Thursday, April 28, 2016

Sheer insanity

If we believe President Aquino was a mediocre manager, what about Juan de la Cruz, were we any better – as citizens? And with the coming change in administration, together with those that were ones the navigators if not the captains of the ship we call PHL, we are all coming out with our two cents on how to right the ship? But what paradigm is guiding us? If it is same old same old, what should we expect? Insanity?

Thankfully, it is now accepted that the two major income streams – OFW remittances and the BPO industry – we were so proud of don’t make for a competitive PHL. But what lesson must we learn? They were classic “pwede na ‘yan”? They had a common denominator which equated to a comparative advantage for PH, English-speaking young Filipinos.

Yet we know from economic development that while the starting point may be agriculture, wealth generation – which we call GDP – demands higher value-added products and services. And that means evolving into industry. It does not mean totally abandoning agriculture but complementing it. [And this blog gave the example of cacao farming being complemented by branded chocolates like premium Belgian chocolates or closer to home, Nescafe in coffee farming.]

And in the 21st century comparative advantage has evolved into competitive advantage. And it is simply the ability to move up the value chain – which is not a static but a dynamic state. Because the human need is a continuum. It is not about consumerism – which is a cop out when our innovation quotient is suspect.

Man is made in the image and likeness of his Creator – who is both human and divine. In other words, “pwede na ‘yan” is not God-like. For man to expect progress and development is not evil but evolution, i.e., a human right.

And which as Francis declared is not incompatible with creation. “[S]pecies survived through a process called ‘natural selection,’ where species that successfully adapted to meet the changing requirements of their natural habitat thrived, while those that failed to evolve and reproduce died off.” [Charles Darwin, Biography, biography.com] It is the Pinoy backwardness that is off base?

Competitive advantage presupposes continuing investment, technology, innovation as well as people development, product development and market development. But then again, as we now know, industrialization demands a platform, that is, infrastructure development.

How can there be sustainable much less competitive industry when power is dubious to begin with? Should we pause and ask ourselves why we allowed Juan de la Cruz to be a victim of such shortsightedness – yet our elite class are talking up business as usual? Because they’re making a killing behind our infrastructure backwardness? It’s sheer insanity! Not surprisingly, once upon a time, the lone voice in the wilderness (Rizal) had to be hanged?

How do we pull the above elements together? That is where leadership comes in. Visionary and strategic leadership. We need a president who can craft and articulate a vision and, as important, to harness the people behind the common good. A visionary leader by definition will have a sense of the kind of team he or she wants to put together. And will not be driven by KKK.

For example, it is not about intelligence or rank per se especially given our culture of impunity – personified by vested interests on the one hand and crab mentality on the other. And how PPP is held hostage? And because of our split-level Christianity (remember Fr. Bulatao?) the sense of community and the common good must be a mandatory – from the vision to strategy to execution.

Thus Juan de la Cruz, in our desire to offer our two cents, must be very conscious of the new paradigm that must define the leadership team of the nation. And more to the point, they cannot be (a) representing vested interests and (b) pandering to populist demands. But do we even have a prayer when these two dimensions of our reality feed on each other – it's spelled paternalism?

“The Christian is not merely ‘alone with the Alone’ in the Neoplatonic sense, but he is One with all his ‘brothers [and sisters] in Christ.’ His inner self is, in fact, inseparable from Christ and hence it is in a mysterious and unique way inseparable from all the other ‘I's’ who live in Christ, so that they all form one ‘Mystical Person,’ which is ‘Christ.’

“There is no other form for the Christian life except a common one. Until and unless Christ is experienced as a living relationship between people, the Gospel remains largely an abstraction.” [Richard Rohr's Daily Meditation, Center for Action and Contemplation, 17th Apr 2016]

What must we learn about community and the common goal – which in nation building is reflected in PH economic development?

For example, Marcos versus Park. From Daron Acemoglu and James Robinson; When nations fail, The Blog, 2nd Jan 2013. “As we noted in our last post, there is a far more charitable account of the Marcos dictatorship after 1972 in the Philippines than brought to mind by Imelda’s 3,000 pairs of shoes. 

“Marcos himself argued that the move to autocracy was needed to discipline the oligarchs and discipline them he did.

“The Lopez family was one of these. Before martial law Marcos had Fernando Lopez as his vice president as part of a strategy to co-opt the oligarchs. But after 1972 Marcos discarded him and expropriated his assets, sugar estates, media empire and power generating plants. He cowed the rest of the sugar oligarchs into submission. He also centralized the state and embarked on an attempt to promote industrial exports.

“In these strategies and aspirations Marcos was quite similar to Park Chung-Hee in South Korea. Park rose to power in a coup in 1961 and one of his first acts was to arrest and lock up business oligarchs on the grounds that they were ‘illicit profiteers’. Park similarly abandoned the attempt to keep himself in power through elections in 1972, just as Marcos did. He also famously launched an ambitious export-driven industrialization plan.

“The difference between the Marcos and the Park experiences, however, is that while the latter was a huge economic success, the first collapsed into an orgy of rent seeking and looting of the state. Why the difference?

“This takes us back to the history and in particular the history of the construction of the state. As we saw in our previous post, the state in the Philippines was built from the bottom up in a way which facilitated its capture by the oligarchy. This captured state was highly patrimonial, largely lacking meritocratic recruitment and promotion of the bureaucracy for example. Appointments were made on the basis of political criteria, for example, ability to help win elections.

“The history of the state in South Korea was very different. As Peter Evans pointed out in his seminal book on comparative economic development, Embedded Autonomy, the Korean state developed by Park was able to tap into a rich history of meritocracy dating back to an examination system which the pre-colonial Korean state had adopted from imperial China. Both Park and Marcos tried to build the state, but they worked in the context of very different historical legacies and contemporary politics. In Korea, land reform had obliterated much of the traditional elites.

“Ultimately, both Park and Marcos attempted to launch what we call ‘extractive growth’ in Why Nations Fail. This was a success in Korea but not in the Philippines because Marcos did not have the type of state that was capable for generating economic growth from above. In Korea, Park was able to create hard budget constraints, and credible rewards and punishments for economic success and failure. Marcos had no such option with his captured patrimonial state. Perhaps the looting started because he realized that Korean style industrialization was not an option in the Philippines (though in fact there is evidence that it dates back to the 1960s).

“All that being said, as we also point out in Why Nations Fail, even Korean growth could not have been sustained without the transition to inclusive political institutions and away from Park’s authoritarian regime.

“But equally importantly, the Philippines experience also suggests that extractive growth is not even a transitory option for countries lacking the type of centralized state that Park inherited and strengthened.”

This blog has talked about the imperative of an ecosystem, both hard and soft elements, that is demanded by a well-crafted and articulated vision. Since we don’t have that heritage, for example meritocracy that undergirds institutions, all the more we need visionary and strategic leadership that values community and the common good.

In short, Pinoy “kuro-kuro” and retail politics or a reactive psyche would be way too feeble an effort to right the ship we call PHL.

“Alas! The Filipino people are running out of patience. And reason is losing its grip on public consciousness. The Philippines will either have to create a genuine democracy or (once again) fall into an autocratic trap.” [The end of Philippine democracy, Richard Javad Heydarian, huffingtonpost.com, 11 Apr 2016]

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“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]

Thursday, April 21, 2016

Can we think big?

Parade of ineptitude,” Ben D. Kritz, The Manila Times, 13th Apr 2016. “TUESDAY’S Senate hearing on the RCBC money-laundering scandal, the fifth installment in what is proving to be one of the more memorable teleserye ever aired in the Philippines, was a fascinating display of the sheer ineptitude of at least some of this country’s most important institutions.

“In a way, what was divulged in the hearing could be taken as evidence that the Philippines really does enjoy God’s favor, because with these sorts of people minding the store, the only thing that could possibly be preventing even bigger financial scams from happening every day is divine intervention . . . Once again it appears that the Philippines has left itself with the unpalatable choice of whether it would prefer to give the rest of the world the impression that this is a very stupid country, or a very careless one . . .”

“Facts. In 2014, the government estimated that nearly 26 percent of Filipinos (25.8 percent to be exact) were poor. Today, that will be about 26 million out of 100 million Filipinos. Of the total poor, about 20 million are in the rural areas, or two out of five of the rural population. These are mostly farmers, fishers and landless workers.

“The Philippines failed miserably compared with Asean neighbors, especially Indonesia, Malaysia, Thailand and Vietnam in poverty reduction. Poverty incidence in the Philippines is up two to three times.” [Memo to presidential aspirants on mass poverty, Rolando T. Dy,MAPping the FuturePhilippine Daily Inquirer, 14th Mar 2016]

With that as backdrop, how do we read this? “Liberal Party (LP) standard-bearer Mar Roxas has vowed to include two million more poor Filipino families under the Conditional Cash Transfer (CCT), popularly known as the Pantawid Pamilyang Pilipino Program or 4Ps, in the early years of his presidency if elected in the May 9, 2016 national elections.

“‘We will continue the 4Ps, we will expand the 4Ps and as initial steps, we will add two million more families as its beneficiaries,’ said Roxas. Currently, there are at least 4.5 million poor families who receive regular cash from the government from nearly 800,000 in 2010.” [Mar vows expanded CCT, Aaron B. Recuenco, Manila Bulletin, 17th Apr 2016]

We can’t really get out of that box, that thinking – parochial, hierarchical, paternalistic, political patronage and dynasties, cronyism and oligarchy? Garbage in, garbage out – aka “insanity”?

Roxas if he is president will disappoint? What about the private sector? “Zobel de Ayala: PH to level up whoever is next CEO of the land,”Doris Dumlao-Abadillainquirer.net, 15th Apr 2016. “We believe in the country and we believe that irrespective of who gets chosen into a leadership position, the country will continue to progress . . .”

“The reason why I believe that is that we’re interlinked globally now. From a standards point of view, from an economic point of view, the world looks at us and we cannot escape and be in isolation from the trends that are taking place. I think, generally, these trends have taken standards up – (such as in) governance and leadership. You will have some better leaders, some worse ones but we have shown as an economy under the current leadership we have evolved as a country tremendously and moved forward. I don’t see the clock going backwards on that.”

Not surprisingly, a reader commented, and to paraphrase, did Ayala not know about Binay and what did they do about it? Can we think big? What do CCT, OFW and BPO have in common? They are a stark reminder of our reactive nature – aka “pwede na ‘yan”? And we would even proudly call it “Pinoy abilidad”?

Are we problem-solving or romanticizing? Reform means altering a structure. And in the case of PH we can’t think big, unable to pursue reform and undo our cacique hierarchical system and structure? Has the debilitating effect of underdevelopment taken away the spirit of Juan de la Cruz? Give me some men who are stout-hearted men?

Should we extend CCT to cover all 26 million? Benchmark. Benchmark. Benchmark. “The Philippines failed miserably compared with Asean neighbors, especially Indonesia, Malaysia, Thailand and Vietnam in poverty reduction. Poverty incidence in the Philippines is up two to three times.” [Dy, op. cit.]

“They make everyone poor,” Farida Lazareva [of Brooklyn] who hails from Moscow recalls waiting in line for 3 hours each morning to get a jug of milk as a little girl living under communism.

“Oh, I hate him [Bernie Sanders]. If you lived under socialists, you’d hate them too. If it will be Sanders, we will have the same here. Everyone will be hungry, everyone will be poor” [The New York Times, 9th Apr 2016; “Back in the old neighborhood to make his (Bernie Sanders) case”]

CCT, OFW, BPO . . . farms to market roads . . . comprehensive land reform? Are they our best shots?

“Causes and effects. Ragnar Nurske (1907-1959), an Estonian economist, concluded that in the vicious circle (cycle) of poverty, low investment arises from low income, which is due to low productivity. Low productivity is caused, or partly caused, by low investment.

“Nurske pioneered the balanced-growth theory. The theory espouses that a government of an underdeveloped country needs to make large investments in a number of industries simultaneously. This will make the market bigger, increase productivity, and encourage the private sector to invest.” [Dy, op. cit.]

The writer’s family was recently in the Philippines, and was told that Roxas still believes he will win given their calculus: CCT recipient voters plus BPO-connected votes plus possibly the INC votes (they’re working on it) plus the machinery of the administration. 

True or not, what we can expect is same old, same old? “I prefer a government run like hell by Filipinos to a government run like heaven by Americans. Because, however bad a Filipino government might be, we can always change it” [Manuel L. Quezon.] Like presidents that needed to be booted out? 

Indeed Rizal proved prescient. It’s the 21st century and we’re the goat, the regional laggard, paying a high price for our underdevelopment – and running around like a headless chicken? “We are not speaking here with the benefit of hindsight. These events are foreseeable. It is taught in any course in diplomacy that we live in a lawless world. A country must have adequate arms to defend its territorial integrity. A defenseless country invites aggression. When the 12 senators voted to oust the US bases in 1992, they should have taken the compensatory step of increasing the defense budget. Given our limited means, this would undoubtedly have caused a decline in our living standards. But then, we have a model on this issue.

“When India started developing nuclear weapons, Pakistan said in response that it would do the same even if its people ended up eating grass. Pakistan got its nuclear arms, but at great privation to its people. But Pakistan’s officials who said this were true statesmen; they had the courage to tell their compatriots what it would take to preserve their national sovereignty.

“We cannot say the same of the 12 senators who voted to oust the US bases. They constituted a majority in the Senate; it was within their power to increase the defense budget, although this would have meant cutting the outlays for education, health and social services. That would have been an unpopular move and they could have been voted out of office. In this respect, the ‘Magnificent 12’ behaved as politicians: They were thinking of the coming elections, not the future of our country. Had they behaved as statesmen, they should have, like their Pakistani counterparts, increased the defense budget even if our people had to eat grass.

“The problem is that we still see this happening in our country now. We see a considerable number of our politicians still calling for the abolition of the Visiting Forces Agreement and the Enhanced Defense Cooperation Agreement but without telling the public that this would require increasing the defense budget, which would in turn depress our living standards.

“It is difficult to see how the removal of the US bases in 1992 constituted a magnificent episode in our history. In fact, this early it is evidently a catastrophe. From here on, we have to live under the shadow of Chinese weapons, including nuclear arms in due course. There is also something wrong when a country overlooks a failure in public policy, in this case the closure of US bases, and pass it off as a success.” [What’s magnificent about withdrawal of US bases (?), Hermenegildo C. Cruzinquirer.net, 11th Apr 2016; Hermenegildo C. Cruz served as Philippine ambassador to the United Nations in 1984-86.]

While there are two schools on the wisdom of US bases outside the country, in a world that is not free of despots, a hegemon is deemed the response otherwise wealthy nations like Germany would be in an altogether different reality? “[T]here are now around 800 US bases in foreign countries. Seventy years after World War II and 62 years after the Korean War, there are still 174 US “base sites” in Germany, 113 in Japan, and 83 in South Korea, according to the Pentagon. Hundreds more dot the planet in around 80 countries, including Aruba and Australia, Bahrain and Bulgaria, Colombia, Kenya, and Qatar, among many other places.” [The United States Probably Has More Foreign Military Bases Than Any Other People, Nation, or Empire in History, David Vine, The Nation, 14th Sept 2015]

We kicked out the US bases and then . . . what? Where are we? Did we believe we were thinking big – or was it a fa├žade?

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“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, April 18, 2016

It’s a mockery of the rule of law

But ours is a culture of impunity, the rule of law be damned! Should we pause and ask: why a supposedly God-loving people be behind this travesty? How much do we wish to devalue the Filipino?

“Panama does not deserve to be singled out on an issue that plagues many countries. But we are willing to accept the responsibility for fixing it, in part because greater transparency is ultimately a continuation of reforms we have recently undertaken. The world must tackle this problem collectively and with urgency, and Panama stands ready to lead the way.” [“Don’t Blame Panama. Tax Evasion Is a Global Problem,” Juan Carlos Varela, The New York Times, 11th Apr 2016; Juan Carlos Varela is the president of Panama.]

How about that for taking responsibility? Compare it to “I cannot give what I do not have,” was the senator’s simple answer, adding that his family had followed the rulings of various courts on ill-gotten wealth.” [“LP blocking human rights claims – Marcos,” Jaime Pilapil, The Manila Times, 10th Apr 2016]

“The best defense is offense” – why be a wimp like this prime minister? “Speaking at a Conservative Party gathering in London on Saturday, Mr. Cameron said he, not his staff, was to blame for mishandling the issue over the previous four days. ‘I could have handled this better,’ he said. ‘I know there are lessons to learn, and I will learn them. And don’t blame No. 10 Downing Street or nameless advisers,’ he said, using the address of the prime minister’s office. ‘Blame me.’

The Cameron case is not about ill-gotten wealth; and the Prime Minister paid taxes on his inheritance. But because of the import of transparency he finds himself on the defensive. “Mr. Corbyn [the opposition Labour Party leader] has demanded that Mr. Cameron release his tax information dating to 2005, when he became the Conservative Party leader.

“Thousands of people demonstrated outside the gathering on Saturday, demanding that Mr. Cameron resign and mocking the Panamanian law firm at the heart of the leak, with the slogan: ‘Mossack Fonseca: Because taxes are for poor people.’” [David Cameron Releases Tax Data After Panama Papers Backlash, Steven Erlanger, The New York Times, 10th Apr 2016]

That’s how transparency is supposed to be valued. Why are we the regional laggard if not the laughingstock of the world? “Parade of ineptitude,” Ben D. Kritz, The Manila Times, 13th Apr 2016. “TUESDAY’S Senate hearing on the RCBC money-laundering scandal, the fifth installment in what is proving to be one of the more memorable teleserye ever aired in the Philippines, was a fascinating display of the sheer ineptitude of at least some of this country’s most important institutions.

“In a way, what was divulged in the hearing could be taken as evidence that the Philippines really does enjoy God’s favor, because with these sorts of people minding the store, the only thing that could possibly be preventing even bigger financial scams from happening every day is divine intervention . . . Once again it appears that the Philippines has left itself with the unpalatable choice of whether it would prefer to give the rest of the world the impression that this is a very stupid country, or a very careless one . . .”

Reality check. “I cannot give what I do not have,” says Bongbong. Consider: In the case of the Marcoses, the Swiss Federal Supreme Court has held that the seized Swiss accounts must be assumed to be of ‘an obvious illegal provenance’. Consequently, all Swiss banks are put on notice that any assets of former President Marcos, including assets of his wife or children, are to be treated as if they are the proceeds of crime. Ironically, the position is that if a Swiss bank admitted today that it had a Marcos account then this would implicate the bank in a crime under Swiss law. [“TRACKING THE PROCEEDS OF ORGANISED CRIME – THE MARCOS CASE,” Dr. David Chaikin, Barrister, NSW, Paper presented at the Transnational Crime Conference convened by the Australian Institute of Criminology in association with the Australian Federal Police and Australian Customs Service and held in Canberra, 9-10 March 2000]

[A]ll Swiss banks are put on notice that any assets of former President Marcos, including assets of his wife or children, are to be treated as if they are the proceeds of crime.” [Swiss Federal Supreme Court.] There goes the argument that the son is not the father? And what about restitution? Ours indeed is a culture of impunity – the rule of law be damned?

Do the Marcoses enjoy the best legal advice? “The Republic of the Philippines has no international judicial assistance in criminal matters treaty with Switzerland. In the Marcos case, Swiss co-operation with the Philippines was based on the 1981 Swiss Federal Law on International Legal Assistance in Criminal Matters (EIMP), the 1982 implementing ordinance (OEIMP), together with various procedural and enforcement provisions in the laws of the cantons of Switzerland. Not surprisingly a team of attorneys for the Marcos family and their corporate fronts waged a vigorously battle against the Philippine government. It is interesting to note that the Marcoses have never explained how they could fund this expensive litigation over 13 years, given that their assets in the Philippines, United States and Switzerland were frozen in the early part of 1986.” [Chaikin, op. cit.]

Indeed they’ve had the best legal advice over many years – and affordability was never an issue? They never explained how they could fund it! And they had another layer of protection – the silence of Swiss banks! Because opening their mouths could mean legal trouble for these banks.

What about advice from Philippine lawyers? Were the Marcoses dealing only with foreign lawyers? We need more Campos-like patriots to turn whistleblower? But physicians are the only ones meant to uphold the Hippocratic Oath? And up goes another wall of protection for the Marcoses beyond the political dynasty they continued to erect right under our noses?

Consider: “[Jose Yao] Campos [Chinese Filipino entrepreneur who owned the controlling interest of United Laboratories Inc.], low key and unassuming, was probably the most cooperative among the known Marcos cronies. Unlike other cronies who chose to slug it out with the post-Marcos government, Campos cooperated fully in surrendering the Marcos assets under his name. Marcos used him mainly as caretaker of those illegal assets.

“What the entire world knows after 30 years is a mere fraction, and not the entirety, of the Marcos loot. A number of their illegally acquired assets in the country have been identified.

“What has been stashed abroad remains a big question, although it has been estimated that the loot could be between $5 billion to $10 billion.

“Marcos was not content to receive huge under-the-table commissions from foreign contractors of big ticket state projects. Marcos and his cronies had set their eyes, too, on major firms long regarded as blue chips by the stock market. These included Manila Electric Company (Meralco), Philippine Long Distance Telephone Company (PLDT), and San Miguel Corporation.” [Search for Marcos' wealth: Compromising with cronies, Philip M. Lustre Jr., rappler.com, 25th Feb 2016]

“A simple method of working out whether a political leader has accumulated illicit wealth is to carry out a net worth analysis test. A person's net worth is the amount by which one's assets are greater than one's liabilities. A political leader's net worth should increase during his period of public office only to the extent that he has legitimate savings from his income and/or capital appreciation. Any increase in net worth that cannot be explained should be treated with the greatest of suspicion. Indeed, in some countries such as Hong Kong and India, any unexplained increase in wealth by a public official constitutes prima facie evidence of a criminal offence.

“Net worth analysis is a valuable investigatory tool in circumstance where there is no direct link between the political leader and the alleged illegal activity, for example, where the money had been effectively laundered. It is also useful when the target has acquired many assets, or where the records or documents showing the financial activities of the political leader are missing, destroyed or are unreliable.

“Although Ferdinand Marcos was barred by law from practicing his law profession during his entire 20 years as President, he claimed that his legal fees represented ‘receivables from prior years’. When Ferdinand and Imelda Marcos became the First Couple in 1965, their net worth was only Pesos ("P") 120,000, i.e. US$7,000. When they were thrown out of the Philippines in 1986, their estimated assets amounted to more than $5 billion.

“The Marcoses used every laundering scheme that was available to conceal their investments. At the same time his Swiss banks offered him various instruments of bank secrecy to protect his interests, such as numbered accounts, Liechtenstein foundations and attorneys with professional secrecy obligations.

“The Liechtenstein foundations provided a hub of secrecy of the Marcos's Swiss accounts. Of the 16 foundations that were documented only five survived. There was a pattern of money laundering whereby the names of foundations were changed, large sums of money were then transferred from the existing foundations to newly established foundations, and finally the old foundations were liquidated.

“Super secrecy was facilitated in Switzerland by the use of lawyers or notaries in setting up Swiss bank accounts.” [Chaikin, op. cit.]

Do they make the Cameron issue look like “loose change”? Yet the fact that he benefited from something that doesn’t pass the smell test compels Cameron to explain.

But not in the Philippines? While in Panama, “[W]e are willing to accept the responsibility for fixing it, in part because greater transparency is ultimately a continuation of reforms we have recently undertaken.”

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“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]

Thursday, April 7, 2016

Problem-solving can’t start with “destiny”

“Wala tayong magagawa.” It’s the wife’s most dreaded response to a question she would matter-of-factly ask when in the Philippines – for something as simple as an information. And which Google translates to “helplessness.”

Does the sense of helplessness come from the acceptance of “destiny”? The blog has referenced Rizal’s genius for seeing through the fraud personified by Padre Damaso. But that’s over a century ago!

“TO a person, the presidential candidates this year are tripping over themselves to pronounce their support for the 4Ps, the government’s P60-billion dole program that gives poor families a monthly stipend for keeping their children in school. That none of them have questioned the basic premise of the program . . . a measure of how much they are pandering to the poor in the hopes of winning their votes.” [Pandering to the poor, Editorial, The Standard, 23rd Mar 2016]

Helplessness and destiny? Consider: “The surrender of the Empire of Japan was announced by Imperial Japan on August 15 and formally signed on September 2, 1945 . . . The 1964 Summer Olympics, officially known as the Games of the XVIII Olympiad, was . . . held in TokyoJapan, from October 10 to 24, 1964 . . . the first Olympics held in Asia.” [Wikipedia]

“The 1964 Tokyo Summer Olympics represented . . . the end of a long, bleak period for many Japanese. It was a moment to recognize and celebrate Japan's progress and reemergence . . .The transformation from devastated enemy to rebuilt friend was accomplished in less than 20 years, a remarkably short time.” [About Japan, Japan Society]

The writer has taken that remarkable accomplishment for granted despite covering Japan during the 10-year period he was an MNC regional manager. Very recently though, the wife organized a trip and while in the Nagasaki Atomic Bomb Museum, history would stare him in the face.

“On August 6, 1945, during World War II (1939-45), an American B-29 bomber dropped the world’s first deployed atomic bomb over the Japanese city of Hiroshima. The explosion wiped out 90 percent of the city and immediately killed 80,000 people; tens of thousands more would later die of radiation exposure. Three days later, a second B-29 dropped another A-bomb on Nagasaki, killing an estimated 40,000 people. Japan’s Emperor Hirohito announced his country’s unconditional surrender in World War II in a radio address on August 15, citing the devastating power of “a new and most cruel bomb.” [“BOMBING OF HIROSHIMA AND NAGASAKI,” History.com]

“After the defeat of Japan in World War II, the United States led the Allies in the occupation and rehabilitation of the Japanese state. Between 1945 and 1952, the U.S. occupying forces, led by General Douglas A. MacArthur, enacted widespread military, political, economic, and social reforms.

“In September, 1945, General Douglas MacArthur took charge of the Supreme Command of Allied Powers (SCAP) . . . MacArthur had the final authority to make all decisions. The occupation of Japan can be divided into three phases: the initial effort to punish and reform Japan, the work to revive the Japanese economy, and the conclusion of a formal peace treaty and alliance.

“The first phase, roughly from the end of the war in 1945 through 1947, involved the most fundamental changes for the Japanese Government and society . . . SCAP dismantled the Japanese army and banned former military officers from taking roles of political leadership in the new government. In the economic field, SCAP introduced land reform, designed to benefit the majority tenant farmers and reduce the power of rich landowners, many of whom had advocated for war and supported Japanese expansionism . . . MacArthur also tried to break up the large Japanese business conglomerates, or zaibatsu, as part of the effort to transform the economy into a free market capitalist system. In 1947, Allied advisors essentially dictated a new constitution to Japan’s leaders. Some of the most profound changes in the document included downgrading the emperor’s status to that of a figurehead without political control and placing more power in the parliamentary system, promoting greater rights and privileges for women, and renouncing the right to wage war. . .” [Occupation and Reconstruction of Japan, 1945–52, U.S. Department of State, Office of the Historian]

What about Vietnam and the Philippines? We can look at a couple of yardsticks – FDIs and investment in fixed capital – 40 years after the Vietnam War and 70 years after WWII. Vietnam = $100.5-B and 24.4%, respectively. Philippines = $60.99-B and 21.7%.

“Facts. In 2014, the government estimated that nearly 26 percent of Filipinos . . . were poor. Today, that will be about 26 million out of 100 million Filipinos. Of the total poor, about 20 million are in the rural areas, or two out of five of the rural population. These are mostly farmers, fishers and landless workers.

“The Philippines failed miserably compared with Asean neighbors, especially Indonesia, Malaysia, Thailand and Vietnam in poverty reduction. Poverty incidence in the Philippines is up two to three times.

“Causes and effects. Ragnar Nurske (1907-1959), an Estonian economist, concluded that in the vicious circle (cycle) of poverty, low investment arises from low income, which is due to low productivity. Low productivity is caused, or partly caused, by low investment.

“Nurske pioneered the balanced-growth theory. The theory espouses that a government of an underdeveloped country needs to make large investments in a number of industries simultaneously. This will make the market bigger, increase productivity, and encourage the private sector to invest.” [Memo to presidential aspirants on mass poverty, Rolando T. DyMAPping the FuturePhilippine Daily Inquirer, 14th Mar 2016]

“Wala tayong magagawa.” “As it is, our economy’s growth in recent decades has been largely propelled by services. A scan of the statistics over time readily shows that our consistent growth leaders have been financial services (banking and insurance), real estate and business services, especially business process outsourcing. By no coincidence, our top billionaires derive the bulk of their wealth from these, and less from manufacturing, and hardly from agriculture. All this explains why accelerating economic growth over the past decade has left the poor behind, as poverty incidence actually rose from 24.9 percent in 2003 to 26.5 percent in 2009.

“This experience was in complete contradiction to the experience in Asia, where the Asian Development Bank found poverty incidence to have fallen by an average of 2 percent for every 1 percent rise in GDP. Asia has in fact been more successful in translating economic growth into poverty reduction than the rest of the world, where poverty fell by an average of only 1.5 percent for every 1 percent of GDP growth. The Philippine experience has not only been inferior; it is perverse, with poverty moving in the wrong direction!” [Small firms and manifold challenges, Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 22nd Mar 2016]

“But throwing money at a problem never solved anything—and it will not fix poverty. The idea of easy money degrades the value of that money and diminishes the worth of an honest day’s work.” [The Standard, op. cit.]

“Failed experiment at DA,” Marichu A. Villanueva, COMMONSENSE, The Philippine Star, 4th Mar 2016. “Ironically, the contribution to the country’s annual economic growth from the agriculture sector, however, has been declining even while budgetary support grew by unprecedented proportions.”

“Farming systems are important. Farm consolidation, such as what is now being adopted in the Asean countries and China, would shape up the countryside. In China today, some 20 percent of the farmlands are consolidated (Jikun Huang, China Academy of Agriculture Sciences, 2012). Policies, like allowing freedom of leases of land-reform lands and lifting retention limits of five hectares on land ownership, would bring more investments.” [Dy, op. cit.]

“We will also need our small firms to band together through various forms of clustering, if they are to be better integrated into international trade. Export orders invariably involve large volumes that no single small enterprise can readily meet.

“But our entrepreneurs need to be helped in shedding the ‘kanya-kanya’ (individualistic) mind-set to tap the opportunities of international trade.

“The challenges of small business in this country are manifold and daunting, and it will take nothing less than a well-orchestrated effort to unleash the great potential of MSMEs to participate more in our economy’s growth, and spread benefits therefrom much more widely.” [Habito, op. cit.]

“Wala tayong magagawa.” Because our instinct is “kanya-kanya” – that brings the perfect storm when reinforced by parochialism, hierarchy, paternalism, political patronage and dynasties, crony capitalism and oligarchy? They would characterize bygone eras yet they represent what we label our culture?

Japan needed 20 years to get back on its feet [and host the Olympics, read rapid infrastructure and economic development], Vietnam a bit more . . . but the Philippines? “Wala tayong magagawa.”

We cannot learn to look outward and forward – and define our place in the sun and what we stand for? We cannot learn to develop a sense of community and the common good? We don't like unsolicited advice? What about foreigners dictating the PH Constitution? Regardless, problem-solving doesn’t start with “destiny”? Being driven out of Eden and Egypt confirmed the magic of man’s creation?

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“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]