Monday, February 20, 2017

Why our worldview matters

“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]

The quote is among those that conclude every posting and (as explained before) they are like the North Star – a guide to stay true to the object of the blog. They’re not about an ideology but a journey, a forward-looking tool. They aren’t about one singular discipline. Development is indeed much more complex and demands a far broader perspective. And yet it is consistent with model thinking. Which is not static but designed for iteration and to be built upon. Not in a linear fashion but lateral – and facilitate connecting the dots, which is how Steve Jobs defines creativity.

But how does that relate to PH reality – like poverty, politics and our culture of impunity? Consider: “This is perhaps the best argument why plunder should be included in the bill re-imposing capital punishment—if ever this benighted measure gets passed. Contrary to Rep. Reynaldo Umali’s argument that ‘it’s only money,’ thieves on a grand scale steal more than wealth and resources: They make off with an entire generation’s only chance to rise above their meager circumstances. . .

“The Supreme Court’s ruling is a timely reminder of the former first family’s excesses, more so now that the anniversary of the Edsa revolution is approaching. As former PCGG chair Richard Amurao, who once thought of exhibiting the confiscated jewelry to the public, remarked: ‘The collection is a critical part of the past. We believe that the exhibit of these ill-gotten jewels will be a great vehicle to raise awareness, especially [among] the younger generation and those who have forgotten [the evils of martial law], to remind the Filipino people of the perils of the two-decade regime of corruption that was under the Marcoses.’” [Ill-gotten ‘baubles,’ Editorial,, 16th Feb 2017]

But that is not all. Consider: “Malacañang has belied rumors that former senator Ferdinand ‘Bongbong’ Marcos Jr. is being groomed as the next secretary of the Department of the Interior and Local Government (DILG). ‘Frankly, I don’t have any knowledge of that,’ presidential spokesman Ernesto Abella told reporters.

“‘As far as I’m concerned, I have not received anything [about the supposed appointment of Marcos as DILG head],’ the Palace official added. There have been speculations that President Rodrigo Duterte would invite Marcos to the Cabinet after the one-year ban on appointing losing candidates in the May 2016 elections expires.” [Bongbong to DILG? ‘No idea’ – Malacañang, Catherine S. Valente, The Manila Times, 16th Feb 2017]

What is our worldview? Why is Marcos still in the news? “There had been no process of purification, no trials for the butchers, and no destruction of the . . . machine . . . Jump forward to the beginning of 2015 and Putin is still in the Kremlin. Russian Forces have attacked Ukraine and annexed Crimea, six years after invading another neighbor, the Republic of Georgia . . .. The desire of men to exploit and to rule over others by diktat, and by force, did not disappear when the Wall fell.” [Winter is coming: Why Vladimir Putin and the enemies of the free world must be stopped; Introduction, Garry Kasparov, Public Affairs, New York, 2015]

We Pinoys are a forgiving lot. Should we pursue the process of purification in order to put our culture of impunity behind us? “In the decision written by Chief Justice Ma. Lourdes Sereno, the high court said the jewelry collection—valued up to $153,089 by appraisers from international auction houses Sotheby’s and Christie’s, or about P7.5 million at current exchange rates—is ill-gotten, and denied the petition filed by Marcos and her daughter Irene to reverse the Sandiganbayan’s earlier ruling.” [Editorial, op. cit.]

Are we a prisoner of our own mindset?  And it is not confined to politics. “PHL manufacturing sector tops 2013 moneymakers’ list-PSA,” Cai Ordinario, Business Mirror, 15th Feb 2017.

Two years ago, the writer attended two economic briefings, one sponsored by Eagle Watch (Ateneo) and the other, co-sponsored by UP. And in both briefings, the takeaway is consistent with this recent article. And supported by another article, “The story behind PH’s 6.8 GDP growth,” Andrew James Masigan, Manila Bulletin, 12th Feb 2017, “that the Manufacturing Resurgence Program is beginning to gain traction and that our industrial base is now widening after decades of contraction.”

If the story started four years ago, in 2013, where are we today? Indeed, this subset of a bigger data point is trending in the right direction. To simplify visualization, let’s establish that there is a local playing field, a regional playing field and a global playing field.

In the local playing field, we created more billionaires in the last few years than the past several decades. Indeed, to this handful of people, PH is trending in the right direction. Of course, even our GDP per capita is trending up.

And it should not be a surprise. It is common knowledge that our consumption-driven economy is a function of OFW remittances and the BPO industry. And with over 100 million of us, manufacturing of local products has to go up. And so the question must be, how do we change the dynamic of our economy?

What is reality? The blog has raised the JFC’s 7 industry winners, for example. And through and after the Aquino administration and now into the Duterte administration, a period of over 6 years, where are we in our industrialization efforts? What is ground zero of industrialization? Take electricity production, for instance. Where do we stand versus our neighbors? Based on available information, on an absolute and per capita bases, we are lagging behind. Indonesia, despite a population of more than 2.5 times ours does better at 1.2 times more electricity production per capita. And it explains our inability to attract FDI to the levels our neighbors do. And why we’re not an investment-driven economy.

And as the blog has argued, we are the only ones that import more than export. What will it take to reverse that trend? Without a purposeful energy or power initiative and a floundering industrialization effort, how do we expect to move from a consumption-driven economy to one that is investment-driven? For example, Thailand, the closest one to pursue, has industry delivering 36% of GDP against our 31%. Vietnam, Malaysia and Indonesia are well ahead. 

Given where we are in electricity production and how uncertain we are on the optimum energy mix to pursue, why aren’t we tapping the best brains the world has to offer and get edified? We need a master plan for total PH electrification!!! But do we have the political will???

In any case, we need to spell out the brief of the initiative in simple terms to attract the right parties to step forward and work with us. Here’s an example in broad strokes: “We are a fast-growing (6-7% range) $300-B consumption-driven economy of 103 million people, generating 30% of GDP from remittances, the BPO industry and tourism. We need a total-country electrification game plan that will sustain growth: (a) via both supply reliability and competitive costs, recognizing that we must bite the bullet during the transition; and (b) by raising the share of industry (of GDP) from 31% to 38% to match our neighbors. We are looking at 7 strategic industries to pursue aggressively, and consequently attract FDI.”

Of course, key players in government and the industry may write a better brief but the thinking process is crucial. Simple is better . . . before we get lost in translation as Boo Changco pointed out in his column, “Airport options, strategies.” Defining where we are and where we want to be in layman’s terms will help Juan de la Cruz crystallize how we can formulate a worldview.

Sadly, we have a built-in barrier a.k.a. an oligarchic economy: “BMI analysts . . . pointed out that only four major conglomerates have been bagging PPP contracts, with constitutional limits on foreign ownership standing in the way of a more ‘diverse’ pool of bidders. Currently, foreign firms need to pair up with local companies through a joint venture agreement in order to take on a local infrastructure project.

‘[D]espite the Philippines’ strong PPP regulations, the country’s subpar business environment continues to hold back key infrastructure projects,’ the Fitch unit said in a report released yesterday as it cited lapses in the rollout of big-ticket PPP deals.

“Although the World Bank ranks the Philippines’ PPP regulations as among the best in the world as it has clear and well-defined laws, transparency requirements and an independent dedicated agency, our Project Risk Index shows that the operating environment for infrastructure projects is still far behind.

“We believe that good PPP regulations are important in bringing private finance and expertise to the infrastructure sector, but the case of the Philippines shows that improvements in a country’s fundamental operating environment are also essential.” [BMI flags poor PPP environment, Melissa Luz T. Lopez, Business World, 3rd Feb 2017]

We may take our worldview for granted yet given how it informs our culture and instincts, we better step up to the plate.

“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]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists . . . A nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“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, Manhattan Project]

“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]

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