“Business leader Manuel V. Pangilinan has called on Philippine companies to innovate and improve their competitiveness to prepare for the Association of Southeast Asian Nations (ASEAN) economic integration by 2015.” [MVP calls for innovation, competitiveness, Manila Bulletin, 4th May 2014] “Even before [the ASEAN integration] happens, Philippine businesses must learn to compete with the rest of [the] ASEAN without the benefit of protectionist policies from [the] government,” said Pangilinan, chairman of the Philippine Long Distance Telephone Co. Chairman . . . But certain things are clear: Economies of scale, which means big business, greater competitive strength, and a Silicon Valley culture are all imperatives when this integration might happen.”
“Should Aquino reconsider Charter change?” [Daxim L. Lucas, Philippine Daily Inquirer, 25th July 2014] “Persistent issues, like the country’s poor infrastructure, expensive electricity and high cost of doing business, are equally important to investors when they choose between the Philippines and Thailand in locating, for example. ‘We all agree that relaxing restrictions of the Constitution is just part of a bigger package,’ the MBC official said. ‘Other elements are just as important . . .’ Efforts must be exerted on all fronts for the Philippines to move forward, and for the lives of more Filipinos to be improved. ‘There is no one silver bullet,’ Perfecto said. Politicians who advocate ‘magic pill’ solutions, take heed.”
“Philippine Long Distance Telephone Co. chairman Manuel Pangilinan . . . said Thursday the full integration of the Association of Southeast Nations will not likely happen anytime soon.” [Full Asean economic integration not likely to happen soon — Pangilinan, Othel V. Campos, Manila Standard Today, 25th July 2014] “We should not be seduced by the conceptual elegance of integration . . . If anything, the reality is that Asean integration will take a long, long time to realize—certainly not in our lifetime . . . [B]usinesses should not be swayed by Asean macro-economic numbers . . . 10 member nations aggregate a market of 620 million people, the third most populous economic entity in the world, with a combined gross domestic product of $2.3 trillion . . . [T]he numbers were ‘seductive’ but ‘can be misleading.’”
“Our gains from Afta as a country are not as evident as those of other Asean members yet. But we have great opportunities, too. To win big, we have mountains of economic policy problems to overcome. [PH in Afta: Moving forward in 2015, Gerardo P. Sicat, Philippine Daily Inquirer, 25th July 2014] “These problems hinder our gains: (1) Philippine production involves high unit cost due to (a) the country’s labor market policies, with our high average wages due to minimum wage and other advanced labor legislation; (b) relatively poor infrastructure investments; and (c) corruption that adds to transaction costs. (2) There is a faulty investment incentives system that acts as barrier to foreign direct investment from our shores and drives it to our Asean partners.”
“The elevation of the country’s credit rating to ‘investment grade’ does not solve the problems that we face competitively in the Asean. Policy makers need to recognize that many problems do not get solved without taking concrete steps to deal with them.”
What can I say? Disclosure: I was a regional manager at my old MNC company in 1992 when Afta was signed. And then a regional manager in North America and lived through Nafta and currently in Europe that is under the EU.
Puerto Rico today is struggling despite Nafta. In the US the American dream has been sent to the jury. “The typical American household has been getting poorer . . . The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation.” [The Typical Household, Now Worth a Third Less, Anna Bernasek, The New York Times, 26th July 2014]
And my wife and I were recently in Canada and a businessman-friend was telling us how taxation makes him want to move to the US. And another found it advantageous to bring in products from war-torn Syria than to produce them in Canada.
The bottom line: There is no free lunch. As they say in New York, we have to work our butt off.
Very recently my Bulgarian friends celebrated the 20th anniversary of the firm. And we held it not in Sofia, the capital, where the head offices are but in Shumen where the manufacturing operations are – comprised of 7 world-class facilities plus a state-of-the-art logistics center, with the 5 erected and the 3 unrecognizable after being brought to the future and quantum scale-ups within the last 11 years; and with still another project underway. It is a town of 80,000 in the middle of nowhere though through a modern highway is only an hour’s drive (100 km) to/from the Black Sea port of Varna. But it has a plateau that is home to a humongous cubist-style monument – “it stands at a height of 450 m above sea level and can be seen from 30 km away” [Wikipedia] built by the Communist in 1981 to commemorate the nation’s 1,300 birthday, represented by the exact same number of steps that snake up the plateau – that offers a glorious view of the town and its surrounding areas, green all around and very sparsely populated.
Three young ladies in their mid-20s were the workhorses that organized the celebration [where else but on the plateau] via a music festival that was widely advertised and opened to the public (under the supervision of their manager.) And after the event, foreigners sent messages: “You ought to manage the next Olympics,” said one, and another: “Hillary Clinton needs you for her campaign” – because there was a sea of humanity yet everything went like clockwork. Because the company does business in different parts of the world, they brought performers from overseas, aside from our foreign guests. It was a gorgeous summer night and two bankers, an American and a European, were talking about the recent bank run in Bulgaria that brought down one of the two that were in the news. And then they asked: “How much more of the world are you conquering? We’re here to join you in the ride!” And in jest I said, “We’re doing the next one in Central Park (New York.)”
Beyond working their tails off, my Eastern European friends are getting more disciplined in their adherence to the basics and fundamentals of the business. They benchmark their efforts against the world’s biggest Western competition – not weak regional or local players – and they know they have ways to go and their work cut out for them . . . and that is propelling their pride and motivation. Yet three major global brands have made approaches seeking partnerships; and they feel like a debutante being wooed by Prince Charming, three times over. And it was only 11 years ago when the then young owner (he started a cottage industry of cleaning products that was then yet to be profitable) shared his vision: to be the Procter & Gamble of Eastern Europe, committing to the creation of desirable consumer products; and precisely one of the first things we did was to organize marketing and R&D under one roof. And the rest as they say is history, and a pretty short one.
The jury is out on Afta. But in the meantime, we Pinoys can’t be ensconced in “same old, same old” if we are to make something of our once Pearl of the Orient. For instance, the challenge of innovation and competitiveness is one dimension – and where we rank poorly as reported in the most recent global rankings. [See above re MVP calls for innovation, competitiveness.] But there is a more fundamental dimension and where we also lag especially in the region and that is: (a) our infrastructure, or lack of, and (b) the absence of an industrial base that first and foremost is strategic and thus feeds into a network of complementing industries. And the resulting synergy is what would make PHL industry competitive – and which is what an ecosystem is. It’s not that different from how a course (education) is designed – i.e., there is a foundation and upon which building blocks are arrayed that complement each other. Yet in the real world we threw that knowledge out the window – in deference to our cacique system and structure?
And that’s not that different from how the ex-commissars in former Soviet satellite countries held sway over the people, very similar to how we deferred to our cacique masters to be the backbone of the economy and the nation – i.e., founded on political patronage and oligarchy instead of a sound ecosystem. And given that reality, Mr. Pangilinan is spot on: “If anything, the reality is that Asean integration will take a long, long time to realize—certainly not in our lifetime.”
Translation: Philippine oligarchy and their political patrons will not lead the change that will put PHL on a transparent, progressive course? For instance, didn’t at least a couple of legislators reveal efforts by vested interests to block energy legislations? Does it bring to mind how American bankers brought the world to its knees? The good news is the judicial system in America has begun to step up to the plate. Where once certain banks were “too big to fail,” recent judgments and settlements have set a precedent: egregious banking practices must be meted with stiff penalties. News items: “JPMorgan begins to provide consumer help under $13 billion settlement” . . . “Citigroup agreed to pay $7 billion [over shoddy mortgage securities transactions in the years immediately before the 2008–2009 financial crisis.]”
Whether the liability of Philippine oligarchy and their political patrons is greater or lesser than those of financial institutions in America is not the point. But consider: the PHL energy crisis has been around for decades. How much has this one critical building block of the economy undermined PHL progress and development? Numbers aren’t the be-all and end-all of sound economic fundamentals? For example, in Wall Street they measure quality of earnings.
And more to the point, why are we still underdeveloped after all these years? Isn’t it funny that we were chest-thumping when the economy was roaring at the 7%-range until recently when reality hit home? But didn’t we know that even at that range it would take us at least a generation to become a developed economy, i.e., we must have known the celebration was premature? And that is why in the private sector they draw a distinction between analysts and leadership – because the latter has the strategic perspective? Simply put, leadership by definition will be two steps ahead of analysts? Unless of course the leadership is incompetent.
At the end of the day, will we continue to see no evil, hear no evil and speak no evil? Yet the problem with an uprising – which some are talking about – is that it doesn’t change us . . . like EDSA I didn’t change us nor did the Arab Spring change the Arabs. How does Juan de la Cruz change? Does it start with the family so that it does not nurture nepotism as a way of life, for example?
And what must be the guiding principles for our school, the church, government and society-at-large? For instance, if obedience can be blind [thank God for Francis!], and risks creating a very soft culture, does it also hold for blind nationalism because it breeds parochialism? And the weaker and the more parochial the culture, the more it nurtures corruption (as we’ve witnessed) as well as paternalism – instead of visionary leadership? A nation of 100 million can’t navigate the 21st century without visionary leadership?
Thus on the one hand we can’t have political patronage and oligarchy and on the other paternalism and populism – being the recipe for disaster aka crab mentality, the race to the bottom and why the region has left us behind? Visionary leadership is not about committing to “300 tenets” (e.g., the wish lists of the majority of us) either but establishing and being single-minded in the pursuit of the “Great Commandment” (e.g., a vision for PHL)?
The bottom line: How do our institutions develop Juan de la Cruz to be equal to the task of nation-building? We can all be great in whatever we do but if we can’t be a great nation it’s a shame – because it means we all failed as caretakers of PHL?
No comments:
Post a Comment