Sunday, November 11, 2012

Peace Accord

The Mindanao peace accord is a confirmation that “daang matuwid” will move us forward as a nation. Still we must be guardedly optimistic especially when individuals and/or parties remain skeptical if not opposed. And the administration would do a world of good to keep them engaged. Deep-seated concerns don’t just go away. And personal interests could indeed derail collective progress. But sincere efforts to engage disgruntled elements would minimize if not eliminate the downsides.

Transition efforts no matter how sincere would take some doing as experienced by Eastern Europe where to some it is taking a lifetime. But still we can’t afford not to capitalize on the Mindanao peace accord. People, like consumers, can’t be fooled. For example, “daang matuwid” must come down to the barangay level. Nature is hierarchical and why local bosses come about. It takes the civilized man to overcome nature’s hierarchy. (And why the late Cardinal Carlo Maria Martini was critical of the Vatican, being 200 years out of date.) In Eastern Europe to be tsar-like is rewardingly intoxicating. And in the US we have our “hot dogs”!

But hot dogs don’t necessarily build a culture of innovation, which is what the 21st century world is about. For instance, how does the West overcome the loss of manufacturing to China? The US cannot simply harp on their history of successes. And unfortunately financial engineering is not the way to go. Many years ago when derivatives first hit a bad patch it became clear that creating tangible value is key, not some mirage or financial mambo-jumbo. And later on the Eastern Europeans, after the initial euphoria with the stock market, had to learn that the stock market ought to be founded on enterprises that create value. And in the small countries in Europe the bias must be to become regional if not global players. This was on top of going through a property boom that went bust.

The good thing is their country’s leadership is accelerating infrastructure development while attracting technology enterprises from the West to make them a regional hub. And to their credit, they have built a modern airport with the requisite fly-over access to the main avenue and the city center; and the new subway system is well on its way to completion. They have the highway network to their seaside which attracts loads of tourists from the West practically done, and they are busily – in a more accelerated fashion – working on the highway to the border in the south that will ease travel to their mountains. They attract skiers from the West. This is the kind of mindset we can use in Mindanao and beyond especially the discipline . . . to prioritize.

Yet my Eastern European friends can’t ignore the imperative of creating a culture of innovation – beyond being activity-driven they must attain that desired state. Technology is a great leg to develop yet the object is the ability to create tangible products. Fortunately they’ve already overcome the first hurdle by looking beyond cheap products their compatriots could afford – which they realized had dictated their inward-looking bias. [And which we Filipinos have yet to realize: low-priced products may generate volumes and yield margins but the greater benefit from innovation comes in higher valued-added products that will find a broader international market and spawn corollary industries locally thus realize their multiplier effect.] And they’ve become globally competitive, developing across their four businesses products for a wider world. And with Asia a new addition to their geography, erecting facilities there is on the drawing board. But the excitement comes in the thinking and the discipline that undergirds the pursuit of the next generation of products. Instead of creating hot dogs they’ve created cross-functional teams that are moving up the learning curve developing higher value-added products, not by chance but via a virtuous cycle.

These people went though very tough times, and our folks in Mindanao could say something similar, and many are still pessimistic. And both need forward-looking leaders that will lead them away from primitive times and into the civilized age, where value-creation or innovation is rewarded, not hierarchy – because of its attendant poverty.

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