Tuesday, March 26, 2013

Infinite wisdom

The Western World has time and again been reminded of it. "In impasse, New York Would Face Steep Cuts," reports the New York Times, 24th Feb, 2013, with sequestration taking effect 1st of March with blanket budget cuts. One's faith may be absolute but man's wisdom isn't. And where we (in PHL) are as an economy and as a nation today would likewise remind us of that reality. While a 6.6% GDP growth, besting our neighbors, has given us bragging rights, we’re still markedly underdeveloped. And we can’t overcome decades of underdevelopment on a dime. But we need a confidence boost so we’re celebrating our latest record levels of OFW remittances – our recurring “Dutch disease”?

Unfortunately, as a former NEDA chief had reminded us, despite crafting development plans for decades, they got us nowhere. Thankfully President Aquino’s “daang matuwid” is giving the rest of the world reason to give us the benefit of the doubt. But same old, same old isn’t the way forward – garbage-in, garbage-out. We're stuck with the same worldview and so PHL power structure remains the same while we are left to embrace our optimism, hopeful that something would break. Sometime ago a friend – yes, a foreigner – rather incredulously wondered how we could turn from driving Marcos out to electing more Marcoses? In our heart of hearts we're a compassionate people. Unfortunately, because of our hierarchical culture – and our acquiescence – we have nurtured political dynasties. [Juan de la Cruz wouldn't have taken down the czars especially Peter the Great for being a reformist?] And in the case of Marcos the dynasty has extended to cronies. And it's a great honor in our hierarchical structure and so we have dynasties at the national and local levels.

It boils down to power! And the higher one is in the hierarchy the greater the power and the influence. The evidence: oligopoly, dummies, behest loans, expanding political bases, "jueteng", small-scale mining, police and/or military protection, etc. The outcome: an uncompetitive PHL! Because of the absence of coherence, a national agenda and the common good! Surely there is economic activity but the classic sub-optimal model – lopsided and perpetuates the 1%-rule or the rule-of-the-few. And it has become our success model that we’ve equated to infinite wisdom? And so there is a sector laughing their way to the bank, except that government is still revenue-starved. And so we need an inclusive economy given poverty continues to claim half of our households. And we believe the missing piece on top of entrepreneurship or MSMEs is Christian charity – which we've translated into CCT or CSR or micro-finance. The reality: our economic pie is pitifully minuscule with a GDP per person barely a tenth that of developed economies!

Clearly we need a major effort in infrastructure development to elevate and strengthen the foundation of the economy. And we've realized that PPP needs a lot more work if we are to translate foreign interests in PHL into real, tangible FDIs. And the restrictive economic provisions of the Constitution, we are reminded once again, need to be revisited. In short, we must be a truly open economy if we are to develop our competitive instincts and raise our competitiveness as an economy. [And I have yet to hear the last of the follies of a closed economy from my Eastern European friends – and why I talk about them.] Even MSMEs must look beyond partaking of our consumption economy and gear up to be globally competitive especially with ASEAN opening our borders to more foreign goods. It is foolhardy when we are to open our borders to imported goods yet restrict the entry of foreign investment and technology. We may believe we have infinite wisdom but underdevelopment also meant we’ve lagged in technology and can’t on our own overcome the disadvantage. As the quality movement mantra goes, "we must 'shamelessly steal' technologies and ideas from wherever" – and why "open-source" came about! We can't be an island unto ourselves – and simply aspire to be higher up in the hierarchy.

It is no secret that the same half-dozen entities have been the ones first in line with those PPP projects. And it’s been how we’ve played this broken record for decades as we sought protectionism in its many guises and turning it into an economic policy founded on the primitive cacique culture. Only Juan de la Cruz is paying the price.


  1. And what are you going to do about it? It's easy to point out the mistakes, but what are you REALLY doing about it? You're in the US, paying your taxes there. We are in the Philippines, paying our taxes, buying small gooods and making small investments to move the economy.

    If you are not part of the solution...

  2. Thanks for visiting the blog.
    It is from comments like yours that I am able to direct my discussions.
    The articles people read in the blog are primarily directed to around 50 thought leaders (columnists, economists and government officials, among others) that I have engaged for 4 years now; and after that I post them as blogs. Either directly or through their own columns they have built on the points I’ve discussed. Ideas are not easy to sell but engaging thought leaders would hopefully generate a snowball effect – especially from those that have been receptive.
    The blog is not meant to reveal my financial stakes in the Philippines given that it is meant to be an idea generator.
    If you would visit the blog more often, you would note that I am advocating for an open economy – clearly not something nationalists want to hear – because my observation having done business in many parts of the world is that open economies are able to attract investment and technology and thus are better able to compete in the 21st century and generate national wealth. For example, I spend most of my time in North America and Eastern Europe and in both cases I came over because these people embraced open economies and offered people like me to come over.
    The economic pie of the Philippines is pretty small (which President Ramos has repeatedly said) in relation to our population. And I submit that we need to open our economy so that we can attract investment and technology – and generate greater national wealth.