Friday, November 18, 2011

Of comfort zones and paradigms

People including foreigners respect the caliber of the leadership in our private sector – despite all the unfavorable news about our economy and beyond – given our history and decades of experience. And it is not surprising since we were supposed to lead Asia into the new century; and the decision to make Manila the HQ of ADB was a confirmation of that belief by the international community.

Indeed the private sector has its core of progressive enterprises. Unfortunately, the rest of the economy hasn’t matched the progress achieved by our neighbors . . . . And so our economic managers proudly unveiled PPP in order to accelerate infrastructure development. And the JFC, working with both the public and the private sectors, developed ‘Arangkada’ to get us on the road to industrialization by focusing on a few vital industries like tourism. Sadly, before it even got off the ground it conflicted with another initiative, to raise the efficiency of our tax collections! (Confusing 300 tenets from the Greatest Commandments like the Pharisees?) And so foreign airlines are staying away; and given our high electricity costs, exporters are also thinking of leaving! And they are on top of our avocation of taunting (if not milking, as one columnist described it?) foreign investments – and we wonder why we only get a pittance? And unwittingly we’re coddling ‘rent-seeking’ oligarchy believing we’re patriots – and wonder why a third of us are hungry? A system that is underinvested cannot generate wealth for 100 million Filipinos – especially when investment is controlled by a handful! It is no different from the time of the tsars! And we’re walking around proud of tradition?

Home” – our comfort zone – is where we can let our hair down and prop our feet up? Hopefully the house isn’t burning? We’ve stuck with our comfort zone for decades; and with the 21st century now a reality, it appears we’ve recognized the world has dramatically changed! What to do? We reinvent the wheel? Unfortunately, our ‘default menu’ may be ‘factory set’ and we appear unable to override it! And so the solutions we come up with have a common thread: inward-looking and, sadly, feeble. Our compassion (or “awa”) wouldn’t take radical surgery even if it was the prognosis – yet we grew up with an abundance of parables? Compassion stops where ‘crab mentality’ begins? If Brazil and Mexico with per capita incomes several times ours still needed CCT, how do we expect ‘farm to market’ roads, for instance, to be the prognosis for our underdeveloped economy?

Which also explains why we struggle with interventions sometimes demanded by institution-building like restructuring – i.e., we personalize the downsides because of compassion. But a leg has to be cut to save a life! Unsurprisingly, our institutions are weak – and thus despite our smarts we can’t build a nation? And we’re entertaining initiatives akin to import substitutions that stunted our manufacturing like they did our economy? The only way we can compete and thrive in a globalized economy is to invest and leverage the investment via technology, innovation, education and talent development as well as product and market development. And that’s done by partnering with the outside world not locking them out. There is no free lunch!

Yet even contract manufacturing, for example, does not have to be one-way, from the West to the East! The writer’s Eastern European friends signed up a Western enterprise to manufacture for them! An enterprise from an ex-communist state just out of the dark ages is the principal, not the hired hands! They are about competitiveness, not ‘rent-seeking’ meant to thrive in crony capitalism and its safety net, political patronage. Simply put, they must sustain profitable growth if they are to carry on their contribution to their economy thus the common good. And it means investing in product development and in technology via product sourcing, in this particular case.

We can talk ‘paradigm shift’ but now must walk it? When the writer covered the region, the only place where he heard ‘paradigm shift’ was in the Philippines, but it was in the neighbors where he saw it! Unfortunately, the world will not change the rules to fit our comfort zone! Nor is it about reinventing the wheel; it is about leveraging what an interconnected world has to offer. It is not about being steeped in tradition; it is about challenging an unfortunate present and creating a better future. We can’t be too heavily laden and weary to formulate a contemporaneous worldview – we have to keep the faith!

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