Riding a tiger

There are several ways to express the above title: (a) The chickens are coming home to roost; (b) We reap what we sow; (c) Garbage in, garbage out; (d) “Isang kahig isang tuka” (live from hand to mouth).

Consider: “Help the farmers now,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 23rd Aug 2019. “The immediate needs of farmers must be addressed. Promising long-term competitiveness for our farmers is fine but as someone puts it so well, in the long term we are all dead. We need a sense of urgency.”

Then consider: “Powell Highlights Fed’s Limits. Trump Labels Him an ‘Enemy,’” Jeanna Smialek, The New York Times, 23rd Aug 2019.

“Jerome H. Powell, the Federal Reserve chair, kept future interest rate cuts squarely on the table on Friday but suggested that the central bank was limited in its ability to counteract President Trump’s trade policies, which are stoking uncertainty and posing risks to the economic outlook.

“While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rule book for international trade.

“Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States [and] there were no recent precedents to guide any policy response to the current situation.”

In other words, garbage in, garbage out. It applies even to “the most technologically powerful economy in the world, with a per capita GDP of $59,500 (2017). [Its GDP in 2018 is $20.89 trillion.]” [https://www.cia.gov/library/publications/the-world-factbook/geos/us.html]

Of course, we must walk and chew gum at the same time. For example, whatever we decide to cover the revenues of our farmers for their losses from rice, we must step up to the plate and commit to making PH agriculture competitive.

We reap what we sow. “In 1995, the WTO allowed the Philippines to impose a 10-year quota system for rice importation. The QR was extended in 2004 and, again, in 2014.” [https://business.inquirer.net/232995/ph-compensate-extension-qr-rice-imports-says-neda-chief]

The world will not wait for us even if we like to shoot ourselves in the foot time and again.

We needed the sense of urgency way back in 1995. But not only. Consider the period 1965 to 1986. Yes, Marcos was the president. Moreover, when did we start to celebrate the OFW phenomenon and kicked the can (of industrialization)?

“Jose de Venecia pioneered overseas contract work for Filipinos where he was one of the first Philippine prime contractors in the Middle East and North Africa in the mid-1970s. He hired 51,000 Filipinos for his companies and engaged in port operations in Saudi Arabia, agriculture in Africa, and mass housing and oil exploration in the United Arab Emirates. His Middle East initiative was followed and later led to the employment of millions of Filipinos.” [Wikipedia]

Marcos was president when Mahathir was first appointed prime minister (1981-2003.) In other words, we needed a sense of urgency even before 1995. Why? Because Mahathir was already in hot pursuit of turning Malaysia into a first-world nation, begging for Western money and technology. To realize his vision of creating the local version of Silicon Valley, he invited Bill Gates and cohort to show them the way.

On the other hand, beyond shooting ourselves in the foot, we can only be sour grapes: “Economic team sees exporting nations faring worse than PHL in recession,” Beatrice M. Laforga, BusinessWorld, 22nd Aug 2019.

“The Philippines will be the least affected in the Association of Southeast Asian Nations (ASEAN), the leading economies of which are more export-oriented. We do not depend very much on exports as do other ASEAN countries.

“We do not depend very much on exports as do other ASEAN countries. We are not a high-flying export economy. [Do] you want to know who will be the worst-affected? South Korea, Singapore, Hong Kong, Thailand, those will be affected; they will collapse.”

For the benefit of these economic managers, here are simple descriptors of these countries: South Korea’s GDP is $1.54 trillion (with a “t”). Singapore is the 2nd most competitive nation in the world out of 140 countries ranked in 2018, while Hong Kong is 7th; Thailand is the 12th most industrious auto manufacturer in the world and the largest in Southeast Asia.

Moreover, economies go through cycles, and these countries have survived their periods and continue to be wealthier than we are.

Still, our instincts will always get the better of us: We are parochial and insular. We value hierarchy and paternalism, rely on political patronage and oligarchy, that at the end of the day, ours is a culture of impunity. They rob us of dynamism and foresight.

The bottom line: It’s about time we get real. We can keep to our parochial and insular instincts, and it will ensure that we stay the regional laggard. Competitiveness is not an option as we see today with rice.

Here’s a quote from a recent posting.

“Because Vietnam and Thailand’s rice enterprises are competitive and ours is not, we must look not for quick fixes but outward, i.e., benchmark, to figure out why this is so. [See above re Malaysia.] As necessary, we must develop dynamism and foresight and overcome parochialism and insularity.

“Knee jerks are shortsighted and not the answer to our woes. Recall we celebrated the OFW phenomenon and abandoned industrialization, the ground zero in the 21st century.

“In other words, beyond industrialization, there are still the hurdles of innovation and global competitiveness. If our perceptive judgment is off, it is from our lack of experience, but we can do something. Benchmark. Benchmark. Benchmark.

“We have so far three different layers of benchmark points: product portfolio, tree farming [talking about coconut, with the farmers in worse predicament that those into rice], farm consolidation as in cooperative.

“Sweden is a great example; they have replanted 80% of their trees with the rest left untouched; they can supply the needs of tissue-based products like napkins and toilet paper on a sustained basis well into the future.

“What about the farmers, how do we pull them together so that we generate economies of scale? Again, we need a benchmark, and Denmark’s cooperative ethos is what we must acquire.

“We must invite friends like the Swedes and the Danes, to name two, and pick their brains so that we can leapfrog our efforts in agriculture, industrialization, innovation, and global competitiveness.”

For this posting, we are adding Nestlé S.A. as the benchmark to establish the product portfolio for PH agri-based products and likewise to invite them like the Swedes and the Danes. [See above re Bill Gates]

Here is what their website says: “Nestlé S.A. is a Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world, measured by revenues and other metrics, since 2014.

“Most people know us through our brands. Our portfolio covers almost every food and beverage category – offering products and services for all stages of life, every moment of the day, helping people care for themselves and their families.

“We develop our products based on the latest research and technology to ensure that good nutrition is as good as it tastes. We do this by striking the right balance of making a product taste good and ensuring it has the optimal amounts of micronutrients. Because if children won’t eat our products, this is a missed opportunity to positively impact their lives through good nutrition.

“Nestlé touches the lives of billions of people every day: the farmers who grow our ingredients, our consumers, and the communities where we live and work.

“Around the world, we work with over 700,000 farmers directly, and with many others through our supply chain. All these farmers and workers are crucial to our company, but it can be difficult to fully understand the complex supply chains that connect us.

“Our raw materials include coffee, cocoa, dairy, palm oil, soya, sugar, cereals, meat, poultry & eggs, fish & seafood, vegetables, spices.”

The writer has read the series of articles by Secretary Dar to share his agenda, and if there is one thing the blog wants to raise; it is that competitiveness is beyond productivity. Procter & Gamble has this jargon: “First moment of truth.”

It merely means that competitiveness is in the eye of the shopper. When she’s at her favorite grocery store or supermarket, what will a Philippine product say to her? 

She doesn’t care how productive we are. Her needs are instinctively dynamic to adapt to a world that isn’t standing still. Recall Darwin. For example, her life span is longer than that of her forebears. On the other hand, see above re our instincts and why they keep appearing in the postings.

Moreover, we don’t have the private sector experience in global competition and, sadly, also in industrialization and innovation. That is why we must pick the brains of the Swedes, the Danes, and Nestlé.

Indeed, we need a sense of urgency. But not only.

“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]