Tuesday, August 9, 2011

The budget: Talking the talk

It appears the DBM secretary is hitting all the requisite operative words in describing the budget: rapid, inclusive and sustained economic development, and focused and cohesive. Indeed the administration must articulate 'its reason for being'. And President Aquino seems single-minded in ‘cultivating the soil’ that is the Philippines – that until we own up to our ‘bad attitudes’, which he spoke about with our community of psychiatrists, we can't expect to grow and prosper.

The fundamental role of a nation is to raise its standard of living via the pursuit of sound economic interventions. Watching our local news is a most depressing experience as they present our reality – our failure to value human dignity! It is thus encouraging when the president's team is able to present something coherent and focused like the budget – which can be game-changing if executed with conviction? We can't pat ourselves on the back with 'make do' initiatives – when they don't fix the fundamentals of the economy: from infrastructure to strategic industries to competitiveness to economic surplus. Thus it is understandable that dole outs are criticized by many – especially if they are unsustainable and take resources away from initiatives that have a far greater impact, or if they don’t deliver the assumed positives. Translation: we don’t want to unwittingly embrace an economy that is lopsided – i.e., for the benefit of a few with a great number ordained to a lifetime of poverty.

It is critical that we appreciate the focus and the coherence in the administration's agenda. On the other hand, we can't applaud the theatrics of the 'big boys' – e.g., the ventures they're wrestling about will not yield the quantum leap necessary to pull the country out of the abyss. They won't raise our technological capacity or our competitiveness. Surely they expect to grow their revenues and that would still be welcomed, but not necessarily praiseworthy – in the name of nation-building. What will elevate our economic output is raising revenues especially in industries where we're laggards. For example, the 12 major dollar-earning industries the Agriculture department identified must indeed be a focus. But the administration must provide concrete plans and take the necessary steps to make them happen – and when?

Just like in any economic or business activity, a robust product portfolio is key in order to optimize yield – for instance, it appears electronics exports are slowing? Thus, we need new high-performing industries in our portfolio. And likewise we need the electronics and BPO communities, for example, to be truly committed to developing higher value-added competitive products. It is noteworthy that the budget provides for infrastructure projects to make strategic tourist destinations accessible – a must given the beauty of the Philippines. Focus and coherence are imperative so we don't get distracted while the administration goes full speed ahead. There will always be the low-hanging fruit that is tempting. Or why developing countries create monopolies cum conglomerates – instead of technologically-driven and globally competitive enterprises. And there is that one initiative where the administration must exercise greater leadership: addressing our energy issue. What must we undertake to ensure sufficiency at competitive costs? Who, when, where and how will we do it? What is the role of renewable energy over time? In short, if we want the administration's budget to be focused and coherent, we must want an energy initiative that is similarly focused and coherent. We need to execute – walk the talk!

What is the outcome that we want – and is mandatory? We want a clear-cut program that will drive economic output in the identified strategic industries that will be sustained by a robust, competitive product portfolio and an efficient infrastructure system. The administration's reason for being must be so articulated, monitored and communicated for Juan de la Cruz to be on board. We must not be distracted by favorite if not politically expedient pet projects or vested interests – while millions of Filipinos end up paying the price because of failure to execute . . . and thus a failed economy! How could we even watch local news that vividly bring to the comforts of our living rooms the widespread hunger . . . in the country . . . we claim we care about – or do we really?

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