Four columnists and … a kibitzer

The above title was inspired by a romantic comedy film that most Pinoys would be familiar with, Four Weddings and a Funeral.

“It features Hugh Grant, and follows the adventures of Charles (Grant) and his circle of friends through a number of social occasions as they each encounter romance … It was made in six weeks and cost under £3 million, becoming an unexpected success and the highest-grossing British film in history at the time, with worldwide box office in excess of $245.7 million ... In 1999, Four Weddings and a Funeral placed 23rd on the British Film Institute's 100 greatest British films of the 20th century.” [Wikipedia] 

Is this film a great example of how conventional wisdom can be wrong? That a budget film isn’t destined to be a top grosser – must less greatness? Let’s hold the thought …

But why Four columnists and ... a kibitzer? The columnists will become clear as we go through the piece. And the kibitzer – one who looks on and often offers unwanted advice or comment – is none other than the writer.

Since it’s a New Year, here’s an opening line that is apropos: “Let’s count our economic blessings (Part 1),” Bernardo M. Villegas, Manila Bulletin, 16th Dec 2018. “As we are ending another year in which the Philippines can still be among the three or four fastest growing economies in Asia, in keeping with the spirit of the Christmas Season, let us count our economic blessings.”

And as the year marches on and before we forget our respective New Year’s resolutions, here’s another thought we want to keep: “Can we really go beyond self(?),” Dr. Jesus P. Estanislao, SWIMMING AGAINST THE CURRENT, Manila Bulletin, 20th Dec 2018. “For many decades, those engaged in business and economics have endured a barrage of messages to the effect that the only thing that really mattered was to think of one’s bottom line.

“That has always sounded not just a bit too selfish. It forgot that men and women are called to rise and go beyond self so as to make dreams ... come true. Presumably [including for] our fellow citizens ... and ... country as a whole.”

If we love our fellow citizens we must know that the size of PH poverty is the population of Australia. And so we must toss old laws like land reform, undo our restrictive economy and commit to good governance?

“We need a big push to fix the agri sector once and for all. That starts with a drastic change in land reform policy. The objective should shift from giving farmers a piece of paper they can do little with, to giving the farmers a dependable source of livelihood.

“We have to accept the fact that land reform, as we know it, has failed miserably. Some 80 percent of our farmers make do with just three hectares of land. There isn’t much they can do with that.

“An administration led by a President who claims political will … should be able to tear up an old failed law and replace it with something to allow farmers economies of scale. Only then can they use modern machinery and technology to improve productivity and livelihood.

“Economist Ciel Habito, a former NEDA secretary, observed in his column that ‘the biggest dampener was agriculture, fishery and forestry, which not only slowed down … but where output actually fell, with a negative growth rate …’” [Agriculture is not growing, Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 21st Dec 2018]

But it’s not only agriculture that is a concern. While rural poverty accounts for the biggest chunk of the poor, addressing it doesn’t cure the cause. Knee jerks are not what a structural challenge demands (e.g., infrastructure, industrialization, undoing restrictive economy to win greater FDIs, good governance, among others) and can undermine the way forward.

And in the 21st century beyond (a) structural interventions there is the imperative of (b) innovation and global competition. Simply put, we are two generations behind and why we can’t seem to see beyond the horizon ... and may have fallen into the Dunning-Kruger effect Paul Krugman speaks to ...

Ergo: We need to rapidly learn how to shed our fixed mindset and develop a growth mindset. And what is their common denominator? To develop our sense of foresight. And that means we must: (a) shift from backward- to forward-thinking; (b) from inward- to outward-looking; (c) discard our thinking model – of doing the same thing over and over again, as in insanity – that brought us to this untenable position; and (d) benchmark and learn from others.

“Our real problem, and one can’t hammer on this enough, is that we are miserably failing to grow our exports ... This demands an aggressive and broad-based national export expansion agenda, and the time to begin working on this was yesterday.

“Last October, the Philippines posted its largest monthly trade deficit on record, at $4.2 billion — meaning that our total import bill exceeded our export earnings by that much. For the first 10 months of the year, the gap has accumulated to $33.9 billion, already well beyond last year’s full year trade deficit of $27.4 billion ...

“What this all means is that our trade transactions have led to a net foreign exchange outflow that will exceed $40 billion by year-end. To put this into perspective, this is already about half of our country’s gross international reserves ($81 billion) at the start of the year.

“It is also well beyond the total combined inflows of overseas workers’ remittances and net foreign direct investments ($28 and $10.1 billion, respectively) we had last year.

“The problem with our trade is that growth in our exports has not only failed to keep pace with … surging … imports, but exports actually fell significantly — and we can’t blame declining export markets abroad for that. Our comparable Asean neighbors actually saw their exports [grew] … as ours dropped …

“The sad reality is that it’s clearly something we’re doing domestically that is leading us to perform so differently, and so badly, compared to our neighbors, and we only have ourselves to blame for our unique (and alarming) performance.” [Our yawning trade gap, Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 18th Dec 2018]

Here’s a word from the kibitzer.

The blog is on its tenth year; and what follows is a collage of the themes of the postings. But first thing’s first. While the first postings appeared in May 2009, the writer started sharing his pieces (to 50 columnists) earlier, in the January/February period.

As an aside, the number is down to 43 columnists; seven opted to “dislike” the postings; while a few have been encouraging, including quoting if not lifting entire articles, the latter with the writer’s permission.

The writer was not a writer and was a very private person despite being asked to lead a Christian community – and probably why it was short-lived. He is an MNC alum ... and was transitioning to retirement when he was invited to be a “volunteer expert” by an arm of USAID in Eastern Europe. And then friends during a family visit to the Philippines urged him to react and share his perspectives given PH was labeled Asia’s basket case. 

He needed to do his homework and over a one-year span the writer kept himself abreast – with local news and what’s behind them – reading 50 columnists. And that gave birth to the piece, “Genesis of this blog.”

And right off the bat he wanted to highlight how we stood versus our neighbors on a few vital economic indicators. For example, ten years ago our exports were at US$ 49.32-B; in the latest information that number is lower, $48.2-B. In other words, falling exports is our reality going back ten years, confirming Ciel Habito’s more recent observation. 

To quote an earlier posting, “Why is Vietnam outpacing PH? For example, our export numbers are pathetic at US$48.2-B against their $214.1-B …

“Still we are proud that our GDP growth rate is in the 6%-7% range [yet coy about the source, i.e., OFW remittances and the BPO industry.] But Vietnam is doing as well at 6.8%. While our GDP per capita is still greater, that will not be for very long. Consider: Their FDIs are at $129.5-B compared to our $78.79.”

Simply put, given our structural challenges but not only, GDP growth rates aren’t the be-all and end-all. And it applies to the private sector too; and to paraphrase Dr. Estanislao, it has to think beyond the bottom line.

Conversely, if in the private sector there’s a few vital success indicators that must be the focus of the enterprise, a people must similarly focus on such few vital indicators to drive the economy – and in pursuit of nation building. 

It’s nothing new, the science of medicine has elevated it to an art form via the vital signs. And in the here and now we have data analytics beyond big data. And why Pareto is a constant theme of the blog.

As some would know, the writer transformed the planning and budgeting process at his then 200-year old MNC-company from finance driven to goal alignment driven, which cascades from the few vital success indicators for the enterprise. 

His “aha moment” came while doing restructuring initiatives in different parts of the world. That there is a positive and proactive way to pursue excellence … and innovation and global competitiveness.

And it most likely explains why folks at USAID tapped him to be a development worker in Eastern Europe. And where he assisted two local SMEs to get up to speed on innovation and global competition; and not be casualties of the MNC mantra of dominance while their nation was gearing up for accession into the EU.

Still, to be able to bring such strategic model down to earth in the 21st century demands being schooled in innovation and global competition. And the writer’s Eastern European friends were surprised that innovation starts with understanding human needs. Enter: Maslow.

In other words, innovation is not for innovation’s sake. It must raise man’s wellbeing. And these folks make the writer proud since innovation is now in their DNA. Unsurprisingly, they are giving Western global behemoths a run for their money. 

It is a continuation of the rapid progress they’ve achieved that the outside world first noted when they were recognized as among the best and fastest growing companies in the EU in 2011. And what they’ve demonstrated over 16 years are: (a) a strong sense of foresight and (b) a growth mindset.

That they could be the best in the business and compete against the giants of industry from the West – that they secretly admired … and measured themselves against. If we must dream, this is how to dream?

What’s the point? 

“The sad reality is that it’s clearly something we’re doing domestically that is leading us to perform so differently, and so badly, compared to our neighbors, and we only have ourselves to blame for our unique (and alarming) performance.” [Habito, op. cit.]

Exports don’t magically grow! See above re common denominator, i.e., develop our sense of foresight. Let’s look in the mirror and declare: “We aren’t destined to be a third-world, underdeveloped, poverty-gripped nation.” That addressing poverty in the rural areas per se is not what foresight is. It is a knee-jerk and why we can’t seem to demonstrate imagination in our efforts.

Think of Denmark’s pig industry. Then imagine and visualize PH agribusiness as a globally competitive enterprise not a bureaucracy – as in a franchise and a monopoly where patronage and oligarchy are a toxic mix: (a) by benchmarking against best-practice countries; (b) to ascertain what we must produce to deliver the greatest returns/margins – i.e., a sustainable revenue stream; (c) win in the global arena with innovative products produced with state-of-the-art technology and economies of scale, including organizing subsistence farms into cooperatives; and identifying the markets and customers to be tapped; and (d) develop an agribusiness vision and plan that will pull all the pieces and connect the dots, including tapping knowledge, technology and even FDIs we sorely need.

Ergo: If we must dream, we must get over parochialism and insularity and do our share to advance civilization. If we can’t, if today we’re two generations behind, it will get worse before it gets better. And why a Singapore is too much for Juan de la Cruz … to dream and attain.

Recall Covey’s 7 habits of highly effective people, e.g., begin with the end in mind. And to facilitate the thinking process, think of the GPS as a model: Where are we; Where do we want to be; How do we get there. 

For instance, export as a nation’s core competency demands a set of building blocks. And why developed nations have a leg up: from infrastructure to industrialization to innovation to global competition.

And so our folks at the DTI aren’t meant to think import substitution well into the 21st century. It is facetious. We can’t keep to our thinking model – of doing the same thing over and over again, as in insanity – that brought us to this untenable position.

What we must methodically pursue is the way forward as demonstrated by developed nations. See above re building blocks. Sadly, given our lack of experience in development, our perceptive judgment suffers. We didn’t see through the fake leadership, that the war on drugs is nirvana, even when it’s anathema to good governance.

Our economic managers can show us the way and benchmark against winners and best practice models. So that we don’t measure ourselves against troubled economies like Argentina, Venezuela, Turkey, and South Africa. 

We are on a downward spiral – think Vietnam, exports, FDIs and good governance – and won’t find solace in the misfortunes of others. 

Likewise, innovation is beyond patronage and oligarchy and is egalitarian and cross-discipline. And a good model to learn that captures the Silicon Valley ethos is “Design Thinking,” developed by Stanford University.

The bottom line: Given our parochial, insular, hierarchical and paternalistic instincts, we must shift paradigms. And that we don’t accept that we are destined to be a third-world, underdeveloped, poverty-gripped nation … Let’s recall the thought: Conventional wisdom? 

To the four columnists, please pardon this kibitzer.

The family joins me in wishing everyone a Prosperous New Year!

“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]