Thursday, August 16, 2012

A purposeful enterprise

Spain has not gotten itself off the headlines. And Greece, Italy and Spain have in fact been hugging the news for some time now. A plane has finally reached the ghost airport of Castellón, in southeastern Spain. [NY Times, 18th Jul 2012] Rather than sitting on the runway, however, the aircraft, an aluminum model, was placed this week atop a giant statue along the entrance road to the airport — another twist in the tale of a $183 million project that has become a symbol of the wasteful spending that has sunk Spain deep into a recession and a banking crisis. The statue, 79 feet tall and budgeted at $375,000, was supposed to honor Carlos Fabra, the longstanding head of Castellón’s provincial government and the driving force behind the airport project. As part of a decade-long construction and housing boom, Spain added airports, toll roads and railway lines, often under pressure from regional politicians seeking a greater presence within the national transport network. Many of the recently built highways are now deserted, and only one-fifth of Spain’s airports made a profit last year.”

Sounds familiar given that many of our rural airports in the Philippines are white elephants? Human nature constantly takes the imperative of “purposeful enterprise” for granted; and so even in the private sector, supposedly more disciplined, including globally competitive enterprises, the failing is commonplace. “Johnson & Johnson has fallen behind its peers "in our view due in large part to underinvestment … and a lack of focus on the specific needs of each business," reports USA Today, 18th Jul 2012. And from Bloomberg, 17th July, “Procter & Gamble’s 5-year performance has trailed each of their main competitors . . . For the better part of the decade the better performers have been those with more focus . . .

51 party-list representatives are millionaires,” Inquirer News, 19th Jul 2012. “The Commission on Elections should not allow millionaires to sit as party-list representatives in Congress as this is tantamount to depriving underprivileged Filipinos of the right to be heard in the legislature . . .”

In the private sector it is well understood that critical mass is fundamental because it is crucial to viability. And the converse is: absent critical mass the undertaking is a non-starter. Machiavelli understood it well – thus divide and conquer. And we are always reminded of this fundamental truth in the story of the loaves and fishes. But whether it is compassion or its opposites like vanity or greed, human nature would almost always defy it.

Is purposeful enterprise on the radar screen of Juan de la Cruz? Unfortunately, despite scarcity of resources, we seem to value paternalism more – which explains what President Ramos calls our "crab mentality"? But we see it as a positive because it comes from our compassionate nature? Yet it undercuts political maturity and, conversely, reinforces our cacique system and structure, manifested in arguably the shortsightedness of major initiatives, i.e., land reform, party-list representation, a distorted wage index that overvalues unskilled work, etc.? Have we unwittingly embedded Machiavelli in our system or is it socialism? Or is dynamism simply non-existent in a cacique environment?

If the failure of the West has been brought about by "financial engineering" and evidenced in the Great Recession, our failure has been brought about by "social engineering" and demonstrated in our elevated and long-standing poverty? Unfortunately, we sincerely believe that social engineering is the solution to poverty when our poverty – unlike what they have in the US – is a consequence of underdevelopment. Of course, Juan de la Cruz who can't put body and soul together has a more urgent need for survival. And that is precisely why leadership matters. And beyond leadership, we need more altruism, not paternalism.

A purposeful enterprise seems elusive to Juan de la Cruz? Yet our history says our forebears were more sophisticated than that. For example, they understood and embraced the imperative of international trade (i.e., with China’s Song Dynasty and Brunei, among others) even before Magellan came. And so beyond tourism and gambling, we must reach out to the world for technology- and innovation-driven investments, develop our infrastructure, agribusiness and manufacturing and logistics, and sustain a competitive economy – a requisite in the 21st century. It's what dynamism is about.

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