Monday, November 2, 2015

Competitiveness is a state of mind (II)

It is not static; it is akin to a moving target. But it’s understandable that we would be upset. “PH ‘ease of doing business’ ranking slips: Down to 103rd spot, officials assail WB methodology,” Paolo G. MontecilloPhilippine Daily Inquirer, 29th Oct 2015.

The Philippines’ ranking slipped in the World Bank’s latest report on the Ease of Doing Business globally—an oft-cited indicator by the government to illustrate progress—raising alarm bells for officials who immediately assailed the report’s reliability and predictability. Government and private sector officials also placed part of the blame on changes in how scores were computed.

“Finance Secretary Cesar V. Purisima said this could have dire consequences on the Philippines’ ability to attract a higher level of much-needed investments. ‘Erratic methodological changes year after year severely threatens the report’s credibility as a reliable global measure of competitiveness,’ he said in a statement.

“He likewise described World Bank officials as bureaucrats ‘sitting in comfortable offices too far away to fully understand contexts and appreciate reforms being undertaken.’”

“World Bank officials acknowledged the reforms undertaken by the Philippines in the past year to make the country an easier place to do business. The problem, according to the WB, is that other countries did more.” [EDITORIAL - Accelerate reforms, The Philippine Star, 30th Oct 2015]

“The world’s top 20 economies for doing business compete with each other for inclusion in the top 10. Regardless of the methodology, they keep emerging as the easiest places for doing business. It is useful for critics of the World Bank report to bear this in mind. The nation must aim not just to do more by way of reforms but to accelerate faster than others.”

Does that bring to mind how mindsets shape our thinking? “Fixed vs. Growth: The Two Basic Mindsets That Shape Our Lives,” Maria Popova,, 29th Jan 2014. “What it all comes down to is that a mindset is an interpretative process that tells us what is going on around us. In the fixed mindset, that process is scored by an internal monologue of constant judging and evaluation, using every piece of information as evidence either for or against such assessments as whether you’re a good person, whether your partner is selfish, or whether you are better than the person next to you. In a growth mindset, on the other hand, the internal monologue is not one of judgment but one of voracious appetite for learning, constantly seeking out the kind of input that you can metabolize into learning and constructive action.

“This illustrates the key difference between the two mindsets — for those with a growth one, ‘personal success is when you work your hardest to become your best,’ whereas for those with a fixed one, ‘success is about establishing their superiority, pure and simple. Being that somebody who is worthier than the nobodies.’ For the latter, setbacks are a sentence and a label. For the former, they’re motivating, informative input — a wakeup call.”

To those with a fixed mindset, “success is about establishing their superiority, pure and simple.” Does that explain our hierarchical system and structure . . . and why we can’t figure out why an egalitarian ethos is imperative if we are to have an inclusive economy? In other words, hierarchy and political patronage and oligarchy Philippine-style can’t bring about economic development despite the mantra of “daang matuwid”?

Listen to how we criticized the new WB report; isn’t it like saying Nokia and BlackBerry had a beef because the iPhone pulled the rug under them? The rules of the game are constantly changing! It is not the strongest or the most intelligent that survives but the one that is most adaptable to change!

Should we then see our rating slippage as a wakeup call? “World Bank recommends: Open up shipping, rice, telecommunications sectors,” Richmond S. Mercurio, The Philippine Star, 30th Oct 2015. “The World Bank is urging the country to open up its telecommunications, shipping, and rice industries to more competition locally and internationally to increase competitiveness and attract more foreign investments. Karl Kendrick Chua, senior country economist of the World Bank Philippine Office, said the three industries have the potential to create more jobs if only the country could improve the quality of their service and lower prices. ‘These are the sectors wherein the costs are somehow prohibitive, negative to the quality of service you get,’ Chua said.”

But that demands undoing hierarchy, political patronage and oligarchy? Which goes against the grain – that of our inward-looking, parochial bias? Which is how we define patriotism and ranks pretty high in our value system? And would explain what’s behind our restrictive Constitution?

And so we are meant to have a fixed mindset as a people? Consider: “Apec’s globalization hurts local SMEs,” Teddy CasiñoPhilippine Daily Inquirer, 30th Oct 2015. As host of this year’s summit, the Aquino administration plays a big role in Apec’s posturing of concern for the weak and small. The Philippine government has even injected President Aquino’s hollow slogan of ‘inclusive growth’ into Apec’s mix of feel-good jargon, with the SME sector as one of its poster boys.

“But first we have to ask: What impact did three decades of trade and investment liberalization have on our SMEs? And will Apec’s newfound advocacy for SMEs do any better? Economic liberalization policies since the late 1980s have caused the demise of our manufacturing sector, notably garments and textiles, footwear, rubber products, furniture, appliances, food and beverage, steel, chemicals, drugs and pharmaceuticals, many consumer goods and even agro-industrial products.”

If that indeed is the worldview of Juan de la Cruz, how do we expect to adapt to this changing world? Does it take a Chinoy to step up to reality? “I am currently traveling with a group of Filipino businessmen and journalists invited by Carlos Chan to see one of his 14 Oishi factories across China in Xinjiang province.” [Along the Silk Road, Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 30th Oct 2015]

“It’s hard to walk through a convenience store in many cities in China and not spot Oishi potato chips and snacks competing for your attention with the likes of Lay’s and Pringles. Oishi’s spelling looks a lot like the Japanese word for delicious, oishii. Yet low-profile Carlos Chan, the guiding force in China behind brand owner Liwayway, hails from the Philippines. Oishi’s success in the mainland helped Chan debut at No. 25 on the new Forbes Philippines Rich List published this month with a projected wealth of $500 million.” [He's Not Japanese: China Success Helps Oishi's Carlos Chan Debut On New Philippines List,” Russell Flannery, Forbes, 11th Aug 2013]

“Liwayway’s beginnings can be traced back to post-war Manila, Philippines. It started as a small business engaged in repacking corn starch. In 1966, the business was incorporated as Liwayway Marketing Corp. (LMC), distributing starch, coffee, confectioneries, and other products. Carlos and Manuel Chan, second generation scions, took the company to the next level. In the 1970s, LMC under Manuel quietly entered the nascent snack food business and introduced its first product, Oishi Prawn Crackers.

“How many more Filipino food multinationals will join the Asean elite circle remains a major strategic question. Changing the inward-looking mindset of many Filipino entrepreneurs to one that is outward looking may be a big challenge.” [Building a multinational brand: The Oishi story, Rolando T. Dy,, 26th Jan 2015]

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