Saturday, January 17, 2015

Problem-solving the problem that is PHL

That may sound presumptuous but it is not if we distinguish problem-solving from prescribing a solution. Remember the adage “If it ain’t broke don’t fix it”? Most everyone knows the Nokia story, the once dominant mobile phone brand, or even BlackBerry. If it ain’t broke better fix it! And as my Eastern European friends (and in fact China under Deng when they visited capitalist Europe) would learn, problem-solving is team sport. More to the point, successful problem-solving and creativity is a product of an egalitarian environment – of openness, transparency and diversity. And the model is borrowed from the GPS: where are we, where do we want to be, how will we get there.

Problem-solving must be principle-based so that it is universal and lends itself to a sense of purpose for a group or people to commit to. Which then turns the challenge into an opportunity, meaning it brings about a sense of control, not helplessness. And the first principle is to establish an overarching goal if not vision.

Instinctively we Pinoys are wedded to the past if not old paradigms even when our daunting challenges demand that we pause and revisit our worldview . . . Take a specific example: while most nations first became an agriculture economy, agri-business or agro-industry – given its greater multiplier effect and impact on economic output – would upend traditional agriculture because the latter was sub-optimal. [“Investing in agriculture, Barbarians at the farm gate, Hardy investors are seeking a way to grow their money,” The Economist, 3rd Jan 2015.]

It is not rocket science but economies of scale that facilitate efficiency, productivity, technology and innovation – but demands 50 small farmers coming together as one competitive enterprise, for example. And that means developing a community sense in pursuit of the common good – the yardstick that is inherent in nation-building . . . If we’d care to reflect on where we are and why we are where we are today!

Consider: We had mistaken that we were showered with manna from heaven – OFW remittances and (more recently) the BPO industry – even when we netted out lagging the region in economic output. The subordination of nation-building to what was convenient, despite the prize of a handful of billionaires that PHL is proud of, has its price! Where is the principle that is driving our embrace of OFW remittances? Where is the overarching goal or vision? Where is the sense of purpose or commitment or sense of control? Where are the building blocks of nation-building? Connecting the dots is the acid test of creativity – and which is why we have to rely on fate or “bahala na” as the cornerstone?

If the overarching goal is to move from an underdeveloped to a developed nation, we have to reach beyond these revenue drivers. Beyond managing the technical piece, of a $272-billion economy to grow by 7%, we must address the fundamentals and raise GDP by 50% or double GDP per capita, to make a dent on poverty . . . and be on our way to be a developed economy. Of course, as Deng Xiaoping rightly saw it, over the long-term we need to develop science, technology and education – the fourth leg of China’s “four modernizations” that included industry, agriculture and national defense.

How do we connect the dots? An economy is the aggregate of the products and services that a nation produces. Today that is largely electronics, specifically semiconductors, besides OFW remittances and BPOs. But we're not into competitive consumer electronic products that will attract a bigger regional if not global market. Our portfolio must be revisited. And the JFC has proposed, after doing their homework, the seven industry winners. They can comprise our new portfolio. The market will extend beyond the Philippines – and will attract major foreign investments, create millions of jobs and raise GDP to approximate those of our neighbors. 

That is a better hypothesis than what we've lived with for the longest time – and which must now be reckoned as a fallacy? We can't just talk a good game and put up a brave face. We must demonstrate a paradigm shift more than express a “kuro-kuro” – which we may consider and believe as an effort toward change while stuck in an old mindset?

We can’t seem to get our act together to amend the restrictive economic provisions of the Constitution, but can we focus and limit the effort to the Negative List? Indeed to amend the economic provisions as well as to move to a parliamentary system can be too much for Juan de la Cruz to chew. And to win his heart and mind we sorely need a concerted effort to educate ourselves on the imperative of doing these amendments. And that means leadership by example – as in the pursuit of the common good. It is more than relying on one’s “kaibigan, kaklase and kabarilan”? Mao was ruthless and Machiavellian yet as his health deteriorated, the person he punished for his capitalistic bend was the same person – Deng Xiaoping – he chose to lead the country despite the objections of his spouse and her Gang of Four.

If we continue the analogy with private enterprise, we need to examine the requisite marketing mix or drivers of this new portfolio, i.e., the products, their pricing, placements and promotions. That means learning more about innovation and creativity. A business if it is to be virtuous must satisfy a simple yardstick: does it make and sell things of value? And a product is of value if it addresses a human need or problem. And human need is best captured in Maslow's hierarchy of needs. In other words, man's need is progressive which marketers must then translate to an ever-increasing value-added proposition. And the greater the value-added the wider the market it will serve. And given economies of scale the healthier the margins will be which then brings about a sustainable business – i.e., attaining a virtuous cycle.

Then comes the resource mix. This is where the public and private sectors must work together and build on the efforts of the JFC and pull together the requisite resource requirements to support the seven industry winners. And that will include: men/women or talents, machinery/equipment, money/investment, materials, and methods/systems. And finally the execution imperatives: who will do what, when, where and how?

The exercise would address the strategic industries that we must develop. But it presupposes that government will drive the development of the requisite infrastructure. For example, where is the leadership to address our now evergreen power crisis? This should shame us all! And the way we’ve allowed our big boys to elbow each other to dominate major infrastructure projects speaks volumes – that indeed we're parochial (and thus have shut out the best the world has to offer) if not incompetent because we're new in the game and more fundamentally because of the absence of visionary leadership? And worst of all, it demonstrates a culture of impunity?

Did Vietnam, Hanoi specifically, just open a new airport? And soon Myanmar? And what is our response? It's more fun in the Philippines? It's classic “pwede na 'yan” or our penchant to make-do if not value the sub-optimal. More to the point, it's not a characteristic of competitive endeavors or winning teams. It is, sadly, a worsening of our Dutch disease being incremental to our reliance on OFW remittances. 

What about other industries? Enter Pareto – i.e., toss “pusong mamon”! There will be other needs that must be satisfied but we must bite the bullet and prioritize – i.e., toss “crab mentality.” And that demands leadership! And for government it means focusing on: (a) the strategic needs of the country as spelled above and (b) good governance. We cannot have the left hand not knowing what the right hand is doing. As importantly, we cannot continue with a culture of impunity. We need “daang matuwid 2.0.” We need the church, the education community and society at large engaged and committed to “team sport” – in a national agenda and campaign.

What about Pinoy compassion, sensitivity, bayanihan, love of God, love of neighbor, etc.? “[T]he Gospel is also a summons to conversion, to an examination of our consciences, as individuals and as a people. As the Bishops of the Philippines have rightly taught, the Church in the Philippines is called to acknowledge and combat the causes of the deeply rooted inequality and injustice which mar the face of Filipino society, plainly contradicting the teaching of Christ. The Gospel calls individual Christians to live lives of honesty, integrity and concern for the common good.  But it also calls Christian communities to create ‘circles of integrity,’ networks of solidarity which can expand to embrace and transform society by their prophetic witness.” [Homily of Pope Francis in Manila Cathedral,, 16th Jan 2015]

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