Sunday, April 21, 2019

Diamond in the rough

It should remind us of Botswana and the DRC (Democratic Republic of Congo), after Russia, the number two and three biggest diamond producers; otherwise, they will mirror Chow Tai Fook (China) or Zale or Kay (which are Signet brands) and Tiffany (both from the US), the three largest diamond retailers.

Nations - especially those endowed with God-given gifts - that can not get from point A (eg, extraction) to point B (eg, high value-added) will not be unlike a diamond in the rough.

Botswana is a small country of a little over 2 million with a GDP per capita (PPP) of $ 17,000, and a poverty rate of 19.3%. The DRC is much larger with over 85 million people, a GDP per capita of $ 800, and staggering poverty of 63%.

The Philippines? We're over 100 million strong, with a GDP per capita at a fraction of Botswana's, $ 8,400, and embarrassing poverty of 21.6%.

We are in this league and not with the Asian Tigers. Unsurprisingly, our instincts of denial are through the roof. What to do? To be in denial is akin to an adolescent and why Trump is labeled narcissistic. Of course, he is over the top, and he lies matter-of-factly, beyond denies.

How come we can not get from point A to point B? Recall a very fresh white elephant we call PITX. It was meant to relieve EDSA of provincial buses - to decongest this ring road of Metro Manila. However, just like the infamy that is NAIA, we chose to live with another failure.

Do we wonder that our playing field keeps shrinking? In other words, if we are to raise ourselves to be competitive against our neighbors, we can not afford a shrinking playing field. Ditto for FDIs. There are six ways to Sunday, not one.  

The blog has discussed that we are foresight-challenged. Experience can teach us foresight despite vision being a rare commodity according to science. We are proud of our "values" as ideologues are. Of course, even the Vatican - polarized like America - is not immune from the folly that today we have two popes. See below re the coming of Christ.

If it is not apparent yet, every post concludes with a series of quotes and one of them is:  " 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]

It takes foresight to discern. How come we are so proud of the beauty of our country yet never got around to match the success of our neighbors in tourism? Does it also explain why we're generations behind in infrastructure development and industrialization? That is why innovation and global competition are way beyond us.

To innovate is to create beyond employing techniques. For example, big data and analytics are beyond analysis per the treatise of McKinsey, the consultancy, One must first have a good handle of the outcome sought, and it demands foresight.

As the blog has argued, parochialism and insularity rob us of the ability to look outward and forward. See above re our shrinking playing field. These values ​​are so ingrained because we see them as supreme. If we turn them on their heads, they come with something so Pinoy that is, our crab mentality. If we can not have it, no one can.

So to prioritize is alien to us. Enter hierarchy and patronage to dispense populism and why paternalism is our definition of wellbeing.

On the other hand, the blog has discussed Sweden's forest industry and the Danish pig industry. Both founded on community and the common good, that is, the cooperative ethos. Both are world-class and sustainable.

The bottom line: If we can not move beyond parochialism and insularity, indeed we shall forever and a day cry out that we are small fry. We are a small fry because we refuse to grow up - as in denial is akin to adolescence. 

Poverty dates back to the story of Eden. It's a profound lesson, that is, to lose everything and even to become refugees with no one to house them taught Adam and Eve that indeed the Creator made something good. 

To reinforce this goodness, Christ came and battled the ideologies, including the scribes, as well as the "imperial Roman oppression and Jewish collaboration." [Rohr, op. cit.] Which today Christians celebrate as his passion, death, and resurrection. He went against conventional wisdom and proclaimed, "he who is last shall be first." That humanity must embrace, beyond the poor, foreigners and refugees. The Statue of Liberty is a constant reminder. One wonders why they put up a replica in Tokyo.

As a development worker in Eastern Europe, the writer would not miss retelling the story of creation to introduce innovation and global competitiveness. See above re to innovate is to create.

"We are poor Bulgarians." Yes, the writer's Eastern European friends come to mind. He is flying to Sofia later tonight, and 16 years ago poverty was the excuse for every business initiative that was on the table. "We can only sell a (consumer) packaged-good for (the equivalent of) 50-euro cents because that is how the consumer grew up under communist rule." Take it or leave it. Aha! In other words, even when they are not fit for human consumption people still pay 50-euro cents.

They had to learn Maslow's hierarchy of human needs - that people are not robots. They did, and today they have seven brands that are multi-million dollar brands that deliver 107% of profits. How did they get there? In one word, innovation - or creation - based on respect for human needs. 

Think of Adam and Eve, banished from Eden, and so their physiological needs surfaced. Moreover, we now know that human necessities are not frozen; otherwise, we would be living in caves if not trees, will not have the iPhone today, and  the writer can not fly to Sofia on a Dreamliner, thanks to Boeing.

By design, the writer's Eastern European friends have an equal number of brands they developed later that are still to reach critical mass levels. It is called investment. In other words, foresight. It gives them the ability to go full circle and connect the dots. Are they done? Not by a long shot. For example, they are partnering with Amazon to sell the company's latest innovation in baby care. Recall the controversy around talc. Human needs make innovation dynamic not static.

Compare that to 42 industry road maps we are so proud to pursue in the Philippines. We do not have a single road map implemented. It is not surprising. To connect the dots for one industry is an enormous challenge, what more of 42?

Another evidence of how we are foresight-challenged and why development escapes us? Beyond the jeepney is the tricycle. Now we have the e-trike, and we're proud of it. Is it a diamond in the rough or classic "pwede na 'yan"?

What foresight and development demand is an efficient public transportation system which presupposes a virtuous circle. It includes rapid infrastructure development and rapid industrialization that will bring about innovation and global competitiveness. Please think of the Asian Tigers and how they traversed the road from poverty to prosperity. 

Let's get back to the writer's friends. They focused on one brand that today still accounts for a third of the revenues and 60% of the profits. It funds every up-and-coming investment; that they have seven state-of-the-art manufacturing facilities with the largest ones moving to robotics to respond to the growing demands from many parts of the world.

What is an economy? It is the aggregate of the goods and services it produces. So, if we are to win with 42 industries, we better come down to earth and learn foresight so that we can prioritize and connect the dots.

Where do politics and the war on drugs belong? What about dole outs from local lords and their cohort at the national level? Think Mahathir. He chose community and the common good instead of prioritizing the development of his hometown. He wanted rapid infrastructure development and rapid industrialization and begged for Western money and technology.

Today, Malaysia is not like Botswana or the DRC or the Philippines. Are we a diamond in the rough?

Happy Easter!

"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]

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