Tuesday, November 20, 2012

The self-actualized Juan de la Cruz

Is the status quo in fact our be-all and end-all because it serves our purpose? And that we weathered the Great Recession while the rest of the world tripped? More so since we believe that our faith holds the keys to heaven? Yet the status quo is also the reality of hapless Juan de la Cruz who can’t call the shots? [Thousands of miles away, while sitting through 2013 budget reviews, it wasn’t surprising that some of my Eastern European friends would reveal their inability to visualize the future – given their dark past – even when many of them have already benefited from the continuing education their leadership has put them through.]

But back to PHL: The good news is global finance types are talking about us as the next tiger, thanks to "daang matuwid.” Yet we ought to be circumspect given how they also saw Russia as part of BRIC, the supposed tigers? People in this part of the world who know what Russia is like take that BRIC label with a grain of salt. Russia is still very much driven by oil and Putin, and when oil is over $100 they are prosperous, and Putin is a hero – but not to the protesters in Red Square. What about PHL? Indeed we must be circumspect about being the next tiger. Fortunately we have "daang matuwid" instead of a Putin. Yet we can't take the status quo as our ticket to truly becoming a tiger, precisely why we needed "daang matuwid." We can't be like a house that is built upon the sand? And our elders drilled into us what that meant. In the hierarchy of needs, for example, they preached that we must recognize that a roof over our head comes before a car. [And which my wife repeated to our daughter after she got her driver’s license and thus had to make do with what was available in the garage, going against the American convention.] Of course in the modern era that has been supplanted by the credit culture peddled by bankers . . . until the bubble burst and plunged the world into the Great Recession. And my Eastern European friends would remind themselves that indeed there are risks in being roped into the credit culture of the West – as they witnessed how a property boom could turn into a bust.

But bad credit comes in different forms. And the Dutch have become the classic example of what is now known as the Dutch disease. And the best way to explain that is our OFW remittances have kept our consumption-economy humming; and we think its manna from heaven. And this has been reinforced by our half-a-dozen dominant entities that continue to prosper principally due to these remittances – and the simple arithmetic is reflected in our local economy being more than twice our export receipts. And we’re proud of it, making it our Dutch disease?

And that house upon the sand becomes glaring given the absence of something as fundamental as basic infrastructure. Add to that the absence of an industrial base of strategic industries that have a greater multiplier effect than our consumption-driven economy. And because our export history is one of third-party contracting, the sad reality is innovation – which directly impacts competitiveness – is a major gap in our capability as an economy and as a nation. And we gloss over this reality and look at an economy either as consumption- or export-driven. While nations that are steeped in innovation and competitiveness generate greater wealth; and why international agencies are preaching innovation and competitiveness especially to developing countries. On the other hand we like to think that our handful of dominant enterprises are great models failing to recognize that they are such not because of innovation and competitiveness but rather in our parochial society they are dominant in a market that is fairly large – of 100 million consumers. And thus we've remained poverty-stricken. To be parochial, as the last 50 years bear witness, can't make us a developed economy or raise our per capita output 10-fold. Meanwhile our neighbors who took the outward and global view developed their competitiveness and simply left us behind. 

And which brings us to the status quo, which in this day and age is not what we must preserve? What we need is to build our house upon a rock, one that has its basic infrastructure in place as well as its strategic industries that are sustained by continuing investments and innovation. We have no choice but to learn the ropes and move up the learning curve. We can't be an island unto ourselves, especially as we discourage foreign investors, the surest way to perpetuate hierarchy and oligarchy (and turn back the hands of time) like they do in Russia.

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