Tuesday, June 26, 2012

We don’t need to contrive a crisis

In the 1980s when Japan, Inc. was perceived as poised to take over the world with their technology and manufacturing prowess, enterprises in the US saw the need “to contrive” a crisis situation given the apparent nonchalance of people – in order to recreate a “Pearl Harbor moment.” What was left unsaid is that “education [was meant to have] prepared them for the future life – given them command of themselves; they had been trained to have the full and ready use of all their capacities.” [John Dewey; On education, Wikipedia]

We don’t have to contrive a crisis; we have been in crisis mode for half a century? Beyond lagging our neighbors in attracting foreign direct investments and our pathetic power situation, we can add two more challenges: (a) “our agribusiness, which accounts for about 40% of GDP, is uncompetitive in the global markets;” [Balanced farm and fisheries growth; MAP Insights, Alejandro T. Escaño; Business World, 4th Jun 2012]; and (b) “the country did not fare well in six of seven innovation indicators in the Global Competitiveness Report 2011-2012 of the World Economic Forum.” [Govt sets survey on local R&D efforts; Mayvelin U. Caraballo, Manila Times, 5th Jun 2012]

Poverty in the Philippines is an agricultural phenomenon with 70% of the poor in the rural areas that are agriculture-dependent . . . Philippine agriculture hosts millions of farmers, fishers and landless workers below the poverty line. It is not competitive in the global markets . . . The answers lie in low productivity, poor diversification in crops and fishery, and undeveloped value adding. The record of tree crops expansion is dismal. Export winners (coconut, banana, pineapple, tuna, and carrageenan) are the same since the 1980s. The country is the only net importer among ASEAN peers . . . At the same time, low productivity and inefficient supply chains lead to high food costs, and in turn, high malnutrition and incidence of hunger. Solve the problems in agriculture, solutions to poverty will follow.”

“The country did not fare well in six of seven innovation indicators. Notably, it ranked last among the Asean countries in government procurement of advanced technology products; it ranked second from the last in university-industry collaboration in R&D and third from the last in the availability of scientists and engineers.”
How did progressive US enterprises pull themselves together? Peter Senge captured it best in his bestselling book, The Fifth Discipline, in 1990: “People put aside their old ways of thinking (mental models), learn to be open with others (personal mastery), understand how their company really works (systems thinking), form a plan everyone can agree on (shared vision), and then work together to achieve that vision (team learning).”

It is not surprising then that the Joint Foreign Chambers (JFC) developed “Arangkada Philippines” covering the 7 strategic industries that could bring $75 billion in foreign investments, appreciably raise national income and create millions of jobs. And agribusiness is one of those strategic industries. The bottom line: we need purposeful leadership if we are to mirror Peter Senge’s five disciplines: (1) systems thinking, (2) personal mastery, (3) mental models, (4) shared vision, and (5) team learning. But it doesn’t mean President Aquino has to go it alone. Precisely, Senge speaks to a learning organization that values, and derives competitive advantage from, continuing learning, both individual and collective. [Rebecca Cors; Engineering Professional Development, University of Wisconsin-Madison, 5th May 2003]

A nation cannot operate like a business organization, but people are able to come together when they have a sense of national pride and nationhood – i.e., we are the region’s economic laggards for a reason? We take it for granted that we have established institutions but the test of the pudding is in the eating: we rank poorly in governance, rank poorly in competitiveness, rank poorly in education? The one thing that we have institutionalized, unfortunately, is our cacique system and structure. And thus our continuing inability to recast our economic model because the elite which enjoy its spoils and call the shots will – given the human condition – be the last to undo what works for them?

Saturday, June 23, 2012

Kudos to the Makati Business Club

Putting up the following challenge the Philippines faces, like the MBC has done, is one of the clearest ways for Juan de la Cruz to recognize how much work we need to do: “Indeed, there is so much that must be done for trade and investment promotion. In the recent World Bank East Asia and Pacific Economic Update, foreign direct investments to the Philippines in 2011 totaled only $1.3 billion, compared to Vietnam’s $7.3 billion, Thailand’s $8.4 billion, Malaysia’s $10.8 billion and Indonesia’s $18.9 billion. Though its foreign direct investments increased from a measly $700 million in 2010, the Philippines’ 2011 numbers paled in comparison with the rest of the region.” [A working PPP, Philippine Daily Inquirer, June 1st, 2012, by Peter Angelo V. Perfecto, Executive Director, Makati Business Club.]

It is not a well-known fact that the Makati Business Club serves as the secretariat of several regional and bilateral business councils established to promote not only business and investment between the Philippines and other countries, but also the exchange of views on policies of mutual concern . . . The business councils that the MBC works with have members outside of the MBC family. In fact, the council chairs hope to get more interest and support from the private sector, so that by the coming together of more business leaders, so much more can be done to promote trade and investment . . . For sure, investment promotion work in the country is one public-private partnership (PPP) that seems to be moving full steam ahead”!

There are two related topics that the MBC article did not speak to but hopefully are in their crosshairs: (a) the efforts behind “Arangkada Philippines” and the 7 strategic industries the JFC (Joint Foreign Chambers) believe could bring $75 billion in foreign investments, appreciably raise national income and create millions of jobs; and (b) the restrictive economic provisions of the Constitution.

It is critical that the private sector indeed shares its expertise in pushing Philippine development – because national pride ought to push us to the head of the pack, not to accept being economic laggards. It is crucial that we define the vital few initiatives that we must push hammer and tongs – i.e., the private sector not only talks, as importantly, walks the talk . . . of “focus.” Thankfully the JFC has done the homework and it would do us a world of good if indeed the MBC would channel their efforts to getting the private sector single-minded.

And since the restrictive economic provisions of our Constitution have put us at a disadvantage versus our neighbors, it would do us a world of good if the MBC would champion efforts to revisit these provisions. There are two other barriers that foreign investors have raised about the Philippines: (a) our pathetic energy situation and (b) the continuing hold of half a dozen entities on the economy. It would do us a world of good if the MBC would step up efforts to promote good governance. Beyond the undertaking to fight bribery and corruption, the MBC could likewise undertake to fight crony capitalism! And to quote President Aquino, “there must be a level playing field”!

Society may equate business to narrow-minded fat cats when the reality ought to be that business can play a major role in economic development, institution building and in thinking discipline. For example, critical thinking is a daily business fare: “Critical and reflective thinking is not a lost art after all. It has remained for the more mature minds a process of thinking, questioning, problem-solving and decision-making – an approach which borders along the original idea of John Dewey. It examines things, events, circumstances and topics. It reflects on issues and practices – local, national, international. It asks not only what happened, but why. As such, critical thinking should not just be relegated to the background.” [Nilo E. Colinares, Ed.D; Educators Speak: REFLECTIVE TEACHING, Manila Bulletin, 3rd Jun 2012.] 

Wednesday, June 20, 2012

Stepping up to the plate

Three years ago when the writer started this blog, friends – both Filipinos and foreigners – wondered aloud if Juan de la Cruz would ever be able to step up to the plate. To this day some continue to doubt the character of the Filipino. Could it be because Juan de la Cruz tends to personalize most things including matters of national if not international import? And the writer saw this while in Manila (during the family’s annual homecoming) when the Corona impeachment trial had just begun. Introduced to some lawyers during a clan reunion, the writer noted that those who were against the filing of the case had clear personal reasons. We have, like Washington, allowed patronage politics to define us – when patronage is the norm good governance goes out the window?

When the verdict finally came, the writer was in the heart of Eastern Europe. Our senators proved that in fact we could step up to the plate! BRAVO! And in this part of the world, they are just learning to deal with the judicial process. And so the writer does not expect them to be as mature as our senators have demonstrated. The writer – a non-lawyer –  has experienced being in the jury (and, as importantly, its efficiency) in a criminal case in Connecticut, USA; and he assumed that since we don’t have the jury system in the Philippines, Senator Santiago would wonder if the other senators, not being lawyers, could appreciate the judicial process. But others disagreed. Indeed, if the legal/judicial community is to step up to the plate, they would have to hold fundamental principles up high. For example, that justice delayed is justice denied. It will go a long way to raising our credibility in good governance and thus as a nation. Efficiency and timeliness engender good governance; while inefficiency and delays feed injustice like corruption. If we believe delays are part of our culture, it’s about time we deal with it?

The challenge to Juan de la Cruz is to move forward; and not to simply be resigned to the conditions obtaining in the country. We keep talking about poverty but don’t talk about our economic model that is generating a meager output and, consequently, elevated poverty. It’s understandable because we lead with our heart; and, unsurprisingly, the same mode CJ Corona adopted at the witness stand? Thankfully the now ex-CJ is putting country first.

We must step up to the plate and recognize why our neighbors are more prosperous; and it is because there is something common among them which, unfortunately, we continue to gloss over? They are outward- and forward-looking; while we are inward- and backward-looking? Between leading with our heart and our parochial instinct, have we missed fundamental principles like causal relationships? The writer remembers his high school PE teacher, a doctor, who talked about cause and effect. And he would add, “If you are interested in causal relationships, you may want to be a doctor. “ [Not this once lazy student.]

We have resigned ourselves to the belief that corruption is a given and so we simply accept it. We have resigned ourselves to being a third-world nation and so we simply accept it. We have resigned ourselves to the power of half a dozen entities to dominate the economy and so we simply accept it. Are we more wedded to an economic model that hasn’t moved us forward for half a century than the bamboo and iron curtains that came down? Our “kuro-kuro” culture generates lots and lots of prescriptions, but between our parochial instinct and leading with our heart, these prescriptions are suspect – because they miss causal relationships? And unable to lift ourselves up, we unwittingly turn fatalistic? We need to tap the power of the human spirit if we are to break free from the mold of fatalism!

And so when President Aquino is not receptive to revisiting the restrictive economic provisions of our Constitution, for instance, what do we make of it? [And because we personalize things, statements like that offend friends of the president? But as we know even the Vatican needs oversight re money laundering, for example, and can’t be shielded by sovereignty?] We know that we lag our neighbors in attracting foreign investments, but it doesn’t mean we are more patriotic than they are? As Senator Santiago wailed, we are a corrupt country? And it appears the Bureau of Customs ought to be a priority? Or are there bigger fish the president worries about? Still, to benchmark our ability to attract foreign investments must be a priority. Our challenge remains: We must step up to the plate!

Saturday, June 16, 2012

Incremental thinking

If we are to address our deteriorating education initiatives, we may have to first ask ourselves the question: “If fundamental to life is development, are we creating the environment that is meant to enhance development”? Industry around the world has been confronting – as a matter of course – the challenge of developing people especially those fresh out of the education system, but not only. And industry has relied on those demonstrating “extraordinary skills” especially technical and leadership. Yet, during times of crisis, problem-solving and execution demands would still confound supposedly talented people.

It appears that people associate incremental thinking with logical thinking – even smart thinking. If there’s one thing about a market economy that is absent in socialism, it is that competition drives free enterprise to unimaginable heights of innovation. The writer has met some of the brightest products of the socialist system and they admit that absent human motivation, the mind tends to be languid. A former rocket scientist from Ukraine is one talent the writer has watched. He would learn and appreciate the workings of a business enterprise assisting an experienced manager and between them they developed information templates that impressed more experienced colleagues – until it appeared they were moving into ‘art for art’s sake.’ But a talent is not to be wasted and so the former rocket scientist was given a business to manage. And he demonstrated that his skills extended to getting results, profitable results – until his one report mirrored a racing car hitting a wall and needed a pit stop. It is the classic case of the ‘low-hanging fruit’! And it is where the men are separated from the boys – i.e., problem-solving and execution are called for!

The Philippine economy, despite how much we celebrate its good elements, yields a meager output. Thus, while we appear to be thriving (e.g., the booming retail and housing industries) from its low-hanging fruit (engendered by OFW remittances) we’re still an underdeveloped economy. Our GDP is a mere ten percent of what we ought to generate if we were a developed economy. The positives that we see lull us into incremental thinking? And it explains why our neighbors have left us behind? We must pursue ‘out-of-the box’ thinking – e.g., ‘discontinuity’ or ‘creative destruction’ – if we are to generate innovative ideas that are simple to execute. [“Simplicity is the ultimate sophistication,” da Vinci.] We have to break the mold from where we’ve been happily plucking our low-hanging fruit.

Unfortunately, we ‘haven’t been there and done that.’ And for half a century we’ve been in incremental thinking mode – which is synonymous to linear thinking? It is logical and it is not wrong. But breakthrough ideas come from breaking the mold. The ego, unfortunately, could get ahead of itself and wave ‘the silver bullet.’ As the writer’s Eastern European friends had believed, “with bread rationed at subsidized pricing,” socialism was ‘the silver bullet’ – and that their way of life was ‘to die for.’ They would later realize that it’s not about policies or “rules,” but rather “fundamental principles” that are tested over time. For example, after training the marketing folks, a new challenge clearly emerged: the sales force needed to understand and accept the fundamentals of marketing (i.e., the 5 Ps: product, pricing, placement, promotion and people) if the organization were to be single-minded and become a sustainable economic undertaking. And so beyond training the sales force, the writer would run the function for two years to ensure that . . . despite the different countries and cultures, the organization would be single-minded.

The former rocket scientist would revisit the fundamental principles and the object of the exercise; and, as importantly, would realize the need to break the mold that was informing his thinking. And that he needed to be forward-thinking and anticipate disasters in order to successfully deliver the undertaking.

The mind is capable of generating breakthrough ideas! And it could run the gamut, from the simple to the profound.

But it demands unfreezing the mind to break the mold and flush out incremental thoughts; and then to start with the end in view!

Tuesday, June 12, 2012

Retreating into our shell

Our challenge is to lift ourselves up as a nation and become a developed economy. It is not a new challenge, but why have our efforts over the last half a century fallen short? Unwittingly, our model of prosperity comes from our cacique system and structure? And, unfortunately, we are again moving in the same trajectory – i.e., when all one has is a hammer, everything looks like a nail? We have the capital and we can lift ourselves up! Sounds familiar – like from the ‘hacinderos' of old? Sounds like Wall Street too – capital got the world economy booming until, of course, the credit bubble. Capital has to be productively and efficiently employed to optimize its multiplier effect – which is the lesson from the Great Recession.

While development, indeed, starts with capital, the 21st century has made the world interconnected and thus highly competitive. We can't opt out of this reality and be isolated like rogue nations. It’s thus unfortunate – in fact mind-boggling – that we don’t see the imperative to compete with our neighbors' ability to attract foreign investments, and revisit the restrictive economic provisions of the Constitution, for example. We believe half a dozen dominant entities can be our ticket to prosperity, and so political patronage is alive and well? That is limiting our options from the get-go. These entities have a common platform – rent-seeking, e.g., utilities, communications, infrastructure. And as they enlarge their capital base they are able to move into other industries – the cacique model at its best where expertise is optional! They’re not about raising our competitive stock, but rather fortifying their dominance absent the imperatives of competition in an open economy – the very essence of a market economy that we seem unable to embrace? Even our energy program is dependent on when these same entities get around to building the nation’s power infrastructure.

And in the meantime we are unable to attract foreign investors because of inadequate and costly power. We don’t have an overarching vision to get such basic need as power provided because we have narrowed our perspective? And it explains why we’re uncompetitive? Similarly, we have lots of SMEs but they are about basic products that every developing country is able to produce. It is where creativity is called for, not in sidestepping our challenges! Of course, these local products are selling and so we have an established ecosystem courtesy of OFW remittances. But this ecosystem produces a meager income for Juan de la Cruz. We need “a pole" that is ten times longer if we are to overcome the hurdle of a developed economy! Our mindset of staying with the “same short pole" even if it is made of "titanium" doesn't elevate our chances! Translation: our average income is a measly 10% that of developed economies and thus we need an altogether different ecosystem! It means beyond associating incremental thinking with logical thinking we have to learn and pursue ‘out-of-the box’ thinking, e.g., ‘discontinuity’ or ‘creative destruction.’

With the world economy in a funk it is better to look inward? We need thinking discipline, not being in a funk ourselves. Our neighbors are affluent because they seek to be globally competitive. We produce semiconductors while Malaysia makes electronic equipment – with higher value-added from partnerships with foreigners. And the contribution of their industry sector to the economy approximates that of the service sector while ours is skewed to the latter. It is fundamental in economics and in business that to be able to aggressively drive revenues (or GDP in the case of a nation) one must play in the bigger market. But given our cacique orientation our success model is to lord it over in a small market. Of course, 90+ million Filipinos is not exactly a small market. All we want is to be ahead of our next door neighbor? Where is the sense of nationhood or community? Where is national pride?

There is light at the end of the tunnel given our stepped up infrastructure building? But as Spain, Portugal and Greece – which benefited from the EU infrastructure program – have realized, there is more to a nation’s economic wellbeing. And it is the imperative to generate greater economic output, e.g., the ability to develop products that will find a bigger market because they are innovative and competitive. Unfortunately, our stratified mindset says that we aren't capable of innovation and competition? And so we must be an island unto ourselves and preserve the status quo? And this mismatch against the reality of the globalized 21st century world will only get worse not better – us with our backward-looking instinct; and the rest of the world consciously opting to be forward-looking!

Friday, June 8, 2012

The US has one Jamie Dimon; we have 24 senators

Tempers apparently were running high when global bankers met in Washington over the weekend. According to the Financial Times, Jamie Dimon of JPMorgan Chase launched a tirade at Mark Carney, Bank of Canada governor, in a closed-door meeting in front of more than two dozen bankers and finance officials. Mr. Dimon’s beef was new capital rules . . . which he calls “anti-American,” and says discriminate against U.S. banks.” [Financial Post, 26th Sept 2011]

The honeymoon is over. “JPMorgan's $2 billion loss: Time to fire CEO Jamie Dimon? [The Week, 14th May 2012]. The nation's largest bank is scrambling to contain the fallout from a risky bet gone wrong, but some say the purge has to start at the top.” Dimon was likened to a “rock star” at the height of Wall Street’s implosion and especially after his bank absorbed a couple of failed financial institutions. But Americans saw it coming as Dimon aggressively led the fight against tighter bank regulations, and even invoked American patriotism.

Sounds familiar? Aren’t some of our legislators invoking Philippine sovereignty given that the international community is on our case re money laundering? And we wonder why our credibility is suspect? In the land that is synonymous to freedom, tax payers are reminded especially at tax time that . . . “The Bank Secrecy Act of 1970 (otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities.” [Wikipedia]

Writes David Brooks of NY Times, 17th May 2012: “. . . The democracies in Europe and the United States were based on a . . . carefully balanced view of human nature: People are naturally selfish and need watching. But democratic self-government is possible because we’re smart enough to design structures to police that selfishness.” But in our cacique environment, we don’t entertain “any threats to our power.” We can be above all else, including the misery of Juan de la Cruz.

And so while the country and the economy is suffering due to inadequate and costly power, we can have a handful laughing their way to the bank. “Since 2003, two-thirds of foreign investments in infrastructure have gone to Vietnam, and the Philippines was getting “change” compared to the amount of trade investments coming into Asia and the rest of the Asean nations . . . One of the major reasons for the lack of trade investments is the lack of power or inexpensive power sources.” [Phl joins list of Next 11 Emerging Markets, The Philippine Star; 17th May 2012.] We can’t just watch the tail wagging the dog. The administration must, indeed, be front and center exercising stepped up leadership given the depth and breadth of this challenge – which, sadly, is a national debacle . . . and a disgrace!

Unsurprisingly, “The senators, particularly Sen. Joker Arroyo, have raised concerns over the ease with which Morales was able to secure Corona’s bank records from the Anti-Money Laundering Council (AMLC) . . . The Senate impeachment court, led by Senate President Juan Ponce Enrile, admitted the AMLC records as evidence . . . “Senate Majority Leader Vicente Sotto III said the administration or whoever is in power might use the Office of the Ombudsman or the AMLC to harass or destroy its political enemies;” Senators cite need to amend anti-money laundering law; The Philippine Star, 17th May 2012.

And so our senators find laws like anti-money laundering incredulous? When is engaging in “ordinary and reasonable” banking transactions a concern? Our senators are not like errant drivers calling traffic cops names – because law-abiding citizens accept them as part and parcel of civilized societies? It is what the rule of law is about – and our incredulity confirms why we rate poorly in governance? And we wonder why we’re underdeveloped? Try banana republic . . .  

Monday, June 4, 2012

Translating a road map into a sustainable undertaking

It is noteworthy that “the leadership at PCAARRD (Philippine Council for Agriculture, Aquatic, and Natural Resources Research and Development) . . . has decided to take on the challenge of building the needed realism into their work and requested the Management Association of the Philippines (MAP) and its partner organizations to . . . familiarize them with the systems used by businesses in assessing market potential and feasibility; appropriate product and process costing; agribusiness value chains and webs; and national innovation systems,” writes Mario Antonio G. Lopez, Business World, 14th May 2012.

The writer remembers – from a few years back – his Eastern European friends wondering why he didn’t appear overly excited about the teambuilding workshop they wanted to conduct. And the Business World article would capture what similarly was going in the writer’s mind: “In quite a number of cases in the past years, it is apparent to many who have been part of, or observed, PCAARRD activities that different R&D activities conducted by members of the consortia more often than not do not take conscious account of the market implications and links of the studies they conduct. If and when they do, the bases they have for asserting "marketability" and/or "profitability" are questionable.” (Similarly, a teambuilding workshop, as an activity, must be reinforced in the work setting by the requisite work processes so that the outcome is greater than the parts – i.e., synergy. For example, the organization must be able to succinctly define its “nirvana” – i.e., “starts with the end in view” – to which individuals are committed and are thus single-minded, not at cross-purposes.)

And the writer’s friends have since understood what being “activity-driven” means. And it is the consequence of linear thinking – or building from the ground up instead of “starting with the end in view.” And hence the title of this blog: Translating a road map into a sustainable undertaking. The Department of Agriculture has developed a road map that would make us a major international player in aquaculture, for example, and the challenge is to translate that road map into a sustainable economic undertaking. It is not about embarking on an undertaking . . . but rather sustaining the undertaking. 

And this latest initiative by PCAARRD to overcome the hurdles of marketability and profitability is a step in the right direction. An undertaking is sustainable when the output is marketable and profitable – which means that the cycle of production and marketing is uninterrupted – recognizing that in today’s world the marketplace is global and so is the competition. And as the article stressed: “To be sure, many have a thorough understanding of the more limited sector or sub-sector understanding of the specific businesses they are in, but these are precisely what they are -- sector-limited, parochial views of the nature of their direct businesses . . . Even our government officials are often no better in their "world views” . . . [M]any other shortcomings have hampered the ability of our country to become competitive in these sectors, thus subjecting us to the onslaught of much cheaper commodities we could easily have produced and exported ourselves.”

Good enough is never good enough. We have to keep raising the bar: “the end point” has to be that our output is unmistakably competitive that we are able to capture overseas markets. We can’t be shortsighted – isolating ourselves from the rest of the world – and claim patriotism. Winning in the global market arena – and generating greater economic output – is what patriotism ought to be. We may not be globally competitive today – and we will never be if we keep the market to ourselves and set such a low bar. Because competitiveness is a skill-set that is developed as our neighbors have demonstrated. Taking for granted that we are incapable of developing – like we’re merely the “little brown brothers” – is reflective of our stratified mindset where people are pigeon-holed akin to a caste system. And which, unwittingly, is why we remain wedded to our cacique system and structure. We can only create what we think and until we get the mindset right we can only expect more of the same! [The writer’s Eastern European friends could still lapse into missing the power of the mindset. And as one explained: “There was a time when “the idea of a bright future” was totally alien; and “a sense of resignation” reigned.”]

Saturday, June 2, 2012

Incompetence can’t be our brand

It took 10 years for the LRTA’s train of impunity to finally run toward Cavite. Surely, international players in the urban rail industry, including investors who sit on trillions of dollars, are waiting to see whether or not the DOTC will implement the project using a truly competitive and transparent model,” writes Neal H. Cruz, Philippine Daily Inquirer, May 13th, 2012; Why LRTA is losing too much money.

I wrote some months ago about my own experience of a delayed flight to Cebu because of NAIA’s runway congestion . . . Secretary Mar Roxas said that the commercial airlines operating in NAIA have doubled to 119 compared to only 62 in 2008,” adds former senator Atty. Rene Espina, Manila Bulletin, May 13, 2012. “. . . [W]e are dragging our feet, reports Business Mirror, 2nd May 2012. The upgrading of airport facilities, a project targeted for completion February 2007 is now moved to June 2013”!

Those news reports are a microcosm of our reality – and it isn’t promising given we’ve already lost this generation to underdevelopment. It is very similar to what the writer saw when he first arrived in Eastern Europe. And we have already seen how country after country in the region has gone ahead of us – “que sera, sera”? The only difference is today President Aquino is personally leading the fight against corruption, but for the rest of us it’s business as usual – while rationalizing the inefficiencies and incompetence in our midst? As the writer’s Eastern European friends have realized: “We can’t get to our destination no matter how much we want to if we are driving a car with a punctured gas tank”! And that is exactly what we are doing with “a little inefficiency here” and “a little incompetence there.” The free market is a highly competitive arena and competition can come from anywhere. To say we were blindsided doesn’t change the outcome, if it is one of failure. Throwing efforts against problems incessantly doesn’t mean we are being efficient and competent. For decades we’ve been caught in the “activity trap” – going round in circles – and that is exactly how and why undertakings fail!

Well traveled as we are, it is not lost to Pinoys that the one thing that generally differentiates a developed from an underdeveloped economy is infrastructure. And the writer’s Eastern European friends have realized why before they were formally accepted into the EU, the EU committed on upgrading their country’s infrastructure. It is no different from how the US developed after WWII following Eisenhower’s efforts to build the US highway system. And Europeans saw it again happen with Spain and Portugal in the early days of the EU. But infrastructure has both hard and soft elements. And among the soft elements is product development. Infrastructure will pave the way for efficiency but revenues will only come from tangible products. (Unfortunately, we’re still wedded to the primitive ways of political patronage and rent-seeking! To add insult to injury, we hide behind the mantel of nationalism; like we hide behind the law to trample truth and justice!)

And as the writer’s friends moved into other businesses, they realized the imperative to move beyond “economy [or cheap] brands” – because they couldn’t compete beyond the local market if their only ammunition was pricing. And it meant they had to import technology and knowledge and invest in the state-of-the-art. And the new mindset allowed them to stretch their thinking about the business, the market and the world. And that bigger thinking would raise their ability and confidence to compete head-to-head with global behemoths.

Why is the Philippines uncompetitive? Because we have accepted as a given a very narrow view of the world – i.e., to keep the market to ourselves. And with an economy driven by OFW remittances and the “big boys” we have truly kept the market to ourselves. In contrast, a broad-based economy that is committed, beyond investment, to technology and innovation would put us in good stead to capture overseas markets ourselves. Our inward-looking bias meanwhile lends itself to political patronage and its resulting inefficiencies and incompetence – thus reinforcing our economic backwardness. And so despite paying CNN loads of money to project our supposed brand, they still aired the other half of the story. Of course, in our parochial confines we have ways to manage news!