Wednesday, July 1, 2015

“It takes a village”

It takes an ecosystem to develop a growing and sustainable economy and move from Third- to First-World. “It takes a village” came to mind upon reading the following: (a) “6 of 10 Pinoys do not believe PH corruption has lessened” and (b) “Connecting the Philippine economy to national, global competitiveness.” And then these: (a) “Doing business beyond borders;” (b) “Wanted: enabling government” and (c) “Gov’t lacks ability to implement.”

Should we be surprised that “Six out of 10 Filipinos do not think there is less corruption in the past three months, based on the latest Ibon Foundation survey results”? [6 of 10 Pinoys do not believe PH corruption has lessened, Ellalyn De Vera, Manila Bulletin, 25th Jun 2015]

“The nationwide survey conducted last May 13-23 among 1,496 respondents found that 59.8 percent have disagreed that there was less corruption in the last three months, while only 23.8 percent said corruption was less. This is an increase from the previous round of 54.7 percent share of respondents who do not think there was less corruption in the country.

“In the same survey round, seven in 10 Filipinos believe that poverty has not lessened in the past three months. Ibon found 72.3 percent of the population saying poverty incidence has not lessened in the past three months, while 17.9 percent said otherwise. The result is consistent with the poverty rate of 67.2 percent, which was earlier released by Ibon Foundation.

“The survey results were released amid government efforts to intensify its anti-poverty program. Based on the latest data by the Department of Social Welfare and Development (DSWD), the government’s conditional cash transfer program, the Pantawid Pamilyang Pilipino Program has expanded to 41,519 barangays in 144 cities and 1,483 municipalities with 4,424,705 registered households nationwide.

“The program is currently in its seventh year of implementation having started in 2008. Since then, roughly P200 billion was spent for the program.”

This blog has pointed out that fighting poverty will not be the answer to the state of affairs we’re in. Like an individual or enterprise a country needs to fend for itself. That is why economic development is fundamental to nation building. The evidence? Despite government efforts to intensify its anti-poverty program, poverty remains alarming.

And in today’s world, the challenge inherent in nation building is even more daunting. “The quest for new streams of revenue is stimulated by change. The change can be negative or positive. The discovery of vast prairies was eventually exploited by the formation of many great cattle ranches. But when in time ranching declined, some innovator coped with the problem by creating the first dude ranch. U.S. business history is rife with the discovery of endlessly new revenue streams in response to technological development, and the buzz about new revenue streams surrounding the Internet is just the most recent example. Change creates opportunities, the ability to see a potential and then to exploit it—that's what creates new revenue streams. The change may hurt or may entice. Either way, effective innovation makes use of the stimulus.”[]

In the case of the Philippines, that means we must go beyond services – or OFW remittances and the BPO industry – and higher up the value chain, and with a balanced portfolio that includes agribusiness and industry. And comes the 7 industry winners from the JFC that we haven’t embraced? Because of crab mentality – or is it “Pinoy abilidad”? We can talk but not walk Pareto? But then again, that is why visionary and strategic leadership is imperative.

“Most people seem to see the Asean Economic Community (AEC) as something that our country is not ready for, and will bring us great problems. The fact is, we are already more Asean-engaged than most people appear to think, and many Philippine businesses of various sizes are already reaping the benefits of doing business with our Asean neighbors. It seems to me that the first hurdle we need to overcome is the self-defeating mindset that ‘we are not competitive enough,’ ‘we are not prepared,’ or government has not done anything to prepare us for the AEC.’” [Doing business beyond borders, Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 23rd Jun 2015]

Is it the people or is it government? “‘Why is it that government wants to put every obstacle it could possibly think of in the way of small businesses?’ an exasperated young entrepreneur asked me the other day. I had been quietly pleased to see him pursue entrepreneurship after having spent several years working for different companies. For many years, I have been calling on young people not to be content with getting a job to work for someone else, but rather to aspire to create jobs for others; and not to settle for earning a salary, but rather to create wealth. Thus, I was glad to see one more young person heeding the call.” [Wanted: enabling government, Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 16th Jun 2015]

“We actually have a law—Republic Act No. 9178 or the Barangay Micro Business Enterprise (BMBE) Law of 2002—that seeks to attract small businesses with less than P3 million in assets to come out from the shadows of the informal or underground economy. Qualified enterprises may apply for inclusion in the BMBE Registry of a town or city, and be issued a certificate of authority that would entitle the BMBE to various benefits.”

“That is all good in theory, but it turns out that in most places, the BMBE Law is the best-kept secret in town, especially in the city or municipal hall itself. In our own barangay office, no one has even heard of it (or at least that’s what the people there claimed). I once wrote in this column about the travails of a colleague who tried to register her business under the law at Quezon City Hall, but was given the classic runaround until she eventually gave up on the idea.”

“In 2013 the first Cities and Municipalities Competitiveness Index (CMCI) ranking was implemented. Being voluntary in nature, about 285 cities and municipalities participated in the first round. The number has increased to 534 local governments in 2014. For the 2015 round, it is expected that about 1,000 local governments out of the total 1,634 local government units will participate. With this number, it is now possible to aggregate results to provincial levels and have provincial competitiveness index, as well. This will bring us closer to the idea of creating indicators that emanates from the local government levels that can be aggregated to provinces, then to regions, then national and, eventually, connect it with our global rankings.” [Connecting the Philippine economy to national, global competitiveness, Dr. Alvin P. Ang, Business Mirror, 25th Jun 2015]

“For example, data on the business registrations, including the gross revenues of firms, jobs created, productivity, among others, emanate from the business permits data. This data can be aggregated to represent the size of the local economy and comparing them into two periods will allow us to estimate growth. Hence, in a way, the indicators already show the local economic growth.”

That sounds promising. But are we in fact out of the woods? “For years, the excuse for lousy infrastructure is we don’t have enough money to build decent ones. Today, however, that is no longer the problem.” [Gov’t lacks ability to implement, Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 26th Jun 2015]

“We have enough funds in government and in the private sector to finance the construction of much needed infrastructure such as railroads, roads, flyovers, dams and airports. Government, by its own admission, is awash with funds, but they don’t have what it takes to implement approved projects . . . This is not good for the country. In fact, our economy stalled over the last quarter because of what Budget Secretary Butch Abad calls a technical deficit or the lack of ability on the part of implementing government agencies to get their projects going. It is also called lack of absorptive capacity.” 

Indeed it takes a village. But if we are to fend for ourselves, we better internalize that the world will not wait for us. Our track record is dismal! We are infamous for our inaction, wasting decades without batting an eyelash? The evidence? NAIA 3 and Mindanao . . .  and on and on . . . we go!

What are we missing? A sense of purpose? Focus? Conviction? Does Juan de la Cruz need to be stout-hearted?

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