Sunday, November 20, 2011

A new day, not a perfect storm just typical bureaucracy

It’s delightful reading President Aquino’s interview with Business Mirror and Philippines Graphic, 5th Nov. “Renewed business confidence in the Philippines, Mr. Aquino said, is reflected in the re-investment of firms that had previously written off the Philippines as an investment site . . . And he is convinced that the Philippines won’t just have to dream of becoming a manufacturing country—by all indications, it can happen . . . The emerging markets of which the Philippines is a part of presents high growth rates for people who are looking for investments. So it behoves all of us to have that environment where we correct the so-called issues against us. So we welcome all of these investors who are looking for that safe haven. The problems elsewhere in the world can translate into opportunities for us and you can see that in so many fields.”

The writer remembers many years ago managers at General Electric seeing themselves as “too US-centric” – as they benchmarked with corporate friends wanting to internalize what being global meant. And the writer thought sitting in New York even for a month would turn one into “too US-centric.” And, of course, there is such a thing as corporate politics to contend with; so corporate-types aren’t exactly naive of the real world. The key is to strive for simplicity – the foundation of competitive advantage because it informs execution – by keeping people singing from the same hymnal because in the free market, failure is not an option! (And why New Yorkers had to ‘occupy Wall Street’; they wouldn’t put up with the chutzpah of greedy bankers who resisted regulations after being bailed out for their colossal failure. And the gall to brag about their smarts when Bear Sterns and Lehman, for example, were offered for a song through the kindness of the Fed – i.e., even bozos could generate profits under those terms!)

Indeed it is important for President Aquino to be confident and self-assured. And reading from the flow of his spiel, it is clear he wants to turn the tide and make us an investment haven. And even beyond that, to be a manufacturing country. Yet even Malacañang can’t escape the phenomenon of “too Malacañang-centric” especially given the reality of cordon sanitaire. And, of course, Philippine politics is much more severe than corporate politics and thus the challenge to get the rest of the country singing from the same hymnal is exponentially larger.

Should there then be the corresponding sanctions if administration managers don’t get the simplicity of the president’s game plan? For instance, we want to raise GDP by >$100 billion via a few vital industries, like tourism and mining to name just two. How discombobulated are these two strategic industries becoming to be? The good news is, after all the highfalutin rationale that froze us into inaction, we are finally doing something with NAIA 1 and NAIA 3. But is our issue with foreign airlines about losing 2 billion pesos in tax revenues or is it about protecting local airlines? Haven’t we been in protectionist-mode for decades which has cut us by the knees, i.e., foreign investors wouldn’t touch us with a ten-foot pole? We don’t want to keep sowing chaos and confusion – the breeding ground of influence peddling, oligarchy and thus corruption? Instead we want to seek simplicity? If a major enterprise cannot compete in the global marketplace, it has its rightful place? Where is Pan American or TWA? In the private sector, failure is not an option – one either sinks or swims? Thus behest loans that are written off by our government financial institutions are worse than the bank bail outs in the West – i.e., they still had to pay them down? What about electricity so basic for an economic activity and heightened development? What about the escalating conflicts surrounding mining regulations?

Beyond simplicity is leadership – and even in a hierarchical structure, the key is ‘to sell’ the game plan, not simply to impose one’s will, which could just be ignored in a democracy! The object remains: to get buy-in and alignment!

Hopefully, the administration is ushering a new day. And that what we are witnessing is typical bureaucracy, not a perfect storm?

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