“Respect” for Juan de la Cruz must be “built in the process.”

That is to build on this article, “Do 4Ps recipients get lazy (?),” Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 23rd Feb 2021.

“No evidence exists that CCTs induce more spending on ‘temptation goods’ like alcohol and tobacco. The available evidence implies that cash transfer programs do not induce the ‘bad’ behaviors often attributed to the poor.

“My take? I think the poor deserve more respect than what they seem to be getting from the rest of us.”

Amen.

But how do we build in respect for Juan de la Cruz and bury it in the Filipino ethos?

Recall the “oneness of the universe” and the Harvard Business Review’s article, “Innovators DNA.” To help appreciate the admonition from Ciel, we can relate it to the Japanese “quality ethos” that the world learned about during the heyday of Japan Inc.

Japanese quality sank corporate America and impelled them to dissect the failings of US higher education. Recall that was when my old MNC-company relocated the family to New York to expand my regional manager role.

The secret of Japanese quality is “they build quality in the process.”

“Lean manufacturing companies will have quality built in their processes as much as possible. By building quality into your process, you prevent unnecessary rework and scrap, i.e., your machines are capable of detecting abnormalities (jidoka), and your fixtures have ‘mistake-proofing’ to avoid ‘mis-assembly’ (poka-yoke).

“When considering quality built-in, the main aspect that should come to mind is ‘automation with a human touch’ or jidoka. That is one of the main pillars of lean manufacturing.

“The original concept was born when Toyota developed a loom that would stop when a thread breaks. That eliminates the need for a person to stand there and monitor each machine. Hence the term, automation with a human touch.” [Quality Built-In (lean-manufacturing-junction.com)]

How does that relate to respect for Juan de la Cruz?

We know about the Indian caste system and who the “untouchables” are. We have our caste system. And in fairness, even the Americans do. Recall the “southern strategy.”

“The civil rights movement and dismantling of Jim Crow laws in the 1950s and 1960s deepened existing racial tensions in much of the Southern United States. And Republican politicians such as presidential candidate Richard Nixon and Senator Barry Goldwater developed strategies that successfully contributed to the political realignment of many white, conservative voters in the South who had traditionally supported the Democratic Party rather than the Republican Party. It also helped to push the Republican Party much more to the right.” [Wikipedia]

In other words, the current far-right wing of the Republican Party is not new. It is decades old.

Then think of the Philippine caste system, and it comes from 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.

Instead of traversing poverty to prosperity as our neighbors have done, the poverty war is our be-all and end-all. Is that what our faith teaches, or is it a reflection of our value — hierarchy, and paternalism? Whatever happened to the oneness of creation — as in the common good?

Consider our reality: “Unctad rates poorly PHL capacity to tap resources,” Elijah Felice Rosales, BusinessMirror, 10th Feb 2021.

“THE Philippines has scored dismally in a United Nations index that measures the capacity of economies to take advantage of their resources to produce goods and services.

“The Philippines was rated 122nd out of 193 economies in the Productive Capacities Index (PCI) published by the UN Conference on Trade and Development (Unctad).

“The country scored 29.81 on a scale of up to 100, as it struggled to compete in the areas of information and communications technology, transportation, and structural reforms.

“According to the Unctad, the PCI surveys the productive resources, entrepreneurial capabilities, and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.

“The Philippines flunked in these categories: institutions, 47.07; human capital, 43.99; energy, 27.86; structural change, 20.02; transport, 12.82; and ICTs, 10.35.”

On the other hand, how come poverty is now in the rearview mirror of our neighbors?

We are trumpeting CREATE when its greatest beneficiaries will be our eight top companies.

That is not to single them out. The blog has repeatedly spoken to the “economies of scale.” Ergo: the largest companies will yield the most remarkable outcomes from significant initiatives, e.g., CREATE.

In the meantime, because we are focused on the poverty war – e.g., create more jobs – we are pursuing several industry road maps with no regard for the unintended consequences.

Translation: We cannot overcome the crab mentality if we don’t learn to prioritize. The blog does not suggest that these road maps are wrong.

We need leadership that will not feed our love of tyranny – and populism and our socialist bent. They have brought us misery and are now in the company of impoverished neighbors, i.e., Lao PDR, Cambodia, and Myanmar, while the rest have left us behind.

Here’s a quote from an earlier posting: “Over 64% of Philippine exports comes from (a) electrical machinery, equipment, and (b) machinery, including computers. In the next category are fruits and nuts at 3.7%.”

Even if we double our investment behind fruits and nuts, think coconut, banana, and mango will contribute less than 8% of GDP against the over 64% of our two top exports.

Tax revenues that we all want to disburse via the LGUs, for example, equitably, will not be boosted by doubling our investment in fruits and nuts.

Can we pause right there and ask ourselves if we’re coming or going?

Consider: We will have a windfall if we win over Apple AirPods.

“The AirPods are Apple’s fastest-growing device and are also the top-selling wireless Bluetooth earbuds with a 50% share of the market. According to Counterpoint Research, Apple sold about 65 million units last year; the latter expects 100 million units sold this year.

“Apple will produce millions of its popular AirPods wireless Bluetooth earbuds in Vietnam, i.e., 3 to 4 million units or 30% of total classic AirPods production will come from Vietnam.

“For now, Apple is not moving the assembly of its premium AirPods Pro to Vietnam; introduced last October, the ‘Pro’ version of the AirPods includes noise cancellation to keep outside noises out and transparency mode when users need to know what is going on around them.

“Most of the US companies, including Apple, are looking for non-China production. Some prefer Vietnam and some like Thailand, some in India, some in the Americas, and other Southeast Asian nations.” [“Apple will reportedly move 30% of AirPods production to Vietnam starting this quarter,” Alan Friedman, phonearena.com, 8th May 2020]

Question: Have we let this nation down? Neuroscience and psychology may provide insights.

For example, cognitive development is not the same as intelligence. Instead, it mirrors experience. And Singapore is an excellent example from several perspectives. Because of the continual pursuit of progress and development, it has overtaken the US in competitiveness.

Moreover, they are confident that an open economy does not deliver the nation to foreigners because of this experience. They fortify, not undermine, their independence with foreign investment. While we Filipinos, given our cognitive development level, cannot imagine how an oxymoron can exist. It’s called the real world.

In other words, parochialism and insularity aren’t what this universe is. Think of Texas and why it is in the news. But then, think of Venezuela too. Venezuela has the world’s largest oil reserves, yet it turned into an impoverished nation. Texas is the energy state. Was it hubris that turned them parochial and insular? They chose to isolate themselves from the power grids serving the western and eastern sections of the US. And today, they are paying the price of isolation. Does that sound familiar to Juan de la Cruz?

But let’s get back to Japan Inc. and how it sank corporate America and saw the development of the 4Cs of 21st-century skills: (1) Critical thinking; (2) Collaboration; (3) Communication; (4) Creative thinking.

We in the chattering classes have written about these 21st-century skills. Sadly, we are yet to internalize them. For example, the blog has repeatedly said that nation-building is beyond the science of economics. Again, that is not to single out one science but to stress that we have ways to get us on the right footing – to pursue nation-building successfully.

It also explains why “innovation” is not our cup of tea. Nor “competitiveness.”

Innovation is cross-discipline and why the blog has repeatedly raised the “Design Thinking” model that best captures Silicon Valley’s secret.

“Innovation” at its core is problem-solving. And it stems from a human need. And Maslow’s hierarchy of needs is a source of insights. Shut it down as the source of evil, and it can explain why we lag in the pursuit of innovation.

For example, Juan de la Cruz’s hierarchy of needs goes beyond the CCT. Yet, we have not articulated a worldview consistent with nation-building, i.e., we must traverse poverty to prosperity.

If that sounds strange, should we take a pause and ask ourselves if we should set that challenge for ourselves?

The blog has also raised our misunderstanding of the value of the Philippine Competition Commission. More than its form is the principle. It must seek to open the Philippine economy, not preserved for our top companies. They represent Philippine political patronage and oligarchy.

On the other hand, “No evidence exists that CCTs induce more spending on ‘temptation goods’ like alcohol and tobacco. The available evidence implies that cash transfer programs do not induce the ‘bad’ behaviors often attributed to the poor.

“My take? I think the poor deserve more respect than what they seem to be getting from the rest of us.”

Amen.

But how do we build in respect for Juan de la Cruz and bury it in the Filipino ethos?

Gising bayan!

Beyond “CREATE”

Indeed, CREATE is a step in the right direction – and is long overdue.

But let’s pause right there, given we are playing catch up. “We cannot solve our problems with the same thinking we used when we created them.” [Einstein]

Translation: CREATE cannot be the be-all and end-all. Beyond playing catch up, we are underwater because of the pandemic. How do we “build back better” to borrow from Biden a Boris Johnson original – per his claim?

So, let’s call a spade a spade. Our caste system has perpetuated our inward-looking bias. Why will we in the Philippine elite class not want that?

The blog always reminds us of the real world. We cannot keep to the old debate between “technocrats and politicians.” That is classic binary thinking. Relativism is what the world is about because of the dynamism of the universe. And why the hierarchy of human needs is inherent – and they are not linear but a continuum. Our primary need for nourishment does not cease, yet our need to be the person we are is dynamic. It is consistent with the character of this universe. Otherwise, Darwin sets in.

Why is the blog stressing these principles? Recall the Harvard Business Review article on the “Innovators DNA.” These principles are universal; they apply to both the public and private sectors. What it says is we must be seeking the “North Star” in our endeavors.

And the blog identified the photosynthesis phenomenon as its best expression. Those familiar with the blog may recall that beyond doing business – i.e.,  competing – globally, I have also done restructuring initiatives – starting from my days in the Philippines and extending to the developed markets.

A restructuring program recognizes a structure challenge, i.e., the business model is not sustainable. And that is so fundamental, yet we Filipinos over decades have not come to grips with this reality: the Philippines has a structural problem.

The above principles apply even in the spiritual realm, as the Franciscans would preach. And it comes from St. Francis. There is universal oneness that humankind must recognize – and that includes all living things and the environment.

So, let’s put CREATE side by side with Vietnam’s economic miracle – not the first but the latest example from our neighbors. Question: What will it take for us to learn from them? Answer: Our caste system undermines our ability to unfreeze our frozen minds – i.e., that is why we struggle to absorb new learnings.

Consider: “Vietnam’s Exports Jump in February as Samsung Boosts Shipments,” Nguyen Dieu Tu Uyen, Bloomberg, 28th Feb 2020.

“Vietnam’s exports jumped in February as Samsung Electronics Co. increased shipments of phones even as the novel coronavirus outbreak hurt the nation’s overall trade activity.

“South Korea's Samsung has started building a $220 million research and development center in Vietnam,” Khanh Vu, Reuters, 2nd Mar 2020. 

“Construction of the center in Hanoi will complete by the end of 2022, Samsung Vietnam said in a statement, adding that the center will employ between 2,200 and 3,000 people.

“Samsung is the single largest foreign investor in Vietnam, with investments totaling $17 billion, it said.

“The center as planned would be the largest of its kind in Southeast Asia and will enhance the company’s research capability in such areas as artificial intelligence, internet of things, big data, and 5G.

“Vietnam’s exports of smartphones and spare parts, mostly produced by Samsung Electronics, rose 4.4% last year (2019) to $51.38 billion.”

Let’s get back to CREATE. “CREATE puts cash in consumers’ hands and capital in the vaults of corporations to trigger an economic dynamism and revival not seen in the last 50 years.” [“CREATE: Creating a miracle,” Tony Lopez, Virtual Reality, manilastandard.net, 19th Feb 2021]

“With CREATE, we are lowering corporate income tax to bring it closer to the ASEAN region’s average. ASEAN has been the fastest growing economic region in the world.

“CREATE Act is perhaps the most extensive stimulus program and most immense tax reform measure ever crafted by Congress.

“Removing the uncertainty will be like opening the floodgates to investment. I expect at least P12 trillion in combined domestic and foreign investment over the next decade due to CREATE alone. About $90 billion of that will be FDI (foreign direct investments).”

Why does Vietnam matter? It is the latest among the neighbors that have overtaken us. And our inability to tap resources put us just ahead – but behind the rest – of these impoverished nations: Lao PDR, Cambodia, and Myanmar.

That is not surprising when we consider that Samsung Vietnam alone generates far more significant revenues than our eight top companies combined.

Why is that?

“Unctad rates poorly PHL capacity to tap resources,” Elijah Felice Rosales, BusinessMirror, 10th Feb 2021.

“THE Philippines has scored dismally in a United Nations index that measures the capacity of economies to take advantage of their resources to produce goods and services.

“The Philippines was rated 122nd out of 193 economies in the Productive Capacities Index (PCI) published by the UN Conference on Trade and Development (Unctad).

“The country scored 29.81 on a scale of up to 100, as it struggled to compete in the areas of information and communications technology, transportation, and structural reforms.

“According to the Unctad, the PCI surveys the productive resources, entrepreneurial capabilities, and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.

“The Philippines flunked in these categories: institutions, 47.07; human capital, 43.99; energy, 27.86; structural change, 20.02; transport, 12.82; and ICTs, 10.35.”

Let’s get back to CREATE. Who will benefit most from CREATE? Our top companies will, despite the inclusion of MSMEs.

The question for these top companies must go beyond reinvesting the savings from CREATE. How will you raise your competitiveness and be in the league of a Samsung Vietnam, for example? 

Consider: Over 64% of Philippine exports comes from (a) electrical machinery, equipment, and (b) machinery, including computers. In the next category are fruits and nuts at 3.7%.

In other words, what industries are we putting in our crosshairs to get the biggest bang for the $90 billion that will come from FDIs? Recall we have 40 or so industry road maps.

We can’t wrap our heads around this fundamental given: the “vital few” or the Pareto principle.

We invoke academic or quantitative exercises – as in “CREATE will create miracles” – yet we never gather Pareto in the execution phase. Pareto’s was one of the earliest econometric models and has not gone extinct.

Here is what Procter & Gamble said in its latest presentation to Wall Street analysts. “Focused portfolio: from 170 brands and 16 categories to 65 brands and ten categories.”

And to leverage Pareto, their business units are down to 6 sectors. For many years, they celebrated their scores of billion-dollar brands until they hit a bad patch – going ten years – when they failed to grow. And an activist investor – schooled in portfolio management, i.e., Pareto – forced a shift in their paradigm. “We cannot solve our problems with the same thinking we used when we created them.” [Einstein]

They have gone even further. Procter & Gamble’s organic sales growth comes from their two biggest markets, the US and China, i.e., they are laser-like in their focus on these two markets.

But let’s get back to our top exports and learn from Vietnam.

Consider: “Apple will reportedly move 30% of AirPods production to Vietnam starting this quarter,” Alan Friedman, phonearena.com, 8th May 2020.

“Last July, trial production of the Apple AirPods started in Vietnam. At the time, the US-China trade war was the biggest news, and Apple looked to move 15% to 30% of its production outside of China.

“Apple will produce millions of its popular AirPods wireless Bluetooth earbuds in Vietnam, i.e., 3 to 4 million units or 30% of total classic AirPods production will come from Vietnam.

“For now, Apple is not moving the assembly of its premium AirPods Pro to Vietnam; introduced last October, the ‘Pro’ version of the AirPods includes noise cancellation to keep outside noises out and transparency mode when users need to know what is going on around them.

“The ‘classic AirPods’ are priced at $159.00 with a charging case and $199 with a wireless charging case. The mass production of AirPods in Vietnam started as early as March. The Vietnamese officials even granted special permits for a key Apple AirPods assembler to help the company bring in engineers to the country for smooth production during lockdowns.

“Most of the US companies, including Apple, are looking for non-China production. Some prefer Vietnam and some like Thailand, some in India, some in the Americas, and other Southeast Asian nations.

“Some believe that Apple will end up moving most of its production to Vietnam; Samsung produces about half of its phones in the country. Apple would have to make sure that it has access to a supply chain that could provide it with components in the quantity and quality that it needs.”

If our top companies are listening, does the Apple AirPod give us an opening to attract significant investment in the Philippines?

Here’s a quote from an earlier posting: “Consider how a small Guangzhou enterprise knocked on the door of my old MNC-company.

‘We come to you because you are the world leader in our industry. We want to partner with you. We cannot bring much, but we need your investment and technology so that together, the partnership will replicate what you have achieved worldwide.’

“Does that demonstrate how a “win-win” scenario would look? 

“This small Chinese enterprise quickly disarmed the behemoth [from the West] by positioning themselves as an equal – not inferior – to the foreigner.”

In other words, our economic managers and legislators must fine-tune CREATE so that we can stand confidently to an Apple AirPod, for example.

We must articulate our investment priority principles beyond “preferred or pioneering” industries to “must-have” to pump prime our creative juices.

And it starts with forward-thinking. 

Where we want to be is to leapfrog and match Malaysia’s GDP. That means we want to raise Philippine GDP by $200 billion. And we will do the analytics covering our top two exports. And one enterprise that we must have is Apple AirPod. 

Given the size of the market for AirPods, we can run the numbers and do scenarios: What options are there for us to commit the Philippines to a partnership with Apple AirPod heavily? That means we will better the Vietnam incentives, including a much lower tax rate that CREATE provides. How will that translate to incremental GDP and tax revenues? 

If the notional number is still below $200 billion, which of our other top exports must we pursue?

We must then create our version of the Pearl River Delta economic zone to ensure we have the ecosystem to sustain a significant undertaking.

That is a broad-stroke explanation of how we can create a confident game plan that will also toss the crab mentality that has yielded us suboptimal outcomes in our economic development efforts going decades. And it explains why we are the regional laggard.

We do want to see the day when Cambodia overtakes us as Vietnam did.

Indeed, CREATE is a step in the right direction – and is long overdue.

But let’s pause right there, given we are playing catch up. “We cannot solve our problems with the same thinking we used when we created them.” [Einstein]

Translation: CREATE cannot be the be-all and end-all. Beyond playing catch up, we are underwater because of the pandemic. How do we “build back better” to borrow from Biden a Boris Johnson original – per his claim?

Gising bayan!

Here come Lao PDR, Cambodia, and Myanmar.

That is shameful – they confirm how deep we are in the abyss. Whatever happened to Filipino pride?

Not a surprise since Vietnam is the latest of the neighbors that – like clockwork – leave us in the dust, and the next one will, sooner or later.

“Unctad rates poorly PHL capacity to tap resources,” Elijah Felice Rosales, BusinessMirror, 10th Feb 2021.

“When pitted against Southeast Asian neighbors, the Philippines ranked seventh in the region to lead only Lao PDR at 138th, Cambodia at 142nd, and Myanmar at 158th.”

Sadly, we can’t recognize how badly we relate to the rest of the world. Think of the Asian Tigers, for example.

We are parochial and insular and value hierarchy and paternalism that we can’t capitalize on what this world has to offer. “Beg for Western money and technology,” said Lee and Mahathir to Deng.

On the other hand, we are reliant on political patronage and oligarchy – and believe they are the ticket to prosperity for Juan de la Cruz.

Consider: When our neighbors “beg” for Western money and technology, they aren’t asking for freebies. They negotiate from a position of strength – as an equal – because they understand what a “win-win” scenario is.

In our case, wittingly or not, we carry our instincts. We don’t demonstrate that we have a perspective of what the other party values. A partnership has two sides, and both must “win” in the process.

Recall human or cognitive development. As in civilization, progress and development equip people to move beyond binary thinking – i.e., relativism. 

It is not evil if we recall our Christian faith. Christ, beyond a relativist, was a radical, a rebel. That is why the authorities – and their ilk, the scribes, and Pharisees – took grave offense. But that did not stop the rest of the world – the Christian community – from accepting him as their Savior.

In other words, we must learn to forward-think beyond responding with a knee-jerk – i.e., proudly logical yet linear and incremental, devoid of the magic of our faculties. The story of creation says humankind is good, not evil.

Consider how we demonstrate the knee-jerk: “Philippines wants more than ‘loose change’ for US troops deal,” Reuters, 15th Feb 2021.

“The United States is providing the Philippines with military aid that amounts to ‘loose change’ compared to other Asian countries, a top official said on Monday, justifying demands by President Rodrigo Duterte for Washington to pay more.

‘If we have solid ties with a powerful ally, then I think it also comes with a higher amount of financial assistance to be given,’ presidential spokesman Harry Roque told a regular briefing.

“Roque cited a study by the Washington-based Stimson Center, which showed the Philippines received $3.9 billion in US counter-terrorism support from the fiscal year 2002-2017 compared to the $16.4 billion for Pakistan over the same period.”

Let's leave it there for now; consider how a small Guangzhou enterprise knocked on the door of my old MNC-company.

“We come to you because you are the world leader in our industry. We want to partner with you. We cannot bring much, but we need your investment and technology so that together, the partnership will replicate what you have achieved worldwide.”

Does that demonstrate how a “win-win” scenario would look? 

This small Chinese enterprise quickly disarmed the behemoth [from the West] by positioning themselves as an equal – not inferior – to the foreigner.

Can we negotiate from a position of strength vis-à-vis the US when it comes to the VFA? We can if we demonstrate our perspective – that we understand and embrace their values.

Consider: We are a freedom-loving people and stand with the rest of the free world in upholding the values of freedom and democracy. And given today’s reality and our geographic location in the South China Sea, we have a part to play in this noble cause.

“Subic Bay has an advantage [that no other locations in the region can match], and that includes huge deep-water facilities and access to the strategic waters of the South China Sea.” [Philippines Orders US to Leave Strategic Navy Base at Subic Bay, David E. Sanger, The New York Times, 28th Dec 1991]

What are we saying when we take the preceding perspective: We offer you a partnership; we have skin in the game; beyond real estate, we can offer our armed forces to safeguard freedom and democracy in our part of the world; that may not be much, and so we need your military and economic might to make the partnership succeed in this noble cause?

Compare that to our posture: “If we have solid ties with a powerful ally, then I think it also comes with a higher amount of financial assistance to be given.”

It reflects our level of cognitive development. Not a surprise, given our value of hierarchy and paternalism.

We haven’t internalized the imperative of the “community and the common good.” Beyond our borders is the rest of humankind. Sadly, we can’t figure that out because we cannot demonstrate our embrace of the common good even within our shores.

Recall 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. 

The bottom line: It is not a surprise that impoverished nations are breathing down our neck. And we – especially the Philippine elite class – must recognize we let this nation down.

See above; the small Guangzhou enterprise.

How can we leapfrog from poverty to prosperity?

Recall Lee Kuan Yew started with something relatively small, given where Singapore is today. He recognized they had no natural resources and too tiny, land-wise. And so, he wanted to be a regional hub.

For example, oil can be shipped to Singapore faster from Saudi Arabia, less than 7,000 km away, while Frankfurt, Paris, or London are all well beyond 10,000. Why not make Singapore a regional refinery? But that also meant building an airport that is a regional hub.

And Lee did not stop there. He envisioned a light industry regional capability and then moved up to R&D, a financial center, and world-class universities, including partnerships with Duke, MIT, and Stanford, among others.

Sadly, we did not learn from Singapore. Or from the Asian Tigers or China, and more recently, Vietnam.

Thankfully, it’s not the end of the world.

We still can learn from our neighbors. If Vietnam can partner with Samsung and Apple, why can’t we?

We cannot if we approach the rest of the world like we do the VFA.

On the other hand, see above, how a small Guangzhou knocked on the door of my old MNC-company. “We come to you because you are the world leader in our industry. We want to partner with you. We cannot bring much, but we need your investment and technology so that together, the partnership will replicate what you have achieved worldwide.”

How do we translate the preceding model to something that will suit our needs?

In other words, if Singapore can visualize getting the oil companies and make it a regional refinery and if Vietnam can do it with Samsung smartphones and Apple AirPods, why can’t the Philippines do it with our top exports? 

That is why we must learn to look outward, benchmark, and learn from our neighbors. And China did one even better, created the most successful economic development project in the Pearl River Delta.

We must move beyond textbook monetary and fiscal interventions.

As the blog has raised, to generate optimal outcomes in our economic development efforts, we must prioritize our top exports.

We want to boost GDP by $200 billion and attain Juan de la Cruz’s prosperity and be, GDP-wise, as rich as Malaysia. Then we can move further and raise GDP per person.

Our inability to focus on where we get the biggest bang for the buck reflects our crab mentality.

It explains why despite the 75 years since our independence from the Americans, we are not only the regional laggard, but even impoverished neighbors can also sink us more profound in the abyss.

But we must first get off our high horse.

Here come Lao PDR, Cambodia, and Myanmar.

Gising bayan!

Expect more of the same – if we can’t undo our instincts.

We all know Einstein’s quote: “We cannot solve our problems with the same thinking we used when we created them.”

And why the blog is critical of shakers and movers, i.e., our economic managers and legislators – as well as our top companies, MSMEs, and the agribusiness sector.

We need leadership to overcome our populist – or socialist – bent.

If we still don’t recognize it, populism is an invitation to tyranny. There is no free lunch. 

And in the olden days, royalty was an expression of tyranny. And why America’s founding fathers made sure they don’t touch majesty ever again.

And, not to forget, the Roman empire, the forebears of the Vatican.

In other words, we must not be surprised that Rizal created the character of Padre Damaso.

Sadly, despite the over a century since Rizal’s time, we Filipinos are yet to leverage his genius. We submit to tyranny because we love it.

Unsurprisingly, our elders created the myths of Juan Tamad and Bondying. Recall even Filipino-Americans voted for Trump.

The party that pontificates personal responsibility runs away from responsibility. Think of the doctrine of command responsibility. And this guy was supposed to be the most powerful person in the world because of American exceptionalism.

Let’s dissect the above assertions.

Let’s start with how we bastardized the buzzword we call “inclusive.” How quickly we forget how much we abhor the crab mentality.

And that is why we continue to wonder why decades ago, Thailand borrowed our economic development plan and executed it successfully while we failed.

Indeed, we had reason to believe we were more sophisticated than our neighbors. Until the Asian Tigers showed the world how they could leapfrog – not just us – but the wealthy nations too.

And that is why the blog addresses us in the elite class. Our sophistication is not a ticket to prosperity.

I know. Why? My old MNC-company is American, and they saw us as ahead of our neighbors. I owe it to our perceived sophistication that I became a regional manager.

Yet, it is high time we come down to earth. “We cannot solve our problems with the same thinking we used when we created them.”

That is why the blog keeps raising that we must recognize our neighbors’ successes and – this time – borrow their model but figure out how to execute it successfully.

Sadly, that is a tall order.

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.

We can’t even look outward!

Unsurprisingly, we can’t distinguish between cause and effect that we can’t see beyond poverty – and into development. It explains our crab mentality, our inability to prioritize.

The evidence? Unctad rates poorly PHL capacity to tap resources; Elijah Felice Rosales, BusinessMirror, 10th Feb 2021.

We are so reliant on political patronage and oligarchy that we can’t leverage what this world has to offer. “Beg for Western money and technology,” said Lee and Mahathir to Deng.

Look outward and prioritize. But first, “where do we want to be”? In other words, we must learn to forward-think.

We must go to school on the Asian Tigers – and forget that we, especially us in the elite class, are more sophisticated than our neighbors.

And Oxford University, for example, has a course aptly called “From Poverty to Prosperity: Understanding Economic Development.”

It is not the first time the blog raised this course: “How can poor societies become prosperous and overcome obstacles to do so? Professor Sir Paul Collier is one of the world’s leading scholars on this question, and in this economics course, you will have the opportunity to learn from him directly.”

Let’s get back to Unctad. “THE Philippines has scored dismally in a United Nations index that measures the capacity of economies to take advantage of their resources to produce goods and services.

“The Philippines was rated 122nd out of 193 economies in the Productive Capacities Index (PCI) published by the UN Conference on Trade and Development (Unctad).

“The country scored 29.81 on a scale of up to 100, as it struggled to compete in the areas of information and communications technology, transportation, and structural reforms.

“According to the Unctad, the PCI surveys the productive resources, entrepreneurial capabilities, and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.

“The Philippines flunked in these categories: institutions, 47.07; human capital, 43.99; energy, 27.86; structural change, 20.02; transport, 12.82; and ICTs, 10.35.

“When pitted against Southeast Asian neighbors, the Philippines ranked seventh in the region to lead only Lao PDR at 138th, Cambodia at 142nd, and Myanmar at 158th.”

What is the bottom line: We cannot create the ecosystem necessary to produce goods and services and enable the Philippines to grow and develop?

The reality is a nation with minimal resources cannot generate optimal outcomes if it can’t figure out what optimal is in the first place.

Consider: How many industry road maps have we been working on over the years? It smacks of the crab mentality. We are not a Ferrari that can go from 0-100 kph in a few seconds.

Prioritize. Prioritize. Prioritize.

Do we want to get ahead of AI, for instance? We cannot even move from voice to software development in the BPO industry, and we think we can leapfrog AI expertise?

That is too academic – logical yet linear and incremental. That is not how the real world works. Experience is the best teacher, i.e., not a unilateral paradigm but nurtures forward-thinking and lateral and creative thinking.

Recall that my old MNC-company is over 200 years old. We had a technology center populated by a thousand scientists. Yet, a partner, a small private R&D lab ran by two Ivy professors, developed the technology that put us ahead of the competition. [That is not uncommon. Pfizer partnered with two Turkish-German scientists in developing the COVID-19 vaccine while another major drug company, Merck, failed.]

And when we geared up to conquer the global market, we pilot-tested “the ecosystem” we pulled together in three countries – we considered representative of the bigger world. And we learned a lot from the experience to develop the global game plan in phases – until we got to over 200 countries. 

The outcome is the only consumer packaged brand that reached almost 70 percent of global households and a dominant market share.

But what about our MSMEs. That is why the blog keeps relating the story of my Eastern European friends. They are a pain in the neck of Western giants. In other words, the West does not have all the answers. Look at the Trump impeachment or Brexit.

And for our purposes, we must not take political patronage and oligarchy as the ticket to prosperity.

Then consider the Asian Tigers. They are all major export players. And in the case of Vietnam, the latest to overtake us among our neighbors, their top export industries are similar to ours, computer-related equipment.

Instead of dreaming about AI expertise at this time, we must first leverage our top export industries. We have a far greater chance to attain a quantum leap in this space if we can focus and prioritize.

That is a broad stroke attempt to explain how to leverage big data and dive into analytics.

To overcome the crab mentality, we must recognize that populism is not the Philippines’ way to grow and develop.

And then we must learn to forward-think. It is not to merely address poverty but to traverse poverty to prosperity. Where we want to be is to be a prosperous nation. And we can start with raising GDP by $200 billion. A 6%-7% growth rate does not define prosperity. And $200 billion does because we know we will be as rich if not richer than Malaysia.

Prioritize. Prioritize. Prioritize.

We can then line up the other industries that make up our top exports, including agribusiness, which means we must learn from the Pearl River Delta economic development zone.

Our current export processing zones are not the answer. We must aim for a competitive advantage.

“We cannot solve our problems with the same thinking we used when we created them.”

Gising bayan!