We can’t perpetually be in denial

We are too weak and unprepared for the 21st century.

And, for the 2020 pandemic. Of course, even America is unprepared. Except that they can print money to the tune of $2 trillion – the “biggest” relief package in American history, says the NY Times – to fight the pandemic.

We are doing something similar relief-wise, but still, both in the US and in the Philippines, there will be fallouts. Small businesses – including gig workers and freelancers and the self-employed – that aren’t strong and prepared for a disruption of this magnitude will fall by the wayside. And that means unemployment – and economic slowdown. For example, before the US stimulus package is even signed, 3.3 million Americans filed for unemployment the prior week.

The pandemic is adding to our humongous challenges in the Philippines.

Let’s digress some: Beyond our tycoons, small enterprises are stepping up to the challenge. That is, to help those in need and their businesses. “How to help the front-liners and the needy in this time of crisis,” Margaux Salcedo, FIRST CLASS, Philippine Daily Inquirer, 22nd Mar 2020. “Donate to the COVID-19 food drive (#Covid19FoodDrivePH). A group of former Enderan students and faculty [came] up with an Adopt-A-Barangay campaign whereby they bring food packed by restaurants to the communities that need it.

“The process is: people donate, organizers give participating restaurants the budget (P50/meal or P500/family meal for 10), the restaurants cook and pack the meals, which are picked up and delivered by army reservists.”

The story became personal to the writer and family. A nephew is part owner of one of the restaurants and sent photos of what’s happening on the ground, including one with an army truck loading the food packs. Says the nephew, “Tito, I’m happy to at least earn and pay ‘sweldo’ (the wage) of my staff during these difficult times. We really can’t stop hustling ‘talaga.’ The moment we stop thinking of ways to grow, that’s when everything will fall and fail.”

He explained the incremental business they are generating from their takeout efforts and the like, quantifying them with hard numbers. The proud tito, the sounding board of their innovative business ideas, being in their late 20s and early 30s, responded with just one word, “Bravo.”

So, let’s resume the posting. 

Five years ago, Bill Gates on TED Talk discussed the likelihood of a pandemic. Yet, everyone is conceding that the US cannot match the swiftness of the South Korean experience in responding to the ongoing crisis. Whether it is the challenge of rapid-fire testing or the commitment to a lockdown, the US has been wishy-washy at best. Ditto for the communications coming from the experts versus the politicians. Unsurprisingly, the US, as of the latest count, “leads the world in confirmed coronavirus cases.”

The good news says Gates, in an interview courtesy of TED Talk, is that the experience from this 2020 pandemic will accelerate the development of the world’s readiness for future ones. That is, even poorer nations will benefit because the richer ones won’t withhold the help. The kind of focus such an undertaking demands must explain why Gates has stepped down from his Microsoft role and his board membership at Berkshire.

And, of course, after a recession, there is pent-up demand that can play out into the next boom.

Still, in the Philippines, we are confronted with the challenge of being the regional laggard. And that comes with all the downsides that we can’t seem to overcome. So, like a broken record, the blog will not tire presenting the alternative perspective it has pursued going eleven years. The goal is that, as the US learned from the 2020 pandemic (though it is five years later), we Pinoys will, in turn, appreciate that we can’t perpetually be in denial.

We are in denial when we can’t recognize that our neighbors, if not the world, has left us behind. Think of Adam and Eve. If man blamed God for being banished from Eden and embraced a fixed mindset instead of a growth mindset, he would be extinct by now. He would not have acquired the wherewithal to grow and develop. Think of the first homo sapiens that saw it imperative to migrate from Africa.

There is no perfection and permanence in this world because the story of creation is dynamic. Recall the Franciscan theology against dualism – as in either/or, best manifested by the scribes and Pharisees. On the other hand, the prophets, including Jesus, preached dynamism. Of course, Jesus paid the price for undermining aristocracy.

Then consider our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Consider too the dismal state of Philippine higher education. Given that knowledge is not limited to the education system, but includes the home, the church, and the community, we as a generation are failing the succeeding ones. We aren’t demonstrating intellectual curiosity. We are in good company, though, those Harvard graduate students who were unable to figure out how forward-thinking Jeff Bezos was.

There is no one universal system to explain the success of our neighbors – they were able to traverse the road from poverty to prosperity. It is not surprising. In high school economics, we learned that the Soviet model was centralized planning. 

At the same time, that of the US, while free enterprise in character, was a mixed system, i.e., the federal government regulates interstate and foreign commerce, declares war and set taxing, spending, and other national policies.

We keep saying the American system will not work for us, yet we like to talk about their federal system – forgetting that we are coming from a unitary system while they were the opposite. America needed to pull the different states together. In other words, the needs are different.

Our need is to fix the incompetence and inefficiency at the national level. And here we can learn from our neighbors. Think of Lee, Mahathir, and Deng. They are the best examples of visionary leadership.

In other words, a nation that cannot produce visionary leadership cannot fix the incompetence and inefficiency at the national level, nor can it pull different regions together as America did.

Or Malaysia. Mahathir prioritized the national interest, and that meant KL over his hometown. Town mates criticized him, but the nation applauded the rapid progress and development of the country. He fought parochialism and the crab mentality for the community and the common good.

That is our first failing. And it comes from our instincts. See above why ours is a culture of impunity.

Are we on the road of a “failed nation?” Yes, we are. We are now in the company of Cambodia, Myanmar, Laos, and Brunei – because our neighbors have left us behind.

Why can’t we step up to the plate and recognize that reality? Because we are parochial and insular, to benchmark is foreign to us. Instead, we rely on political patronage and oligarchy. But they are no different from us; they are not only parochial and insular, but they also value hierarchy and paternalism as we do. That is why we cannot overcome aristocracy and entitlement and will continue to eschew personal responsibility. 

“The powerful truly lord it over us mere mortals. I should not be writing about this at a time when Filipinos need to come together for the common good. But I can’t keep silent about this.” [Inequality prevails: Welcome to the Philippines, Emil Jurado, Manila Standard, 26th Mar 2020.]

So, what are we left? The path of least resistance – as in “pwede na ‘yan.” Then think of what the 21st century is. As the blog has stressed, innovation and global competitiveness characterize this century.

Recall how Vietnam, more impoverished than we are, succeeded in becoming the manufacturing hub of Samsung’s electronic manufacturing in the region. They generate more revenues than our top eight listed companies in the Forbes list combined – and are poised to overtake not just us but Singapore too.

How did they do it? Like the rest of our neighbors, they looked outward, not inward. They tapped foreign money and technology. They had visionary leadership.

On the other hand, we complain that the GVCs or global value chains confine us to the low-margin pieces of the manufacturing process, orchestrated by the MNCs. We gloss over the character that the Vietnamese displayed. They are dynamic to boot.

Because of the pandemic, we again see the hype – as in dole-outs – courtesy of our top enterprises. We must be thankful but not retreat into our shell – aka our instincts – otherwise, we shall perpetuate our culture of impunity.

In other words, we can’t be dynamic and proactive and forward-looking if we can’t undo our instincts. And we won’t because we are ensconced in dualism. Think of China, though communist, embraced the free market.

Then consider: How can our neighbors beg for Western money and technology. How come we boxed ourselves in choosing who are friends should be? Why do we have to choose between China and America? Did Padre Damaso neuter our dynamism? 

For example, we kicked out the US military. Did we get our wish, “a government that is run like hell by Filipinos”? How come several others, including former Soviet satellite states, are begging for the US military to protect them?

It manifests our value of analysis but a failing in analytics. More evidence? How come we now own the “Dutch disease”? Does it explain why we turn a blind eye on the two drivers of the economy, i.e., OFW remittances and the BPO industry, and instead stomp our chest for our supposed excellence in the pursuit of fiscal and monetary policies?

We are not only adding insult to injury given the social cost of the OFW phenomenon; we are stunting the progress and development of the Philippines by indulging aristocracy – as in political patronage and oligarchy. See above Jesus undermining aristocracy.

But then again, analytics, beyond analysis, demands forward-thinking. To foresee, to be ahead of the curve, and distinguish the vital few from the trivial many. Sadly, the crab mentality reinforces our built-in blinder and barrier.

Why are we too weak and unprepared for the 21st century and the 2020 pandemic? See above our instincts.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, 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]

Why habits and instincts are hard to break

Consider our biases: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Sadly, precisely because they are inherent, we take these biases for granted – if not virtues.

In a previous posting, the blog spoke to our value of hierarchy and paternalism. These are two sides of the coin of “entitlement” – and that it translates to a caste system. The bottom line: aristocracy, because it has no monopoly of “innovation,” undermines the best thinking of man – which comes from diversity and pluralism, the best example being the innovation culture of Silicon Valley.

And because hierarchy and paternalism equate to entitlement, they nourish and perpetuate parochialism and insularity.

Consider: “Thanks to our economic managers across administrations, our country’s debt-to-GDP ratio is now a mere 41.5 percent, having peaked at nearly 75 percent in 2004.

“With relatively lower trade-to-GDP and debt-to-GDP ratios, we may yet emerge less scarred than many other economies when COVID-19 finally blows over.” [A fragile world economy, Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 20th Mar 2020]

Recall how we celebrated every time there was a slowdown in global trade because we’re not export-oriented?

Then consider what Vietnam has done: “Samsung Electronics posted 74 trillion won (US$65.7 billion) in sales in Vietnam in 2018, accounting for 28 percent of the Southeast Asian country’s gross domestic product (GDP). The sales figure in Vietnam amounted to 30 percent of the Korean tech giant’s total sales in 2018. Analysts say that these figures mean that Vietnam has solidified its position as the biggest production base of Samsung Electronics, outclassing China.” [http://www.businesskorea.co.kr/news/articleView.html?idxno=29966]

With due respect to Ciel, our paradigm won’t move one bit because of our parochialism and insularity. Who is the regional laggard?

There are at least two reasons why our debt-to-GDP ratio is a mere 41.5 percent. Have we forgotten the two drivers of the Philippine economy, OFW remittances, and the BPO industry? They are a windfall that makes us able to manage inflation, currency, and the debt ratio. Likewise, it manifests that we have been afflicted by the “Dutch disease,” if we don’t own it altogether yet.

The bottom line: we are the regional laggard because ours is a service-consumption economy. It requires lower investment and, unsurprisingly, generates underdeveloped levels of per capita income. That then explains the poverty we like to address given our supposed Christian heritage, but wrongly – to paraphrase the priest in his homily admonishing against dole-outs but to instead live a Christian life, referenced in a prior posting.

Why wrongly? We maintain aristocracy – aka our value of hierarchy and paternalism. Yet, we mouth that “inclusiveness” is a must.

Let’s digress a bit to build on the topic of Christianity. A Jesuit priest introduced the family to Franciscan theology. Like everyone else, he is working from Fordham, which is his home. And since no one can attend mass because New York is in lockdown, for this Sunday, he emailed his homily about the “deep encounter between Jesus and this man born blind. That the blind man’s admission of his blindness and darkness is in contradistinction to the Pharisees.”

It recalls the Franciscan theology against dualism, as in either/or, which can best describe the Pharisees. On the other hand, the Franciscans value mysticism to describe the prophets, including Jesus, that valued tradition and yet criticized the scribes and the Pharisees.

We aren’t prophets, but if we are to raise the dismal state of Philippine higher education, we need to develop more significant intellectual curiosity. It demands honest-to-goodness efforts. Recall from a previous posting; even Harvard graduate students can use intellectual curiosity. Here, we again have an uphill battle.

So, let’s resume the theme of the posting. 

What about the problem of the world? We are not a significant participant, so why are we even talking about it? We are a nonentity as far as the world economy is concerned. But it won’t isolate ourselves from COVID-19 – despite being a minimal player, i.e., we can’t perpetually shut ourselves out of the global travel and leisure industry or even consider it because tourism is supposedly one of our key sectors.

The reality is that tourism is low-hanging fruit and why the blog has discussed Greece and Spain and Italy as significant tourism players yet cannot keep up with wealthier nations that are stronger industrial-investment economies.

Let’s tackle another point in Ciel’s article: “The World Bank warned in its Global Economic Prospects report that the risk of a new global debt crisis was at hand. It noted that four waves of debt accumulation had occurred over the last 50 years, and the current wave that started in 2010 appears to be ‘the largest, fastest and most broad-based increase’ in global borrowing since the 1970s.”

Recall the Global Recession of 2008 and the Keynesian prescription the world heeded. In other words, the magnitude of global borrowings was to mitigate the recession. And it is not a mystery; economies go through – boom and bust – cycles.

For example, “The Fed last cut rates near zero in December 2008, during the financial crisis, and kept them at that historic low until the end of 2015.” [NPR]

What is left unsaid is that greed was behind the subprime mortgage loans that bankers developed into financial instruments called derivatives and then transacted globally despite their knowledge that they had no value? And because of their global character, the bust was comprehensive as well despite the liquidity from this low-interest era. Hence, the 2008 Great Recession has stalked the world to this day. For example, the US ceased to be a manufacturing economy and thus the rise of populism that elected Trump.

In other words, the human condition – and it is not limited to greed, think what Hitler brought – can wreak havoc. For example, Czarist Russia. Or the despots the world today faces with the migration phenomenon they created – with a little help from the lies behind the Iraq War. The rush to seek asylum, beyond migration, that pushed the UK to Brexit – and other nations to the right as well – is another example. 

There is no Great War at hand, but if we add the current pandemic to what’s on the world’s plate, there is a de facto war. And these are the times that try men’s souls. And that is the dramatic way to usher dynamism.

Because especially for us, Pinoys, to be dynamic, is not a given. In a recent posting, the blog discussed Arangkada and AmBisyon. They are to guide our economic development efforts, yet both are foundering.

And with the pandemic, we are again grappling with more “must-dos,” but until we dig deep into our hearts and souls, we will not turn into proactive and forward-thinking people and nation.

There will be an economic slowdown. It will add more complications to our already confused state of mind. Consider: We are in our unending debate to address the restrictive provisions of the Constitution. There is also the issue of Federalism and the war on drugs. What to do with POGO?

Even the most significant economy, America faces daunting challenges. For example, here’s Wikipedia on the recent recessions in America or before we count the upcoming one courtesy of the pandemic:

“Early 1990s recession in the United States: After the longest peacetime expansion of the 1980s, inflation began to increase, and the Federal Reserve responded by raising interest rates from 1986 to 1989. That weakened but did not stop growth, but some combination of the subsequent 1990 oil price shock, the debt accumulation of the 1980s, and growing consumer pessimism combined with the weakened economy to produce a brief recession.

“Early 2000s recession: The 1990s once were the most prolonged period of growth in American history. The collapse of the speculative dot-com bubble, a fall in business outlays and investments, and the 11th Sept attacks brought the decade of growth to an end. Despite these significant shocks, the recession was brief and shallow.

“Great Recession: The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States’ largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, and AIG, as well as a crisis in the automobile industry. The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package.”

The Great Recession continues to haunt the world, even when Japan and Europe had negative interest rates. And very recently, this month, March 2020, “the Fed cut its key interest rate near zero – in coordination with efforts to buttress the global economy by the Bank of England and the Bank of Japan.” [NPR]

What about the global value chain? “Observers attribute this chain reaction to the rapid rise since the turn of the century of global value chains (GVCs) or the phenomenon where different countries share in the production process. Rather than confine the range of production operations to the same location, GVCs spread them across countries, sourcing component goods and services from where they are cheapest.” [Habito, op. cit.]

No one says we must be limited to this enterprise. Or if we are to be part of the chain, let’s benchmark against Vietnam. It is the manufacturing hub of Samsung’s electronic manufacturing in the region. We are not in a race to the bottom.

Benchmark. Benchmark. Benchmark.

In other words, we cannot sweep aside what the 21st century is about, i.e., innovation and global competitiveness. We gloss this reality over precisely because we are too weak and unprepared for this century. And why are we? Because of our parochialism and insularity. Why was Vietnam able to make a name for themselves despite being more impoverished than the Philippines?

And there are other industries that if we can only look outward and forward, we can become a crucial player. And that is why the blog continually speaks to the writer’s Eastern European friends. They had to make a very significant shift in paradigm – from socialism under Soviet rule to a free enterprise undertaking as an EU member.

And after being a failed micro-enterprise for eight years, they are today a key player in an industry dominated by Western global behemoths. As those familiar with blog know, they came out stronger from the Global Recession of 2008 and will again come out stronger from the current 2020 pandemic.

The blog is in its 11th year. And it can only sound like a broken record because its reason for being is to understand and react to the worldview that has rendered us a weak economy, and embarrassingly, the regional laggard.

And it has raised the challenge of perceptive judgment, which comes from experience. We have been going around in circles, especially those of us in the chattering classes because we lack the expertise in development. On the other hand, our neighbors have a wealth of experience, having traversed the road from poverty to prosperity. [Those who watched the BBC interview of the South Korean foreign minister to share her nation’s efforts to combat the pandemic can’t help but be in awe with her sophisticated worldview, and she mirrors the many facets of their success story as a nation.]

And the writer has dealt with them – as well as from other parts of the world – over many years. There are things they do differently from us. For example, these people are not perfect. Still, there are things they do differently.

Parochialism and insularity are universal. Still, it is a matter of degrees. Recall Lee and Mahathir told Deng to beg for Western money and technology. Again, it is a matter of degrees.

Why are we the least able to attract foreign investment among the neighbors? See above; we rely on political patronage and oligarchy – or “a government run like ‘hell’ by Filipinos.”

Other people, to a far higher degree, have the instinct to look outward than we do.

And these experiences explain how the writer reacts to the worldview that embarrassingly turned us into the regional laggard. 

Likewise, if we reread the above recent recessions in America, the reference period coincides with the time the writer was outside the Philippines doing global business.

But he spent the first 20 years of his career in the Philippines so that he can speak to Juan de la Cruz and the world as well. 

He participated in figuring out the way forward and acting upon the challenges presented by APEC, NAFTA, the EU, and the fall of the Soviet empire.

And as we speak, he is again directly involved to decipher and respond to the unfolding 2020 pandemic selling Eastern European manufactured products in the New York metro area – where competition is not for the faint of heart. They come from a supply chain that covers several countries, including technology and equipment and materials. In other words, they are part of the circle to address and mitigate the pandemic, including committing sums of money for the purpose.

But the writer’s friends with his guidance created the chain themselves and are not just a passive element – as we in the Philippines perceive the “global value chain” and thus have no say in global trade. Then think of how Vietnam did it. They looked outward to tap foreign money and technology. 

Recall the analogy to photosynthesis. It illustrates how to create a sustainable and competitive global enterprise as well as the challenge of innovation, which starts with the ethos of raising the consumer’s well-being. Globally successful enterprises don’t mirror aristocracy. They rely on diversity and pluralism to understand the consumer as well as diverse teams to create innovative products and services.

In sum, the lesson of dynamism stands out from these decades of experience. Which isn’t surprising given this universe is dynamic. And man has lived through this reality. Think of Adam and Eve, if not the Great Wars.

Sadly, dynamism is foreign to us Pinoys. We are parochial and insular. We value hierarchy and paternalism and lack the perceptive judgment our neighbors have under their belts – a product of their experience through the journey from poverty to prosperity.

Why are our habits and instincts hard to break?

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, 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]

Einstein’s “insanity” and our hierarchical and paternalistic instincts

Do they explain our shortsightedness? It recalls the homily of the priest in one of our gated communities admonishing the matrons of the village to stop giving dole-outs to the poor living across the fence. That will not undo the plight of these people. What you must do is think about living a Christian life.

The simplest way to say it is, “don't give them fish, teach them how to fish.” The context is broader than that. We must undo our value of hierarchy and paternalism. In other words, aristocracy is not a virtue; diversity and pluralism are because they yield the best thinking of man. Recall the bestseller, “I’m OK – you’re OK.” The other person is an equal, not a subordinate.

With due respect to our top eight listed companies that are in the Forbes list, that homily was directed at you and to our Forbes billionaires. And to us in the elite class because we are part of this exclusive circle. Scratch my back, and I’ll scratch yours. But let’s test that.

For example, hierarchy and paternalism are two sides of the same coin. And that coin is no other than “entitlement.” It is what a caste system is. Sadly, it explains why we won’t open the Philippine economy. Wherever we stand in the hierarchy, entitlements will come our way. That is why Juan de la Cruz loves tyranny, and it comes hand in glove with impunity.

And let’s test that as well. How can Samsung Vietnam deliver much more to the Vietnam economy than our top eight listed companies that are in the Forbes list combined?

Then consider: Are the two water companies among these listed companies? “The two water companies were mandated under the Clean Water Act of 2004 to put up a sewerage system within five years from the effectivity of the Act. That was apart from the obligation of the two companies to put up a sewerage system as required in their concession contracts. In August 2019, the Supreme Court found that the two water companies completed only 20 percent of the sewerage system that the Clean Water Act mandated.

“Today, 80 percent of the sewage of 15 million people in Metro Manila are simply dumped into rivers and esteros that flow into Manila Bay. The Supreme Court called Manila Bay ‘the widest septic tank ever made by Filipinos.’ The Supreme Court fined the two water companies about Ps921.46 million each, plus an additional daily fine of some Ps322,102 each until they comply with their obligation under the Clean Water Act.” [Waiting for the next epidemic, Antonio T. Carpio, CROSSCURRENTS, Philippine Daily Inquirer, 19th Mar 2020]

Why can’t we produce visionary leadership? Think Lee, Mahathir, and Deng.

Conversely, the war on drugs isn’t leadership. Nor can it be justified by the assertion that our economic managers are smart enough to keep the economy going. If we are to traverse the road from poverty to prosperity, we need honest-to-goodness leadership.

We can extend the analogy to the imperatives of the 21st century: innovation and global competitiveness. In other words, a hierarchy has no monopoly of “innovation.” That is why, in Silicon Valley, they elevated the norms of “brainstorming” to “design thinking.”

The outcome is for a diverse team not merely to generate an idea but a prototype of the concept – so that it can be tested and re-tested sooner than later and for the team to rapidly learn and relearn within a much-compressed period.

Question: Why are we stuck in a service-consumption economy when our neighbors, including Vietnam, are now deep into an industrial-investment economy? They drastically reduced poverty while our headline continues to be poverty and the imperative to be compassionate. Or is it the preservation of the status quo because of our hierarchical and paternalistic instincts? See above the coin of entitlement.

If we pause for a moment, will we recognize that most everything that we call our way of life is a function of these instincts?

Start with Metro Manila traffic. Why can’t we relate it to our shortsightedness instead of racking our brains for quick fixes? We must give employment to the jeepney and tricycle drivers. But we can have hybrid ones to minimize pollution. It is classic “pwede na ‘yan.” If our instincts call for forward-thinking, we will create and deliver a plan for an efficient public transportation system instead. 

Moreover, this is not an isolated failing; its impact on the economy and our ability to address poverty is staggering. The economic cost of Metro Manila traffic is nine times more than the 4Ps, and in 2020 we will spend Ps108.8 billion.

How did we come to celebrate the OFW phenomenon? It comes from the same fixed mindset. We must give employment to Juan de la Cruz. Forget its social cost and think of how we’ve remained an underdeveloped economy. If our instincts call for forward-thinking, we will create an industrial-investment economy instead and be in the same league as our neighbors and not the regional laggard.

Memories are short as though we don’t know how the comprehensive agrarian or land reform program failed to address rural poverty and instead undermined the agriculture sector. It has remained fragmented, unproductive, and uncompetitive.

But we do have the 4Ps and the now “unconditional” cash transfer – and it is working, working to keep the poor subservient? Benchmark. Benchmark. Benchmark. Is this how our neighbors overcome abject poverty? [It is now unconditional cash transfer because it is legitimate vote-buying power, as in the power of the incumbent? Has this nation gone to the dogs yet? Not to worry, we’re well on our way to a “failed nation.”]

Yes, the insanity gets even worse. We can’t walk away from POGO when more impoverished Cambodia did.

The bottom line: When we pull together all the above pieces that define our way of life, we created a perfect storm that we can’t overcome.

The current pandemic will hurt us like the rest of the world. If we think retreating into our shell as in parochial and insular will isolate us, God bless us! That will confirm our insanity to the nth degree. 

In other words, we cannot stop looking at the world as the market. Precisely in a global recession, we want a broader market, not a narrow one. That is truer for lower-cost locations like the Philippines or Vietnam. Western behemoths, because of their size and global reach, have slower growth rates and will suffer in a worldwide recession. There will be those that will retreat, retrench and restructure – as what happened in 2009, which fed on the downturn.

The writer is in New York as he writes and where his Eastern European friends have introduced a portfolio of 8 brands. They are a lower-cost location too and are witnessing a replay of 2009, which they experienced in Europe and grew at an accelerated pace, but this time in the New York metro area.

The pandemic is not permanent, and the panic buying will abate, but they are getting free promotion for their brands – despite being new in the market – because of the panic buying. They can’t just stop selling because people are suffering. Meanwhile, they are leading the effort in their hometown for the local community to deal with the pandemic. [Disclosure: The writer is not isolated from the downturn being an investor in the market for decades.]

If we in the Philippines don’t step up industrialization efforts, we will always miss on these global phenomena. Recall what made the Asian Tigers.

And we won’t be in the league of our neighbors until we accept the folly of our shortsightedness and insanity. Recall our value of hierarchy and paternalism, the two sides of the coin of “entitlement.” It is our ticket to our journey to a failed nation.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, 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]