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!

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