“Be dead in the water …”

“If something is dead in the water, it has failed and it seems impossible that it will be successful in the future: So how does a governmentrevive an economy that is dead in the water?” [https://dictionary.cambridge.org/us/amp/english/be-dead-in-the-water]

And here are views from two of our respected economists: (1) Why can’t we export more (?), Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 17th Aug 2018; (2) Governance failure across the board, Solita Collas-Monsod, GET REAL, Philippine Daily Inquirer, 11th Aug 2018.

How about recognizing that we’ve long suffered from our own “Dutch disease”? If we struggle to figure out the analogy, is it because we don’t connect the dots and imagine and visualize an ecosystem?

And why the blog constantly speaks to critical and creative thinking. For example, we know – and should our economic managers do a soul-searching for failing to educate our people on what a GDP growth rate means beyond the numbers and think of data analytics borrowed from information technology? – that OFW remittances and the BPO industry are the drivers of the economy. And in more ways than one they gave us robust GDP growth rates for several years. That some of us even predicted boom times which is but a classic “pwede na ‘yan.”

Yet, neither generates the kind of multiplier effect (of investment) as industry does – especially one that is founded on innovation and global competitiveness. In other words, these economic drivers that also produced a handful of Pinoy [Forbes-ranked] billionaires don’t have the legs nor the horsepower to make us regionally much less globally competitive. Which is what generates wealth in the 21st century and creates jobs and in the case of our neighbors drastically reduced poverty.

And why we must think ecosystem. Or more precisely, not a perfect storm or a vicious circle, but the opposite, a virtuous circle which is what an ecosystem is. Think of our “culture” or way of life, a constant reminder from the blog: “We are parochial and insular. We value hierarchy and the paternalism it brings. And we rely on political patronage and oligarchy given the spoils they bestow. That when all is said and done, we bite the bullet – aka a culture of impunity.”

It explains our failure in governance ... which in a democracy is self-government, a government of the people, by the people and for the people. And why the blog always speaks to Juan de la Cruz.

And why can’t we export more? In a recent posting the blog raised the falling out between Steve Jobs and his friend Steve Wozniak, the latter who was the real techie being the engineer, while Jobs was the college drop out. Because Wozniak couldn’t imagine and visualize beyond the obvious – which to him is: “didn’t we just set out to create a great personal computer”? But to Jobs Apple was more than the obvious.

Think how legal luminaries behind the Con Com were criticized because “The protectionist, isolationist and fearful terms of the 1987 Constitution, of the 1935 Constitution even, were essentially maintained.”

With due respect to our economists, we cannot solve a problem in isolation. Think of the war on poverty, the war on drugs and the war on drunks. We are a product of our imagination – sadly reflected in our inability to progress from third-world to first-world. And we can only go as far as we can imagine the future. We need forward-thinking if not visionary thinking and leadership.

For example, to be able to export, we must think innovation and global competitiveness. Not livelihood. Pinoy friends keep telling the writer that we are inherently entrepreneurial given practically 99% of our registered enterprises are MSMEs. That is again classic “pwede na ‘yan” – because they are more like livelihood undertakings.

As someone from the DTI shared with the writer, “You know, once an exporter gets a big order, the next thing you hear is the family is in Europe on a grand holiday; and you know where the money comes from, the operating funds of the business; so they are undermining the enterprise from the get-go.” As our accountants will tell us, we can take money from a business via retained earnings, that is, the surplus that is set aside … but only … after the operating needs of the enterprise are earmarked.

Surprise! “In the first half of this year … most of our top 10 export products dropped at double-digit rates, including chemicals (-44.4 percent), coconut oil (-28.9 percent), ignition wiring sets (-27.5 percent), and bananas (-13.2 percent).

“It’s well worth examining why. For coconuts and bananas, the problem has been traced to large-scale destruction from the “cocolisap” pest and Panama disease (Fusarium wilt), respectively, which agriculture authorities have failed to handle promptly and adequately. For nonfarm exports, we need to study more closely whether the problem has been on the demand or supply side.

“In past articles, I’ve pointed to at least two things we may be doing differently from our neighbors that could explain our export gap with them. One, we have traditionally failed to provide enough support to our exportable high value farm products. For one thing, research and development support has been highly inadequate, even for our export mainstays of coconut, bananas and mangoes. For decades, we have lacked a coherent and well-funded national strategic plan for these crops.” [Habito, op. cit.]

A national strategic plan? As some would know, the blog has raised Arangkada incessantly. Question: why aren’t our economists addressing this attempt to step up to the plate of industrialization? The JFC pulled a cross-section of society together and offered Arangkada – and it is one of the very few times we tried to connect the dots. And for the umpteenth time, it is how Steve Jobs defined creativity.

But neither the Aquino nor the Duterte administration supported it. Is it because we truly cannot imagine and visualize an ecosystem – because of our lack of foresight, inability to change and a backward-looking mindset?

And what about governance? Our exportable high value farm products were appropriated by political patronage and oligarchy, which translates to a culture of tyranny and privilege as opposed to innovation and global competitiveness. We can’t solve a problem in isolation ... and must recognize the imperative of a virtuous circle. To consider otherwise is insanity.

And what about supply and demand? In the 21st century, if we are outward-looking, we will readily figure out that it is yet again a function of innovation and global competitiveness. Which demands research and development but not only. It must be part of a coherent ecosystem. And the analogy is simply: humans need oxygen and we know how it is supplied via the ecosystem.

In other words, R&D starts with human needs such that innovation is not innovation for innovation’s sake. And why the blog has repeatedly narrated how Steve Jobs created the iPod – i.e., that music is the way to the soul. And it was Apple’s first successful attempt to break away from the Mac.

And as we know the iPhone followed the iPod. And again, it was simply to pull together technologies – the cellphone and MP3 – that were already around. Surprise! And it is a glaring demonstration of how to move up the value chain and of a formidable platform to accommodate a range of apps that will address more human needs – the open secret behind Apple’s success – including health related. And so which enterprise is the first one-trillion-dollar enterprise?

Is that how we think … or why we can’t grow even our top 10 exports?

Yes, we must get serious about exports ... and we need good governance to boot. But they don’t come cheap. They come from foresight and visionary leadership ... and demand not a perfect storm or vicious circle but a virtuous one.

And in a democracy the government is Juan de la Cruz … who can take it for granted and pay the price.

“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]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“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]