Sunday, May 20, 2012

“He is one of the big boys”

Banking on the revived interest of investors, Philippine Ambassador to Japan Manuel M. Lopez is embarking on a new and lofty mission – to make great strides in attracting foreign capital that can help lift the country’s economic stature,” reports Manila Bulletin, 30th Apr 2012. “It is some sort of a ‘role-shift’ for him – considering that he is one of the ‘big boys’ in the Philippine business scene, and has always been a private sector player at that.”

Mr. Lopez noted that ultimately, the goal would be to move the Philippines out of obscurity and into the fast lane . . . [He] emphasizes though that the prudent step is “to focus on our core competence” – which he believes are in the areas of electronics, SMEs and tourism . . . [The] country can still gain competitive advantage against other Asean countries – or at least, it can be on a head-to-head race with Vietnam and Indonesia . . . “[C]ompanies which have subsidiaries in the Philippines still find value in investing or expanding,” hinging more on the incentives being offered at the PEZA zones as well as the country’s highly-educated labor market. But the Japanese investors still complain of hurdles in the country’s “changing tax system” as well as the state of infrastructures which are relatively inferior to others. The market size (or the lack of purchasing power because of smaller middle class base) may also serve as deterring factor, especially for companies which are gearing up for bigger sales. Such that when car parts manufacturing firms had to relocate because of the Thai floods, they have chosen Indonesia over the Philippines because of the former’s “richer” middle class.”

Clearly no one will offer anything to us on a silver platter. The challenge to us Filipinos, indeed, is to stray out of comfort zone? For instance, given our parochial instincts, we’re still conflicted about the interconnectedness of the global economy – where global leadership is the norm? Writes Angel Cabrera, president of Thunderbird School of Global Management (Business Mirror, 29th Apr 2012): My colleagues have conducted surveys of thousands of managers around the world and interviewed dozens of successful leaders. These efforts have helped us identify three critical skill sets for effective global leadership: global mindset, global entrepreneurship and global citizenship.”

But isn’t our culture supposed to be superior? There are “. . . cultural traits that are necessary for greater economic success,” John Mangun, Business Mirror, 30th Apr 2012, summarizing “The Role of Culture in Economic Development,” a paper published in 2009 by Jesuit priest Francis X. Hezel. On trust and morality, for example: It goes beyond family . . . “you cannot build a sound economy by just treating your family properly and cheating everyone else . . . Less successful economies tend to keep individual initiative and creativity as a low priority. “Follow the boss’s ideas; he knows best” . . . Persistent and consistent work product day after day and week after week is critical.”

We need to truly examine the value of trust and morality and how limited we define them – ‘charity begins at home but doesn’t end there’; recognize the issue of hierarchy and how it undermines innovation; and the imperatives of productivity. Is it about time we toss some of our assumptions – that have formed our comfort zone and our parochial view? We are not the world – but we can be part of it?

It is encouraging that a Lopez – coming from an old Philippine oligarchic family – is revamping a supposedly enduring assumption that has left us with pathetic levels of foreign investment. And given his own industry and business experience, he is preaching “focus,” for instance. And he has spelled out a few more pragmatic imperatives if only to stress that we can’t live in our own made-up-world? For example, investors are “prowling” the world, investing even in countries with less business and management sophistication than us, because of one factor: per capita GDP. Thus, as Ambassador Lopez says: “when [Japanese] . . . manufacturing firms had to relocate because of the Thai floods, they have chosen Indonesia over the Philippines because of the former’s “richer” middle class.”

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