In a funk …

But because we’re a bunch of optimists, have we fallen into the trap of que sera, sera? Or are we ensconced in the belief that we are “in the moment” – why worry be happy – which, in fact, is healthy?

What if we’re heading over the cliff? Consider how much incremental thinking has seeped into our instincts … forgetting that: (a) we’re the regional laggard and (b) while poverty remains front and center. And because we strongly believe our faith demands that we care for the poor, we have long concluded that we’re on the right path.

And it explains our version of retail politics and populism. In many parts of the world, the 2008 Great Recession brought about a rethink of globalization – and capitalism and democracy even. But we’re not even part of this story. Our exports are flat versus 10 years ago, for example. And while we like to point to the uptick in the share of manufacturing (of GDP), we don’t have a true industrial economy that can be characterized as innovation-driven and globally competitive.

Because we opted to focus on the local economy especially after we saw that our OFWs were pumping free money into the economy – which to us is what globalization ought to be. Then add to that the BPO industry. And lo and behold … we created more Forbes billionaires.

Which explains why we’re in a funk. We have a make-do economic model that will not lift us: (a) from being the regional laggard nor (b) drastically reduce poverty like everyone has done.

The model is not sustainable and competitive – and keeping to incremental and linear thinking will ensure we stay in a rot – in a funk, in the shackles of a vicious circle.

Think of an economic model as akin to a business model, the common denominator being the imperative to constantly figure out where the income stream is coming from. And as important, how a dynamic universe that is a 24/7 phenomenon can adversely affect their sustainability. Recall a prior post: Oil and water don’t mix – nor do a dynamic universe and a passive people.

And why the blog often points to the folly of our reliance on OFW remittances and the BPO industry. That they have turned into our own “Dutch” disease – that we like to sweep under the rug.

Those of us that are into sports will appreciate that when playing catch up one must play double time – as in Arangkada.

Consider:

We can’t relate good governance as an imperative to traverse the journey from poverty to prosperity. For example, we accept that our legislators are being bought. Unsurprisingly we keep to the same names to lead us: Marcos, Estrada, Arroyo, Revilla, Duterte, etc., etc.

The kasambahay of the sister-in-law, every election time, will journey to her hometown to ensure she gets a piece of the action. “I spend Ps2000-3000 for the journey but at the end of the day I am ahead with the Ps5000 that is meant for me.”

In other words, the system is rotten from the bottom up. And as the writer’s Eastern European friends would remark every time they saw a politician with their security escorts, “wang-wang” and all, “A rotten fish smells from the head down.”

In the meantime in the Philippines we are celebrating the new CB governor. Because he is committed to keep the pace of spending.

That’s precisely the point – we keep to incremental and linear thinking. And MSMEs and tourism come to mind.

It is not that MSMEs and tourism aren’t good. But because of incremental and linear thinking we can’t see beyond the horizon – that foresight does not come into our consciousness.

For example, we can’t prioritize … and when push comes to shove we fall into the trap of crab mentality. Because we like retail politics – aka populism – being relevant to the war on poverty and inclusion.

In the meantime we applaud every time we hear Build, Build, Build even when Arangkada has been orphaned. Where does the confusion lie? On one hand we have 42 industry road maps – dating back to the PNoy administration – that we want to pursue. On the other, Arangkada is no longer in the national consciousness.

Say again, what is our priority in tourism?

If our best islands are the priority, then let’s make infrastructure development behind these islands the priority.

And on the 42 industry road maps, let’s prioritize the two that will give us: (a) the biggest bang for the buck and (b) the quickest wins. And transform our psyche or habit from losing, i.e., regional laggard, to winning, And if that means opening them to foreign investors then let’s prioritize these industries and update the negative list (of our restrictive economy.)

And we can likewise prioritize which MSMEs will support: (a) these priority tourism initiatives and (b) the two industry road maps.

But let’s stay with MSMEs for a moment. See above re an economic model is akin to a business model.

Whether an MSME benefits from the knock-on effect of a large enterprise being in a subindustry or is a standalone, sustainability is never a guarantee. Which is what free enterprise is in the first place. There is no free lunch. And the barriers to success are multifaceted.

And the export and restaurant businesses are good examples, both being very competitive businesses with high mortality rates. And especially in the 21st century which has been defined by innovation and global competition, i.e., if a business at inception is acknowledged as an innovation, then it can be competitive.

Yet the universe never stops, i.e., innovation and competitiveness at the outset does not guarantee the future. Because of man’s ever-changing needs. Which is the starting point of innovation and foresight. And great innovators are great in understanding human nature; and Steve Jobs is a classic example. 

See below re where we excel instead, i.e., the mechanics of analysis. It explains why despite the running battle between politicians and technocrats we’re in a funk. It is not how to win in the 21st century. It is not how innovation and global competitiveness is attained.

And not to forget the Pinoy hierarchical and paternalistic bent. They undermine innovation … and foresight.

And ... our inward-looking bias, including family, adds fuel to the fire. As someone from the DTI told the writer, when a Filipino exporter gets the first big order, the next thing you know the family is on a grand European holiday.

We can go on ... For example, given Central Luzon delivers two-thirds of GDP, and given we are the regional laggard, how do we benchmark our initiatives? Not by making Makati and BGC as the models. But by shamelessly stealing from China: make the Pearl River Delta economic development initiative as the benchmark.

Foresight. Foresight. Foresight.

Unfortunately, the ability to foresee is not the same as the ability to analyze. And why there is such a thing as “analysis-paralysis.” But because we: (a) can confuse the two yet (b) believe we excel in the mechanics of analysis, we take it that we don’t need to learn from others. 

Techniques or mechanics are one thing and the ability to figure out where one is going is another. This was dissected by the consultancy, McKinsey, to explain how to leverage big data and analytics.

It is what foresight is and isn’t.

And the reality did not spare major global enterprises like GE – i.e., its business model no longer meets the demands of the 21st century – and P&G – where it costs the jobs of three CEOs, the unloading of over 100 brands and the forced entry into the board of an activist investor. The good news is the more dynamic mindset the latter brought with him is today reflected in P&G’s better performance.

But foresight will not come to Pinoy consciousness if we keep to our inward-looking bias.

Why are we in a funk?

We are parochial and insular. We value hierarchy and paternalism. We rely on political patronage and oligarchy. That at the end of the day ours is a culture of impunity. The blog has been saying it for ten years now ... And over that period Vietnam has overtaken us in more ways than one.

But to wrap up the posting, let’s hear from the World Bank: “The fact that better economic performance has failed to generate enough jobs and has not translated to better services can be partially linked to limited competition in key areas ... 

“In manufacturing, where the contribution to GDP has decreased in recent decades [contrary to what we claim], Philippine markets appear to be more concentrated than those of regional peers, with a higher proportion of monopoly, duopoly or oligopoly markets, which are typically more prone to collusion and abuse of market power, and a recent increase in the number of monopolies and duopolies.” [Fostering Competition in the Philippines: The Challenge of Restrictive Regulations; November 2018]

Gising bayan!

“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]