Sunday, April 27, 2014

“Individuals and communities face trade-offs”

That’s from “Nobel economist Thomas Sargent [speaking] to [the] graduates of Cal-Berkeley in 2007. It's only 335 words long, but it's really great. It breaks down the 12 economic concepts that every graduate should know.” [The Greatest Graduation Speech Ever Given Is This Bullet-Point List Of 12 Economic Concepts, Rob Wile, Business Insider, 17th Apr 2014] Does that one line explain why crab mentality can be such a slippery slope?

It is not uncommon for citizens to have very strong feelings about their country yet it takes maturity for nations to grow and develop – i.e., to pull together for the common good. More to the point, we can’t keep giving ourselves too much slack . . . way too much slack? After 68 years . . . we don’t have to be bogged down and fixated by “our history” like juveniles rebelling against their parents? We’re supposed to be smart people and can take responsibility; and the sooner we demonstrate it the sooner we could “lift all boats,” to quote President Kennedy.

Given this blog is several years old, some people know that I’ve been a development worker for eleven years now. And I’ve shared in this blog the crux of my message to my Eastern European friends. [See below re transparency, integrity, trust.] And while we Pinoys could talk about our history these people have far more to tell us; for instance, the land which today they call their country is a mere shadow of the original. They’ve ceded a big chunk of their land. And as they would admit, they were always on the wrong side of history, aligning themselves with the wrong bloc a number of times and ending up among the poorest Europeans. I could not address their entire nation and I am only committed to one particular group. But we Pinoys have far greater experience in freedom and democracy and progress and development, and don’t need – really – international institutions to tell us what to do? But why is our reality at odds with the assumption?

That is why leadership matters – but the right leadership. For example, while Russians perhaps because of national pride may be rooting for Putin, countless Eastern Europeans shudder at the thought that a semblance of the old Soviet empire has reared its ugly head. [In the meantime Russia continues to rely on natural resources to be the core of its economy that is nurturing an oligarchy instead of promoting an egalitarian, competitive economy. And the model is not lost to Eastern Europeans that have learned their lesson – about ideology and the imperative of “bread and survival.” And we Pinoys like to romanticize what development is about?] As one of Putin’s mentors in the KGB had noted, the man had very little sense of danger. Such strong-man rule would bring Marcos to mind? And did he likewise minimize the danger inherent in martial rule – and has it damaged the moral fiber of the Filipinos?

There are studies about leadership that say CEOs in general have big-size egos. And even Pope Francis is viewed as a CEO by The Economist, 19th Apr 2014: “The pope as a turnaround CEO” – with a “strategic focus on the poor” . . . and employing “the tools of brand repositioning and restructuring.” To pursue restructuring demands tough-mindedness and it is not something that is truly welcome – not in PHL where we see it as the opposite of compassion? But inherent in leadership is to navigate the path into the unknown we call the future. And since the endeavor is likely to be complex, room for error is a given. But the sin of omission is no less of a sin and weak leadership can only be characterized as marking time, with no vision of the future?

And the 21st century globalized world complicates leadership even more: while nations collaborate given the imperative of interdependence – or the folly of isolation – they are in fact engaged in friendly competition. Because at the end of the day, nation-building is an enterprise, i.e., the products and services necessary for the wellbeing of nations and their people don’t just fall from the sky like manna from heaven. [“Yes, Christ saved us. He is still helping us but He doesn’t work miracles to solve our own problems. We should save ourselves now,” Fr. Bel R. San Luis, SVD, Christ saved us; let’s save ourselves, Manila Bulletin, 22nd Apr 2014.] And nations must be committed to interdependence internally if they are to attain synergy or the common good. And which in today’s lingo is what being competitive is about – and why even in PHL we have a national council for competitiveness.

While we like to highlight our good deeds – or the progress of our efforts, and they are laudable – where PHL is today and was yesterday and will be tomorrow says we have yet to succeed in the pursuit of the common good? And have yet to produce a string of the right leadership – not a string of plunderers?

But perhaps the biggest hindrance to PHL progress and development is crab mentality? If we can’t get what we want – given our lack if not absence of community sense – we would rather undermine representative democracy, as in our party-list system and the initiative for people to participate in the budget process? It is worse than running an enterprise by committee – and why enterprises have CEOs! Or does Juan de la Cruz miss the distinction between teamwork and leadership? For example, even in “bayanihan” (cooperative) efforts there is still a “kapatas” (foreman.)

Is it why we can't produce the right leadership, and are constantly devolving into chaos – which is what characterizes crab mentality in the first place? Representative democracy presupposes a community sense, of trusting one another – including the leadership – because everyone is committed to do their part of the endeavor. It means committing to transparency and integrity in order to build democratic institutions that level the playing field – and thus engenders trust and fosters a community sense. 

Sadly, we are light years behind? Because of our “kawawa” [pitiful] persona we instinctively invoke “victimhood” – and that is “the how not to” . . . pursue excellence and competitiveness? In this day and age, no one will pity Juan de la Cruz. We can't cry victimhood while misusing our resources and, worse, our talents – for the benefit of the few. Every time my Eastern European friends talk about freedom and democracy, I could only lament how we Pinoys continue to trample on what could have been a precious gift. Unfortunately, so long as our elite class continues to prosper, who cares about the Philippines?

“I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.” [ibid.]

And here is a part of that speech: “Economics is organized common sense . . .  Many things that are desirable are not feasible; Individuals and communities face trade-offs; Other people have more information about their abilities, their efforts, and their preferences than you do; Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended; When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation; Most people want other people to pay for public goods and government transfers (especially transfers to themselves).” Amen.

Friday, April 25, 2014

It all starts in the mind II

Can we foresee PHL as an egalitarian society or is that going against the grain? And so when we say it is about our heritage and are proud of it and it is our culture, what we truly are saying is: we are a cacique system and structure and thus hierarchical? People call it mindset and if we Pinoys are to build strong institutions that are imperative in a functioning democracy – and level the playing field – we must first get our head in the right place? In other words, we have to go through the process of unfreezing. The mind has no room for new learning unless it unfreezes assumptions, practices, biases and even ideologies. And it is what separates inherently progressive, creative and innovative environments from the rest. The latter are simply marking time if not behind the times. And to Francis, the Curia is a good example of that – because even our faith can't be kept in isolation?

Of course, defenders of the status quo are offended thus the speculation that his papacy could be a short one. “What if, in a Church with two popes, the one in the Casa Santa Marta dies first? When John Paul’s health was waning, people would ask him how they could carry on his legacy. “How do you know that I will die first?,” the old warrior would jibe. Sure enough, John Paul outlasted friend and foe, mindful that it was the sudden death of a pope—John Paul I, who died after a month in office in 1978—that led to his own election, and mindful that he had lived out his marathon papacy only after surviving an assassin’s bullet, in 1981. A third of a century after the death of the first John Paul, people in Rome still bat around the notion that he was done in—poisoned—by enemies of reform. It is never far from the thoughts of the people who look after Francis that his openness to the world—the embraces, the selfies, the spontaneous encounters with ordinary people—makes him a target.” [The Pope in the Attic: Benedict in the Time of Francis, Paul Elie, The Atlantic, 16th Apr 2014]

And talking about institutions, and given the Filipino culture is heavily tilted to the church, the church ought to be the model in renouncing hierarchy – in the same fashion that Francis has done? Does that sound heretical? It all starts in the mind? The school must likewise toss “the ivory tower” label. If in the West industry – the ones that create the bulk of the jobs and, as importantly, collaborate with other sectors if not lead the march of contemporary science and man’s progress and development – find the educational system wanting, it is because ivory tower connotes isolation and thus undermines learning which by definition must be dynamic. Industry or private enterprise in its simplest form is the pursuit of an economic activity.

And an economic activity if it is to be true is sustainable – i.e., a virtuous circle – and is nurtured in an egalitarian society where there is a strong community sense and where freedom and democracy reigns. Conversely, hierarchy or ivory tower – and worse, oligarchy – is anathema to a virtuous circle. And in the globalized, highly competitive 21st century world, it is an imperative.

What about government? It is the microcosm of the institutions of a nation and in the case of PHL, given the influence of the church, and that of the school, how could we nurture public service to be egalitarian when we equate rank to absolute power and privilege – as in Padre Damaso, for example? Not surprisingly, ours is a cacique system and structure aka our heritage and culture? And that is being kind because the reality is it fosters condescension and abuse instead of good governance – which as we now know translates to a culture of impunity? And when the Filipino family is confronted by such a reality, what else will it be like? It will expect paternalism in return – which lends itself to crab mentality? The bottom line: we created a multi-headed monster instead of a virtuous circle? And the evidence: PHL remains the regional laggards and thus our inability to put body and soul together for a vast number of our people.

What then do we need to commit to and wholeheartedly pursue if we want future generations to inherit a better Philippines – and relive its old glory? That we all led by our institutions need to open our minds and toss our assumptions and start building strong democratic institutions. It means for Juan de la Cruz to respect meritocracy instead of our “paki system” – aka crab mentality that seeks short-term gains at the expense of long-term sustainable progress and development. It means for the church to reinforce the virtue of an egalitarian society as opposed to that of a hierarchy. It means for the school to eschew the ivory tower and work across disciplines and beyond – especially in this day and age of warp-speed change, which we can take for granted at our peril.

What about our cacique masters – and oligarchy? In an environment characterized by strong democratic institutions, they will be the pariahs – together with their cohort in the media and elsewhere? In the meantime, it explains precisely why we are the laughingstock of the region if not the world? A nation supposedly of smart people yet unable to feed its own people – because we have consistently failed in being good shepherds to our God-given talents and resources?

Wednesday, April 23, 2014

“All you adults are fake”

“My father is a fake. My mother is a fake. You are a fake, all you adults are fake!” [Cardinal Tagle to faithful: Join politics to clean it, Avie Gochoco-Perez, Philippine Daily Inquirer, 17th Apr 2014] “I wanted to strangle her! This was annoying! But I tried my best to sincerely listen to her. I asked myself: Is she an enemy with all her irreverence? I realized she was not an enemy, she was a friend. She was looking for someone she could trust, people with integrity, parents to lead her to her true humanity.”

It reminded me of my late Jesuit friend, instead of being direct and saying fake, he would say “plastic.” But I was so dense that it took me a while to realize that indeed we adults are fake? Who could the girl Cardinal Tagle talked about trust? Or more to the point, who in PHL is with integrity or could lead young people to their true humanity? In the first place, we like to think we’re blessed – if not holier than thou – because we’re the only Catholic nation in this part of the world while closing our eyes to our culture of impunity? An Australian public servant resigned for accepting a supposedly expensive wine; and how many of our public servants ought to resign if that is the yardstick of integrity?

But can we pin it solely on them or are we complicit? It takes two to tango – and not surprisingly PHL has been unable to build the strong institutions imperative in a functioning democracy. We can wail “inclusive” (growth and development) but if we keep to our cultural bias, of a hierarchal and a cacique system and structure – as in an oligarchy – we are simply shooting ourselves in the foot! Put another way, it is not about inclusive growth but the imperative of building strong institutions that level the playing field. It is again, sadly, another illustration of missing the cause for the effect?

“[T]rue progress in the Philippines would be out of reach unless the improbable was achieved: Dismantling of oligarchies that control both politics and business.” [No real progress in PH if dynasties not dismantled, Paolo G. Montecillo, Philippine Daily Inquirer, 17th Apr 2014] Are we a fake?

“More and more, our economic and political elites seem to be solely treating this archipelago solely as a market or a fiefdom, not caring about its future as at least half of their wealth is abroad. Both elites and the middle class have lost their sense of nationalism.” [America’s colonial burden, Rigoberto Tiglao, The Manila Times, 15th Apr 2014]

“And of course, in such a culture, prominent are the luxury, gated communities, inside which the wealthy can escape the dysfunctional environment through life-support systems . . . This is a bad Latin American economy, not an Asian one . . . It’s true that the Philippines was not much affected by the global recession of 2008, but that’s only because it was never integrate into the global economy in the first place.”

“Whereas the Asian tiger economies have strong manufacturing bases, and are consequently built on export, in the Philippines exports account for only 25 percent of economic activity as opposed to the standard Asian model of 75 percent. And that 25 percent consists of low-value electronic components, bananas, and coconuts mainly.”

“No country in Asia, with the possible exceptions of Myanmar, Cambodia, and Indonesia, has weaker, more feckless institutions . . . The Philippines has remained among the most corrupt, dysfunctional, intractable, and poverty-stricken societies in maritime Asia, with Africa-like slums and Latin American-style fatalism and class divides. Indeed, the Philippines has been described as a “gambling republic” where politicians “hold power with virtue,” dominating by means of “capital” and “crime.” Are we a fake?

Be that as it may, the resurrection of the Lord is a reminder that “the improbable” is achievable, including the rebirth of Juan de la Cruz . . . Happy Easter to all!

Friday, April 18, 2014

The continuing assault on freedom

“My grandfather was imprisoned for ten years simply because he refused to change our name as directed by our Soviet masters. He was not the only one put to jail, countless more were, and when the Soviet Empire fell they were freed and recompensed – but the years they wasted were utterly way beyond.” An Eastern European friend was relating (against this backdrop) how some of their Russian friends were behaving – with jingoism – following Crimea. “Can you imagine how these recent events have sent chills down our spines?”

“From the moment that Russia’s invasion and annexation of Crimea cast a new, bitter chill over relations with the West, a sinister jingoistic vibe has pervaded this unsettled capital — stirred up by state-controlled television and Mr. Putin himself.” [Xenophobic Chill Descends on Moscow, David M. Herszenhorn, The New York Times, 12th Apr 2014] “Moscow today is a proudly international city, where skateboarders in Gorky Park wear New York Yankees hats they bought on vacation in America, and where the designer French or Italian handbags might just as well have been picked out in Paris or Milan as in one of the boutiques in Red Square. Apple iPhones and iPads are nearly as common on the subway here as they are in Washington . . . In the weeks since the military incursion into Crimea, however, Russian flags have been hung from the windows of apartment buildings all over the city, just as American flags appeared in profusion after the Sept. 11 terror attacks.”

“At Mr. Putin’s direction, a committee led by his chief of staff is developing a new state policy in culture . . . [T]he proposed cultural policy emphasizes that ‘Russia is not Europe’ and urges ‘a rejection of the principles of multiculturalism and tolerance’ in favor of emphasizing Russia’s ‘unique state-government civilization’ . . . ‘What do we see from the first pages? Gnomes, Snow White — these are representatives of a foreign-language culture,’ an expert of the Russian Academy of Education, Lyubov Ulyakhina, [said] in a question-and-answer interview. ‘Here’s some monkey, Little Red Riding Hood,’ . . . ‘of 119 characters drawn here only nine are related to Russian culture. Sorry — no patriotism — this is not funny; this is our mentality.”

And the friend continued: “Some people don’t appreciate, much less value, freedom because unlike my grandfather, freedom wasn’t summarily taken away from them.” And not surprisingly, in PHL, where we talk a lot about our colonizers, we have been constantly assaulting freedom – unwittingly, of course? For example, after 68 years we have yet to build strong institutions, which are lower in our value system compared to our respect for hierarchy – and reflected in our cacique culture and deference to oligarchy, even that of the dummy variety? And there is no strong public opinion to overcome them – not now and not in the distant future especially when a big chunk of media is in the back pockets of vested interests?

And while glossing over our lack of community sense (reflected in culture of impunity), crab mentality (or mistrust of representative democracy) and poor self-esteem (expressed in our parochial worldview), we like to harp on family? That is a virtue indeed yet as the young Jesus demonstrated in the temple, beyond family is a bigger community? And it is beyond . . . “kaklase based, Jesuit based and law school alumni based,” to quote a priest?

Spending more time outside the Philippines, I am witness to the reality that family values are not our monopoly as Filipinos. For instance, I learned about our “querida system” while still a young boy in Manila. And I have yet to know of the querida system among my foreigner-friends and acquaintances. Of course, I have seen divorces but as Francis says, who are we to judge? And Pope Francis made himself available to celebrate the baptism of a divorcee's child, out of wedlock. And we don’t want to mirror the ideologues Francis referenced as suffering from leprosy?

“The problem with ideologies . . . is that we live in a non-ideological world. Nobody knows what will happen to the Eurasian idea [of Putin] if oil prices start to fall. No matter how different [Putin] thinks he is from the westerner, the crux for the Russian will again be bread and survival.” [Boyko Vasilev, Putin’s turn signals, Bulgaria on air, April 2014]

And as the friend explained: “Flying from Moscow to Siberia where they have winter resorts, one would not miss the poverty on the ground – it is stark and visible from the sky.” And that is reinforced by “. . . [F]or 25 years after the fall of the Soviet system it did not build a consumer oriented economy and now fully depends on the export of natural resources . . . mostly to the EU. If extraction of shale gas in Europe develops on the scale it has developed in North America, the Russian economy will suffer a dreadful strike . . .” [Konstantin Tomov, Incurable dependence, Bulgaria on air, April 2014]

“The threats exchanged between the EU and Russia hide their mutual helpless . . . In the epoch of globalization, economic sanctions are subject to Newton’s law: each force is equal in magnitude and opposite in direction to another force. With such a law, there is no chance for a long-term benefit.”

What should we in PHL be concerned about? As I explained to my Eastern European friends, while I came over as a business consultant, I’ve learned a lot from them. Could we Pinoys learn some about freedom and democracy from these ex-socialists?

Monday, April 14, 2014

Community sense II

Community sense presupposes interdependence and synergy – or gestalt, where the whole is greater than the sum of the parts. “. . . [P]sychological sense of community is the perception of similarity to others, an acknowledged interdependence with others, a willingness to maintain this interdependence by giving to or doing for others what one expects from them, and the feeling that one is part of a larger dependable and stable structure.” [Wikipedia]

Ergo: PHL’s party-list system and the “Bill filed mandating people participation in budget process” [Jovee Marie N. dela Cruz, Business Mirror, 6th Apr 2014] simply confirm that we indeed suffer from the lack if not the absence of community sense? Are they manifestations of crab mentality? “Crab mentality is broadly associated with short-sighted, non-constructive thinking rather than a unified, long-term, constructive mentality.” [Wikipedia.] Put another way, we want to move closer to direct democracy because representative democracy has not worked for us – given our culture of impunity? And it explains President Aquino’s focus on good governance via “Daang matuwid”?

It is a good starting point but we need to do more – tons more – as a people and individually? But do our parochial instinct and focus on family – and kaklase, etc. – make us unable to recognize and appreciate the broader community? And thus by extension we shall be unable to move forward as an economy or nation? If we cannot trust each other and our elected leaders, how could we “acknowledge interdependence with other” nations in this day and age of a globalized world?

Take Asean or the threat of China, for example. Asean as an economic bloc means a bigger market for everyone. But to play in this bigger arena demands that a country has the requisite foundation: infrastructure and industry. In the private sector, that translates to having the manufacturing capability and the broader supply chain and the competitive products that are marketable. And PHL is deficient across the board? 

What about the threat of China? Again, it is a challenge of interdependence with the rest of the world? For example, Japan and Australia and Germany and Poland and the EU are all looking for support from the US military and NATO. And as we know, some Japanese investors have pulled out of China and relocated to our region. Yet as suggested by a columnist, we must seriously dissect our being of the East as the Chinese are (and recognize that our culture is different from that of the West) and thus must deal with China like another Easterner? Could this be shared by many of us? And given that the US is a former colonizer, the relationship we could have with them would only be akin to that of a superior and a subordinate? 

“PHL: A near-failed state used by the US,” wrote Rigoberto D. Tiglao, The Manila Times, 10th Apr 2014. “What struck me more though reading Kaplan’s book is its scathing criticism of the Philippines, for which he devotes an entire chapter he cruelly titled “America’s Colonial Burden.” It is as damaging to our country’s image—even more, probably—as the 1987 “Damaged Culture” written by another Atlantic Monthly writer, James Fallows was. While my tribal emotions cry “foul”, my reason, unfortunately, agrees with many of his insights.”

Do we not look at ourselves as co-equal to other nations? Of course we are not – given our backward economy that is principally driven by oligarchy on the one hand and our infrastructure- and industry-deficits on the other? And given our predicament, how could we imagine being able to demonstrate a global community sense? Is it about our hierarchical instinct, the lack of community sense or the poor self-esteem of Juan de la Cruz? “Self-esteem [is] defined as the experience of being competent to cope with the basic challenges of life and being worthy of happiness . . . [It] is the sum of self-confidence (a feeling of personal capacity) and self-respect (a feeling of personal worth). It exists as a consequence of the implicit judgment that every person has of their ability to face life's challenges, to understand and solve problems, and their right to achieve happiness, and be given respect.” [Wikipedia]

What does it all mean – that 68 years after our independence from the Americans we are still not ready for representative democracy and/or to be a global citizen? For example, what are the relatively recent adherents to democracy thinking and reading about? “Democratic countries, as a whole, are richer than undemocratic ones; they have less wars; they cope better with corruption. Why then does democracy seem to have lost its attractiveness for so many people today? Democracy, in fact, is a rather rare flower. It first germinated in ancient Athens . . . But later it disappeared from the maps for almost two millennia. Even during the allegedly enlightened 20th century it was rare – the first German democracy did not even survive for 15 years before falling down under the pressure of the Nazis.” [Politics in focus, Bulgaria on air, April 2014]

“In 1941, there were only 11 democracies, in the world, and not all of them matched the term as we know it today (Switzerland, for example, gave women the right to vote in 1971). In short, democracy is not growing by itself under the pressure of natural laws – it requires uninterrupted care. But once the West triumphed in the Cold War and had no enemies, it seemed to believe on the opposite. The na├»ve attempts made in Iraq and Afghanistan proved that democracy could not just be imposed by organizing elections. In order to make it work, strong public institutions and, most of all, a well informed and active public opinion are needed . . . We are currently living in a time of aggravating confrontations – with Russia, China, the Islamic world, which are naturally causing concern. But they may turn out to be the necessary labor-pains for “the rebirth of history.” Democracy needs opponents. Simply because, as Churchill once said, it is the worst form of government except all the others that have been tried.”

It is the 21st century, but does that mean PHL is equipped to afford democracy uninterrupted care?

Friday, April 11, 2014

Where our hearts truly are

When we say “reform,” where is our heart really? And does it explain our inability to figure out where we are and where we want PHL to be? There were fairly recent commentaries about our confusing nationalism and parochialism – and what about monopoly and oligarchy?

“Studies have shown that, in most cases, monopolies do tend to create a higher pricing structure for consumers over time, as a lack of competition does not allow the normal balance of supply and demand to determine price. For a monopoly to be most beneficial to the consumer, the company must work to find ways to improve its service and reduce the price. This does not happen easily in a monopoly environment . . . The debate on monopolies is never going to be fully settled. Monopolies need to be judged on a case-by-case basis when assessing the impact on economic welfare. However, anti-monopoly legislation could wind up creating a situation where the government picks the winners and the losers. That could be a bigger problem than the monopolies themselves.” [The question of business monopolies, The Business Mirror Editorial, 3rd Apr 2014]

But does the issue in fact go beyond monopolies per se? For example, PHL is unable to attract the level of FDIs our neighbors do and the debate continues about the restrictive economic provisions of our Constitution. And which is compounded by the reality that as an economy we are uncompetitive given our meager GDP per capita, the lack of infrastructure, the weakness of our industry and agriculture, among others. And behind all that is another reality that ours is an oligopoly – a disincentive to FDIs except that we’re still in denial? Put simply, we don't offer a level playing field and are not as advertised and why the dummy route exists! And what is the word – given we’re supposed to be sophisticated – pathetic? And while we debate the question of business monopolies indeed the gap between the haves and have-nots remains alarming that despite our enviable GDP growth rates we’re still mired in poverty.

“Despite its glowing performance, poverty and income inequality has remained high. In contrast, other neighboring countries [achieved] significant poverty reduction, [while] the Philippines experience seems to be a puzzle. [There are] certain policies and regulations that have constrained the transformation of the economy and the generation of more productive jobs. There is a need, indeed, to expand job opportunities so that economic growth can be made more inclusive . . .” [PIDS sees 2014 growth at 6.6%, Cai U. Ordinario, Business Mirror, 3rd Apr 2014]

And we will be reduced to spinning wheels if we aren’t prepared to examine where our heart really is? And as we confuse nationalism with parochialism, PHL shall be defined by oligopoly – and thus an uncompetitive economy – that comes hand in glove with poverty?

And, not surprisingly, “domestic servitude” remains alive and well in our homes: The technological machinery and public services that might encourage the middle class to depend less on servants are also far from developed. Servants, for their part, tend to be complicit in their own subservience. Confronted with few opportunities, they find ways to reconcile themselves to their position. As with colonial society, the bourgeois household relies on the ongoing collaboration of those below with those above. To the extent that domestic servitude lies at the material and ideological heart of middle-class life is the extent to which efforts at forging a more egalitarian society—efforts led today by the middle class itself—will remain inevitably forestalled.” [Servants, or the secret of middle-class life, Vicente L. RafaelPhilippine Daily Inquirer5th Apr 2014]

And for the nth time: In its annual National Trade Estimates (NTE) report, the USTR again urged the Philippines to open up areas such as agriculture, telecommunications, banking, insurance, logistics, advertising and retail to foreign investments.” [USTR urges liberalization, Daryll Edisonn D. Saclag, Business World, 3rd Apr 2014]

“Trade officials were not immediately available for comment but United Broiler Raisers Association President Gregorio A. San Diego, Jr. said: ‘The tariff for chicken... is not barring the entry of US leg quarters. In fact, these are coming here at very low prices.’ The local poultry industry, in fact, is unable to compete due to this, Mr. San Diego claimed . . . Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr., for his part, said: ‘We’ve gone a long way in terms of implementing the ‘sin’ tax. We’ve implemented a system where we level the prices of products.’”

We can cherry pick the issues raised against us but the bottom line is we, in the region, are the least able to attract foreign investment. And beyond those issues about PHL, we still have to demonstrate the ability to truly be competitive and drive economic development. For instance, when the public sector talks about adapting best practices from the private sector, one very critical piece is that of strategic thinking. And which can simply be expressed as: everything starts in the mind.

“Encouraging routine strategic thinking may be the most important thing you can do as a leader. It’s not an easy skill to teach or learn, because it is as much a mindset as a set of techniques – but it’s not impossible . . . Encourage people to ask “why” and “when.” Consistently asking these whenever a course of action is being considered enables people to fully understand the goal it aims to achieve and its impact.” [Strategic Thinkers Ask “Why” and “When”, The Management Tip, Harvard Business Review, 4th Apr 2014]

The problem we face though is beyond management thinking. It is the “Pinoy mindset” and the “Pinoy heart” that is getting in the way of PHL development?

Monday, April 7, 2014


Is it about ironies or is it simply “democracy Pinoy-style”? We can forcefully argue that freedom has its limits and hence support the cybercrime law or that unfettered free enterprise undermines democracy, as greed does in the West? But if we pause for a moment and figure out why we are where we are  – i.e., underdeveloped and stuck with poverty if no longer the sick man of Asia – is it because we have yet to define where we want to be? Can we internalize the imperative of setting a vision as a people or as PHL or to put in simpler terms, what the object of the exercise or what the context is?

Or even more fundamentally, we have yet to grow up as a nation? Given that nation-building is an enterprise, it isn’t uncommon for many to express that we could learn from the private sector like MNCs the pursuit of excellence or competitiveness? On the other hand, given that our instincts are parochial, while we intellectually understand benchmarking, for example, we don’t truly value it because of (national) pride? Nokia was proud and great; like BlackBerry was as was Detroit, among others? And until they turn themselves around they’d be of the past!

As Larry Page (of Google) would say it, We want to figure out what the future will be like . . . And ask ourselves: how we will get there.”Instinctively he is framing the context, the object of the exercise?

All the above were running in my head over the two days I sat listening to my Eastern European friends where we had the managers from the home office and the different regions of the world review the business for the past year and quarter, and going forward. We had updated our view of the future and unveiled an even more aggressive set of goals. I had a simple task at the end of the proceedings and that was to remind them that like they asked eleven years ago, there are no rules only principles. And to call the attention of those who thought then that we were embarking on the impossible.

“We know where we are, and we just redefined where we want to be, and laid down how we are to get there. It is a challenge not a cakewalk but you have the leadership that sets you apart and why you have done wonders in such a short period. And you deserve the credit for being equal to the task, but you don’t want the entrepreneurial spirit to wane because you don't want to be a dinosaur.”

Governments are more complex yet rightly so, forward-looking public-sector workers pick and choose private-sector practices to make governance more efficient. And in the case of PHL, it demands accelerating economic development in order to drastically reduce poverty? And that means not being hostage to oligopoly – which will never wane until we learn to truly seek an egalitarian society? But we can’t do it if we’re still confusing nationalism and parochialism, and monopoly and oligopoly, for example?

We should instead aspire to be a nation of MNCs (like our neighbors) and not live in the past where MNCs meant the West – or the big boys. MNCs, by necessity or the global challenge they face, invest in the building blocks of an economy – from technology to innovation to people to product and market development – and bring to life what economists call the multiplier effect of investment. And it is through these building blocks where wealth is spread to the broader population. It is not an ideological construct but as tangible as the ‘parable of the talents’ – or why this blog always talks about my Eastern European friends and our faith while being critical of ideology, like Francis is?

Do the following newspaper articles reflect ironies or are they a window to the heart and mind of Juan de la Cruz? “THE Supreme Court has junked the ill-gotten cases against the heirs and in-laws of the late President Ferdinand Marcos due to a lack of evidence, and took the Presidential Commission on Good Government and the Office of the Solicitor General to task for bungling the job.” [SC clears FM heirs of ill-gotten charges, Manila Standard Today, 31st Mar 2014]

“Chinese authorities have seized assets worth at least 90 billion yuan ($14.5 billion) from family members and associates of retired domestic security tsar Zhou Yongkang, who is at the center of China's biggest corruption scandal in more than six decades . . .” [China seizes $14.5 billion assets from former leader, Reuters, 31st Mar 2014] “More than 300 of Zhou's relatives, political allies, proteges and staff have also been taken into custody or questioned in the past four months . . .”

“Now that basic education in the Philippines is moving towards the K + 12 curriculum, a good number of industries needing technical skills, from the BPO sector and tourism to manufacturing and agribusiness are planning to adopt the dualvoc method, emulating the Dualtech example in transforming the last two years of high school (Years 11 and 12) into a dual training program in partnership with selected high schools.” [PH leads US in apprenticeships, Bernardo M. Villegas, Manila Bulletin, 30th Mar 2014]

“Has the DepEd achieved its mission? Will it meet UNESCO’s Education for All Goal by 2015? As our government administration changes over time, so do the policies, plans and programs of the department. It is very unfortunate that these constant changes in the system have proven to be detrimental to teachers, to the school environment, administrators and most of all to the students. [As a matter of fact, Sara Soliven De Guzman, The Philippine Star, 31st Mar 2014]

“At this point in our national development, we can turn a tendency to settle for being copycats into an asset. Our inventors can build on existing technology and sound science by tweaking existing products to come up with Pinoy versions.” [Innovation, Sketches, Ana Marie Pamintuan, The Philippine Star, 31st Mar 2014] “The Japanese and now the Koreans and Indians have done it with motor vehicles, consumer electronics and, yes, military hardware. The Chinese are racing to catch up . . . Surely we have enough innovators who can do the same for the Philippines. With sufficient support for R&D, we should be able to produce our own machinery for many industries and develop a vibrant local pharmaceutical sector like the Indians . . . Encouraging innovation ideally starts early in life.”

“The Philippines is under mounting pressure to retain its number one rank in the global call center industry. But cheap labor is not the key. Keeping the number one post means offering high quality services, using available resources and streamlining its expenses . . .” [PH under pressure to keep top rank global call center, Emmie Abadilla, Manila Bulletin, 30th Mar 2014] “There are two main success drivers: the first is highly qualified management that pays fixed attention to boosting call center efficiency and streamlining expenses while also boosting income at the same time. That, coupled with next generation IT solutions, enhances performance by automating all major business processes . . . For one thing, call centers workers need better educational support to serve current accounts and accommodate future market needs . . . [E]mployees’ skill sets must be reinforced to avoid a ‘mismatch’ between the knowledge acquired from formal education and the requirements expected by the customers.”

“The Philippine Economic Zone Authority (PEZA), which administers export zones and regulates tax incentives granted to their locators, has opposed plans to overhaul the country’s fiscal incentives regime and its merger with the Board of Investments (BOI) stressing the current system is working well and changes at this time when the country is enjoying positive business sentiment globally could only drive investors away.” [PEZA opposes overhaul of fiscal incentives, merger with BOI, Bernie Magkilat, Manila Bulletin, 30th Mar 2014]

“The Bureau of Internal Revenue (BIR) is urging Congress to pass first the Department of Finance’s (DOF) four priority measures meant to plug tax leaks before discussing any proposed bill that aims to restructure the current income tax regime.” [Plug tax leaks first before reducing income tax – BIR, Manila Bulletin, Chino Leyco, 30th Mar 2014] “BIR Commissioner Kim S. Jacinto-Henares said the Congress should pass the fiscal incentive rationalization bill, the tax incentive transparency act, the mining revenue sharing bill and the customs modernization bill.”

Shouldn’t we be constantly reminding ourselves where we want to be – or could we even agree where we want to be?

Sunday, April 6, 2014

The challenge of sustainable growth

The challenge of sustainable profitable growth comes from the private sector. And in the public sector we just drop “profitable” and it applies? And sustainable in either case means optimizing as opposed to sub-optimizing efforts – as in a race to the bottom? Put another way, if we Pinoys are predisposed to isolating ourselves – as in parochialism – because of our assumptions, we would indeed be in a race to the bottom? Even our faith ought not to be an ideology – or why Ecumenism came about, i.e., to embrace our Muslim brothers, for example? And which in reality is what development – aka maturity – is about? And could it be at the root of PHL underdevelopment? No one has the perfect belief system? Of course, ideologues think they do? And, not surprisingly, Francis minces no words in addressing them?

For instance, how could we heed the call of IMF for sustainable growth? “The IMF called for further reductions in bottlenecks that may be discouraging broader-based business activities, so that the Philippines may realize its full potential for “rapid, sustained and inclusive growth.” [IMF: PH challenge is to deliver sustainable growth, Mayvelin U. Caraballo, The Manila Times, 26th Mar 2014] And the “bottlenecks” are in the head of Juan de la Cruz? And that is why “the Pinoy mindset” is being raised by more and more concerned individuals?

Can we imagine that in the 21st century we would still read something as backward as this? “Senator Aquilino “Koko” Pimentel III on Wednesday asked the Department of Energy for a power master plan to end more than five years of suffering for the people of Mindanao because of recurrent power outages and extended blackouts. He said industry experts saw the need to rehabilitate aging hydropower plants, put up new generating companies, ensure reliability of transmission lines and secure efficiency of power distributors to prevent the outages. The Mindanao senator said foreign investors are interested in upgrading existing power plants and build new generators, but there is no clear roadmap to off-takers, some of whom have taken a wait-and-see attitude.” [Power master plan needed, Manila Standard Today, Macon Ramos-Araneta, Mar. 27, 2014]

I was away from Eastern Europe for over three months and when I came back [in the apartment] none of the appliance-digital clocks were blinking. Ergo: over the winter months, there was no power outage in this supposedly poor Eastern European country.

It’s not that we don’t know what to do – or that we can’t craft great plans and road maps – but what about the wherewithal to get things done? “MORE private sector investments in agricultural development are needed ahead of regional integration, the National Economic Development Authority (NEDA) said . . . The Philippine government needs to enhance collaboration with the private sector to promote agricultural competitiveness . . . As Southeast Asian economies collectively gear up for regional integration, it is important to understand how public-private partnership schemes could facilitate the modernization of the agriculture sector and the revitalization of rural economies . . . [T]he absence or lack of efficient infrastructure -- particularly in transport, energy, and communications -- was one of the critical constraints to agricultural growth.” [NEDA urges more agri investments, Business World, March 26, 2014]

But then again, leadership matters? “With so many challenges facing the country today, MR. RIGHT 2016 would surely benefit from as many skills sets and as much leadership and management qualities that he or she can muster. Though he does not necessarily need to be a genius, he would need to have a wide set of competencies with enough leadership and intellectual capital to properly address the challenges that will be inherited from this administration.” [Finding Mr. Right: Competence, Manila Standard Today, Danilo Suarez, Mar. 27, 2014]

If we can’t carry out something as fundamental as getting things done, how could we deal with foreign affairs – which are convoluted by nature because every country has its self-interest to protect? “EVEN AS critics of the Aquino presidency’s decision to enter into a ‘de facto basing agreement’ with the US raise their voices in opposition, they must still nonetheless ask -- and answer -- the question, what are the consequences of NOT entering into such an ‘access agreement’ with the US? I think it should be obvious that this country’s foreign policy has to take into account geopolitical realities and that the makers of such policy will often need to make pragmatic -- if not necessarily idealistic -- decisions if we are to advance our own national interests.” [Pragmatic foreign policy, Rene B. Azurin, Business World, March 26, 2014]

“Having the military bases of a foreign power on our soil clearly upends traditional notions of independence and sovereignty, which understandably raises the hackles of the ‘nationalists’ among us. It seems to me, however, that those responsible for our foreign policy have to sometimes balance abstract ideals against the practical and concrete implications of not yielding a position on certain issues. And, as far as that’s concerned, actual costs and benefits, to the Filipino people as a whole, have to be valued and considered. Priorities, in terms of promoting the overall welfare, necessarily enter into these calculations.”

Can we fix or solve problems of consequence? Apparently we can although many quarters say challenges remain, which would again test our resolve: “The Philippine government signed a peace accord with the country's largest Muslim rebel group on Thursday, the culmination of years of negotiations and a significant political achievement for President Benigno Aquino III.” [Philippines and Muslim rebel group sign peace deal, Oliver Teves, Associated Press, 27th Mar 2014

"In signing this agreement, the two sides have looked not to the problems of the past, but to the promise of the future . . . After so many years of conflict, and so many lives lost, it is a momentous act of courage."

"For generations, fellow Filipinos in the (southern Mindanao) region were embroiled in a cycle of poverty, injustice, and violence," Aquino said. "If we are to truly address the root causes of conflict, we must close the gap between the region and the rest of Filipino society."

“Some in the crowd wiped away tears as presidential peace adviser Teresita Deles said in a speech, her own voice breaking: "No more war! ... Enough!" 

What about “enough of underdevelopment” – and persistent poverty – or more precisely, enough of political patronage and plunder and oligopoly . . . and ideology?

Thursday, April 3, 2014

Reform matters – beyond “nationalism and political correctness”

Is Juan de la Cruz predisposed to reform? Consider: we grew up sheltered in a society that is parochial and hierarchical and where subservience is reinforced? My parents sent me to a parochial school – and so I can write about parochial – and I did it too with my daughter even in suburban New York. And we take it as a given that our cacique masters rule – or oligarchy or political dynasties? “Let's face it; honest media are still the most potent watchdogs to guard against corrupt public servants and jaded official conduct. One cannot underestimate the power of media not only to inform but to educate. That is of course, counting out the so-called‘envelopmental journalists,’ and there are legions of them, whether at the national or provincial levels. Broadcast block-timers who are adept at ‘ACDC (attack-and-collect, defend-and-collect) journalism’ are among them.” [Dr. Antonio Montalvan II, Miriam's shame campaign, Kris-crossing Mindanao, Philippine Daily Inquirer, 24th Mar 2014]

And what do we read and watch and hear about – if not oligarchy and political dynasties? And we wonder why we can’t attract FDIs – when the world knows that ours is a skewed playing field? And on the one hand the DTI is husbanding the development of 30 or so industry road maps while on the other the DOE is saying that private industry must build more power plants? The left hand does not know what the right hand is doing?

How can we push industrial development without an energy infrastructure and absent government leadership in light of what a couple of legislators said, that vested interests have been fighting efforts in energy development? We can all be screaming reforms until we’re blue in the face but until we step up to the plate we shall be an “ampaw economy”? For example, we are more adept in manipulating the pork barrel system than pushing infrastructure development via the PPP? And how can we put up a modern airport when we can’t agree on most things – and thus can’t problem-solve most things?

“SINCE MID-2012, the National Competitiveness Council (NCC) has been working to lower the cost of doing business in the Philippines . . . As in Gameplan 1.0, the basic elements of the plan are a series of videoconferences with IFC analysts in Washington and brainstorming and problem-solving workshops . . . in improving the 10 processes covered in the Doing Business report . . . If the objective is to lower the cost of compliance for entrepreneurs and businesses and thereby create impetus for new business growth and expansion, then one approach is to repeal or eliminate laws to create the overall effect of lowering the cost of doing businesses . . . Other countries including Korea, Vietnam, Cambodia, Mexico, and Australia have done precisely this.” [Repeal laws and lower cost of doing business, By Guillermo M. Luz, Philippine Daily Inquirer,29th Mar 2014]

This is not the first time this blog has raised our sheltered upbringing. For example, is it true that “mababaw ang kaligayan ni Juan de la Cruz.” We can’t seem to have a sense of vision because most things have been paved for us? And so as one priest said, even our corruption is “Jesuit based.” Our world has been shrunk for our convenience? And, not surprisingly, we equate nationalism to parochialism? And no matter where in the world we traveled, when we arrived at NAIA, our sense is “there is no place like home”?

Unwittingly, that sense comes with the broadest definition of what home is? Let's set aside the soft spot in our hearts for a moment and figure out the fallout – beyond NAIA being among the worst airports – like corruption is not just “Jesuit based” but more so “family based”? And what about being left behind as an economy and as a nation? And now Francis is opening our eyes so that we don’t confuse faith with hierarchy, the root of our subservient culture? These people are supposed to be holy, and they're stealing!”

Many must have watched the Charlie Rose interview with Larry Page of Google. “We are supposed to make the world a better place.” And I am paraphrasing. “Where we are now is just scratching the surface. For example, information is power – but not until it becomes knowledge. That is what we are trying to do – computing must be able to do that by being able to sense what we need something for. And it is always to make the world a better place. Internet access, for instance, demands a lot of technology even satellites to be able to send signals to our gadgets, but what about people in poor countries? And so we asked ourselves, how can we mirror a satellite for these people? What about the concept of a balloon? And so we are developing a balloon that will give people access to the internet.”

And when Charlie Rose asked, Rupert Murdoch said curiosity would describe how his mind works, and Warren Buffett and Bill Gates said focus, what about you? “We think of what the future would be like and we ask ourselves how we can get there.” And it brings to mind the mantra of innovation: start with the end in view. [And focus ought not to be lost to Juan de la Cruz; it is something we have yet to demonstrate – as in nation-building, starting with energy and a handful of strategic, competitive industries?]

How could we Pinoys have a sense of vision? A vision is forward-looking, not directed and nailed to the past – that of a hierarchical, cacique and subservient culture – that breeds tyranny and corruption and is family based and “Jesuit based and ‘kaklase’ based and law school alumni based,” to quote a priest? Before we can embrace reform we need a vision for Juan de la Cruz and the ability to focus on that vision, say, nation-building?

The above comments came to me after reading the following articles:

From Dr. Jose V. Abueva, Our only republic, Philippine Daily Inquirer, 22nd Mar 2014: “. . . In his column ‘Newsstand’ (Opinion, 2/12/13), John Nery questioned the historical and legal accuracy of a ‘Fifth Philippine Republic.’ We are also doing so . . . As an assertion of nationalism and ‘political correctness,’ President Diosdado Macapagal changed the date of Philippine independence to June 12, 1898. But this does not alter the historical and legal basis of the establishment of the republic in 1946.”

“So, in our view and in fact, we only have one Republic of the Philippines. It began on July 4, 1946. But 68 years later, our republic is still ‘a soft state’ that shows some signs of ‘a failing state.’ We are still suffering from the debilitating effects of the Marcos dictatorship and we have yet to consolidate our democracy 28 years after our glorious ‘people power’ revolt in 1986.”

“To consolidate our democracy, we have to make real and palpable progress toward fulfilling our constitutional vision to ‘build a just and humane society’ and ‘a democracy under the rule of law and a regime of truth, justice, freedom, love, equality, and peace’ . . . We need many more transforming leaders and even more empowered citizens who can effectively participate in politics and governance.”

“Moreover, we have to transform and reform several of our obsolete and dysfunctional political institutions . . . Some of these reforms will require amending our 1987 Constitution . . . As the largest Church, our Catholic Church must be reformed to make it truly conform to our faith and effectively involve the faithful in its mission.”

And from Carmen N. Pedrosa, From a distance, The Philippine Star, 22nd Mar 2014: “I attended the German Chamber of Commerce lecture discussion to see what the invitation could possible mean by “Creating more and better jobs: we can work it out.” The guest speaker was Rogier van den Brink of the World Bank.”

“There were many things that could be done but the government will have to do its bit about the ease of doing business here. Too difficult and that goes for local businesses as well . . . First, the central policy challenge facing the Philippines today is how to accelerate inclusive growth, the type that creates more and better jobs and reduces poverty . . . [Y]ou already know what reforms are needed to create more and better jobs . . . the reasons why these reforms are well known, but not implemented, are also well known. Reforms create winners and losers . . . the winners have been unable to convince the losers that implementing these reforms would put the country on a much higher growth path than before, which would also benefit those who would lose out in the short term. Hence, there is no simple and quick technical solution for the reform agenda . . . Finally, and more importantly, seizing this window of opportunity is not just the job of the President: government, business, labor, and civil society, need to work it out with a sense of urgency and agree on an action plan on job creation.”