Monday, August 20, 2012

Prioritize and focus

To be inclusive meant that President Aquino had to recite a laundry list of accomplishments in his 3rd state of the nation address? That is not to undervalue the successes of the administration yet it brings to mind the scribes and the Pharisees, who were admonished to focus on the Great Commandment, notwithstanding the 300 tenets they knew by heart. But the president is expected to satisfy each and every constituency, not to mention the pet ideas and projects of favorite government and industry players – and other thought leaders. And not surprisingly the SONA had to be long.

Still, the administration is on the right track, but should consider moving beyond plucking the low-hanging fruit. For example, beyond celebrating the express interest from foreign investors, we must seek to be a competitive economy. Thus, we must get the basics right like yesterday – e.g., infrastructure, agribusiness, manufacturing and logistics – via technology- and innovation-driven investments. As one senator noted, foreign investors have been raising the issue of power – the kind of disaster that will haunt us when we unwittingly outsmart ourselves (e.g., doing an exhaustive analysis ought not to freeze us into inaction) and are deferential to oligarchy?

Likewise, it would not be enough to say that the restrictive economic provisions of the constitution are not a priority. The rule of thumb in benchmarking is to identify the positive and the negative elements (and how we measure against benchmark countries) and to prioritize and fix those that are the major barriers. In short, the administration, if it is to successfully engage Juan de la Cruz in the efforts to drive the economy, must put that up for the latter to appreciate the Philippine challenge, and thus get his buy-in. That is what transparency is about; it is not some esoteric notion. Put another way, we can’t be patronizing to Juan de la Cruz, which is at the root of our inability to develop political maturity? [It brings to mind an old best seller, “I’m OK, you’re OK.”]

The administration would also need to explain to Juan de la Cruz that our economic frailty comes from underdevelopment, or as President Ramos described it, "The pie is too small." There is not enough to go around; and indeed it is glaring when we put our GDP per person side-by-side with those of our neighbors. And as Clinton would put it, "It's the economy, stupid"! Ergo: We’re not making a dent on poverty because we’re not hitting the nail on the head; not even with high-profile initiatives like land reform, pushing a living wage (which has made us uncompetitive by overvaluing unskilled work) or the party-list representation, supposedly to give the poor a voice in the legislature.

The writer's Eastern European friends shared some long-held thoughts recently as he was preparing for his summer break back to New York: “Competitive advantage does not come from selling cheap products but from products that the consumer values.” [And Maslow captured it in his hierarchy of human needs.] "Your margin focus totally changed us; we became more dynamic.” They were selling cheap until they saw the risk to their viability. “We must get to the next level. We know we’re doing something right – that we can sell our products – but there is something we are missing. Don’t just tell us what we’re doing right; please tell us what we’re doing wrong.” They professed to want change yet struggled to confront the need to reinvent themselves. On the other hand Juan de la Cruz would be quick to say, “alam ko na iyan”! – “I know that already”! Is it why we’ve mismanaged our economy for decades?

And when the writer gets back from his holiday, they’ve already organized a series of classroom sessions. They want to revisit one imperative: to be faithful to the fundamentals – and the mechanics – of the business, which they have heard and espoused over the last 10 years; and have hurt Western global behemoths in markets where they compete. But they also know that sustaining competitiveness is 24/7, i.e., dynamism has become instinctive to them. And these are ex-socialists, used to getting their daily ration of bread and vegetables and were told how great their life was! Unfortunately, as a Filipino friend says, “we can’t change our culture.” That will only ensure that the next generation would be in the same boat?

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