Saturday, June 15, 2013

Our slip is showing

When "PLDT failed to pass the pre-qualification process for the two telecom licenses offered by Myanmar" [Manila Standard Today, 13th Apr 2013] was Myanmar telling the world that they wanted to play in the 21st century globalized arena? "The PLDT group had a tough time in pre-qualifying for the bidding because of the group's limited international operation. On our own we cannot, because the requirement of Myanmar is that to prequalify you must have operations under your control outside your home base."

Google Myanmar and it says: “Government – Military regime". A military regime is showing PHL supposedly a market economy for decades what a market economy ought to be – especially in the 21st century? Unfortunately, since the PHL economic model is largely characterized by oligopoly, even our major enterprises can’t measure up to the imperatives of the 21st century? The evidence: we are the first to complain about the services we get from our telecoms industry. And so given that in the Philippines dominant entities can flex their muscles – e.g., access to capital – and enter into businesses where they bring no competitive advantage, we may assume that they can enter a business that they know most especially in another country? Unfortunately, in the 21st century, "knowing a business" does not equate to bringing competitive advantage – which is imperative to sustain the business over the long-term and be patronized by customers because it is trustworthy and reliable, for example. Competitive advantage presupposes, beyond capital, investment, technology, innovation as well as developing talent, products and markets – precisely why Myanmar had its pre-qualification requirements?

Our paradigm has yet to shift to 21st century mode? Does being parochial and hierarchical – that nurtures our system of oligopoly – explain why we lag the world? First it was Thailand, then Vietnam and now even Cambodia is able to show us the way in farming, for instance? And Myanmar is doing what we can't seem to do with our power crisis? For example, why can't we open (like we did with gambling) the power industry to the world when its backwardness (owing to protectionism or shortsightedness or incompetence or all of the above?) has undermined our economic growth and development? Very soon Myanmar would have better telecoms and Internet services than we do?

We’ve been several times in the past voted as the next tiger. Has that ensconced us into our comfort zone? When I was a boy I learned that PI (as we were called then) was a promising young nation and I witnessed our "looban" (in the 3rd district in Manila) being bulldozed as streets were being laid out. And as I joined my old MNC employer years later, that promising-nation label remained and we hosted lots of regional meetings in Makati hotels. And given Pinoys were perceived as better informed, I personally gained from that positive image, and was given a regional role. Our board of directors even held its first ever meeting outside New York in our local offices as a vote of confidence and optimism. And as one senator more recently said, “Been there done that”!

With the signing of the ASEAN integration over 20 years ago, I got involved in organizing regional hubs; the president of the company who had called PI Shangri-la was surprised that the objective assessments made by our team showed how far advanced our neighbors were and how much the Philippines had fallen behind across several critical factors, including infrastructure. And sadly, that reality was replayed recently as my Eastern European friends worked with me to prioritize their entry into the Asian market.

Given how far behind we are in progress and development, we need a lot more than investment-grade ratings. In other words, trickle-down works if the ecosystem (as discussed above, especially infrastructure and competitive advantage) is able to efficiently turn capital into competitive products and services sought by the bigger global market. We won’t get ever close to that realization if we don’t get it cracking. And if Bernanke can't get the US economy off its lethargy, our Central Bank's monetary role either won't suffice – despite our enviable foreign exchange position.

And in the meantime, or until Juan de la Cruz wakes up to reality, indeed we need prayers – but not only . . .  

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