Saturday, March 23, 2013

Starter building blocks for PHL development

Beyond "daang matuwid” we need to focus on a set of starter building blocks for PHL development if we are to translate foreign interests in PHL (generated by "daang matuwid") into tangible foreign direct investments. They won’t constitute a master plan but we need a good start – and signal to the world, including foreign investors, that we are pulling the country together. [Fearful of autocracy post-Marcos we've moved to the opposite extreme unwittingly nurturing local lords – from dynasties and influence peddling to gambling and massacres or killings. The evidence: our inability to forge a national agenda and develop critical industries while perpetuating oligopoly.]

These building blocks can be as basic as power, coconut and fisheries. The JFC or Joint Foreign Chambers through "Arangkada Philippines" proposed seven (7) priority industries that will attract $75 billion in foreign investments, generate over $100 billion in incremental GDP and create millions of jobs – and after two years of prodding we haven't yet embraced them as our national priority. There is disbelief especially by foreign investors in our failure to craft a power or energy master plan when power is basic to industrialization. Some of us would even debate and argue the importance of agriculture over industrialization. But in a globalized and a highly competitive world, competition is the true measure of development efforts. A nation's output must find a wider market if they are to be sustained. There is no free lunch.

We haven't viewed power from the measure of competitiveness – or even to raise our economic output in a major way – but rather as a challenge of affordability. That given our widespread poverty we cannot pursue an energy master plan especially when RE is not yet fully developed. And similarly we view agriculture as a priority not from the measure of competitiveness but as poverty alleviation since poverty is more pronounced in rural Philippines. While we keep saying that our economic pie isn't big enough, has our compassion for the poor subsumed the imperatives of development? We can't be penny-wise and pound-foolish?

Is it any wonder why PHL is uncompetitive? And consequently our economic output or GDP has remained at Third-World levels – as though we've been in a race to the bottom? It's about time we learn to look forward and up. We have missed the forest being too closed to the trees. Beyond coconut and fishing we need manufacturing if we are to move up the value chain. And that is precisely why we need an energy master plan. And given coconut and fishing are major industries, they can be the building blocks of an agribusiness – i.e., it is more than agriculture. And Nestlé is a good example. Their business starts with coffee farming, for example, but goes farther like George Clooney promoting their Nespresso brand of premium coffee – one in the portfolio of products they'd developed and manufactured. [That is a simple illustration of the imperatives of global competitiveness this blog has discussed: Investing in technology, innovation as well as people, product and market development. They are why progressive MNCs are world-beaters.]

That is how we can view our coconut and fishing industries. The government can flex its muscle and signal to the rest of the world that we are creating Nestlé lookalikes in these two industries mirroring the PPP. That means private enterprise stepping into the value chain with government accountable for economic land use and infrastructure. We need more that a "flavor of the month" like coconut water exports, for example, and it starts with a sustainable source of basic product – employing world-class technology – as well as bringing innovative end-products to the consumer, beyond intermediate industrial products.

Government may not have the competency to develop the agribusiness blue prints for the coconut and fishing industries like we've struggled to put the PPP initiatives together. We must tap the right expertise from wherever. We should similarly tap the best expertise to craft the energy blue print even if that means working with foreigners. We have an underdeveloped energy industry and can use lots of help. We can’t just defer (“pwede na ’yan”) to local lords whether in politics or industry or oligarchy. "Bayan muna" – or country first! I would like to thank Dr. Flor Braid who raised the question: If it is important to focus and prioritize, how should our leaders do it?

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