Saturday, November 17, 2012

An escalator to the moon

There was none . . . yet Kennedy driven by the risk of giving the Soviets the confidence that could have led to greater adventurism on the part of Khrushchev set for the Americans a commitment to get man on the moon within a decade. The reality was even the scientists were uncertain how it would be done.

The Eastern European representative of US AID on the ground was selling me the idea of coming back after my one month commitment; and it so happened it was the US Thanksgiving Day and there was a celebration in the office for the handful of American consultants, including myself. [To the Eastern Europeans I am "Amerikanska," and spoken in Russian-like accent.] And one guy said he was jealous because he was not being asked. I took it as a joke: "Vensi, there, he just solved your problem." That night the Americans and their spouses celebrated Thanksgiving in a fancy restaurant that later on we would learn was not recommended for expatriates – to be expected of na├»ve Americans! The buzz was it was the favorite of the "local mafia" – former communist commissars that had controlled the transition to free market and taken over major industries like power, telecommunications, media and the like. Sounds familiar?

"We need to rapidly develop our fledgling enterprises especially because in 5 years we expect to be in the EU, but even today MNCs have already set up shop in this country. They will eat our lunch. And in your industry there is this one company that I believe has the best chance to successfully compete against foreign companies. They are begging if you'd give them a few minutes to present themselves. They asked me to have you try some of their products.” And as they say, the rest is history. But the point to make is that these people had no clue what they had to do other than the aspiration to succeed in a globalized world.

It's been well over a decade since the Ramos administration had to first deal with our nagging power issue. And we are in a better position that Kennedy was simply because power generation is not an unknown challenge. But it requires a Kennedy-like mindset. For example, we have to think outside the box, literally outside the Philippines and put out a project brief, something like: “From the outside one would see a market of 100 million consumers. Given this market size and the population and economic growth rates and per capita GDP, how would the market look like in 10, 20 or 30 years? Given those fundamental parameters as well as the characteristics of an archipelago and the distribution of the population and commerce and industry, what is the ideal energy mix that this country should have? They must deliver sustainable power supply as well as competitive rates, the object being to spawn other economic activity, i.e., attract foreign investments and pave the way for the establishment of strategic industries and beyond. What will the transition scenario be like from a supply and rates standpoint? More importantly, where are we, where must we be and how shall we get there?

Assuming a globally respected energy enterprise with a track record of success globally is presented this market, will they find it attractive? Only capable global entities will be prequalified to pursue the project; they can partner with local players when the latter’s facility or facilities fit the overall project design and objectives and thus would satisfy the supply and rates parameters envisaged. And they must spell out the mechanisms that will be put in place to ensure failure is not an option. Given the risk of cronyism and corruption, what is the ideal mechanism that will ensure a best-practice project management model? How can the process be made transparent including creating a totally independent project management team that will report to an oversight body (headed by a Warren Buffett-type) that will in turn be responsible to the Philippine leadership: the president, the energy secretary and the cabinet's economic cluster? How will the project managers interact with the relevant government agencies, the public at large, etc.? What communication mechanism must be in place so that there is absolute transparency; and what safeguards must be in place to ensure efficiency throughout the process and until project completion?”

Imagine Juan de la Cruz is putting a man on the moon; failure is not an option! It’s not about me and myself!

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