Monday, December 26, 2011

Critical thinking in a soft culture

‘We must undo the damage of a misguided culture perpetuated by corrupt politicians and businessmen, power-hungry and greedy tyrants, the powerful forms of media and the apathy of many citizens (whose disheartening response to the mess around them is to go abroad) who defuse the fervor for genuine social change. It is not the Filipino culture that is damaged!’

That is paraphrasing one of the responses at the one-day Rizal @150 Anniversary Conference on Nation and Culture held last 3rd Dec. [Thanks to Dr. Florangel Rosario Braid.] A couple of issues raised at the conference drew the writer’s curiosity: how to internationalize the Filipino outlook; how to take advantage of the Filipino’s ability to adapt to changing circumstances as it competes in the global economy; and redefining the Filipino citizen as multicultural, multireligious. But do we accept that ours is a soft culture as Lee Kuan Yew says? Do we believe that ours is a hierarchical culture? Could they be behind the ‘misguided culture’ being perpetuated by a few? Is our softness reinforced by how we see ourselves in the social hierarchy, i.e., helpless? And so we tolerate corruption, power-seekers, greedy tyrants, and the powerful in the media because of that helplessness – and going abroad becomes an escape?

Because of our softness our bias is for inclusion (and miss the imperative to prioritize and focus) and see poverty as our biggest challenge? But isn’t poverty the outcome of underdevelopment? Or is our default-model the US, where they also have to fight poverty (in reality the core of compassionate conservatism to counter the perceived insensitivity of "laissez faire conservatism")? But to compare poverty in an economy where the per capita income is $3,500 (PHL) versus $47,200 (US) is comparing apples and oranges? Shouldn’t we be comparing ourselves with Thailand ($8,700) or Malaysia ($14,700) or any of our neighbors? These countries have reduced poverty substantially by pursuing economic development! Our income of $3,500 is simply too meager to spread around! And worse, the thought perpetuates our ‘crab mentality’?

Taking a page from the playbook of the private sector, when the revenues of an enterprise can’t cover its expenses, the marching order is to drive profitable growth. The writer is reminded of the 9 years he has spent in Eastern Europe. (And why our messed up economy would take a generation+ to fix.) And the one thing they haven’t stopped talking about is the imperative of gross margins. When he arrived, his friends proudly claimed that low-pricing was their advantage over MNCs – “because the people are poor.” Unfortunately they were not making the margins to give them the firepower to compete, and worse, were an unprofitable enterprise. They’ve learned since but are keeping the focus on gross margins. As the organization expands even those coming from MNCs could instinctively see driving sales as the key, unwittingly compromising margins. It’s giving away the store! And to enlarge national economic output or GDP, enterprises must by definition be sustainable!

The solution is simply innovation – not our celebration of monopoly and oligarchic power – to be able to create products (or services) that the consumers will value at a price that generates healthy margins. It is what competitive advantage is about! And competitiveness is driven by investment, technology and innovation, and talent, product and market development! It also applies to the Philippines? Our GDP is dependent on a consumption-driven domestic economy – which makes us proud because we have many successful local enterprises, but the big picture punctures that confidence. We are unable to match our neighbors’ economies especially exports because we are not competitive, and thus have become economic laggards!

Our biggest challenge is not poverty but development. And to get there, we need to focus on competitiveness. And it starts with the building blocks of power generation, basic infrastructure and strategic industries that will develop competitive products. And how could we address our soft, hierarchical and parochial culture? It’s a challenge to our institutions especially the church and education. Adam and Eve were driven out of Eden; Christ was a pain to the hierarchy in his community and beyond, and he embraced the Gentiles, foreigners and sinners!

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