“It’s the politics, stupid!”

“That is Acemoglu and Robinson's simple yet compelling explanation for why so many countries fail to develop. From the absolutism of the Stuarts to the antebellum South, from Sierra Leone to Colombia, this magisterial work shows how powerful elites rig the rules to benefit themselves at the expense of the many. Charting a careful course between the pessimists and optimists, the authors demonstrate history and geography need not be destiny. But they also document how sensible economic ideas and policies often achieve little in the absence of fundamental political change." [From Dani Rodrik, Kennedy School of Government, Harvard University; in praise of Why Nations Fail: The origins of power, prosperity, and poverty; Daren Acemoglu and James A. Robinson; 2012]

“So how does James Robinson [professor, Harvard University and co-author of “Why Nations Fail”] see the Philippines? He talked of the EDSA Revolution where the Philippines became more inclusive and democratic. However, he said there is still patronage-based bureaucracy, lack of political competition with traces of dynasty control, exchange of goods for political support, etc.  Is there any evidence of the Philippines not yet truly inclusive?  He said, it is the number of OFWs still seeking better life outside the country.” [Why nations fail (?), Flor G. Tarriela, Manila Bulletin, 10th Jun 2015; Ms. Tarriela is Chairman of PNB and a FINEX Trustee. She was formerly undersecretary of Finance.] 

How should we react to the professor?

“[Secretary Cesar Purisima (Best Finance Minister)] is optimistic about the future due to good governance, which is ‘unquantifiable.’  So what is good governance? He discussed seven elements, which he says is a journey, it’s not just talk nor fiction, but a reality: Transparency. Government Responsiveness to people’s desire. Consultation, consensus-oriented and not just mandated or handed top down. Efficient and effective. Rule of Law, Accountability and Active Participation.

“Will the Philippines succeed? What are the key success factors? Secretary Purisima named people, the government, natural endowment and the economy. He said first the Philippines is blest with 100 million population, 23 median age, demographic ‘sweet spot’ and 10 million Filipinos abroad.  The government is investing in people, especially education with the Conditional Cash Transfer and K+12 programs.  The Philippines is blest with natural resources, beautiful beaches and 5th in terms of mineralization yet Philippine growth had no help from mining.  On the economy, he paid tribute to Gov. Amando ‘Say’ Tetangco Jr. (Best Central Bank Governor) as the banking system is well managed; with low NPLs, implemented Basel 3 ahead of time, strong external position and debt level.” [Tarriela, op. cit.]

On the other hand, let's ask Juan de la Cruz: “Tubig!” “Kuryente!” The blog often talks about Maslow's hierarchy of human needs, and water and electricity belong to the most basic of necessities or physiological needs in his lingo. Why can't we provide them to Juan de la Cruz? Says Robinson, “patronage-based bureaucracy, lack of political competition with traces of dynasty control, exchange of goods for political support, etc.,” undermine nirvana – as in inclusive and democratic.

Beyond Maslow, the blog argues that we are foresight-challenged. In fairness, we must ask: How? In the first place, science says that foresight is a rare commodity. Second of all, our instincts don't lend themselves to dynamism, which in this day and age – of Silicon Valley and beyond – means a growth mindset, not a fixed mindset. 

Instead of dynamism, we bask in resilience, a euphemism for the status quo. So the blog often references the story of Eden, from where Adam and Eve were banished, and connects the dots to Easter to highlight the passion, death, and resurrection of Christ. 

Because dynamism isn't a monopoly of Silicon Valley but is at the heart of the story of creation aka the law of nature and codified by natural science and brought forward by Einstein. 

If we can pause for a moment to appreciate the wonders of creation, chances are we will be inspired to learn from it and begin to look beyond the horizon instead of embracing resilience aka status quo.

For example, how was Vietnam able to think outside the box and tap Samsung to invest $17-Billion and bring technology to them and generate exports to approximate total PH exports? 

Creation is good, so said the Creator – and so is dynamism. It is well-equipped to deal with evil whether in Eden or the Last Supper. Of course, Padre Damaso is larger than the Creator. Hitler thought so that he had visions of a superior race. 

Closer to home, Bongbong and Imee are entertaining the delusion of leading the country like their father did because it represented the golden years of the Philippines? That is not what Lee Kuan Yew said, that we begged for foreign exchange otherwise we would default on obligations that were coming due. Will they go the way of Hitler and their father too?

We in the elite class better learn our lesson. Can we put together a team that can be as good as the management teams of General Electric and Procter & Gamble, for example? GE was the yardstick for succession planning in the West that they can mold CEOs like no other environment. PG invented marketing. In the public sector, the UK civil service model was the envy of the world. Why is there Brexit?

Hint: Parochialism and insularity are delusional. If Trump and company haven't heard it yet.

It took the world over a hundred years to confirm Einstein’s theory that gravity behaves the same way in a faraway galaxy as it does in our solar system. It reinforces the science that foresight is a rare commodity.

The framework is how the writer introduced innovation and global competitiveness to his Eastern European friends who were born godless under Soviet rule. Worse, time cruelly left them behind. 

The good news is their nation dates back to the time of Jesus Christ and the likes of St. John the Baptist walked their land if the archeological finds are accurate. So the story of creation is not unfamiliar to them. 

We can take the imperative of a growth mindset for granted, but until we recognize why we can't approximate “fundamental political change” referenced by Robinson, the status quo wins out. Because “powerful elites [will always] rig the rules to benefit themselves at the expense of the many.”

The status quo is preserved in a hierarchical structure especially when human-made disasters like clockwork confront a nation like the Philippines. It comes with such grand labels as CSR (Corporate Social Responsibility) for example. Worse, it is reinforced by our instincts, to wit: We are parochial and insular. We value hierarchy and paternalism, rely on patronage and oligarchy. They make for a perfect storm – as in a vicious circle.

Who needs to develop foresight and innovation and global competitiveness when powerful elites have the market to themselves? On the other hand, as Vietnam has demonstrated, foreign investment and technology by the likes of a Samsung, for example, can equal the total exports of the Philippines. In fairness, non-business folks or non-economists will not readily appreciate the multiplier effect, especially of technology-based exports, which explains why Vietnam's poverty rate is very much less than ours.  

Moreover, Vietnam is communist yet is more open than we are. How do we expect a Samsung to pour $17-Billion and bring technology to us given our parochial and insular instincts? We need everyone in the Sy family to invest their assets in PHL if we are to be competitive against Vietnam. However, can they? Alternatively, will they?

Failing that, we can ask the next four Pinoy Forbes billionaires to invest their assets in PHL. However, can they? Alternatively, will they? Moreover, what technology can they offer that will bring us incremental exports equal to today's total PH exports?

Still, given we're incurable optimists, as the respected secretary, we are optimistic about the future. Because the Philippines is the model of good governance?

Over the last ten years, the blog has argued the counterpoint. No force appears able to upend our bias for the status quo. It is beyond “It's the politics, stupid” – as in a vicious circle.

Consider what other thinkers say about “Why nations fail.”

“The book reviews how some good regimes got launched and then had a virtuous spiral, while bad regimes remain in a vicious spiral. This is important analysis not to be missed.” [Peter Diamond, Nobel laureate in economics, 2010]

“Countries rise when they put in place the right pro-growth political institutions and they fail—often spectacularly—when those institutions ossify or fail to adapt. Powerful people always and everywhere seek to grab complete control over government, undermining broader social progress for their own greed. Keep those people in check with effective democracy or watch your nation fail.” [Simon Johnson, coauthor of 13 Bankers and professor at MIT Sloan]

Everyone is now waiting for the coming elections to right the ship that is the Philippines. As Robinson infers, “exchange of goods for political support” is the rule rather than the exception in PH.

Alternatively, we like to reference the emergence of right-wing nationalism. It is laughable especially when it is happening in the US and the UK. The West, specifically the financial community, brought about the 2008/9 Great Recession. The fallout and the contagion from the subprime mortgage fiasco via the Ponzi scheme these folks called derivatives can be placed foursquare on their laps.

Moreover, we in the Philippines were not part of this scenario because we had right-wing populism and the one-percent phenomenon in the heart of our instincts long before they became buzzwords.

We call it responsiveness to people's desire yet Robinson describes it as patronage-based bureaucracy. In case we have forgotten, recall land reform and the party-list system in particular and crab mentality in general. Well-intentioned but undermines community and the common good, as in we're foresight-challenged.

Likewise, it goes for legislative efforts including fiscal and monetary policies that we can't pull together to create an ecosystem that is a virtuous circle. They are the opposite side of the same coin, the other being our above instincts. 

The evidence? Our failure to pursue rapid infrastructure development and rapid industrialization make us ill-equipped for the 21st century, as in innovation-driven and globally competitive.

Why are we underdeveloped? Why do nations fail?

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]