Wednesday, January 23, 2013

Not stuck in the sand

SEN. Francis Pangilinan on Monday underscored the need for “inclusive and sustainable growth” as the Aquino administration continues to rally support for good governance and fiscal measures, buoyed by the 7.1-percent growth in the third quarter of 2012.” [Business Mirror, 10th Dec 2012.] “While there is cause for us to be thankful for the 7.1-percent growth experienced in the third quarter, we must be mindful that we have been there before,” Pangilinan said even as he added that “more than simply reaching such growth rates from time to time is the question of sustaining it.”

Start with the end in view. We need to lift our GDP per capita tenfold if indeed we are desirous to be a developed nation. And as international agencies have figured, that will take a generation at a constant 7% annual growth. It is not a cake walk. But it doesn’t mean it can’t be done. And indeed it can’t be done if we continue to be led by long-held beliefs and assumptions? Nor will the answers come from others? The answer is in our head, our heart and our gut – i.e., our perception is processed internally and translated into our worldview that we ought to revisit? And it is beyond an intellectually crafted initiative when it is measured by the activity per se and not but by the outcome it must deliver.

Is Sen. Pangilinan very much aware of our reality: (a) a culture of corruption, (b) poor infrastructure, (c) lack of competitiveness and (d) a restrictive economic environment? And one manifestation of the "perfect storm” they have generated is our energy conundrum. And it also explains why we have no strategic industry base to speak of. But then again, the answers cannot come from others like the Joint Foreign Chambers – or their seven (7) priority industries? Because Juan de la Cruz goes for the activity he wants to pursue as opposed to the outcome he must deliver? We want to satisfy our values of inclusion and populism and then turn fatalistic when the outcome does not meet the yardstick of the common good?

For example, our favorite "big boys" continue to dominate the energy sector while we're debating about the Mindanao power crisis and the broader and bigger crisis we face today and tomorrow. And thus economists have recognized that the lack of a truly coherent energy intervention would continue to underscore our underdevelopment and undermine our competitiveness. But then again we are developing over 50 industry road maps because we need them to raise our competitiveness – but what they give is false insurance?

The bottom line: Will all the activity in the energy sector in fact address our shortage and cost issues and thus elevate our competitiveness? Will all the industry road maps we are developing equate to the outcomes set by the JFC's seven (7) strategic industries, and that is, generate $75 billion in incremental investments and deliver over $100 billion in additional GDP while creating millions of jobs? It appears several industry groups are working with government to pull their respective road maps. The intention sounds encouraging, but do they meet the acid test – i.e., the test of the pudding is in the eating? Specifically, are these industry groups committed to becoming regionally if not globally competitive? Are they committed to invest in technology, in innovation, in people development, in product development and market development – beyond expanding their local businesses? Will they generate at least $75 billion in incremental investments and deliver over $100 billion in additional GDP while creating millions of jobs? If not, then it behooves government to focus and prioritize industries that will give us the big and the quick wins.

For example, pursuing the JFC's seven priority industries and their requisite support-industry clusters will generate greater synergies and realize the JFC's end goal than 50 different industries. Unfortunately, we're stuck in the same "inclusive" mental model reminiscent of the failed land reform program. And it’s not our fault; we simply don't have the track record in the successful pursuit of major undertakings – and why we remain underdeveloped.

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