Tourism and Agriculture

Beyond OFW remittances and the BPO industry, tourism and agriculture are near and dear to our hearts because of their impact on employment. In other words, given poverty is our albatross, we strongly feel for these sectors.

These four (4) sectors contribute 40% of GDP, even greater than industry’s 31%. The balance comes from services. And all told, they generate a sizeable local economy that is bigger than that of Malaysia, Thailand and Vietnam.

Yet our poverty rate still makes us the regional laggard – given our inward focus. And why Vietnam outperforms us in exports, 4.5 to 1, and ours are flat versus 10 years ago. On the other hand, the fact that we created a handful of Forbes billionaires blurs our perspective – i.e., we are doing something right. Aha, “inclusive” is what is missing! Let’s do CSR. Let’s do this, let’s do that.

The blog has pointed to our lack of foresight and our instincts of hierarchy and paternalism. We may be kicking and screaming given PH poverty but in our heart of hearts we feel for oligarchy. Because they are Pinoys too – and patronage always comes in handy, it’s our crutch. And because of our instincts of compassion and paternalism, we want these sectors to grow.

Whether it’s instincts or inside the box thinking, our inability to overcome “insanity” – doing the same thing over and over again … and expect a different outcome – is our biggest challenge.

But let’s digress for one moment. The wife, daughter and writer are in the Philippines for the family’s annual homecoming. And they saw a bit of tourism and agriculture and were able to make the contrast versus Ubud, in Bali – their first holiday stop after their arrival – when they drove from Alabang to Tagaytay and then to Liliw and Cavinti in Laguna, with a lunch stop in Pagsanjan on the return. [If you like “krispy pata” and “binagoongan” look for the restaurant at the center where they prepare them as one dish.]

The daughter continued on to Boracay and El Nido with two friends from New York and a cousin. This family is a sucker for holidays, and when the son-in-law can take time off, it becomes a party of four – like when they spent a week in St. Barth in early December. It’s a carryover from the writer’s days in his old MNC-company where every first working day of January, everyone posts their planned holidays for the year – so the world (subsidiaries) can take note and ensure meeting and travel plans are in sync.

When we talk of MNC efficiency, this is one minor element. And which the writer’s Eastern European friends have embraced. The downside is [not really; given the productivity inherent in today’s technology, it’s a cakewalk] even in Bali the writer would go over the daily sales report versus the inventory of products and the forecasts as well as the profit picture that is constantly updated.

Disclosure: This is where big data comes in and as important is the exercise in analytics: Where is growth coming from; How to exploit them; What is restricting growth; How to fix them; How to leverage products, customers and markets as a universe to attain synergy and generate even greater growth and profitability? Think how our neighbors have left us in the dust. They do analytics as a matter of course. We talk about it. And the gap in experience means it will get worse before it gets better for Juan de la Cruz.

That’s a longwinded way to … establish the predicate of this posting.

While on a bicycle sightseeing tour in Ubud, which includes pedaling around rice paddies, one will not miss how efficient the irrigation system is. Says Wikipedia: “Subak is the water management (irrigation) system for paddy fields on Bali island … developed in the 9th century … Irrigation is not simply providing water for the plant's roots, but water is used to construct a complex, pulsed artificial ecosystem. The system consists of five terraced rice fields and water temples covering nearly 20,000 hectares. The temples are the main focus of this cooperative water management, known as subak.”

Another thing a visitor will notice is the center of Ubud, civilized and organized – i.e., there is efficient coexistence and order – that they attract 3 million foreign tourists every year. That is more than the 2 million that Tagaygay gets, both local and foreign. And population-wise, they’re roughly equal: Tagaytay = 72,000; Ubud = 74,000.

We need to better appreciate time and space and the relationships that spell out coexistence and order. In other words, there can be no efficient coexistence and order when time and space is not respected. The evidence? Think of how anarchy has invaded our land use and traffic system – if we can call it that. As well as the constant themes of the blog: from our failure in infrastructure development to industrialization to innovation to global competitiveness. It was plenty clear in Tagaytay, Liliw and Cavinti.

On the other hand, consider this blog post from a woman in Florida: “Before most tourists are wandering the streets the Balinese are out sweeping up all of the previous day’s offerings from around their businesses and homes. Buckets of water are used to wet down the sidewalk and they scrub not only the perimeter around the doorway, but the gutters too.

“The streets of Bali are spotless in the early morning hours and sidewalks, steps, statues, and temples are now ready for the daily gift of offerings meant to appease and please the various gods and demons of Balinese Hinduism.”

Let’s then get to Liliw. The Church of St. John the Baptist is central to Liliw; and like most parishes in the country, the parish church is the hub. And together with its river and the crystal-clear water galloping down Mount Banahaw and the footwear industry, these elements would define for the writer what Liliw is.

If that sounds parochial, the locals aren’t when it comes to the footwear industry. They understand “nationalism” better than Trump and the Brexiteers? Consider: “We don’t like to be sitting the whole day making slippers; we want something more interesting. So we rely on Batangas and Quezon to supply us the labor.”

Even a young boy of less than 10 understood what economics is, the law of supply and demand, for example. While doing selfies in the church grounds, the group was approached by this boy. “These 3 bundles of “paco” leaves sell for 20 pesos per but I will give them to you for 50.” Later on, while window shopping, the boy came again. “It’s after 5, you can have these 3 bundles for 20.” Jeff Bezos will hire this boy in a flash.

About a half-hour drive up Mount Banahaw was another selfies’ spot and where the family met a farmer. “We do tomatoes, cabbage and ampalaya to optimize the yield. These plots of land have different owners, dating back generations. Those whose forebears were truly industrious got the largest plots; all they had to do was make the claim to earn the rights to these plots.”

Livelihood undertakings make these rural folks thrive. And the family saw that from the Airbnb accommodations which the daughter found while in Bali – and signed up for: Tagaytay, Liliw and Cavinti. Livelihood means marginal income and very limited multiplier effect to impact a wider population. And why poverty continues to haunt us. And simply mouthing a euphemism like “inclusive” doesn’t make it so – because of PHL underdevelopment. See above re foresight and the constant themes of the blog. 

After ten years of postings – given the consistency of the themes – those who read the blog will recognize its message re incremental and linear thinking. That this thinking process, which is universal, is not geared to developing one’s foresight and embracing lateral and creative thinking. And why the world can count with its fingers how many visionaries walked the face of the earth.

And Stephen Covey captured it succinctly in his “7 Habits of Highly Effective People,” and Habit #2 expresses it as: Begin with the end in mind. That’s gobbledygook to over 99% of people because logical, incremental and linear thinking is how we all learned to think.

And to paraphrase Steve Jobs’ address to Stanford graduates, you cannot connect the dots if you don’t have the experience; it only comes after you’ve gone through the pain of creativity. In other words, creativity is simply connecting the dots. Think of why the Asian Tigers and even Vietnam are running rings around us: they have the experience and we don’t when it comes to infrastructure development, industrialization, innovation and global competition.

How does it relate to tourism and agriculture? Viewed from the perspective of Economics, we know the imperative of the factors of production; and so they have been our focus in order to raise productivity. That is established knowledge and we must embrace it. But the 21st century demands something beyond, i.e., innovation and global competitiveness. Recall how often the blog speaks to the imperative of benchmarking.

And this is where we fall flat on our face given our inward and backward instincts – as opposed to outward and forward. Think foresight, that is, beyond logical, incremental and linear thinking.

In agriculture, we must benchmark against the products our neighbors dominate. In other words, agriculture is beyond food security, another euphemism; nor is it copra because it is our comfort zone. They are able to dominate a portfolio of agri products because they understand the global market and have figured out which will generate the requisite volumes – revenues and margins – for them to have the confidence to aggressively invest behind these products.

Begin with the end in mind: Define the products that will be the priority for Philippine agriculture, that is, after we went through the benchmarking process. And then work backwards to figure out the 3 sets of dynamics that must become our expertise to deliver the desired outcome: (a) the product mix, i.e., what we must produce and why and how to win and generate the desired revenues and margins; (b) the resource mix, i.e., beyond the factors of production that will raise the probability of winning in the global arena, e.g., economies of scale; and (c) the execution mix, i.e., proactively manage the enterprise, e.g., who will do what, why, when, where and how?

And if we do a rigorous job of benchmarking, these elements are where our neighbors put lots and lots of investment. To us Pinoys investment is all about capital – as in and oligarchy and the big boys. And why we don’t understand that insights are the key to benchmarking.

We must move beyond poverty – and thus livelihood undertakings – as the platform for the agribusiness industry. If the public sector cannot manage such a global undertaking, it makes sense to partner with the private sector, including foreign enterprises that can contribute money and technology. Even our big boys can’t claim the expertise that is called for. And why Vietnam’s exports are 4.5 times more than ours.

This model works in tourism too. For example, Trip Advisor identified the 30 top attractions in the Philippines, i.e., these are our crown jewels that can win in the global arena. [See above re benchmark against the agri products our neighbors dominate.] They must be the focus. Not every tourist spot imaginable can make this cutoff. And this is where crab mentality sinks us to regional laggard status. [See above re time and space and our blurred perspective.]

And so we jump to the conclusion that “inclusive” is key that we forget the imperative, “what is our priority?” Think Pareto. In a previous post the blog discussed how the Pearl River Delta economic development initiative became the catalyst that made China the world’s number one manufacturing enterprise.

And then just like in agriculture, after we defined the priority attractions for Philippine tourism, work backwards to figure out the 3 sets of dynamics that must become our expertise to deliver the desired outcome.

Our small entrepreneurs and subsistence farmers that are focused on livelihood undertakings are thriving albeit generating marginal incomes. It is our leadership and industry that must step up to make PHL a global player. And being a global player has a knock-on effect on small enterprises, e.g., they can be tapped to be providers to the bigger enterprise. For example, how do we overcome the export advantage of Vietnam or how can Tagaytay attract 3 million foreign tourists like Ubud?

Not if we keep to our fixed mindset. That we are destined to be a third-world, underdeveloped, poverty-gripped nation and can’t foresee PHL as a developed, wealthy, first-world nation. And not if we can’t overcome our instincts: We are parochial and insular; We value hierarchy and paternalism; We rely on patronage and oligarchy … that ours is a culture of impunity.

“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]

“You have to have a dream, whether big or small. Then plan, focus, work hard and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“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]