On the plane from Warsaw to New York recently the writer thought about the subject of this post while reading “The Book of Joy” by His Holiness the Dalai Lama and Archbishop Desmond Tutu with Douglas Abrams. Says Archbishop Tutu, I can be hopeful but not be optimistic – a lesson from his apartheid experience. Is it another way of saying, we may not be in a death spiral but are we in a downward spiral?
“4 of 10 nonpoor Filipino households could slip into poverty in 3 years,” Cai Ordinario, BusinessMirror, 13th Jul 2017. “The lack of access to transportation, decent employment and timely government intervention could send a lot of nonpoor households to poor status in three years, according to the Philippine Institute for Development Studies (PIDS).
“In a policy note, titled “Estimating Filipinos’ Vulnerability to Poverty”, PIDS supervising research specialist Christian D. Mina and senior research fellow Celia M. Reyes said four of 10 Filipino households are vulnerable to poverty.”
The article brought the writer decades back to their freshman class that was introduced to Modern Math and the concept of sets and subsets. “Access to transportation, decent employment and timely government intervention could send a lot of nonpoor households to poor status in three years.” Are those subsets of the bigger set of development?
If it isn’t obvious yet, while the blog is about the Philippine economy, it is founded on the imperative to reinvent ourselves. And the blog argues that it goes beyond the conventional wisdom of monetary and fiscal policies, with its constant reference to the Asian Tigers – and the compounding effect of FDIs and rapid growth over decades left us in the dust – and, more recently, a course offered by Oxford University, “From poverty to prosperity: Understanding economic development.”
Coming from the private sector, the writer has experienced countless times being too close to the trees to see the forest. And why the blog often discusses themes around vision and values and worldview as well as instincts. And the primacy of sustainable profitable growth, i.e., competitiveness – defined by its own subsets of investment, technology and innovation as well as people, product and market development – for enterprises.
Which is what free enterprise is, derived from “the pursuit of life, liberty and happiness”? And it explains American exceptionalism espoused by the forebears but sadly undermined by Trump? Who is enamored with autocracy and autocratic leaders and oligarchy. And why in a recent post the blog spoke to Du30 – similarly captivated by autocracy – and his popularity, leader dependency and foresight.
Let’s put that in our back pocket for the moment and think of how we’ve traversed the PH course so far. And do a simple cause-and-effect exercise. There is now the debate about the jeepney. Indeed, it gives Juan de la Cruz access to transportation and, as important, provides employment to many.
And the government wants to intervene and modernize transportation. But modernization is just another subset of the bigger set of development? Think OFW remittances and the BPO industry – and where we’re losing our competitive advantage given our fixed mindset and lack of foresight? Put another way, we must get ahead of the curve and move up the value chain.
While these two income streams have become the drivers of PH economy, we are still kicking and screaming: We want an inclusive economy! The reality is we don’t have the platform of an inclusive economy … because we chose to build upon the sand! And we chose to be in denial?
Have we learned our lesson? Take tourism. Tourism is a low-hanging fruit but doesn’t equate to an economic miracle despite its positive impact on employment and GDP. Think Greece where travel and tourism account for 7.5% (second only to Malta) of GDP: “As Greece continues talks with creditors over the next stages of its international bailout program, Donald Tusk, president of the European Council, has warned that it is ‘no success story’ yet … Greek prime minister Alexis Tsipras has called for an emergency summit of EU leaders if a deal is not struck [soonest].
“But while Greece tussles over the reforms required to unlock the next tranche of bailout aid, its economy is sliding back towards recession, making the need for funding all the more urgent.” [Financial Times, 6th Apr 2017]
And while with Marawi and Martial Law, PH can only have another layer of challenges. Consider: The writer's European friends had booked holidays to the Philippines but had to cancel, following advisories in their countries, and are going to Vietnam instead. Are we in a downward spiral?
Think of the forest beyond the trees. What are the critical subsets of development if we benchmark against the Asian Tigers? Think of Lee and Mahathir showing Deng and PH the way: You don’t have to love the West but beg for their money and technology. Of course, given our poor self-esteem, we pooh-poohed it while Deng obliged. Surprise, surprise ... These Asian nations have become the benchmarks for infrastructure development, industrialization and competitiveness.
What about the Oxford University course (which we can Google) so that we can do our homework, gear up and take the journey from poverty to prosperity?
Can we establish a true north for PH ever? Can we ever establish our priority initiatives? For instance, Germany’s trade surplus at $300-B is 50% greater than China’s – being the gold standard in manufacturing technology. Do they have 50 or so industry road maps? What about the Asian Tigers? Prioritize. Prioritize. Prioritize. The vital few not the trivial many. We must seek to get the biggest bang for the buck every … every … step of the industrialization pursuit and generate the capacity for further investment – and attain a virtuous circle. We’re totally confused about what an inclusive economy means? Because crab mentality gets in the way?
And the top exports are a good starting point while we inject greater market orientation and figure out consumer needs – and scale and ascend the value chain. [These are PH’s top exports that yield a trade balance surplus: (1) Electronic machinery, equipment; (2) Wood; (3) Optical, technical, medical apparatus; (4) Ships, boats; (5) Fruits, nuts; (6) Ores, slag, ash; (7) Gems, precious metals; (8) Knit or crochet clothing, accessories; (9) Leather/animal gut articles; (10) Vegetable/fruit/nut preparations]
To establish a true North and to prioritize both demand foresight.
An Italian friend, an expat in Bulgaria like the writer, just before he left for New York, narrated that Line 3 of the Sofia subway system was progressing. And the writer retreated to trusty Google to learn more.
“The European Commission (EC) has approved another EUR 86.6 million from the European Regional Development Fund to finance further construction works on the western part of Line 3 of the underground in Sofia, according to a EC press release … Sofia Metro is an underground railway network in Sofia, capital of Bulgaria. The metro system will include three lines and will connect different regions of the city … Sofia is largest city of Bulgaria and the 12th-highest populated city, with 1.4 million occupants, in Europe. The increased population of Sofia forced the construction of the metro system.
“The project was planned in the 1960s and was executed for the first time in 1990s. It was planned to provide quick and safe transport to commuters … The execution of the project was delayed as Sofia did not require an immediate underground system. The historical layers underneath Sofia's core are also a cause for the delay.
“The metro system incorporates three lines with branches in the periphery. The 65km three lines connect 63 stations of Sofia.”
Why is foresight imperative? Sofia is a very small city compared to Metro Manila and by the time they complete the project in 2020, it would have taken over 50 years. Think of NAIA Terminal 3 and the on-again, off-again airport project.
Can we establish a true north for PH ever? Can we ever establish our priority initiatives? Not if we can’t internalize community and the common good. Not if we can’t undo a culture of impunity.
Let’s get back to the Dalai Lama. Archbishop Tutu, the more eloquent speaker of the two, acknowledges that he cannot fill a stadium with people to listen to him unlike the Dalai Lama. It is the singer not the song. As the Dalai Lama puts it, even in front of a humongous crowd, he does not think of himself as special.
He thinks and prays for the 7 billion humans on this planet once he opens his eyes in the morning – and sees himself as one of them ... And the rest of humanity can learn from the Dalai Lama … It is about community and the common good … Which is alien to Juan de la Cruz to begin with?
Are we in a downward spiral though not in a death spiral?
“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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