Saturday, May 10, 2014


It connotes being “two-faced.” To illustrate: On the one hand our thought process has a bias for comprehensive, as in CARP or the Comprehensive Agrarian Reform Program – but where we’ve yet to deliver on the promise. While landownership in CARP is laudable, the outcome we must seek must go beyond – i.e., a true comprehensive program must be defined as a virtuous circle. And the key to attaining such a goal is to first view the program from the backend, not the frontend. For example, the output must generate a surplus so that the process goes round and round as in a virtuous circle. Put another way, in a market economy, industries – including agribusiness – must meet the demands of the market. It is the essence of free enterprise, and where competition is fair and square. And so we can’t just assume that whatever we produce will find a market. We must design our products to deliver a compelling value proposition to the consumer. Why are we an oligopoly, for instance, and talk about a level playing field like a promise to be broken? Is it because we have yet to internalize “fair and square” – i.e., the simplest definition of freedom and democracy?

And on the other hand, “The Philippines has yet to promulgate a comprehensive antitrust statute to fully cover the anti-competitive acts [in the numerous but] fragmented legal provisions . . .” of what we consider a competition law. Not surprisingly, PHL is not fully compliant with the ASEAN guidelines. “Congress’ lack of success in passing antitrust legislation [stems from] historical and social circumstances . . . which have largely concentrated economic power in the hands of a few who lobbied against competition . . .” [Competition needed, Opinion, Philippine Daily Inquirer, 28th Apr 2014]

Yet do we sincerely believe that we are the next Asian tiger? It all starts in the mind. And we can’t be a tiger if we have a bias for sub-optimization. To maximize efforts in pursuit of a major undertaking may not be realistic thus enterprises and nations commit to optimization instead. But to sub-optimize is idiocy – it is a race to the bottom especially in this day and age when countries have formed economic blocs that by definition will have winners and losers. [And we’ve lived through it with my Eastern European friends, starting from how we prepared as their nation geared up to accession into the EU to how to compete with Western-industry behemoths to extending our wings to Asia and then to North America, where pleasingly even New Yorkers have shown us a lot of respect – aka “ease of doing business”.]

But in our hearts and minds, can we shake off our cacique culture given all the privileges that come with rank? In an egalitarian society privileges are an insult to a people’s intelligence, character and maturity – or why monarchies, like in Spain most recently, have earned the people's wrath? To truly take freedom and democracy to heart, a community cannot assume that people aren’t equal? And we Pinoys can’t keep to our assumptions and practices and beliefs and ideologies if indeed we mean what we say, that we want “inclusive growth”? Inclusive growth is not paternalism. It is not alms giving. It is not CSR . . . They in fact reinforce our cacique culture – and that is borne by science, i.e., charity-giving triggers the part of the brain associated with pleasure. Inclusive growth is about building strong democratic institutions. It is leveling the playing field. It is egalitarian. Is our inability to embrace a true competition law reflective of a fundamental flaw?

We were just reviewing an acquisition opportunity with my Eastern European friends in Europe. And what caught our attention right away was why the opportunity even came about. Lo and behold, the European Union’s commission for competitiveness mandated the company that owned the brand to divest it after it had successfully won a bid to acquire another brand with a dominant market share in the same business. In other words, in these markets where the costs of doing business are higher than in PHL, the reality is “ease of doing business” is their mantra, i.e., competition is fair and square, mitigating their higher costs structure. And it’s not something out of the ordinary; it is part of doing day-to-day business, like we came across the opportunity because it came through our email system. Of course, there is no perfection in this world – not even in Europe – but the fact that we in PHL remain the least able to attract FDIs should wake us up?

And what do we get in our personal email inboxes? And it’s not uncommon: this or that oligarch celebrates another success – but at whose expense? But then we just have to ask ourselves, are we ‘balimbing’ – or just behind the times?

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