Saturday, December 29, 2012

A New Year’s wish

It is not self-flagellation that we need but what about an honest-to-goodness "examination of conscience” – if we are to turn over a new leaf? But aren't we being Christian-like precisely when we aspire to be "inclusive"? Whether it was the Baltimore Catechism or our prayer group that started us in our faith journey, it is common knowledge that even the Creator had to prioritize? And "to prioritize" is something we take for granted and consequently, "to focus" is missing likewise?

We joke about it but if we pause for a moment to figure out why economic development-wise we lag at least a generation, we may want to ask ourselves if "crab mentality" will help explain why we can't build and operate an international airport, for example, when practically every other nation has done it. And if we add our energy conundrum and how much we have outgrown our infrastructure in general and thus putting a strain on the environment and, not surprisingly, the elevated incidence of respiratory-related diseases, among others, the picture isn’t pretty.

And “pwede na ‘yan” isn’t the answer given that these are not brand new but rather an accumulation of shortcomings – and a manifestation of a structural weakness – and not surprisingly would require at least a generation to tackle? And that assumes we shall grow the economy at a consistent 7% annually. And as a senator reminded us, the question is, can we sustain it? We may be celebrating the recent fate of the BRIC countries (once favored by Wall Street) yet what goes around comes around. And precisely, these countries have had their own structural shortfalls that made those rosy predictions come to naught.

A recent Harvard Business Review article (Accelerate, John P. Kotter, Nov 2012) presents a model on how enterprises can cope in today's dynamic world and thus be on their feet. Yet to globally competitive companies the model is not new because it is simply fundamental. But what higher learning does is translate real-world solutions into a body of knowledge and present it as a model.

Kotter spells out the challenge of an enterprise as follows: “Perhaps the greatest challenge business leaders face today is how to stay competitive amid constant turbulence and disruption." And he calls his model the “Eight Accelerators”: (1) Create a sense of urgency around a single big opportunity; (2) Build and maintain a guiding coalition: (3) Formulate a strategic vision and develop change initiatives designed to capitalize on the big opportunity; (4) Communicate the vision and the strategy to create buy-in and attract a growing volunteer army; (5) Accelerate movement toward the vision and the opportunity by ensuring that the network removes barriers; (6) Celebrate visible, significant short-term wins; (7) Never let up. Keep learning from experience. Don’t declare victory too soon; (8) Institutionalize strategic changes in the culture.”

Not surprisingly, for example, Clinton translated his "It's the economy, stupid" into the "single big opportunity" of balancing the budget – because it’s simply fundamental? But we Pinoys struggle to prioritize and thus are unable to internalize the Pareto principle or the 80-20 rule? How can we focus on what matters and will give us the big and quick wins if to be “inclusive” is our overarching value – and unwittingly fall prey to crab mentality?

There is a "black hole" between plans that read right on paper and plans that are successfully executed that enterprises learn about from experience – i.e., "portfolio management" is a given. Every time there are a number of initiatives in a plan the 80-20 rule will most likely emerge. We need more than a New Year's resolution, we need to break the cycle – i.e., haven't we written great economic plans over the last 65 years or so?

And that is the New Year's wish we want to share with Juan de la Cruz.

Wednesday, December 26, 2012

A Christmas wish

If we have one wish for Juan de la Cruz, it is change. One recent Sunday my wife and I attended the noon mass at the Cathedral of St. Joseph in Sofia, Bulgaria. We had few options after missing the English mass, and knew it would be in Latin. While we admired the recently reconstructed church (a casualty of WW II), we knew it would be a struggle to follow the celebration despite our subconscious putting a sprinkling of Latin words in our mouth from those pre-Vatican II days. And on the flight back to New York I happened to read an article about the growing number of churches reverting back to Latin. Didn't we say it was a dead language? But the article tried to provoke: Are Catholics recognizing that Vatican II was a catastrophic mistake?

Indeed the human instinct is resistant to change. Even globally competitive enterprises invested in "managing change" have realized that change, including those from bad to good, brought upheaval. And it holds true in the Vatican as well – where among the cardinals there is dissension too. The debate goes: if the church is committed to engage the "People of God," it ought to keep them truly engaged? How could one ignorant of the language be engaged in the mass, for example, even when the Eucharistic celebration is central to our faith? Blind obedience nurtures subservience, not faith – or character? Moreover, faith and institution are not one and the same? Which explains why despite errant church administrators the faithful remain faithful? Yet there remains a discomfort about change given the changes Vatican II has brought about that many are fearful of? And which is why the curia struggles to address change?

And similarly, the upheaval that accompanies change explains why we struggle to address change even when we acknowledge that we must – or why CCT is such an important piece of the national budget, for instance? And so we want to raise our competitiveness to give us a shot at lifting our economy? And indeed we're doing it in a prudent manner; yet it hasn't spared us of being witness to the ups and downs of our periodic rankings. And thoroughly addressing the individual yardsticks makes sense except that while we are going through our own exercises, other countries are not asleep.

How do we leapfrog our efforts? There must be a bigger or overarching value that we must aspire for not simply to raise our ratings in the various measures? What is the object of the exercise? Economic development is meant to move underdeveloped nations to developed-nation status. Clearly, there is a great distance between the two – and in our case that is at least a generation growing at a constant 7% annually – and thus there is a great chance of being lost along the way. Development like any undertaking demands investment. It is a journey that calls for time, talent and treasure as we know it in our faith journey. But what has been getting in our way?

Oligarchy and political lords both nationally and locally dominate our power structure and given our respect for hierarchy, we unwittingly are aiding and abetting the perpetuation of this sad reality? And have we misunderstood what “inclusive” meant? It is not synonymous to “crab mentality” or we shall keep repeating failings like land reform – which was bound to fail because it was not designed to be sustainable. Land as a resource must generate returns that are healthy in order to create a virtuous circle. It means, beyond distributing land, creating the requisite ecosystem. It is the lesson we learned from the “Parable of the Talents” – i.e., optimizing the returns from our God-given talents and resources means not being confined by boundaries, parochial or whatever else. And the converse, unfortunately, is oligarchic rule. And have we also misunderstood patriotism? Haven't the vulnerabilities inherent in poverty (while we've trampled on the environment) in fact exposed us to more and greater risks?

These are indeed great obstacles yet we have the God-given human spirit to rise above them. The challenge is for Juan de la Cruz to respond accordingly. And thus our wish is change and . . . a blessed Christmas and New Year to one and all!

Saturday, December 22, 2012

Hopefully within our lifetime

A highly respected journalist reacting to the book I recently published (Learning to Reinvent Ourselves: How to Make the Philippines a Winner in the 21st Century) sounded hopeful but not exactly confident that PHL would in fact be able to right itself within our lifetime. How could we have taken such an uncertain path? Is it simply because we are in denial? Is it because of intellectual arrogance – as an educator-friend would opine? Is it because the status quo is so rewarding to the establishment – where we all belong save Juan de la Cruz? Or is it because we are a soft- and leader-dependent culture but our string of leaders haven’t crafted and articulated a vision for Juan de la Cruz? True leadership is credible and crafts and articulates a vision that the population in turn would embrace. When the way forward is crystal clear, people are able to demonstrate unequivocal commitment.

Can we, say, over the last half century, point to visionary leadership that articulated the future such that we in turn demonstrated an unequivocal commitment? Our claim to fame remains our OFW remittances and our rising foreign exchange reserves – and they serve a very narrow slice of the economy. Of course, those in financial services are cheering, but these are the same cheerleaders with eggs in their faces when the credit bubble burst? The axiom: money is not an automatic value-creator unless it is efficiently employed to add value – as in the parable of the talents. Still we are proud of our consumption-driven economy especially when the rest of the world has had a recession. Sadly, we’re far removed from the realities of the 21st century world where economic success or failure is measured by innovation and competitiveness – the true value-creator. China and Germany have been urged to push consumption but we aren’t like them, and don’t share their profiles. China is a low-tier GDP per capita nation but with over a billion people the aggregate economy is humongous. And Germany, while a lot smaller population-wise, has a GDP per capita in the top-tier. PHL has neither characteristic and so we should instead be benchmarking against our neighbors – poor nations once but have successfully elevated their economies. But we remain overly proud to accept the slightest imperfection? Or are we simply unable to step up to the plate – i.e., what we sorely need is investment and technology, full stop!

We may have a robust BPO industry and our handful of billionaires have made it to the Forbes wealthiest. And we may be enamored by our tourism campaign despite the deficiencies in our infrastructure. But the rest of the world has already moved ahead and in pursuit of the spoils they anticipate with the dawning of the Asian century. And we risk being swallowed by the competition if our best response to the 21st century world is our inherent fatalism and/or the oblique way (half-baked or “medya-medya” in the vernacular?) we employ to face our challenges? Incremental thinking – and gains – may be good enough for Juan de la Cruz but that won’t suffice in this day and age.

Thankfully President Aquino’s “daang matuwid” has grabbed the attention of the world community, and that is the good news. The challenge we still face is: what is the vision for PHL and how crystal clear is that to Juan de la Cruz so that he would then demonstrate an unequivocal commitment? We are trumpeting that we are open for business yet our actuations continue to confound foreign investment. Which priority industries are we supporting without equivocation? How do we expect to push over 50 industry road maps, for example? Are we unwittingly setting ourselves up to sub-optimized outcomes and compromises (e.g., with vested interests) if not corruption? Our definition of “inclusive” cannot undo the realities of Pareto’s econometric model. There is a continuing body of knowledge behind the principle, also known as “vital few.” The New York Times magazine (on 11 Nov 2012) featured the Spanish global retailer, Zara, explaining how it grew into the largest fashion retailer. Zara is about driving “fast fashion,” meaning a relatively few contemporary styles that move fast off the shelf.

Of course, beyond Pareto, there are success levers that must be present in the pursuit of critical undertakings: the product or service itself and the other elements of the communication mix, the resource mix and the execution mix (who will do what, when, where and how.) It is not about intellectual arrogance and complexity, but simplicity!

Monday, December 17, 2012

Developing a subculture

A British culture-management consultant was comparing notes as she was preparing for her workshop with a North American company for its team in Eastern Europe, which also had folks from Africa. MNCs are able to operate across cultures and markets because it is able to create a subculture – and it supports the conventional wisdom that necessity is the mother of invention? From within an MNC the perspective could be that simple yet from the outside it could be overly complex? For example, in the Philippines we’ve had a love-hate relationship with MNCs and expatriates? And that reality is reflected in the World Bank’s metric re “ease of doing business” – i.e., we rank number 138 behind our neighbors Vietnam (99) and Cambodia (133) as well as Indonesia (128), China (91) and India (132). Indeed we are fortified against the outside world, reminiscent of the old walled city of Intramuros? While quantitative analyses may say we are still a better choice for businesses than India, Vietnam and Cambodia, the prognosis may not hold true over the longer term. That is, if we remain unwelcoming of outsiders and fail to recognize that our inherent parochialism (which preserves our cherished hierarchical structure) won’t propel PHL to become a developed economy.

And while we’re preoccupied with our inward-looking worldview, the rest of the world is moving forward. After apologizing for being on the phone, a Bulgaria taxi driver explained what was going on: “Our Company wants to distinguish itself from everyone else in the business and so whenever I notice something that is undermining the effort, I offer ideas. I work directly with clients and they tell me what works and what doesn’t. We charge more than others yet Carrefour (the French hypermarket chain) signed a contract with us and we are the only taxi company allowed in their taxi stand. And we are in the process of signing up more firms like hotels. And so I was telling the dispatcher that the game is very simple and we must always be defined and perceived as the better choice, like no other.” This man was born and raised under communist rule – and ten years ago that was obvious from their crumbling infrastructure . . . and even beyond, especially in their “mentality” as my friends would explain.

The British consultant was discussing a culture-management conference in Tallinn, Estonia in the fall of 2013, and we were considering presenting our Eastern European experience. And if we do, I would talk about this taxi company and my Bulgarian friends. [Beyond the recognition as one of Europe’s best and fastest growing companies, they were feted on 6th December 2012 by the European Excellence Awards for a recent multi-country product launch alongside global brands Braun and Axe.] Thus it shouldn’t be surprising when I think about it, why in “ease of doing business” Bulgaria (66th) ranks ahead of the Philippines (138th). But should it prick a Pinoy’s ego?

I had always assumed that Bulgaria would rank worse than the Philippines given what I walked into ten years ago. And as my Bulgarian friends would relate, “Barbados, we found out, is not for us. It is perhaps British but definitely not Bulgarian.” They want something less organized and more rowdy. They have their version of Filipino time, for instance. They could create bottlenecks while driving – and thus can use basic road courtesy. And so it is amazing to me still that within its organization my friends have developed a subculture – of transparency, being vision-driven and focused and disciplined. It did not happen overnight. They struggled to migrate from their “Bulgarian culture” and “small-company” mentality. Indeed they were torn: they saw their initial successes as coming precisely from their culture and their entrepreneurial bias. But as the business grew, it became clear to them that the challenge has likewise grown beyond their comfort zone. They had to learn that an MNC, which they have become, as a matter of necessity, needed to create and articulate a subculture.

A business is an economic activity that must pass the test of time. And that is a universal need. It must be inclusive in the true sense (not our crab mentality), i.e., deliver benefits to an expanded and expanding clusters of constituencies beyond the short- and the medium-term and over the long-term. And world-class companies have demonstrated longevity beyond a strictly parochial setting. And they don’t have to be from the West; they could be once dirt-poor Eastern Europeans that are able to develop a subculture that has universal appeal. But is that asking too much of PHL?

Thursday, December 13, 2012


The JFC (Joint Foreign Chambers) are calling our attention for the nth time to our ambivalence re foreign investment. “During the 20 years since the important liberalizing reform of RA 6957, the Foreign Investments Act (1991) as amended by RA 8170 (1996), only two major changes have been made to the FINL (Foreign Invest Negative List): RA 8762, the Retail Trade Liberalization Act (2000) opening retail trade to foreign investors investing at least $2.5 million; and EO 158 (2010), the 8th FINL allowing 100% foreign equity in gambling in PEZA zones (by presidential proclamation).” [Manila Bulletin, 13th Nov 2012]

Is it about “Pinoy abilidad" – we open our economy some and keep it shut at the same time? Do these two measures (RA 8762 and EO 158) address the need of an underdeveloped economy – or that in fact they represent the investment policy that we badly need? Retail as an industry (is basically brick and mortar with practically nil value-added) generates 3% to 4% return versus manufacturing’s double digits. Ergo: where the multiplier effect or the economic reach is larger is obvious without even going through the arithmetic. And gambling is easy money but fraught with ethical issues . . . but not a problem: we see no evil, hear no evil and speak no evil? Or is the RH bill the greater evil? What about the inability to put to good use our God-given talents – and because of abject poverty poor Juan de la Cruz has long been dead in spirit? And how does gambling drive innovation and competitiveness – or retail, for that matter? And when we read that one of our largest conglomerates is yet to move beyond retail and demonstrate competitive advantage (and the others are in a similar boat?) that in fact tells us where we stand as a nation and as an economy: economic laggards yet rewarding to oligarchy that is laughing their way to the bank?

And the zarzuela goes on? “Flag carrier Philippine Airlines is in negotiations to acquire as much as a 50-percent equity in the national airline of the Cayman Islands in what could be the long-awaited solution to the downgraded aviation safety status that has hounded local carriers since 2008.” [Philippine Daily Inquirer, 13th Nov 2012.] It is not surprising that our largest enterprises mirror what we are: we side step a problem and then thump our chest because in the process we gain something even better?
All the Wal-Mart Moms, who never really understood that whole Cayman Islands bank account thing marking Romney not as the poster child for the 1 percent, but as the poster child for the .0001 percent of the 1 percent.” [Morris Daily Herald, 14th Nov 2012.] Cayman Islands are a red flag even to supposedly materialistic, greedy Americans! But do we recognize how circuitous a route we like to take instead of addressing our challenges head on? It’s the laws of physics! We can’t unwittingly water down the counterweight to a force especially when it is destructive. And it explains why we have become synonymous to sub-optimization? It is the kinder and gentler way of saying “synonymous to compromise” – ergo, corruption? And that is an inherent weakness we must address if we are to ever become a competitive economy – the direct way to address underdevelopment and thus poverty?

In the meantime, this is the kind of news we will wake up to in the morning: “Unemployment grew in the third quarter, the Social Weather Stations (SWS) said in a new report, reversing a steep fall seen three months earlier.” [Jobless rate up anew, Business Mirror, 15th Nov 2012.] “The latest rate of 29.4% -- recorded in an August survey and up from May’s 26.6% -- is equivalent to 11.7% jobless Filipinos."

It’s important to feel positive yet we can’t mirror a cellar-dwelling team taking for granted that they would get into the finals? No way Jose! Even the talented Lakers had to fire the coach!

Monday, December 10, 2012

Critical of the model that we love

When all is said and done, ours is a borrowed page: the US trickle-down economics? Admittedly there are aspects of it that we hate and those that we unwittingly love? The dichotomy wasn’t lost to Mahathir when he spoke at UST sometime ago. And in his case the one thing that he learned to love is their capacity to invest and bring technology. Simply, Mahathir urges us to discriminate instead of shooting ourselves in the foot? He dislikes the West, particularly George Soros who raided the ringgit, but he craves their wealth and technology . . . and can use them.

We inadvertently subscribe to US trickle-down economics and thus miss that the condescension – or American arrogance – that comes with unfettered free enterprise mirrors our cacique structure? We had the 1% anomaly even before Occupy Wall Street dreamt of it? The human condition, as in greed, travels with ease and so even Europeans, long critical of US-style capitalism, succumbed to it thus aiding and abetting the collapse of the global financial system? And worse, their banks were more vulnerable than US banks.

And it makes Mahathir truly prescient; and being a doctor it was not surprising given his training in cause and effect? We may not be unanimous about the role of government versus that of the private sector in economic development. But we ought to be more perturbed about our failure in power generation; we appear nonchalant because the private sector (or our favorite big boys) would do what is good for Juan de la Cruz? PSALM wallows in debt. Does that mean we’re getting closer or farther away from fixing our energy dilemma? Our neighbors, on the other hand, knew that government had to provide leadership in economic developed as exemplified by Singapore and Malaysia? And both Lee Kuan Yew and Mahathir bin Mohammad offered us unsolicited advice.

The problem with US trickle-down economics when applied to PHL is that we don’t have the infrastructure and the ecosystem of a developed economy like the US. And thus the flaws of their model don’t represent our own challenges. The issue of inclusiveness in a US environment versus ours is not the same. Our inclusiveness challenge is largely due to our underdevelopment. [Yet we have produced billionaires that have dominated our economy and thus its lopsidedness. And because of their influence – that could be owed as much to our acceptance if not embrace of a hierarchical structure – we have become party to protecting oligarchy via the closed economy that has characterized PHL and thus starved of foreign investment and technology.] We ought to be comparing ourselves to neighbors that were once poor like Thailand: they have appreciably reduced poverty simply because they are more developed than we are, i.e., their GDP per capita (at purchase price parity) is $9,500 against our $4,100. [And poverty to us means making less than one or two dollars a day. In the US poverty thresholds are used depending on the size of the family and the ages of the members: for example, in 2012, a family of five, with two children, their mother, father, and great-aunt, has a threshold of $27,010; and the family is classified as poor if it misses said threshold.]

When we compare apples to apples, our concern must be to drive our economy. Simply put, we have to focus on building our economy like our neighbors have done. And it starts with basic infrastructure – from power and beyond – and prioritizing the pursuit of strategic industries and their requisite ecosystem or clusters as economists would call them. For example, the seven strategic industries identified by the JFC (Joint Foreign Chambers) must be our concern, meaning we must set up the support industries that will make these strategic industries viable. Agribusiness is one of them. Beyond talking about a “comprehensive agrarian reform program,” we must be focused on making agribusiness a viable economic undertaking – from the inputs to the outputs and ensuring that throughout the process they are efficient, productive and competitive.

Because of our inability to step up to the plate, we’re confusing our challenges and not surprisingly are in a maze that shouldn’t be there in the first place: CCT, land reform, minimum wage legislations, etcetera have not made a dent in our poverty efforts! Why? We keep taking our eye away from the ball!

Saturday, December 8, 2012

Where we stand if we pull out a GPS

The global financial system is not starved of investable funds and with more and more economies showing signs of feebleness, people in financial services, now that the era of the BRIC (Brazil, Russia, China, and India) countries is stalling, are looking at growth markets where they could park these funds. “Park” means investment is single-minded – it is driven by returns not friendship or even favored-nation status. [And while our CB folks are beaming given our elevated foreign exchange reserves, economists are livid as the peso remains fairly strong, a negative for our exporters; while our importers/retailers are salivating, reinforcing our consumption economy.] Says Euromonitor International, "[The] N-11 or next eleven are: “ Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam; all 11 countries demonstrate population growth rates above those of Western developed economies, indicating greater consumer market potential; large populations represent a wide potential pool of consumers for businesses to target, while high growth rates mean that this market will expand rapidly, providing proportionally more potential customers." How do these countries make hay?

We just did an investment guide with my Eastern European friends following the inclusion of Hong Kong and Singapore in their list of new markets. How should they prioritize investments in the Asia-Pacific region? The object is to compete and win; and that demands investing in product development and innovation and people and market development and, fundamentally, a manufacturing and technology hub. In short the ecosystem. [To prioritize, compete and win are inherent to investors. It means investing in the ecosystem (“sowing”) and thus expanding economic reach (“reaping”). It is what “inclusive” is as opposed to paying lip service]. Looking at 15 countries, from Australia to Vietnam, where do we stand? We are number twelve, ahead of India, Vietnam and Cambodia, but still in the bottom rungs. And it brings to mind why Ford relocated to Thailand and why some Japanese companies doing business in and rethinking China opted for Indonesia over us. And simply, our economic profile does not sparkle compared to many of these countries. And it is but a repeat of what we saw after 1992 (Asean integration) when we lost some MNC manufacturing to our neighbors. Our large population base is negated by our poverty levels and our fractional GDP per capita compared to our neighbors. And when one factors in our infrastructure deficiencies and the absence of an ecosystem that can support strategic industries, our economic muscle needs to be toned.

We must fix our problems . . . and fix them fast and faster! We got to do what we got to do! “What you see is what you get” is the rule of thumb for investors. Everyone knows power is a fundamental problem in PHL. We now know that tourism will take years to develop because of our infrastructure deficits. We are working on over 50 industry road maps yet the seven industry winners called by the JFC (Joint Foreign Chambers) have yet to fly, beginning with mining. [Prioritize. Prioritize. Prioritize.] And while we're pursuing export promotion and development we must likewise move beyond the nascent stage of defining what innovation is. [Practice. Practice. Practice.] Unwittingly, we are falling back on traditional exports (or our comparative advantage like bananas, i.e., we have the soil and the climate to grow them) but they don’t necessarily generate high-margin revenues as in higher value-added products – which translate to competitive advantage . . . And even Ayala Corp., one of the biggest conglomerates in the country, has been generating a negative or low income from its international businesses . . .” [Manila Times, 2nd Nov 2012] . . . And so where will our competitive advantage come from? Our MSMEs are low-cost industries and as Poland, Spain, Greece and Portugal have learned, in the 21st century world, an economy needs more than that: a nation needs to be competitive . . . which comes from moving up the innovation learning curve.

If the BRIC nations were no slam dunk, will we be able to figure out why we’ve had a “boom-bust” history? Unfortunately, it appears we’re between a rock and a hard place: the inertia to take things for granted [vested interest masquerading as love of country?] is powerful and even worse is our speaking from both sides of our mouth [do we/don’t we like foreign investments?] either because common sense [the parable of the talents?] is in fact a rare sense or closure is not us – “kuro-kuro” is us?

Tuesday, December 4, 2012

On whose terms?

People invariably demand that they see the world on their own terms. And despite their blind spots our neighbors have zoomed pass us becoming First-World nations even. Thanks to their leaderships – they made the difference. And thankfully too, because of President Aquino, the international community is today warming up on PHL.

Before the president’s "daang matuwid" it was not uncommon for us to justify our nonchalance about corruption, for instance, because every nation can't be clean? In fairness we’ve come out with loads of prescriptions on how we could move forward. But unwittingly we may have accepted that we are a badly engineered machinery and thus in band-aid solution mode, meaning that we’ve been sidestepping the roots of our problems?

The European Union Commissioner for Transport . . . told . . . Vice President Binay that “when it comes to air safety, we don’t have friends” and the EU remained non-committal on the possibility of lifting the ban on Philippine carriers . . .” [Manila Standard Today, 2nd Nov 2012.] [The] CAAP head . . . said only two out of the 22 actionable items identified by the US FAA as safety concerns remained unresolved, namely the lack of qualified safety personnel and the absence of an integrated IT system to modernize the sector’s database.” But these are run-of-the-mill issues – not rocket science – and which is why Business Mirror, 2nd Nov 2012, screamed: “Leadership problem caused CAAP failure.”

The administration of President Ramos saw the dire situation in our power supply. Decades later, in 2012, shouldn't we be reaping something more tangible than: "The draft Power Development Plan for the Luzon Grid for 2012-2030 of the Energy Department . . ." [MST Sunday, 3rd Nov 2012.] The operative word is draft? And beyond that is a sprinkling of "indicative projects." It says we simply don’t get major projects done timely and right? We are not operating in a vacuum. Friendly nations are competition – for investment and technology and thus innovation, talent, products and markets. And so "daang matuwid" is criticized because the test of the pudding is in the eating? But is the continued poverty or destiny of Juan de la Cruz in fact in the hands of powerful local cliques?

The Philippines may be “open for business” . . . But if the business is cornered by the powerful local cliques . . . then that particular sector is locked shut, whatever the consequences on the investment climate and the national economy,” writes Jojo Robles, Manila Standard Today, 1st Nov 2012. “An international consultant working on the aborted $1.5-billion investment package from Qatar and Kuwait has confirmed . . . that the visiting emir . . . personally ordered the Bank of Qatar to abort the transaction in a fit of royal pique . . .”

And the biggest local players don’t even have to excel globally. Our business model, “to monopolize and/or dominate local market,” is dated and a confirmation of our cacique structure. Reports the Manila Times (2nd Nov 2012): Ayala Corp., one of the biggest conglomerates in the country, has been generating a negative or low income from its international businesses . . . during the past few quarters . . . [The] Strategy and Development Managing Director said . . . that while their core businesses are doing well, their international businesses are relatively failing to excel” . . . The bottom line: Even our largest enterprises can’t be operating on our own terms as Poland has realized, Unless Poland turns itself into an innovative, knowledge economy, it risks heading down the same path as Spain, Greece, or Portugal,” Reuters, Poland stumbles on journey from low-cost to hi-tech, 28th Oct 2012.

Those countries mirror some of our ways. And in the case of Poland they too pride themselves in their BPO expertise. My old MNC employer established its European shared-services center in the country and it has emerged as a best practice model that they will replicate in other regions. "Poland has thrived on attracting low value-added businesses such as television assembly plants and off-shore accounting and call centers . . . The statistics show just how poor Poland is at innovation. The country spent 0.74% of GDP on R&D in 2010, much less than the 2% on average in the EU . . . [The good news] is the government is doing something about the problem. [It is not] a civilization leap, but regulatory and systemic changes will allow Poland to surprise many countries. This requires five, maybe 10 years."