Wednesday, April 8, 2015

“Don’t overpromise and underdeliver”

That is fundamental in managing expectations that leaderships must recognize. Yet we can commiserate with President Aquino: “[T]here has been so much good news and yet this good news has often been relegated to the back pages of our broadsheets.” [Aquino laments people losing sight of PH successes, Jerry E. Esplanada, Philippine Daily Inquirer, 25th Mar 2015]

Still, the administration wouldn’t want to be raising expectations: “You ain’t seen nothing yet”! Does it bring memories of “Mission Accomplished”? And didn’t the adventurism by ideologues in Iraq contribute in more ways than one to the continuing conflicts in the world, take ISIS for one?

In managing expectations context is imperative. It is about treating others as equals. But given our hierarchical system and structure, we are likely to miss that totally – e.g., we value CCT but miss out on the commitment to community and drive economic development? And not surprisingly, the JFC are finding themselves holding the bag in the efforts to push industrialization?

“Labor export was a stopgap many East Asian states—including today’s South Korean powerhouse—took up in the 1970s, while moving from a strategy of import-substituting industrialization to labor intensive exports. Most of our neighbors have given it up, as their economies picked up speed and gave their workpeople more pleasant alternative occupations. In our country, by contrast, labor export has become a prime development program. Unlike our vigorous neighbors, we simply have no alternative. Since we have few competitive goods to trade, we export warm bodies instead.” [More and more are leaving home ‘for the sake of the children’: ARE WE RAISING OUR PEOPLE TO BECOME MIGRANTS (?), Juan T. Gatbonton, The Manila Times, 21st Mar 2015]

With our average income as meager as it is, we must be concerned (or be very, very angry, to borrow words from American economist Paul Krugman) that we’re not aggressively driving GDP. We can’t philosophize and romanticize the school of thought that GDP doesn’t matter. [On the other hand, because we confuse our problem as one of poverty instead of underdevelopment, we want to be compassionate and keep raising the minimum wage while failing to aggressively drive average income thus undermining an economy that is already unproductive, akin to burning a candle at both ends.] We're reading too much about developed economies and their challenges that don't apply to an underdeveloped nation like ours. And that is why the rating agency, Fitch, is comparing our average income to that of other countries with higher credit ratings.

“Fitch also noted that Manila’s governance standards and its per-capita income were weak points of the economy even as its public finances remain a neutral factor. Fitch, likewise, said the steady inflow of worker remittances and growth of the business-process outsourcing (BPO) industry ‘underpins’ the country’s economic growth. The Philippines’s per-capita income stood at only $2,836 in 2014 compared against the ‘BBB’ median of $10,654 . . .” [Purisima: PHL underrated, to see more credit upgrades, Bianca Cuaresma, Business Mirror, 18th Mar 2015]

Successful major undertakings are characterized not by linear thinking but by visionary leadership, and strategic thinking – the ability to see the big picture and stay with the North Star. For example, given the law of small numbers, how should we read the following? “2014 was a banner year for FDI (foreign direct investment) reaching an all-time high of $6.2 billion, 65.9 percent higher than what we received in 2013.”

Try the following: “In 1995, the foreign capital stock installed in Indonesia (due to previous encouragements of FDIs) amounted to $20.6 billion. This was already 3.1 times the comparative figure for the Philippines of $6.73 billion. By 2010, Indonesia’s foreign capital stock was $160.7 billion, by then already 6.2 times that of the Philippines’ $25.9 billion. By 2013, the latest available, the amount of foreign capital installed in Indonesia was $230.3 billion, 7.1 times bigger than that of the Philippines’ which stood at only $32.5 billion.” [‘Foreign direct investments to the Philippines and Indonesia compared’, Gerardo P. Sicat, CROSSROADS (Toward Philippine Economic and Social Progress), The Philippine Star, 18th Mar 2015]

We also can’t deny the slew of concerns, even warnings, from international financial institutions, foreign investors, rating agencies, etc. that power and infrastructure development in general, for example, continue to put us at the tail end region-wise. And as the JFC pointed out, if we are to generate jobs in a major way, we need to raise investment levels drastically and focus on 7 strategic industries as a platform for an industrialization initiative.

Thus instead of saying, for instance, “yayaman lang si MVP if we give them another infrastructure project,” what leadership must be addressing is the underlying challenge of Philippine development – or simply nation building.

And more to the point, the issue we must resolve is: “How do we put a check on political patronage and influence peddling and crony capitalism that have reinforced our oligarchic economy?” It is not about preempting a tycoon from winning a big chunk of infrastructure projects but making certain that ours is a level playing field. That is, if indeed we want to attract foreign investment to the levels enjoyed by our neighbors.

“Whether the optimists or the pessimists are proved right on the OFW question, we can’t deny there’s a growing sense of despair about our country’s future. And it’s not just our present-day leaders who are to blame.” [Gatbonton, op. cit.] “‘Philippine policymaking,’ the World Bank noted in 1993, ‘has historically been captive to powerful vested interests that have shaped economic policy, to protect and enhance their privileged position, often to the detriment of national well-being.’

“Even the Jesuit sociologist Fr. John J. Carroll became pessimistic about the long-term viability of democratic politics in our society of great inequality, ‘where the powerful use the law to oppress the weak.’ The system works less and less well; and since its problems are structural, there are no prospects for short-term improvements to which people could look forward.”

If we have to give the administration the benefit of the doubt, indeed campaigning and politicking are more fun than governing. Yet nation building is what we sorely need given our underdevelopment and the extent of poverty we are dealing with. And here visionary leadership is what is called for: “Taking the people from where they are to where they have never been before.”

Visionary leaders can motivate people to support development efforts that may be alien to us, the people, because we’ve never been there. And that is why managing expectations is imperative. That is, overpromising and underdelivering is akin to crying wolf – and undermines the credibility of leadership.

This administration is winding down. The president can make the most of it by playing and acting the role of elder statesman, if indeed he wants a place in history. The mantra ought to be to point every Filipino to a North Star. Not to make sure his candidates take over. We know Mar Roxas cannot deliver. End of story. We know Binay’s rags to riches story. While Marcos is “delusional”? We don’t have a succession plan which is not surprising if we consider that even Singaporeans are claiming the same thing.

What is a North Star? It starts with the reality that the common tao is already thinking of when to return to their provinces and not miss the next president who will be “buying votes.” And everyone knows where the money comes from. The president needs more than a peace council. He needs a “democracy council” – for us to relearn what freedom and democracy means.

If CCT hasn’t fixed the lot of the poor, the president can tell Juan de la Cruz that vote-buying is meant to make us hostage to a dysfunctional system – that is at the root of our poverty. And we can probably use help, say, from the UK and IBM – to get Philippine civil service committed to service and streamlined.

He can in the meantime instruct the cabinet to draw up an economic program that starts with a clean slate. They've had 5 years of experience to draw upon. And the outcome is what we need to hear as a nation. And put the next administration on notice. That the challenge is bigger than the next president, and given his experience he wants the nation put on the right track . . . and not accept laggard – and the attendant persistent poverty – as a given? “My loyalty to my party ends where my loyalty to my country begins.” [Manuel L. Quezon]

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