“We like to think we're rational human beings. In fact, we are prone to hundreds of proven biases that cause us to think and act irrationally, and even thinking we're rational despite evidence of irrationality in others is known as blind spot bias.” [58 Cognitive biases that screw up everything we do, Drake Baer and Gus Lubin, Business Insider, 18th June 2014]
Is there something to read between the lines in the following? “Cielito Habito, chief of party of the USAID Trade Related Assistance for Development (TRADE) Project and former Philippine economic planning chief, said some deterrents to FDI persist in the Philippines, such as constitutional restrictions on foreign ownership, the high cost of power, infrastructure inadequacies, cumbersome trade transaction processes, and governance hurdles including at the local government levels.” [PH still lags in FDI inflows as Asean integration nears, The Manila Times, 24th June 2014]
“’In a second analysis by UNCTAD, the investment incentives mostly focus on economic performance objectives, and less on sustainable development . . . There is a need to better align incentives to sustainable development goals (SDGs),’ Habito said. The SDGs are intended to galvanize action worldwide through concrete targets for the 2015 to 2030 period for poverty reduction, food security, human health and education, climate change mitigation, and a range of other objectives across the economic, social and environmental pillars,” Habito said. Habito added that inadequate public finances will need to be supplemented by private sector investments, which are currently very low.”
If investment or the lack of it in fact underpins our underdevelopment and our inability to focus on sustainable development, what would it take for us to have a bias for investment? Is the reason we seem unable to address the challenge of investment that we’re not foursquare behind it? And so international institutions continue to hammer us on the “constitutional restrictions on foreign ownership, the high cost of power, infrastructure inadequacies, cumbersome trade transaction processes, and governance hurdles including at the local government levels?”
Do they in fact represent our “blind-spot bias”? And so we’d look elsewhere like targeting rural poverty or farms-to-market roads? But they are the low-hanging fruit – similar to promoting OFW remittances that have translated into our own “Dutch disease”? Put another way, they are the inverse of the Pareto principle?
If we are to look at agribusiness, for example and develop a roadmap, it has to be in the context of agribusiness being a critical building block of PHL economy – not a livelihood or charity initiative. And it demands for us to first define what the endpoint is [note that the typical linear thinking process starts with the input, not “with the end in view,” or clearly establishing what success means or what the endpoint is like], as in making PHL a major player in agribusiness. (Sadly, for decades, major agricultural products were in the back pockets of vested interests – and we wonder why PHL agriculture is outdated? And they were laughing their way to the bank because of our complicity, i.e., our protectionist bias or how we would define nationalism? And we have reams and reams of research to justify our worldview? No wonder Lee Kuan Yew and Mahathir Mohamad both would choose to give unsolicited advice given our parochialism? Let’s grant, for the sake of argument, that they are ignorant especially of our culture, but a medical historian, in 1971, noted that in the history of man, “the experience of the ignorant has routed the wisdom of the learned,” from The New York Times, Who made the pacifier, Dashka Slater, 20th June 2014. Sadly, Singapore and Malaysia have the better experience in development?)
If we are to be a major agribusiness player, what products must be our focus – i.e., like in the private sector, our product portfolio must be comprised of products that will give us the biggest bang for the buck. And that presupposes that products are segmented consistent with their architecture: from basic to high or very high value-added in order to optimize returns. That can only come if we've figured out the regional and global markets for these products. How do we then penetrate these markets? What mechanism must we put in place to tap and win these markets? (And doing road shows or even attending trade fairs is too passive; marketing efforts must be proactive.)
How do we produce these products, beyond the requisite farms, what industries must we erect? What are the mandatory inputs at the farm-end and at the industry-end? How do we assemble these inputs and pull them together to attain synergy? Do we need advanced if not state-of-the-art technology to sustain competitiveness? What about foreign technology and investment? [Note that the inputs come later in the process, i.e., a roadmap is akin to a GPS; we first set where we want to be, not the other way round. And we have visionaries to thank and the psychologists that figured out how their minds worked.]
But back to infrastructure: “[I]nfrastructure development in the country remains a major hindrance to the country’s development amid the planned regional integration.” [AEC offers trade opportunities but infra bottleneck remains, Mayvelin U. Caraballo, The Manila Times, 24th June 2014]
“Philippines is the third lowest in overall quality of infrastructure in the Asean region based on the Global Competitiveness Report 2013-2014. To fully take advantage of the opportunities of an integrated Asean, investments in infrastructure are needed particularly in the aviation industry . . . NAIA 1 (Ninoy Aquino International Airport Terminal 1) served 7.5 million passengers in 2012, but its capacity is only 5.5 million passengers . . . emphasizing [the necessity] to boost infrastructure spending to 5 percent of GDP by 2016.”
“One commentary described the Italian situation as a government that is slow, inept and bureaucratic; where it takes years or decades to get anything through the courts. Italians have displayed a marvelous aptitude for getting things done in spite of government, not because of it.” [Philippines: The Italy of Asia (?), The Business Mirror Editorial, 24th June 2014]
“THERE are some interesting similarities between Italy and the Philippines. Obviously the Roman Catholic Church runs deep into both countries’ culture, and many people feel the Church has or attempts to have too much influence over secular affairs. Italy, like the Philippines, is a country where the people are tied to their provincial roots.”
“Matteo Renzi, from the left-leaning Democratic Party, at 39 years old, became Italy’s youngest Italian Prime Minister in February . . . For the last 10 years, his one objective has been the top spot to bring genuine structural reform to Italy. Renzi has convinced many people that reform is possible. Specifically, he wants to eliminate their Senate and streamline the decision-making process in the house of Parliament. This will require a change in the Italian constitution. He believes that the current system discourages foreign direct investment . . . He wants to reform the judicial process to allow court cases to be resolved in a realistic timeframe.”
“This is not just all talk and campaign slogans. Renzi is willing, because of the parliamentary system, to have his government face election after election if necessary to allow the people to decide if his reforms are welcomed or not . . . Renzi does not see those who object to all of his plans as the opposition but as an opportunity to forge alliances toward a common goal. He has a detailed vision to fix what he sees as a broken system of government. Maybe the Philippines is not the Italy of Asia, after all.”
In other words, could we ever come up with a detailed vision to fix . . . what is a broken PHL – and elect a leadership like Renzi? Could we ever step up to the plate? Could Juan de la Cruz ever figure out his blind-spot bias?
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