Wednesday, December 30, 2015

“White men can't jump”

Can Juan de la Cruz? It's a new year, the time to turn over a new leaf? Old habits die hard. In America people find comfort in the status quo. And why despite its many advantages it keeps underperforming in today’s globalized world. But when the writer was hired by an MNC he was handed a clean slate. “This is your job description. The one thing I want to tell you is we make things and sell things.” And when the next assignment was New York, it again meant getting a clean slate. The writer would share the story with his Eastern European friends: (a) to equip them to compete against the best and the brightest – wherever; and (b) to stress that change is the only thing constant.

In PH our challenge goes beyond poverty; it is about development! And fundamental in development is the pursuit of industrialization. Even agriculture must be industrialized – like Malaysia has demonstrated – if it is to contribute its fair share of economic output and bring more returns to its constituents, especially farmers.

“We said, and we repeat it once more, and will always repeat it, all reforms of a palliative nature are not only ineffective but are even harmful when the Government is beset with ills that need radical remedy.” [Rizal’s prophecies fulfilled, Oscar P. Lagman, Jr., Business World, 28th Dec 2015]

Why industrialization? The ecosystem of an industrialized economy, feeding on each other as in synergy, generates a much greater knock-on effect. Beyond investment it includes technology and innovation as well as people and product and supply chain and market development . . . And they bring about greater employment . . . and higher economic output.

We’ve long been afflicted by our own Dutch disease – OFW remittances and the BPO industry. That is, we shut our senses from the travails of OFWs given they fuel PH’s economy to: (a) be among the fastest growing; (b) keep our forex reserves healthy; and (c) put 12 Filipinos on the Forbes’ list. And everyone wants to take credit? Precisely the nature of a Dutch disease – the failure to recognize the fortuitous character of the nation's income streams. Yet there is no free lunch. Ask the Alaskans!

Decision-making like life is about options, and sadly we accepted being a consumption economy: “puwede na ‘yan.” Eliminating options from the get-go is shooting ourselves in the foot, like bad choices do. And why design-thinking (a problem-solving and innovation model) mirrors the framework of brainstorming. But then again, in a hierarchical system and structure, hierarchy rules.

But back to industrialization. It must be founded on a simple mantra: everything starts with the product! [In PH it’s not about the product but franchising industrialization to oligarchy, the converse being over 99% of enterprises are MSMEs as we hold FDIs at bay? And we call it patriotism instead of tyranny even when our average income remains at Third-World levels?] That’s why there is product development (and crop rotation in the case of agriculture) and portfolio management. And fundamental in economics or enterprise is the scarcity of resources; meaning, portfolio management must pass the rigor of the margin or profitability test. Still, there is always the big picture or the ecosystem. 

And not surprisingly, notwithstanding our biggest enterprises and given their business models, we can’t raise PH global competitiveness index. Their common denominator is derived from our oligarchic – as opposed to competitive – economy. And our patriotic fervor gets knotted in this antiquated model, making us pushovers in the global competitive arena.

Thus we're stuck (also brought about by linear thinking as opposed to creative or lateral thinking) and left to deal with poverty and financial inclusion given our limited options. Either we make do or write our own rules, and ignore Darwin? That we don't even need FDIs being an island unto ourselves? Try telling that to the Americans or the Chinese, the biggest economies and largest recipients of FDIs!

Parochialism. Paternalism. Hierarchy. Political patronage. Oligarchy. They comprise our ecosystem as we continue to live in the past, wittingly or not, if not a throwback to czarist Russia or the ancient world of the Greeks or Romans. And it explains why we lag our neighbors in the Global Competitiveness Index, a key measure in 21st century economic development and nation building.

Enter Steve Jobs with his mantra of creating “insanely great products.” While a Yale professor (teaching a course in the study of geniuses) puts Jobs in the company of Beethoven and Einstein, among others, he “grew up idolizing the Hewlett-Packard ideal of an egalitarian workplace where ideas come before hierarchy . . .” [p. 62, Steve Jobs: the genius who changed the world, Time special edition 2015]

Ideas come before hierarchy . . . Should we dissect the value that comes with respect for elders – the excuses and its extension to hierarchy – and why the Church, including the Curia, struggles to comprehend Francis? Is Christ embracing the lowly incomprehensible to the holier-than-thou? Is egalitarian a Western invention that we must criticize? When hierarchy in tandem with parochialism is yet to exact its full measure on Juan de la Cruz – even when poverty has already confounded us despite the billions spent on CCT?

“Did Steve Jobs ‘invent’ the incredible glass surfaces of the iPhone and the iPad? Certainly not—but he sure as heck invented the need for them and the vast potential behind the revolutionary touch-input archetype created by the combination of that glass surface and the applications and interactions sitting under it.

“Maybe we should think of it as invention through integration, or integration-driven invention. Either way, the fundamental point is the same: Steve Jobs saw things none of the rest of us saw, and he drove the creation of things no other company could create.” ['Steve Jobs Didn't Really Invent Anything.' Really (??), Bob Evans, Forbes, 12th Dec 2011].

And that would bring Beethoven to mind. “Beethoven’s innovation was the ability to rapidly establish a solidity in juxtaposing different keys and unexpected notes to join them. This expanded harmonic realm creates a sense of a vast musical and experiential space through which the music moves, and the development of musical material creates a sense of unfolding drama in this space . . .

“Beethoven’s music parallels the simultaneous development of the novel in literature, a literary form focused on the life drama and development of one or more individuals through complex life circumstances, and of contemporaneous German idealism’s philosophical notion of self, mind, or spirit that unfolds through a complex process of contradictions and tensions between the subjective and objective until a resolution or synthesis occurs in which all of these contradictions and developmental phases have been resolved or encompassed in a higher unity.” []

Innovation is about integration or a higher unity. At Apple Jobs had to rely on ideas from his team within and without. With Beethoven it meant borrowing from other art forms. And that is where hierarchy falls flat on its face, precisely why Francis keeps beating up the Curia? Neither does innovation reside in an inward- and backward-looking bias but an outward- and forward-looking mindset.

Should we fault President Aquino if he sounds he’s from the Curia when he is in good company – our elite class, including the candidates in the next presidential election? If Binay’s paternalism (or more dole outs campaign promise) can only accelerate our way down the abyss, what about Roxas? He’s from our elite class, a product of a Western elite school to boot. In our hierarchical system and structure he has the pedigree – and the brand name – and is a great choice?  

Brand names are no guarantee: “After five years of making predictions, we are proud of our record. Out of the 49 companies that have made our list, 24 have disappeared. Given that these brands were chosen from a universe of thousands, we think it's an impressive record.” []

We can clutch at straws yet how far we've come down the abyss is mind boggling! Are we predisposed to pursue transformation? Fatalism is a sinking ship as in to prioritize is alien to us. And we keep taking the path of least resistance – because of “crab mentality.” And they run counter to the imperatives of transformation.

We take it as a positive that we're negotiating trade with the EU. That is well and good. But if we can't develop competitive products we can't generate much economic output from trade agreements. The evidence? Mexico which is yet to exploit NAFTA or Greece which imploded despite EU.

Likewise it’s important for the business registration process to be more efficient to encourage more MSMEs. But over 99% of our enterprises are MSMEs yet we still lag in the Global Competitiveness Index. Because developing competitive products – innovation, in other words – must come first! Not franchising industrialization to oligarchy – which spells t-y-r-a-n-n-y by the few?

We can’t be like Steve Jobs but still we can’t ignore integration, the key to innovation. It is the North Star that we must keep an eye on. For example, in the beginning the writer’s Eastern European friends assumed he was there to hand them the rules. “What is the rule for this and the rule for that?” And they were disappointed even angry – their word.

They've since realized it's about the integration of the sense of purpose and principles and values. That must come from the team in an environment that is egalitarian. And very recently, visiting one of their countries, the writer worked with the local team to redefine their purpose . . . until they figured out that they must be three times bigger than their most successful market. How? Through the requisite principles and values. (That is despite being a poor ex-Soviet satellite or why in PH MNCs are profitable. It’s par for the course, not to crow about – if they’re to be a force for good otherwise they ought not to be around.)

And as Steve Jobs put it, it is the intersection of liberal arts and technology. And so it was fine with him when his friend Steve Wozniak (an engineer) did not see him as a technology expert. 

We have experts and technocrats in PH but where are we and why can't we move forward as a nation? White men can’t jump. Can Juan de las Cruz?

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

[My family joins me in wishing everyone the very best of the New Year!] 

Tuesday, December 22, 2015

“Arrogance of success”

“. . . [L]ike what he did in Makati City . . .” [Binay unfazed by Duterte lead in survey, vows to reduce poverty in PH, Maya Jajalla, Inquirer Visayas, 7th Dec 2015] “He vowed that his administration would prioritize poverty alleviation and uplifting the lives of Filipinos, particularly in Negros Oriental, considered the poorest province in Central Visayas. He also promised to continue the cash dole out program of the government for poor families — the Pantawid Pamilyang Pilipino Program (4Ps) — and improve it to ensure better and efficient services as well as provide financial assistance to the senior citizens like what he did in Makati City.”

Of course we can afford dole outs. Beyond Binay and Makati, consider: “12 Filipinos in Forbes’ 2015 billionaires’ list,”, 4th Mar 2015.

But can we do better than dole outs? “Learning and innovation go hand in hand . . . The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard (1911-1989), physicist-priest; colleague of Einstein in Manhattan Project]

Not surprisingly, we rank poorly in the Global Innovation Index, behind Singapore, Hong Kong, China, Malaysia, Vietnam, Thailand and India. We may be ahead of Indonesia but how could we lag Moldova, for instance? Those of us ensconced in gated communities won’t even imagine living in Moldova – a nation of less than 5 million people with a GDP (PPP) per capita of $5,000, even lower than our $7,000.

Granted we’re moving up in the various global rankings, let’s distinguish the low-hanging fruit from honest-to-goodness transformation. In other words, so long as we take as sacrosanct elements of our way of life we shall always be blindsided – that will reflect and reinforce the absence of community and the common good in Juan de la Cruz? And proud as we are, our 12 entrants to the Forbes’ list cannot enlarge the PH pie. That is why a critical measure of development is not the 1-% but the size of the middle class.

And it’s not about focusing on populist measures either. Fundamental in economics is the scarcity of resources. And the response is not “crab mentality” but priority setting. The evidence? Beyond poverty we can’t fix such basic problems as electricity, the jeepney and, of course, traffic. Priority setting comes not from an inward- and backward-looking bias but an outward- and forward-looking mindset. And from where visionary and strategic leadership is derived. To keep postponing the inevitable means spiraling down the abyss – a race to the bottom!

“[I]n the city of Sirjan, decisions long postponed have begun to impose themselves on local officials, forcing them to make difficult choices in allocating scarce water supplies.” [Scarred Riverbeds and Dead Pistachio Trees in a Parched Iran, Thomas Erdbrink, The New York Times, 18th Dec 2015]

“Wedged between two newly built neighborhoods of five-story apartment buildings, a convoy of water trucks waited in line to fill their 5,000-gallon tanks. Under a deal with the local water management company, up to 400 of these trucks a day draw water from the city’s main well and head to the Golgohar iron mine, the largest such mine in the Middle East. It employs over 7,000 people, many of them from Sirjan, and a water shortage has compounded an already difficult situation brought on by collapsing iron ore prices.

“It is internationally unprecedented to carry water with tankers, but we have no other way . . . If water is not taken to the complex, projects are stopped, and many people will lose their jobs.

“Kerman Province remains one of the largest producers of pistachios in the world, but its irrigation methods are frequently outdated. In one field, a farmer, Ismael Alizadeh, opened an eight-inch water pipe during the middle of the day, under the burning sun, flooding a field of pistachio trees. ‘We have always done it like this,’ he said with a shrug.

“He blamed the government for keeping energy and water prices low . . . covering his huge pump and 20 employees. ‘It’s ridiculous,’ he said. ‘And while we have no water, its price is also dirt cheap.’”

It’s delusional? Which is also what we suffer in PH?

The fact that Bongbong Marcos has the gall to talk down on Marcos critics speaks volumes, and brings to mind Peter the Great who was supposedly a reformist. But having lived through martial rule we know firsthand that power corrupts – and absolute power corrupts absolutely. Does it explain the chutzpah?

Yet, is it only Bongbong or Binay who is delusional? Power resides as well in the elite class and where we are today as a nation speaks volumes. We have been corrupted as well!

And the writer can commiserate with the NEDA secretary who sees the economy growing at 6% despite a slower 3rd quarter. Because even at 7% growth it would take us a generation to move up to developed-nation status, confirmed by the international institutions.

Comes our next delusion. That because we are the fastest growing country in the region we should be thankful and in celebration mode. But that’s of no moment because our average income can’t mask our being a Third-World country; and with it comes the levels of poverty we talk about incessantly.

Indeed we have a structural deficiency – effectively a cancer – and yet we like to look at the symptoms like our 6% or 7% growth rate? OFW remittances and the BPO industry by themselves can’t build up this economy. Nor the series of credit rating upgrades, with due respect to the CB. The financial community does not necessarily examine the building blocks of an economy. The evidence? Look at how they brought the world down to its knees, the Great Recession!

The fact that we are nowhere near an industrialized economy says we can’t be an economic powerhouse. Singapore is tiny population-wise, among others, and can easily be a service-economy powerhouse like Switzerland. But 100 million Filipinos need more than a service economy. And we like to talk up demographic as our “sweet spot” – that a big and young population equals a dream economy and attractive to investors? Another delusion? China and India had bigger population and the world was witness to their poverty until they pursued economic reforms – and attracted FDIs. Yet we like to believe FDIs come like manna from heaven? 

We need enormous investments that must be funneled to critical industries that will raise PH competitiveness. And that means setting priorities like the 7 industry winners teed up by the JFC because they will attract FDIs, generate employment in a major way and appreciably raise economic output, including exports. Except that it goes against the grain especially when our favorite industry is not among the winners. And when political patronage and oligarchy are behind the “crab mentality,” we can only kiss FDIs and PH industrialization and competitiveness goodbye? And which has been the case for the longest time!

And even more fundamental, to attract investment, we must accelerate infrastructure development. And that means we can’t take the focus away from Metro Manila while we do what must be done in the other major metro and even rural areas. And our dreadful traffic is only a symptom. It is again about Pareto. We have to accelerate infrastructure development in Metro Manila given it is the engine of the economy.

Americans can focus on Iowa to demonstrate a culture of inclusion it being campaign season but that doesn’t mean Cuomo can ignore the infrastructure challenges of New York – or those of California c/o Brown. Or could they stop prosecuting errant politicians – like those in Albany.

On the other hand ‘Pinoy abilidad’ is telling us to prioritize the low-hanging fruit like making business registration more efficient or lowering taxes to encourage consumption or focusing on MSMEs. There is nothing wrong with all of them. Except that they are focused on “the activity” as opposed to “the outcome.” Sadly, they are a reflection of the absence of visionary and strategic leadership?

But then again, visionaries are few and far between. Even Steve Wozniak could not figure out his friend Steve Jobs that they had a falling out. Wozniak was focused on “the activity” of creating a computer but Jobs’ vision was to change the world. And indeed that was way beyond human comprehension.

To Wozniak Jobs was perhaps delusional?

And if an Iranian farmer acknowledges their own delusion, what about us? We may be successful as individuals but have we set this nation down a slippery slope? And that is more than shameful?

Being a churchgoing people, what role should we wish the Philippine church play so that we – especially the elite class – begin to dig deep and figure out what Rizal and peers saw over a century ago? And there is Francis if we need guidance? Our shortcomings aren’t new as historians would point out – and we have a bigger challenge than we’ve recognized?

In the meantime, “As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

[My family joins me in wishing one and all a blessed Christmas and a healthy and prosperous New Year!]

Saturday, December 19, 2015

“This flies in the face of reason”?

“Since the launch of the country’s National Renewable Energy Program (NREP) in 2011, the government has approved the construction of 21 coal-fired power projects. This flies in the face of reason. In a country with such abundance of renewable energy from the sun, the wind and the earth, it is madness to keep importing fossil fuels like coal, oil and gas, and to delay the inevitable shift to renewables that is already under way.” [How to achieve energy security and restart industrialization, John A. MathewsRoger D. PosadasPhilippine Daily Inquirer, 13th Dec 2015]

Should we be surprised at all given how we lag the world in infrastructure development? Does it have to do with our values – that patriotism presupposes we are an island unto ourselves? For example, we are proud that our BIG Boys control this building block of the Philippine economy? And are likewise proud of our compassion and wouldn’t want Juan de la Cruz to pay higher electricity bills – even during the transition from fossil to RE? And why we can’t transition out of the jeepney?

Yet when all is said and done, we don’t want to be amongst the endangered species Darwin spoke about? This is the 21st century and our worldview has to adapt accordingly?

“Learning from neighbors. First, the renewable energy goals need to be made more ambitious—much more ambitious. For a country of the size of the Philippines, there should be a goal of 10 GW by 2020 and 100 GW by 2025 in renewables capacity. We would expect that these ambitious goals would kick-start an energy revolution that would then become unstoppable. [Mathews, Posadas, op. cit.]

“Next, the government should invite foreign companies to bid for power supply contracts—subject to stringent local content requirements that would kick start a real renewables manufacturing industry in the Philippines. This would help to meet developmental goals—creating manufacturing industries, employment and exports around new energy systems, and relieving the pressure of coal, oil and gas imports on the balance of payments.

“Third, local communities should be encouraged to build their own locally owned and supplied power systems—to break the monopoly of National Power Corp. which has been such a dead hand on the electrification of the Philippines.

“In this way the first hesitant steps taken so far, such as the Bangui and Mindoro wind farms, and the three-phase solar power project at Negros Occidental launched by San Carlos Solar Energy Inc., could be replicated and expanded. The Philippines has abundant renewable energy resources—but they need to be harvested using devices that are becoming central to global competition in the 21st century.

“The renewable energy revolution offers countries like the Philippines a fresh start in achieving goals of industrial development and movement up the ladder of rising incomes. Energy security is a critical element in this process—as clearly understood by China, India and Brazil. While politics in the Philippines fiddles over feed-in tariffs, the rest of world powers ahead with a renewables revolution that promises independence from fossil fuels.”

What chance do we have to learn to adapt to the world around us? We can’t write our own rules; and it applies even to a global behemoth! In other words, no one can live in the past. “A company of our size, international reach and complexity cannot be managed with structures from the past . . .” [The Engineering of Volkswagen’s Aggressive Ambition, Jack Ewing and Graham Bowley, The New York Times, 13th Dec 2015]

“. . . Volkswagen had become a place where subordinates were fearful of contradicting their superiors and were afraid to admit failure. There is a self-righteousness which led down this terrible path . . . ‘We need in the future a climate in which problems aren’t hidden but can be openly communicated to superiors’ . . . VW had this special culture . . . It was like North Korea without labor camps . . .”

But let’s get back to PH. There is good news – but not really? And so how do we learn to appreciate that there is the big picture? For example, “compassion” is not the be-all and end-all. There is such a thing as kindness to a fault?

The government should review the program and implementing guidelines of the P1-billion Agriculture and Fisheries Financing Program, the state-run think tank Philippine Institute of Development Studies said Monday.” [PDIS: P1-b agri funding to fail, Gabrielle H. Binaday, The Standard, 14th Dec 2015]

PIDS economists Ma. Piedad Geron and Gilberto Llanto said in a policy note the government should not go back to the old scheme that did not work out in micro-financing before. ‘The foregoing remarks and observations point to one thing: the government may be going back to an old approach that did not work—the past DCPs,’ the authors said.

“As presently formulated, the program guidelines seem to resurrect some of the arrangements under the failed directed credit programs, or DCPs, of the past . . . The P1-billion flexible credit facility aims to help over 1 million farmers and fisherfolk who were non-agrarian reform beneficiaries and engaged in priority commodities identified by the Department of Agriculture in the 20 poorest provinces.”

And so we applaud efforts that meet our standards of “inclusion,” but then again we must recognize that if we can’t connect the dots chances are we will fall short. Nothing operates in a vacuum, so to speak.

“The EIU cited as one of this year’s financial inclusion highlights in the Philippines the signing of the National Strategy for Financial Inclusion last July. “The strategy establishes a framework and action plan for the government and the private sector to take a coordinated and systematic approach to the development of a financial system that is accessible and responsive to the needs of the entire population,” it noted.” [PH lands in top 3 on financial inclusion, Ben O. de Vera,Philippine Daily Inquirer13th Dec 2015]

“However, despite the strides made thus far, there remain a number of challenges to financial inclusion in the country, according to the EIU. While the Philippines has been a leader in promoting and creating an enabling environment for financial inclusion, there is still much to be done as only 26 percent of adult Filipinos have savings accounts and only 10.5 percent have access to formal credit . . .

“Also, challenges remain in terms of scaling market innovations, particularly in technology-driven initiatives . . . There is also a chronic need for financial education and consumer-protection initiatives across regulated and nonregulated institutions . . .”

Those are two enormous challenges. Innovation demands much more than financial inclusion – and it starts with an open, progressive, forward-looking mind. (And why the Volkswagen story is instructive in a parochial culture like ours where we value hierarchy, political patronage and oligarchy.) While financial education is optimized – and goes far and wide – when there is a large middle class.

To quote an earlier posting: Our challenge then as now is to “transition to a new stage of consciousness and transform [our] society beyond family bands . . . to [a true] nation state; and for the economy to evolve beyond foraging and horticulture and agriculture to industrialization; and change our power structure and the role of religion” [Reinventing organizations, Frederic Laloux, Nelson Parker, 2014; p. 14] – and move it away from ideology and fundamentalism. (The latter being a continuing declaration from Pope Francis?)

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Monday, December 14, 2015

The same kind of thinking?

We are among the happiest people if not the happiest; and a most resilient people? Consider this reality that we seem to have more than our fair share: “Poverty alleviation is the main concern of many countries. Poverty is said to be an economic, social, cultural, political and moral phenomenon. Like the issue, its solutions are multi-faceted. It requires a collective action from governments, corporations, citizens, consumers, workers, investors and educators . . . The country’s poverty is more of a shameful condition than a pitiful one. It has not substantially improved since the 1990s.” [Ethical business actions and poverty reduction, Marie Annette Galvez-Dacul, Green Light, The Standard, 6th Dec 2015]

“Economic Growth Didn’t Ease Poverty,” Benjamin E. Diokno, Core, Business World, 8th Dec 2015. “The first Millennium Development Goal (MDG) is to halve poverty incidence by 2015. Despite the above normal economic growth during the last four years, the Philippines will miss this goal. By contrast, the same goal has been reached globally in 2000, five years ahead of schedule.” [Economic Growth Didn’t Ease Poverty, Benjamin E. Diokno, Core, Business World, 8th Dec 2015]

“Likewise, our ASEAN-6 (Association of Southeast Asian Nations) neighbors -- Indonesia, Malaysia, Singapore, Thailand, and Vietnam -- have met this lofty goal many years ago. This suggests that our Asian peers are doing things right while we continue to muddle through.”

We continue to muddle through? “To argue that jeepneys should not be phased out because they are a tradition is to say we never should have stopped burning wood for fuel . . . The romanticized notion that the jeepney is a testament to Filipino ingenuity and resourcefulness because it was built out of army jeeps left behind by the US forces after World War II is today as outdated as the vehicle itself. We need a better symbol of Filipino ingenuity and resourcefulness—preferably one that doesn’t belch smoke.” [Smokescreen arguments, Editorial, The Standard, 9th Dec 2015]

“We can't solve problems by using the same kind of thinking we used when we created them.” [Albert Einstein]

“Mar . . . feels that the Aquino administration has achieved what no other Chief Executive before him has done – turn the economy around and plant the seeds of good governance. Aquino put the nation in a position of strength by improving its relationships with its stakeholders (creditors, investors, trading partners, the public, etc.) and fixing the nation’s Balance Sheet, so to speak. He believes that the best way to move the country forward is to continue the development path PNoy has started. He presents himself as the proponent of that path.” [The difference between Grace and Mar, Andrew James Masigan, Manila Bulletin, 6th Dec 2015]

“What happened to the hundreds of billion pesos of cash transfers distributed by the government? On the President’s request, Congress has approved a total of P229.8 billion from 2011 to 2015 . . . The counterfactual argument, of course, is that the poverty picture could have been worse had the Conditional Cash Transfer (CCT) program not exist. But could the P229.8 billion have been better targeted? And could the cost of administering the CCT program have been minimized? The next administration should review the program with the view of making it more cost-effective . . . Strong, sustained growth is a necessary condition for poverty reduction, but it is not a sufficient one. It matters where growth is coming from, and whether it is inclusive.” [Diokno, op. cit.]

Does it mean then that allocating money even in the billions isn't the answer to poverty? President Ramos said it best, “we need to enlarge the pie.” In other words, PHL’s GDP per person has remained at Third-World levels, a mere fraction compared to those of our neighbors, and billions in CCT money by definition will not raise our average income or enlarge the economic pie?

And there are factors that are imperative to raise economic output especially for an underdeveloped economy. And topping the list would be infrastructure development and industrialization, the hard elements that drive a nation’s competitiveness. Yet for the longest time we’ve been unable to focus on them – a reflection of our inability to prioritize?

Where is it coming from? The absence of visionary and strategy leadership and our crab mentality – a double whammy; and given our parochial bias and values of hierarchy, political patronage and oligarchy they yield a perfect storm – undermining the common good and nation building? 

Of course we have the money (FX reserves or GIR) that makes the CB proud although we would rather be silent about the source: the blood, sweat and tears of over 10 million OFWs! And because they prop our oligarchic economy and enrich the few, we like to think we're fine and dandy? Why rock the boat? All we need is CCT to placate the poor? It’s the economy, stupid!

And there are the soft elements too. “In the latest World Economic Forum Global Competitiveness report, 2015-2016, ‘inefficient government bureaucracy’ climbed to the top spot as the most problematic factor for doing business in the country, from last year’s fourth place. Moreover, ‘complexity of tax regulations’ ranked fourth, whereas elsewhere in the ASEAN it is not in the top 5 concerns.” [Reduce regulatory burden (!), Romeo Bernardo, Introspective, Business World, 6th Dec 2015]

“The World Bank has earlier warned that ‘Certain tax policy regimes are both inefficient and detrimental to job creation. Enforcing the current weak tax design may yield more revenues but will have adverse impacts on jobs’ (World Bank, “Philippine Economic Update,” 2014).

“Then there are the big disputes arising from sudden idiosyncratic reinterpretation by regulatory bodies of contracts after more than a decade of being implemented and celebrated as successful examples of public-private partnerships. I refer to the two water concessions of the Metropolitan Waterworks and Sewerage System, the Shell-Oxy Malampaya project, and the Manila North Tollways Corp.; all are now or about to enter international arbitration initiated by the private parties against government for non-implementation of contracts in amounting to several tens of billions of pesos.

“How can Public-Private Partnership (PPP) projects for infrastructure . . . take off unless government can provide greater regulatory clarity and stability? To keep in step with our neighbors, a comprehensive regulatory package must be part of next administration’s reform pillars.

“NEDA Deputy Director General and University of the Philippines Professor Emmanuel F. Esguerra identified elements from OECD and ASEAN for best practices for good regulation . . .

“Beneath technocratic language is the political reality of bureaucratic inertia and entrenched interests in the status quo labyrinth that must be overcome. Hopefully, our next leader will have the vision and political will and skill to take on this difficult but necessary task for the Philippines to truly travel the “tuwid na daan” to inclusive investment-led growth.”

That’s a challenge that can't be underestimated: we can't solve problems by using the same kind of thinking we used when we created them. And in today's digital age, Steve Jobs would add: creativity is connecting the dots. And that is as much a challenge given the specialization and linear thinking inherent in higher education.

And not surprisingly, the engineer in Steve Wozniak (who cobbled together the first Apple) saw the weakness in Jobs (the college dropout) technology-wise, and to Jobs that was just fine: he wanted to change the world. And Apple had to be more than a discipline or an expertise. Steve Jobs wanted to create an altogether new ecosystem. Which explains why the traditional giants in corporate America were relegated to the sidelines. Yes, even a supposedly fully developed environment can be transformed.

But which we Pinoys have yet to visualize – even when our underdevelopment in fact gives us a whole lot of playing field!

Where is it coming from? Our inability to raise our level of consciousness because we see ourselves as the chosen few and have attained wisdom? Enter Francis: are we suffering from neurosis or leprosy?

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Monday, December 7, 2015

Juan de la Cruz: from sheltered to grown up

Experience would tell us that people go through transformation – and don’t grow like trees. Consider: Our challenge then as now is to “transition to a new stage of consciousness and transform [our] society beyond family bands . . . to [a true] nation state; and for the economy to evolve beyond foraging and horticulture and agriculture to industrialization; and change our power structure and the role of religion” [Reinventing organizations, Frederic Laloux, Nelson Parker, 2014; p. 14] – and move it away from ideology and fundamentalism. (The latter being a continuing declaration from Pope Francis?)

Economic development presupposes a higher level of consciousness; and it comes from advances in human development. Think North Korea if you will. 

Where human development lags, a society will reflect its archaic character, for example, hierarchical and nurturing political patronage and oligarchy. 

“[T]o . . . [understand] . . . the human condition necessarily [requires] a truthful, ‘clear conscience’-guided, instinctual approach, not a resigned-to-living-in-denial-of-the-human-condition, alienated-from-the-truth, blocking-out-of-condemning-moral-instincts, hiding-in-Plato’s-cave, ‘intellectual’ approach. It is simply not possible to build the truth from a position of denial/​lying. You can’t think effectively, insightfully . . . if you’re not being honest.” [Freedom: The end of the human condition, Jeremy Griffith,, 2015, p. 239]

“We can no longer afford these past failures and present-day delusions that: democracy without civic responsibility can insure development; while maintaining the unjust structures that have kept our economy stagnant, we can progress sustainably; prosperity automatically trickles down from the rich few to the impoverished many. Expectedly, we may fail again – if we content ourselves at this time with flawed policies, greedy officials, self-serving dynasties and widespread corruption.” [Nation-building: Remembering Andres Bonifacio,Former Philippine President Fidel V. Ramos, Manila Bulletin, 28th Nov 2015]

“In fact, it is a measure of the blindness of human-condition-avoiding, denial-based thinking, and the effectiveness of human-condition-confronting, honest thinking, that when the whole truth about our condition is finally reached, as it now has been, it can appear so straightforward and simple that it seems self-evident. But simplicity has always been a hallmark of insightful thought—as the pioneering biologist Allan Savory observed, ‘whenever there has been a major insoluble problem for mankind, the answer, when finally found, has always been very simple.’

“For instance, when Charles Darwin put forward his breakthrough, and necessarily exceptionally ‘fearless’ and truthful-thinking-based insight of natural selection, it was, in hindsight, such a simple explanation that the eminent biologist of the time, the aforementioned Thomas Huxley, was prompted to exclaim, ‘How extremely stupid not to have thought of that!’” [Griffith, op. cit.] 

What an irony. What seems self-evident becomes elusive because of denial, if not blindness? How many times the writer himself experienced “looking with his mouth, not his eyes” – to the glee of the spouse!

Beyond denial or blindness is the need to safeguard self-esteem. “In claiming the status of victim and by assigning all blame to others, a person can achieve moral superiority while simultaneously disowning any responsibility for one's behavior and its outcome. The victims ‘merely’ seek justice and fairness . . . The victim stance is a powerful one. The victim is always morally right, neither responsible nor accountable, and forever entitled to sympathy.” [Ofer Zur, PhD, The psychology of victimhood,]

Consider: “APEC has contributed to global inequality,” Satur C. Ocampo, AT GROUND LEVEL, The Philippine Star, 21st Nov 2015. “Zeroing in on APEC’s impact on the Philippines, Ibon points out that despite the growth in trade and foreign investments, the results are depressing.”

But then again, “US agri giant Cargill grows presence in Vietnam,” Boy P, Happy Hour, The Standard, 19th Nov 2015. “Vietnam, which a little over a decade ago was lagging behind the Philippines, is attracting a lot of investors for various sectors, among them the electronics industry with news that it attracted $10 billion in foreign direct investment inflows from such giants as Samsung, LG, Panasonic and Foxconn. Double digits—impressive, don’t you think so?

“According to reports, Vietnam showed the fastest growth rate last year in terms of export revenues and foreign market share compared to other Asean countries—yes, the Philippines included—making it the 3rd biggest electronics exporter in the region and the 12th in the world.”

“In an interview with PBS host Charlie Rose, Petraeus warned against putting American troops on the ground in the war-torn country, saying the country ‘may be a Humpty Dumpty that can't be put back together again … One doesn't know what the various outcomes could be.’” [Petraeus Warns: No U.S. Ground Troops in Syria, Rob Garver, The Fiscal Times,, 24th Nov 2015]

And the Petraeus quote would be a good illustration of absorptive capacity. Ergo: is the Philippines a Humpty Dumpty such that outsiders are not keen to bet on us? Because one doesn’t know what the various outcomes could be?

“Despite several government moves to hasten infrastructure development over the last five years, [ECCP president Guenter] Taus said Philippine infrastructure continues to lag behind globally. Citing the outcome of the recent World Economic Forum Global Competitiveness Index, Taus said the country’s ranking in terms of infrastructure has remained poor, with the report noting in particular the below par airport and seaport infrastructure.

“‘The current state of infrastructure of the country is actually dragging down the competitiveness of the Philippines. There is plenty of room for improvement and a multitude of innovative solutions available to make positive changes happen,’ he said.” [Infra still weakest link to Philippine competitiveness – ECCP, Richmond S. Mercurio, The Philippine Star, 25th Nov 2015]

And so we rationalize our underdevelopment. It's been caused by others . . . starting from our colonizers . . . to MNCs . . .  to globalization . . . etc., etc. Conveniently forgetting that our neighbors, once poor, became the admired Asian Tigers – for adapting to the new order consistent with Darwin and generating not only humongous wealth but as importantly contributing largely to the drastic reduction of poverty in the world?

Should we invoke victimhood that feeds on ‘learned helplessness’ and puts us in a race to the bottom? And how do we move beyond the levels of law and criticism and conflict to the level of wisdom? Yes, working on the Sabbath is allowed! And how do we square our reality against the imperatives of visionary and strategic leadership and wisdom and Darwin-consciousness while overcoming victimhood and learned helplessness?

In other words, how does Juan de la Cruz discover transformation – the road to nation-building? We know it goes beyond education per se or being the only Christian country in the region (albeit at war with its own Muslim brothers and sisters) or the power inherent in political dynasties and oligarchies?

And that is what we must bring to APEC if we are to be competitive. Consider: We take hierarchy and economic classes as givens. Not surprisingly our marketers think of the D and E markets and products for poor Pinoys – which we euphemistically call compassion. But that puts us in a race to the bottom. Would man have progressed much beyond living in caves if eons ago he saw that worldview as positive? Enter Maslow who says the hierarchy of human needs is in fact a continuum. Needs aren’t stuck at the basic level.

And in product development basic products don’t yield the multiplier effect – that creates auxiliary industries and a positive employment environment – to the scale superior products do: from investment to technology to innovation to people and product and supply chain and market development.

Nor do needs stop even at a perceived higher level given the nature of a continuum. Yesterday was the Jumbo Jet, today it's the Dreamliner; tomorrow it will be something else. The story of Nokia is instructive. They had 40% of the global market but focused on the low-end effectively ceding the development of the smartphone. While we ceded innovation to the rest of the world basking as service providers and/or contract manufacturers – true to our sheltered nature? We won’t outgrow that; we need transformation instead!

Social mobility even when merely apparent can be a manifestation of human development. That in grade school we read about a model “bahay kubo” that is spic-and-span with family members all pitching in to make it so. The writer shared the lesson with his then new found friends in Eastern Europe to help in their transformation – to imagine a state beyond being “poor Bulgarians” . . . and equal to MNCs.

They had to toss the narrow (economic class) parameters in their product development exercises and instead crafted an ascending value chain model to mirror Maslow’s hierarchy of human needs. That opened their eyes – to curiosity, inquisitiveness, discovery and innovation. And confirmed that development is multifaceted and lateral, not linear.

For a country characterized by delayed justice – and where a culture of impunity reigns – we indeed have ways to go to advance in human development! Especially when we put a premium on hierarchy – where rank has its privileges, including self-serving dynasties as President Ramos calls them.

Do we need the Philippine church to follow the example of Francis – and upend rank, and preach an egalitarian ethos? Pulling rank is the fastest and surest way to stunt transformation if we want to figure it out!

If we are to be on equal footing with our neighbors – and drastically reduce poverty – Juan de la Cruz must transform himself! And it goes well beyond the Aquino presidency. His administration could descend with the pitfalls inherent in KKK – “kaklase, kaibigan, kabarilan” – but we must then critically examine who the next president could be! Is there a candidate to lead Juan de la Cruz to the road he badly needs – to transition to a new stage of consciousness? In a democracy we get the leadership and the government that we deserve!

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]