Tuesday, February 28, 2012

Beyond optimism

You know what happened to this once dominant enterprise," begins a friend, "they thought they were invincible and kept pushing into unrelated businesses until they got burned. They had to unload a few if only to preserve a good chunk of their wealth.” Could it also be why old-Filipino families are no longer the kingpins of Philippine industry? Could our cacique orientation – beyond optimism – have blind-sided them from the modern-day challenge of competitiveness?

The writer – as part of his efforts to share what the outside world is like – was with a group of consultants, who were working and developing their practice road map. They defined their ‘nirvana’ (to be the first Filipino MNC in their practice) but at first wondered how a ‘product architecture’ (that spells out a firm’s product portfolio, from basic products and on to high and even higher value-added) could equate to a consultancy’s ‘service-product architecture.’ It is important for a consultant to switch from passive to proactive mode – and thus be truly valuable to a client? A consultancy is expected to have a perspective that the client is probably missing. And a proactive consultant could, for instance, assist the client sharpen the definition of their own nirvana – e.g., a growing income stream sustained by competitive advantage and thus healthy margins. And they must then ascertain the gaps in the business – measured against the yardsticks of investment, technology, and innovation, and talent, product and market development – and, as importantly, which of these gaps are critical and thus the priority. And the consultancy’s practice would then have a wider arena, moving across the service-product architecture – or offering a range of services: from being an ‘outside ad-hoc service provider’ all the way to being an ‘in-house extended- if not full-service provider.’

Nine years ago when the writer first met his Eastern European friends, he was truly impressed by their optimism – especially given the horror stories they shared about being under Soviet rule. Yet when the writer was to wrap up his month-long engagement, they lobbied the local US-AID representative for him to return. The writer extended his engagement sensing that they were sincere in their desire “to create their new world": they were (a) committed to be a ‘white business'; (b) seeking help to turn their ‘dream’ into a plan – that must be executed with discipline and hard work; and (c) recognized they could trip if not in fact stumble and wanted their attention called whenever they did – “because we may not even realize we are messing things up.”

Optimism is a must yet Juan de la Cruz must face reality squarely. We know we lag our neighbors in gross investments and it behooves us to seek clarity of purpose, define our nirvana, and be single-minded in the pursuit of economic development. And while we must apply rigor in crafting road maps, execution remains the acid test, that is, to successfully put critical initiatives on stream – i.e., power generation, basic infrastructure and identified strategic industries! Inaction has undermined Philippine economic development – and yet where is the fire in our belly? [“Aanhin pa ang damo kung patay na ang kabayo”?] We have to move beyond spinning wheels – or “papogian”! On the other hand a slogan doesn’t equate to branding? 'Pinoy abilidad' can’t be neither here nor there; there is something between 'cutting corners' and spinning wheels – and it's called ‘common sense, but beyond intuition’?

An algorithm that is constructed on the back of an envelope is . . . certainly good enough to outdo expert judgment. This logic can be applied in many domains . . . Obstetricians had always known that an infant who is not breathing normally within a few minutes of birth is at high risk of brain damage or death. Until the anesthesiologist Virginia Apgar intervened in 1953, physicians and midwives used their clinical judgment to determine whether a baby is in distress . . . Without a standardized procedure, danger signs were often missed, and many newborn infants died . . . Apgar jotted down [what she called the simple] five variables [of heart rate, respiration, reflex, muscle tone, and color] and three scores (0, 1, or 2, depending on the robustness of each sign) . . . Apgar began rating infants by this rule one minute after they were born. A baby with a total score of 8 or above was likely to be . . . in good shape. A baby with a score of 4 or below was probably . . . in need of immediate intervention . . . The Apgar test is still used every day in every delivery room.” [Thinking, fast and slow, Daniel Kahneman, a Nobel laureate.]

Saturday, February 25, 2012

‘Consuelo de bobo’

The good news is the Aquino administration for 2012 is focusing on infrastructure, tourism and agribusiness. And it is important if transparency and execution go hand in glove with these efforts and become the focus of the news that Juan de la Cruz wakes up to in the morning. Then we can truly say we’ve elevated the national agenda from ‘consuelo de bobo’ to reaping our rightful rewards.

Thus our best minds can’t be stuck in sub-optimized mode or we shall be perpetuating a failed undertaking? We can only pity Juan de la Cruz if our supposed thought leaders can't present him with a new day? Because our inward-looking template that has guided us for more than the last half century is out of sync with the 21st century?

We’ve had loads of sophisticated economic models and analyses only to take pride – with much horror this being the 21st century – in consuelo de bobo, in our handful of billionaires and OFW remittances? As many people have said, we seem to have run out of models to replicate – e.g., monetary and fiscal policies, and initiatives to generate economic activity at the lowest levels? But not so fast! There is something in these models that others were able to leverage and capitalize. It's like a plane crash – there is such a thing as human error. For example, we have neglected the basics, the building blocks of an economy: power generation, basic infrastructure and a handful of strategic industries – and it appears we’re still consumed by ‘puro daldal, satsat, sitsit.’

We can’t use the excuse that we're victims as though we were born in Siberia or some Godforsaken place? Or that we've been colonized – another convenient excuse as though others weren't? We were born to a beautiful country called the Philippines – and foreigners called it Shangri-la. While the writer’s Eastern Europe friends still shudder with what Soviet rule handed them. And aren’t we all proud of our natural resources? At the end of the day, we shall run out of excuses – because there really is none?

Models are inanimate and it takes a nation and its people to breathe life into them. And that presupposes we are bringing a new set of assumptions – which connotes we are accepting the shortcomings of the past. But false pride easily sets in and so we can trumpet consuelo de bobo as synonymous to success? We’re not meant to simply set very low expectations? Yet our hierarchical structure feeds on the accepted norm of consuelo de bobo because it reinforces our cacique hierarchy and values – which smacks of lopsidedness? But even at the upper tiers, as a friend narrates, a successful entrepreneur he knows limits his target market to Filipinos in the US. "If indeed his product is world-class and his marketing system works, why is he setting such low expectations?"

The writer was invited by a couple of groups to talk about competitiveness, and the wife noted that instinctively our comfort zone is limited to 'tabla-panalo.' We’re not truly risk-takers and don't go for the high-risk, high-reward proposition, i.e., driven by investment. And which also explains why our success model can be generalized as: (a) trading or (b) the conglomerate – a lot of businesses but none that is truly world-class. And as a friend recalls, at one time the largest Filipino enterprise had 70 businesses. And in both cases value-addition is not central. And if there is major investment involved it comes with rent-seeking and thus crony capitalism. And which explains why we haven’t developed competitiveness as an instinct. With due respect to our optimists, in a globalized economy, we don’t have the playing field to ourselves – we have to measure our efforts against others. But of course, our oligarchs dominate in our protected environment – and at the heavy price of transforming the nation to an economic laggard!

We can thus characterize Philippine industry as lopsided yet nowhere near measuring to global competition! And given how change-averse we are it would take eons for Philippine industry to simply get off its comfort zone. For example, we have focused on pricing as a strategy given the low-purchasing power of Juan de la Cruz. Unfortunately, that perspective is reinforced by a linear-thinking mode – which we must overcome by pursuing value-addition, for example. Value-addition demands new thinking and innovation which we sorely need if we are to raise our competitiveness.

Tuesday, February 21, 2012

Inclusive like quality is built-in

Inclusive like efficiency or quality – as quality gurus preach – is not an afterthought? It must be part of our way of life, and built-in to the way we do things. If we simply look around, do we see efficiency or quality – or even inclusive? When people in positions of influence carry themselves with impunity – with no regard for the common good – how will being inclusive become part of our culture? On the other hand, promoting an industry like garments and overseas employment, with the goal of generating employment, proved short-sighted? The goal must be viability and sustainable growth. And presupposes efficiency and quality, thus competitiveness – which comes from investment, technology and innovation and talent, product and market development! Competitiveness remains abstract since we’re stuck with ‘low-price is nirvana’ – when it should be ‘margin is nirvana,’ if we are to have the firepower to compete globally! [Dominant players would want the status quo because the local market is theirs’ for the taking – and thus “free-market” is criticized for being rigged? Or the kinder version is we’re instinctively parochial it is not on our radar screen?] And why the writer talks of Eastern Europe, where the consumers aren’t well-off either. And why the iPhone outsells cheaper smartphones.

When we travel to Hong Kong or Singapore isn’t efficiency and quality simply palpable and tangible – that even the West is blown away, i.e., the US lags Singapore and Hong Kong in competitiveness? The writer, who worked with them as a regional manager for 10 years, saw firsthand that they learn fast, are forward-looking and committed to competitiveness – the key to economic development in the 21st century. We have to cease leading with our heart telling ourselves that our neighbors are not smarter than us! Action speaks louder than words? And the way we talk of inclusive brings to mind why Rizal was critical of the friars: “Follow what we preach not what we do!” We take our values for granted but if we pause for a moment we may recognize how little we value community, or the common good, while we keep a strong identification with our "own” – if not our status, our parochial or selfish interests? We value family yet the mention of family from amongst ‘the chosen few’ equates to invoking rank and privilege – the same reason many people never warmed up to George W. Bush?

Three years ago when the writer started the blog people were sensing hopelessness. Today, with President Aquino, people don’t necessarily feel assured but are hopeful because of his “daang matuwid.” Unfortunately, the horror stories get worse – and even worst! Says one, “Do you know why there is a debate about the SALN? The reality is our culture of impunity has rendered the very concept of SALN inutile! He who is pure cast the first stone!” Says another, “We like our way of life; our quality of life is to die for – unlike the ‘do-it-yourself’ lifestyle in the West. And so we accept the reality that the chosen few would be calling the shots – be lord and master. And beyond the three branches of government are the kingmakers. Because to run for public office requires tons of money – i.e., the system perpetuates corruption and abuse. There are those who are altruistic, but they are simply overshadowed by the system.”

On the other hand, we’re quick to point to the deficiencies of others forgetting that there is no perfection in this world. Even Eden wasn’t perfect. And in the modern era, even NASA isn’t perfect – and so is Microsoft or Apple or Facebook. And which is why quality gurus preach continuous improvement – i.e., man is the true measure of himself and thus ought to keep raising the bar. Even piousness is work in process. The operative word is work, not inaction. Is our inaction, our being execution-challenged, rendered by our instinctive model of perfection which we won’t satisfy? Where is the image of perfection coming from – our split-level Christianity? Are we fixated with the myth of absolutes like 'materiales fuertes'? Or are we simply backward-looking instead of forward-looking?

What do we really value? Hong Kong and Singapore aren't perfect – but if some of our movers and shakers would visit either one to digest how these people have made competitiveness a way of life, and keep raising the bar, they may realize how deep a hole we've dug ourselves in. Celebrating individual successes is not what it's about. But we have our OFW remittances – which, unfortunately, is simply clutching at straws, ‘consuelo de bobo’? And that’s all we deserve until we galvanize ourselves into action!

Thursday, February 16, 2012

Is Procter & Gamble too complex?

Analysts say “some investors believe the company is ‘too complex’ and that more focused competitors will perform better in the future,” reports the Associated Press, 27th Jan 2012. The CEO of the world's biggest consumer products maker was asked if the company would do better if it were broken into separate units. And he argued that the company has been more focused as major portions of the business have been taken off the portfolio. Still, an analyst went so far as to "downgrade its rating from "Buy" to "Neutral" citing an array of concerns about the company's culture, strategy and potential . . . It has limited its ability to meaningfully change how it does business."

P&G is recognized as one of the most progressive global enterprises with a track record spanning almost 200 years. Yet it is not shielded from the pitfalls that come with complexity. Economies and nations are more complex by nature and which is why strong leadership, driving a clear vision and congruent values would characterize the efforts of those that elevated themselves to model economies. In short, they succeeded in overcoming complexity and pursued a more focused development path. No wonder Myanmar is tapping Singapore’s expertise.

Until Juan de la Cruz learns to focus and prioritize, we would be economic laggards – with Myanmar soon breathing down our neck? Everything starts in the mind and a complex mind finds comfort in complexity? The writer is chatting with a Filipino grammarian from the media industry. As a writer he easily grasps varying perspectives and realizes that Juan de la Cruz is not predisposed to change. He takes his hat off journalists that he believes are mavericks if not radicals but the common denominator is still Juan de la Cruz operates in his comfort zone.

Even in a high-stake legal drama complexity does not have to be the bottom line. Writes CJ Artemio V. Panganiban on the Corona impeachment trial: “I think it is best to be transparent, open and forthright, and to abandon the use of unnecessary technicalities, remembering always that impeachment belongs to the people, not just to lawyers. Our people simply want the truth. Anything that prevents its discovery merely incenses them all the more. The best strategy is really simple and is captured in lyrical Filipino, “Walang taguan, walang takipan. Katotohanan lamang ang panalo sa bayan.” (Rough translation: Hide nothing, cover up nothing. Only truth will win the people.) [Philippine Daily Inquirer, 28th Jan 2012]

A relative visited with the writer’s family over the recent Christmas holiday and traveled with them to the Dominican Republic. And the one thing he would notice was the pace of life – and he was talking about the New York metro area and Puerto Plata, a laid back seaside community. “Waiters in Manila can’t survive this pace,” he says. But 10 million OFWs, including those in restaurants and hotels and on cruise ships, are viewed as models and clearly the pace of work doesn’t bother them. Unfortunately, when we’re at home and in our comfort zone, we do as the ‘Romans do?’

Does it explain why we’re economic laggards? Even a simple chore as waiting in a local restaurant could be complicated by the Pinoy mindset – i.e., they are simply not focused and thus slow? And back in Manila, the writer and wife unconsciously were wondering why the waiters were taking their sweet time – and the relative’s reaction was confirmed.

We must take note that even a world-class and very successful enterprise like Procter & Gamble could be criticized for not being as focused as the competition – and for its culture and its strategy and potential! And thus Juan de la Cruz must recognize such pitfalls otherwise he would simply be at home in his comfort zone. And whether it is the chaotic traffic or the lack of sensitivity to the environment or simply respecting time and space, indeed we have an uphill battle. We want to provide an efficient, rapid transport system within the Makati central business district, but how are we populating Fort Bonifacio? We would not replicate Makati’s immense density – and pollution – and chaotic traffic in an area where we have all the time and the chances to do good?

Saturday, February 11, 2012

‘Cause and effect’ II

The nearest the writer could translate it in the vernacular is "puno't dulo." And in a culture that is spontaneous – and concededly a fun place – it is taken for granted. While it is imperative to be focused, it is necessary to establish an end goal – “a vision," if you will – otherwise we could find ourselves simply spinning wheels. On the other hand, it does not have to be the source of complexity. For example, there are reports on the road map that will guide our fisheries and aquaculture industry – and ideally there must be an effort to reduce it into a simple, actionable plan: who will do what, why, when, where and how?

It appears that local enterprise Alsons has gone full circle in its aquaculture business – from development to international commercialization, i.e., China. In the private sector a similar experience would rate as best practice – and progressive, globally competitive enterprises spare no efforts to replicate best practice models in rapid fashion. And so the news about Myanmar tapping Singapore’s expertise in economic development should put ‘a fire in our belly’ – i.e., benchmarking must become instinctive to Juan de la Cruz, and “to shamelessly adopt success models!” The object is to be globally competitive.

One of the strategic industries we know we must pursue is tourism – and indeed we must. Yet there are critical parameters we must bear in mind so that we don't stray from "puno't dulo." The JFC (Joint Foreign Chambers) has identified 7 industry winners that must be our priority. But of course given our instinct of inclusion we want 13! Try prioritizing 7 and we could still be tripping all over as we are witnessing in the mining industry. What more of 13? And so a columnist offers to start with three: tourism, infrastructure and agribusiness. Yet we must sharpen the parameters of strategic and priority industries. For example, sustainable efforts and competitiveness – not just ‘a flash in the pan’ – must always be paramount. We gave jobs to lots of people when we ventured into garments and likewise our OFW focus. What have we learned? Simply, just to talk about jobs could be short-sighted! It means going beyond prioritizing the agenda of the poor – and beyond setting very low expectations that generate insufficient yield, and being a victim of crab mentality.

Thus Obama’s oratory is not for us! The US is a fully developed economy but the imbalance makes unemployment a major issue. Our own imbalance is not caused by full development but in fact by underdevelopment. And thus our priority must be development. We keep talking about growth but growth beyond form . . . is substance. And what we’ve labeled growth for decades was more form than substance – with due respect to cheerleaders of past administrations. Substance on the other hand would have elevated us to first-world nation by now – after over half a century. It is not a subtlety – it explains why we're economic laggards! ‘Pinoy abilidad’ is not straightforward and is in fact complex, to the point of inaction. It explains the gross and utter neglect of progress and economic development. And worse, corruption and abuse thrive in an environment of complexity. And which also explains why we can't find resolution and agreement in most things critical to nation-building. We must thus seek clarity and simplicity – i.e., it’s not about perfection which has also become our defense mechanism for inaction. The evidence: NAIA, power generation, mining, etc.!

Greece has a well-developed tourism industry accounting for 15% of GDP, more than the 10% accounted for by our OFW remittances. What must we learn? Greece, explained the writer’s Greek friends themselves, has not developed a competitive economy – or generated products and services that are competitive which would find markets overseas. Unsurprisingly, they are a big headache for the EU. Tourism is a low-hanging fruit and thus in our case, the JFC talks of 7 industry winners. Simply, we must prioritize industries that we can translate into sustainable efforts and competitive advantage. With due respect to a priest (understandably expressing compassion) tourism is good but it is not nirvana.

On the other hand, the Alsons model is a good one because it demonstrates the confluence of investment, technology, innovation, and talent, product and market development. But they can’t sleep on their laurels either – i.e., continuous improvement. Still they present a classic example of cause and effect or in the vernacular "puno't dulo." We must move beyond 'Pinoy abilidad' – and recognize the critical pieces we must assemble and the dynamic they must generate.

Thursday, February 9, 2012

Understanding competitiveness

Simply: “Find lines of attack . . . rattle [the competition] . . . carry the fight directly to [the] opponent . . . The results of that strategy, carried out by a veteran squad of strategists and operatives assembled by Mr. Romney . . . have been on striking display here . . . By this weekend . . . [they] were on the offensive and increasingly confident . . . His team suggested that it had learned a lesson about never letting up on rivals . . .” [NY Times, 28th Jan.]

Dr. Norio Usui, an economist of the Asian Development Bank (ADB), shared with DTI and BOI officials his research . . . His main thesis is that the Philippines was unable to reduce poverty and unemployment despite steady growth for three decades because of its failure to diversify and upgrade its products, particularly in its industrial sector . . . Usui explains our failure to upgrade and diversify industrial production is one of the fundamental reasons why our economic growth has not produced the job opportunities for our people, reduced poverty levels, and generated more investments in our economy . . . Diversifying products simply means not to “put all your eggs in one basket,” and instead, to capitalize on existing capabilities developed in making a successful product to create new products within the same industry and in other industries that require the same set of skills and tools. If you can make a pair of pants, then with some adjustments, you can make a pair of shorts, and so on . . . This is how other countries like Thailand and Indonesia have outperformed us. This is why, according to Usui, successful economies have expanded their scale of diversification, leaving us behind.” [Legos and Two Legs, Adrian S. Cristobal Jr., WHAT’S IN A NAME? Business Mirror, 29th Jan.]

Competitiveness requires bulking up – and then some – to be able to stand up and win against the competition. It does not mean being a conglomerate – which generally thrives when the competitive arena is confined and weak as when capital is light and investment and innovation levels are low. Ergo: promote a restrictive economic policy and protectionism. Unfortunately, that is our instinctive success model, including its element of rent-seeking. We find comfort in a business that is guaranteed by a franchise, for instance, which lends itself to crony capitalism; and its equivalent in the export arena is our dependence on contract manufacturing and outsourcing. Our mindset and business model can only be characterized as passive – when competitiveness by definition is proactive. With due respect to our optimists (which we mischaracterize as patriotism) competitiveness demands action – beyond emotion! And the reality is we have been kicking up a perfect storm – from setting very low expectations owing to crab mentality to inefficiency if not inaction driven by a lack of commitment to the common good – that has put us on a downward trajectory! And until we open our eyes to that reality we shall be unable to call on the human spirit . . . to reinvent ourselves. Incremental change is not what we need though radical change would be unmanageable – if not worse than the status quo that nurtures our bias for hierarchy! It is purposeful change that we need!

The Lego analogy made by Dr. Usui is the day job of marketers. They typically develop a product architecture in order to figure out how to move up the value chain, recognizing that the consumer has needs that she may or may not readily articulate, yet could be “divined” from her lifestyle. And as the world knows, Steve Jobs was a master. And as marketers pursue value-added product elements like Apple does, they develop depth of knowledge, experience and expertise, and above all financial wherewithal – thus competitive advantage.

We must challenge our mindset – learn about the imperatives of change – instead of feeding and reinforcing our comfort zone. Which we instinctively do whenever we celebrate our "Dutch disease" – i.e., represented by OFW remittances and our oligarchy whose influence over media adds insult to injury. It is not about misguided optimism either but the necessity of recognizing reality! We must seek to understand and embrace the art and science of competition like our neighbors do. We can’t leave stones unturned. We must identify the key, priority factors (c/o Kurt Lewin) that could truly drive or hinder our efforts; and doggedly address them, meaning as our national agenda instead of thriving in our highly political culture – of impunity. As Vice-President Pelaez sighed, “What is happening to our country?”

Monday, February 6, 2012

Finding the common ground for the common good

It appears the bishops' conference could be a template in finding the common ground for the common good. "Filipino bishops seek to stay clear of impeachment trial," says the National Catholic Reporter, 25th Jan 2012. Their common ground: "All of us [bishops] still believe in the separation of the church and state, and that means all the bishops respect the right of the state to run the country in regards to temporal matters."

Yet individually the bishops retain their strong feelings. The bottom line: the bishops are demonstrating maturity! There are those "who are sympathetic to the Chief Justice, and believe that the Hacienda Luisita decision is the why of the impeachment trial. While others maintain that it is part of a larger effort to probe allegations of corruption and anomalies of public officials and to hold accountable those responsible." Thus the bishops are pulling out the big guns in the name of evangelization, and that is, for the dioceses to activate the BECs - Basic Ecclesial Communities.

BECs are small groups of Christian neighbors who regularly gather for Bible sharing and the Eucharist. The grassroots communities, which are united with pastors but ministered to by lay leaders, share a sense of responsibility for one another and integrate liturgy with reflection and action on socioeconomic concerns of the community, said Fr. Amado Picardal (Executive Secretary of the CBCP Committee on BEC).

"We have a split-level Christianity," he said, citing anonymous government workers who are "very religious, like Arroyo and Corona," but who have confessed to him about accepting bribes and kickbacks and their participation in other anomalies . . . A lot of corruption happens in the local level, and BECs can and have been able to stop these by monitoring the use of [community] and provincial government funds and money for road and other construction projects," Picardal said. [Said another: "We see people going to church, but the vital question is, How much does their faith influence their important decisions in life? Are God and his commandments still important to them?"] In 1987, a BEC he worked with in San Fernando, Bukidnon, fought to stop illegal logging that was causing flooding and droughts in the southern Philippines town.”

If Juan de la Cruz could only follow the footsteps of the bishops – and seek the common ground – we can once and for all address the fundamental failings that have stunted our development all these years: power supply, basic infrastructure and strategic industries.

The power supply issue is complicated no doubt given the new challenges as well as opportunities presented by renewable energy. Mining as a strategic industry is mired in controversy. And in basic infrastructure, to name just one, given this is the 21st century, we can’t remain wedded to the infamy of our international airport – which is being complicated by the opportunity presented by Clark but with the attendant imperative and challenge for a rail system between Manila and Clark.

We must turn things around and cease tolerating inaction – being victims of conflicting ideas and beliefs. We can't mirror the failure of our judicial system, for example, that has turned its back on something very fundamental: justice delayed is justice denied – as suffered by the coco farmers, for instance. Put another way, we can't remain indifferent to the pursuit of economic development – yet claim we are concerned with poverty. That is synonymous to what the good pastor says about our split-level Christianity!

The bishops have set an example – we can likewise subordinate our own held beliefs and seek the common ground for the common good! "Even if Corona is found guilty and is ousted, it doesn't mean corruption will end if people, the culture and bureaucracy will not reform," Picardal said.

Thursday, February 2, 2012

Good news, bad news

The prospects look good for a growing economy in 2012 and I think foreign investments will increase substantially,” John Forbes, senior adviser of the American Chamber of Commerce, told the Business Mirror on 24th Jan 2012 . . . He said the growing optimism was mirrored by the rising number of foreign companies asking how they could move their operations here.”

On the same day, the writer was with a friend in the BPO business and with them was an American who was setting up, for the umpteenth time, a local operation for his American principal. It stemmed from a decision to move their India operation to the Philippines. Not surprising given what Gerardo P. Sicat wrote:

National economy: one part world class, the main bulk is uncompetitive.” The Philippine economy is made up of two parts. One part is world class but the main bulk of it is uncompetitive . . . Let’s first take the bulk of the nation’s economy. Four-fifths of it is burdened by high costs. In general, public utility services are sold at high unit costs. Public infrastructures are inadequate, overstressed and underinvested. The business regulatory framework is impeded by corruption, rent-seeking, and involves multiple steps that jack up production costs. All these make operating enterprises weighed by high costs . . . One-fifths of the economy is world class. Here, firms are generally profitable, workers have high productivity and raw material inputs are available at world prices. As a result, the enterprises operating in them are lean, mean, and highly competitive. These enterprises are located in special economic zones . . . But this world class segment is also burdened by the inadequacies of the larger component of the economy. Infrastructure services and other non-traded goods add to the burdens of these world class components and chip away partly on their performance.” [Crossroads by Gerardo P. Sicat, The Philippine Star, 25th Jan.]

Juan de la Cruz is neither here nor there? "The slow pace in the integration of renewable power sources into the overall power supply of the country is also not the fault of Almendras. As we have underscored a few times, he is facing formidable opposition in his bid to push the country’s renewable energy program which PNoy has advocated . . . Given the names behind the move against renewable energy, we can only sympathize with Almendras. Among these big names are former energy secretaries: former President Ramos’ energy czar Delfin Lazaro and the Arroyo administration’s Raphael “Popo” Lotilla.” [Hidden Agenda, Mary Ann Ll. Reyes, The Philippine Star, 25th Jan.]

Do we have the capacity to move the Philippines forward as an economy? This was lurking at the back of the writer’s mind given all the above. He was talking to two physicians and in jest the writer said he was not even smart enough to be a doctor. (But why are you in the BPO business?) It only confirmed we've mismanaged our economy so bad for decades that doctors out of our premier university (UP) would not be practicing their profession. And they would add: “We would be doing others a favor, particularly nurses, if we train them in medical coding! These nurses pay tuition to get practical experience in a hospital with no guarantee of employment. If we could get them jobs . . . that will be a big plus.”

The writer was wondering if he was still jetlagged hearing all this. And he could only think of Warren Buffett – who says he is willing to pay more taxes because he's born lucky. “I am lucky to have won the ovarian lottery, and doubly lucky that I was born in this country.”

And the writer tells the two Filipino physicians that he would help them develop a product architecture and product portfolio – i.e., competitiveness is simply that their mindset and business model aren't stuck in passive mode, but ratcheted up to proactive mode. They had explained that the medical transcription business has been overtaken by technology. And the writer was truly impressed that indeed these UP grads are smart. They engaged him on specific ways to move their BPO business up the value chain. If we could only focus on the four-fifths of our economy – and fix them in short order we could truly predict boom times! Until then, we’re simply crying wolf!