Are we digging our own grave?

Is our caste system irreversible?

With due respect to our economic managers and legislators, and economists, how do we open our eyes and cease perpetuating an oligarchic nation?

In other words, everything that we do, including what media is playing up, is geared to fortify our caste system. There is another name for it, mainstream economy. This economy is for us in the Philippine elite, and that’s why we’re proud of the dollar billionaires we created – and prouder still that our economy is enviable.

In the meantime, over 10 million OFWs are our sacrificial lambs toiling to bring us our much-needed remittances. And together with those manning call-centers 24/7, they form the two pillars of our economy.

More evidence? We borrow tons of money for the 4Ps and still have the region’s worst poverty rate and GINI coefficient index.

Can our educational system come to the rescue – or is it near a “rescue” itself?

Let’s not be defensive; even in the West, they face challenges.

This universe is not at a standstill for humankind to be sitting on its laurels. It is its character: dynamism and interdependence — and yet it is why and how living things thrive.

Sadly, we Filipinos chose to go against its nature that we nourish and perpetuate our caste system.

And as the blog has argued, it reveals 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 consequence? We are oblivious to the world. The world has left us way behind that Juan de la Cruz is yet to pay a steeper price.

The blog all along has wondered why and how we never grasped that our neighbors left us behind.

“Beg for Western money and technology.” That was their mantra.

Aren’t we learned and can build a nation from the ground?

“John Woolman, an eighteenth-century American Quaker, had a successful retail business but gave it up because he felt it kept him from clearly seeing something that disturbed him: slavery. He came to see how money stood in the way of a clear perception of injustice: people who had a lot of property and land needed slaves to maintain them (or so these folks reasoned). He saw the same problem with his reasoning. Whenever he looked at injustice in the world, he always saw it through his eye, his situation and benefit.” [Richard Rohr’s Daily Meditation, Center for Action and Contemplation, 24th Sep 2021]

Let’s move quickly up to the 21st century: “The Illinois representative thought the GOP was an abundance of democracy-loving internationalists. Now he sees the party as a corrupt shell of itself.

“Political courage is a fascinating phenomenon, particularly at moments when it is largely absent. That is why I'm so interested in the imperiled career of Representative Adam Kinzinger, the Illinois Republican. He has described Donald Trump’s demagogy for what it is—a danger to the republic. And he has the spine to excoriate members of his party for succumbing to Trump’s imbecilic authoritarianism.

“Dissent can often lead to social and political death (and sometimes, physical ‘death’), and, as we’ve learned in the months following the insurrection of 6th Jan, most Republicans would sooner cast people like Kinzinger into the wilderness than risk ostracism.

‘I don’t have a tribe,’ Kinzinger told me when we spoke earlier this month. ‘The good thing is, I don’t care. The only reason this hurts me is that it reminds me of how frigging crazy the Republican Party has become, and it’s not my tribe anymore.’

“I asked Kinzinger if he thought he had been naive about the people who now lead the party. ‘You know, you always think that everyone has a red line. No matter how much politics a person can play, there’s a red line that people can’t cross. I was naive. Some people only care about access to power. I’m still coming to terms with this.’

“Kinzinger, along with another apostate, Liz Cheney, serves on the House committee investigating the events of 6th Jan. His decision to join this Democratic-led committee caused some of his Republican colleagues to worry (or publicly worry) that he had become a spy in their midst.

“The story of the Republican Party’s descent into ‘Trumpist’ authoritarianism is one The Atlantic must tell. And our writers have been telling it well, with moral urgency and a commitment to the notion that reality is describable and provable, for more than five years. That is a delicate assignment for The Atlantic. We came to life with the promise that we would be of ‘no party or clique,’ and we try to make good on that promise. It is difficult, though, when one of the country’s two major parties is violating the norms of democratic behavior. We will continue to hold the Democratic Party accountable as well when accountability is needed, and we will continue to publish writers—conservatives, Republicans, ex-Republicans—who are thinking in interesting ways about the future of their party and country.” [“Adam Kinzinger: Republicans Are ‘Frigging Crazy,’” Jeffrey Goldberg, The Atlantic, 23rd Sep 2021]

Do we wonder what The Atlantic is all about? Emerson Collective owns it. 

Enter: Laurene Powell Jobs. “In one soul, in your soul, there are resources for the world.” [Ralph Waldo Emerson]

“With those startling words, Ralph Waldo Emerson enlarged our conception of the value of human life. I read his simple declaration about the reach of human capability as a statement of fact: there is within each of us the potential to improve the world around us. But Emerson’s line is not only a description; it is also an imperative: while all of us possess this transformative potential, too many of us don’t get the chance to fulfill it — which means that we all have work to do.

“At Emerson Collective, this is what drives us every day. If we’ve helped someone transcend the limits of circumstance and chart a new course for themselves and their families, we know we’re fulfilling our mission. Like our namesake, we believe deeply in self-reliance; but we recognize that the road to self-reliance sometimes requires help from others. We trust that hard work and determination can make anything possible, but opportunities for hard work and grit must be found and even created.

“For people trapped in the quagmire of poverty and disenfranchisement, a strong will to overcome the odds is rarely sufficient to beat them. For the 22 percent of children born into poor neighborhoods in the U.S., hard work will not likely be enough to overcome the obstacles they will face, including those that remain invisible to outsiders. For students in challenging environments—where schools are chronically short of funds, advanced classes in high school are non-existent, often low expectations, and mentors are few—'force of will’ alone cannot ensure a college education and a bright future. And for families forced into the shadows by a dysfunctional immigration system, perseverance cannot secure legal status and equal rights.

“Qualities of character, in other words, must be supplemented and supported by policies and inspirations. These lives, these communities, are gardens of promise, but they need water to flourish.

"Many years ago, I visited a nearby high school where students were working to defy the odds and do something challenging: to become the first in their families to earn a college degree. They had the same dreams and talents as students from neighboring communities but faced far more daunting obstacles. As the first to apply to college, attend and graduate, and embark on a professional career, they met uncharted territory at every stage.

“It takes a unique brand of boldness to envision—and pursue—a future so different from the world that surrounds you. These students possessed courage and drive but lacked the gateways to achieve their dreams—this struck me as a great injustice. It inspired me to launch a program called College Track—which has, to date, guided and supported thousands of students on their quest to earn college degrees, most of whom are the first in their family to reach this pivotal milestone.

“Today in the United States, with few exceptions, where a person is born determines how far they can go in life. Among developed countries, the U.S. ranks second to last in economic and social mobility. That is shameful. It wasn’t always this way—and it doesn’t have to stay this way. That is not how we want our country to work.

“This imperative underpins both the moral and practical mission of our work at Emerson Collective: we are idealists with our feet on the ground. Students can’t become self-reliant adults unless we give them an excellent education and a pathway cleared of obstacles. Immigrants can’t contribute to our communities and live open and accessible, and productive lives unless they are free from fear of detention and deportation. Complex systemic failures require flexible approaches, new models, and improved public policy. Every day with new ideas, accurate numbers, and innovative practices, we at Emerson Collective do our part to advance these solutions. We do so in partnership with creative thinkers, entrepreneurs, and organizations – with the broad community of concern and solidarity that we seek to foster.

“Our basic belief, as Emerson taught, is that we are doubly obligated: we must rely on ourselves, and we must rely on each other. By helping individuals to achieve their dreams, we unleash the full force of the world’s most powerful resource: human potential.”

Here’s a reaction from a journalist: “It’s a diverse set of concerns and reflects her belief that issues like poverty, education, personal health, and environmental justice are all interconnected.

‘When you pull one thread, you get the whole tapestry,’ she said. ‘When you’re working in the social sector, you actually cannot make any lasting forward movement if confined to one thing.’

“Ms. Powell Jobs, 56, is acting with a sense of urgency these days. She believes that President Trump’s statements and policies have unleashed dark forces that are tearing apart the very fabric of society.

‘It’s not right for individuals to accumulate a massive amount of wealth that’s equivalent to millions and millions of other people combined,’ she said. ‘There’s nothing fair about that.’

“And yet Ms. Powell Jobs is hardly apologetic. ‘I inherited my wealth from my husband, who didn’t care about the accumulation of wealth,’ she said. ‘I am doing this in honor of his work, and I’ve dedicated my life to doing the very best I can to distribute it effectively, in ways that sustainably lift individuals and communities.

‘I’m not interested in legacy wealth buildings, and my children know that,’ she added. ‘Steve wasn’t interested in that. If I live long enough, it ends with me.’ [“Laurene Powell Jobs Is Putting Her Own Dent in the Universe,” David Gelles, Corner Office, The New York Times, 27th Feb 2020]

Let’s get back to the Philippines.

The blog all along has wondered why and how we never grasped that our neighbors left us behind.

Here’s a quote from an earlier posting: “It may take ten years [for the economy] to reach pre-COVID-19 trajectory,” per NEDA chief Karl Chua.

“We must, therefore, leapfrog and toss linear and incremental thinking.

Can we stop and digest that?

“The challenge we face is not a cakewalk.”

We are GDP-starved despite (1) the collective wealth of our dollar billionaires; (2) the even much more significant treasure of $60 billion from OFW remittances and the BPO industry; (3) the “sweet spot” we call our consumer market because of our young consumers; (4) the tons of money we borrow for the 4Ps; (5) our eight top companies; (6) the MSMEs that count for almost 99% of registered enterprises; (7) and the massive Build, Build, Build program. 

The blog all along has wondered why and how we never grasped that our neighbors left us behind.

“Beg for Western money and technology.” That was their mantra.

Are we digging our own grave? Is our caste system irreversible?

Can we, in the Philippine elite, cease the hubris? 

We cannot build this nation from the ground up. 

Country after country in the region demonstrated that. “You don't have to love your former colonizer. We are poor nations; we need their money and technology.” That was Mahathir speaking to Juan de la Cruz.

After the economy has contracted because of the pandemic, isn’t it insanity to be touting the 6%-7% GDP growth rate? Whatever happened to Grade 5 arithmetic?

And so we want to keep to our debt ratios and keep our credit standing while the economy is on a free fall? The rating agencies will still penalize us because we have a structural problem.

Translation: See above; we are GDP-starved, dependent on, and in the hands of the lower caste made up of OFWs and young people staffing call centers.

Where is the economic genius in this economic structure? These are desperate Filipinos that the Philippine economy cannot feed. What is their asset? They speak English, not because we are tops in education.

We lag in education, and we lag in economic output. That is not an “economic genius.” That is a caste system.

And both of them — English and education — were imposed on us. But then again, so was the Japanese Constitution. And Japan turned into an economic power. Or think of how Europe can’t live among themselves, and Churchill had to cajole Roosevelt to save them and the world.

And most recently, Vietnam. The Americans dropped more bombs on them than all the wars combined. And today, save for Singapore, they have the most FDIs in the region. They didn’t do the 4Ps to arrest poverty but followed the footsteps of their neighbors — and our neighbors too.

One more time with feeling. What is this universe about — dynamism and interdependence?

Now that we’re amid a pandemic, what to do?

That is why we must walk and chew gum simultaneously. Don’t let the economy contract even more – and very quickly, turn our paradigm on its head. 

Translation: This time, we need economic pragmatism, not economic genius — or bluster.

For example, our tax legislation — despite our penchant for alphabet soup, as in CREATE and SIPP, won’t suffice to leapfrog our deficits in FDIs and technology – and the economic output of our neighbors.

The operative word is leapfrog, not logical yet linear and incremental thinking.

That’s why the blog submits that we better redefine what we want in our leadership. The Duterte bias was errant from the beginning; we picked a Davao for the benchmark, and that smacks of parochialism.

Benchmarks must be world-class models, and we don’t have to look very far — because our neighbors awed the world.

Why does the blog speak to Apple all the time?

Are we digging our own grave?

Gising bayan!

We must turn our paradigm on its head.

Question: We don’t have to go back decades, but where is our head today versus, say, twelve years ago?

The genesis of this blog: “I started writing to engage columnists and newspaper editors at the end of a trip to the Philippines over Holy Week in 2008 – to echo the frustrations expressed by friends and relations that were much louder and more intense than prior trips

“My first thought was: with so many talents and skills, how could the country be the basket case of Asia? Are we too nice as a people?

“Since then I have kept abreast with local news and opinions, and it seems that the views about the economy can be summarized as follows: (a) Our leaders failed us – they are too preoccupied with their selfish interests; despite People Power corruption still reigns and reigns powerfully; (b) Capitalism failed us – capitalists and foreign investors are not unlike our leaders, they have only enriched themselves and exploited the resources of the country; (c) We remain a resilient people – we have created a new and more significant middle class with millions of OFWs and their families, and at home, we can make do with homegrown entrepreneurship.

“Yet, poverty remains our Achilles heel; and hence our Christian compassion has become an advocacy.”

Can we pause – and ponder?

The pandemic has exposed the weakness of our economy. And the recovery will be treacherous and take time, years, per NEDA.

Recall that the blog has repeatedly spoken to the character of this universe: dynamism and interdependence.

Interestingly, here’s how The Economist hypothesizes about America: “Is America Inc getting less dynamic, less global, and more monopolistic?” [The Economist, 16th Sep 2021]

Dynamism and interdependence. Can we Filipinos wrap our heads around that?

It will not be easy, given 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.

And how should we hypothesize about the Philippines?

“The reference of Oxford Economics to the highest increase in the labor force will remind us that the two most potent engines of growth before and after the pandemic are the remittances from some 10 million Overseas Filipino Workers (OFWs) and the considerable dollar earnings of the BPO-IT sector. These two account for some 12% to 15% of the Philippine GDP, and they would not be possible without our young, growing, and English-speaking population. During the pandemic, these were the two sectors that hardly suffered from the global meltdown.

“The HSBC prognosticated about the Philippines, actually were accomplished during the past five years of the Duterte Administration, especially those about the significant improvement in infrastructures through the Build, Build, Build program.

“What we still need is to reduce restrictions against foreign direct investments that may still happen before the end of the present Administration through the three pending bills in Congress, i.e., the Public Utility Act, Retail Trade Liberalization, and the Foreign Investment Act.” [“Aspiring for high-income status,” Bernardo M. Villegas, Human Side Of Economics, BusinessWorld, 14th Sep 2021]

“The good news is that the data show that the Philippine economy has become more inclusive, and income distribution has improved over time, notably within the last decade. The average income of the wealthiest one-tenth was 12 times the poorest one-tenth in the 1980s, 10.3 times in 2009, and now only 7.6 times as of 2018.

“A study by Dr. Rafaelita Aldaba found that across Philippine manufacturing industries, the top four firms accounted for an average of 81 percent of total industry output in 1998. But ten years before, that ‘four-firm concentration ratio’ was just 71 percent, implying that market concentration rose through that decade. More recently, the Ateneo Policy Center found that in 2012, the top 15 business conglomerates generated the equivalent of 4.7 percent of our total gross value added, aka gross domestic product. By 2018, this share had grown to almost 6 percent.

“These all mean that incomes of the lowest income groups have grown faster than incomes at the top and that in the poorest regions have risen faster than in the traditionally favored areas of Metro Manila and Luzon. Indeed, government policies must have been instrumental, like the Magna Carta for Micro, Small, and Medium Enterprises of 2008 (MSMEs), the Philippine Competition Act of 2015, and the Board of Investments incentives for inclusive business models.

“But with large enterprises contributing an estimated 38 percent of total jobs and 64 percent of total incomes, it stands to reason that they too must have had a role in the observed improvement.” [“Big and bad(?),” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 21st Sep 2021]

Hold it right there.

And let’s get back to The Economist: “Concerns about the health of American business are many and varied. Because of the short-terminism, Chief executives suffer from criticisms. And their companies are berated for fetishizing shareholders over everyone and everything else. Elon Musk, boss of Tesla, a maker of electric cars, grumbles about a surfeit of business-school graduates stifling innovation. President Joe Biden frets as much about American companies losing out to China as Donald Trump (albeit with less bile). He also worries about the concentration of power among America’s most prominent firms.

“All this paints a picture of America Inc that looks stodgier, more parochial, and monopolistic. If true, that would be bad news for the spiritual home of free-market capitalism. But is it? The Economist set out to test all three hypotheses about American business: less dynamic, less global, and more concentrated. The results appear nowhere near as bleak as the doomsayers would have you believe."

Question: Do we see that there are concerns expressed about the health of America, while in the case of the Philippines, the net is that the prognosis is promising?

Here’s a quote from an earlier posting: “Recall that the blog argues that we don’t know how to drive revenues or the top line because of our oligarchic enterprises. And why our eight top companies – combined – can’t match the output of one Vietnam enterprise, Samsung Vietnam.

Let’s pause once again. 

Do the dots connect? When an enterprise gets a free lunch courtesy of rent-seeking, why would it develop the ability to seek and win revenues? 

I worked with one Philippine oligarchy for eight years; we did not worry about selling because the market absorbed everything we produced. Zero competition is heaven-sent.

But there’s no free lunch. Use it or lose it. That’s why neuroscience says the brain is like a muscle, and it needs toning.

What about the dollar billionaires that we’ve proudly created because we have a promising economy?

With due respect to Ciel Habito, between OFW remittances and the BPO industry, as pointed out by Bernie Villegas, we generate roughly $60 billion. And that is 169% more than the combined wealth of our dollar billionaires.

In fairness, that is why we celebrate OFWs — and the BPO industry, too — as heroes, and they are the two pillars of our economy.

But do they give the Philippine economy free lunch? Use it or lose it.

On the GINI coefficient, we have the worst index compared to our neighbors.

The bottom line? Are we again falling into the trap of “correct analysis” but missing the “analytics” – the big picture – as we did when we celebrated the uptick in manufacturing in 2015?

And that is why the blog (a) put up the challenge of raising GDP by an incremental $200 billion and (b) leapfrog our neighbors because we lag in GDP per capita.

In other words, that goes beyond the imperative to raise agriculture’s productivity to feed into manufacturing and industrial development.

That is classic linear thinking. And we should have done that decades ago.

That’s why the blog often narrates the Ph.D. candidate I mentored in her dissertation. Don’t think of the object of the exercise to be a commercial success. Instead, consider that higher education must seek to impact the real world.

Recall that Steve Jobs wanted to make a dent in the universe, and his widow is making good on his aspiration. She is well on her way to disbursing his wealth — all of it — for humanity’s sake.

“The most important lesson from South Korea for the Philippines is the priority to be given to rural and agricultural development in attaining sustainable and inclusive growth. Although South Korea has minimal agricultural resources, Park Chung Hee ensured the focus and importance of rural and agricultural development at the beginning.

Then consider: “It would be of great interest for us to examine closely the experience of South Korea, one of the so-called ‘tiger economies’ which transitioned from low-income to First World status in record time. Among these Newly Industrializing Economies (NIEs), South Korea is the closest model to follow because of its relatively larger population. The other three — Singapore, Hong Kong, and Taiwan — have much smaller populations and may have fewer lessons for us to follow.” [Villegas, op. cit.]

One more time with feeling: That is classic linear thinking. And we should have done that decades ago.

Indeed, we must continue to do the spadework at the rural and agri levels. 

But there must be a parallel effort to leapfrog industrial development so that national income or GDP accelerates at a much faster pace to support rural and agricultural development.

Stop. Look. Listen.

If we have our Zoom groups, is that a topic we want to explore? To explore is a lateral thinking exercise. Among my Eastern European friends, they call it brainstorming to generate the Monday to Sunday versions — a reminder that the story of creation took more than one day.

In the West, they call that “walking and chewing gum simultaneously.”

Beyond learning from the Koreans, we must learn from the Vietnamese. It was Boo Chanco who narrated the sob story from a Korean about how we blew it and lost Samsung to Vietnam.

And at the macro level, we must recognize that the period of the ‘60s and beyond is very different from today, the 21st century. Simply put, the South Korean model worked in the earlier period, but the Vietnam miracle says today is another ballgame. 

Innovation is happening at warp speed. The good news is that even developing countries can tap them via FDI.

For example, when the blog started a dozen years ago, it pointed out that Vietnam was cornering FDIs coming to our part of the world.

Technology development is not linear. Please recall lateral thinking. In fairness, it is counterintuitive. 

Practice. Practice. Practice.

For example, I recall the story of my old MNC-company tapping technology from the outside despite its 1000-strong technology center. [Disclosure: I have been a practitioner for decades that I speak matter-of-factly about the distinction between “analysis” and “analytics.” The world and higher education teach us otherwise; logical yet linear and incremental thinking.]

It works for MNCs, and it works for countries too like Vietnam and China. Again, my old MNC-company, as with many Western MNCs, transferred technology to China via its liberal investment climate.

It works even for MSMEs. My Eastern European friends tapped innovation offered by Western suppliers that recognized their ability to expand their geographical reach. Unsurprisingly, they can compete head-to-head against Western behemoths.

We Filipinos don’t have to settle for and start with R&D 101.

Consider: “It may take ten years [for the economy] to reach pre-COVID-19 trajectory,” per NEDA chief Karl Chua.

We must, therefore, leapfrog and toss linear and incremental thinking.

Here’s a quote from an earlier posting: “Think of the following as subsets or building blocks in our nation-building efforts: (1) OFW remittances; (2) the BPO industry; (3) our being a consumer market – that we like to call “sweet spot” because ours are young consumers; (4) the 4Ps; (5) the eight top companies; (6) MSMEs that account for almost 99% of registered enterprises.

“But why are we still GDP-starved? All those building blocks collectively fall short of lifting Juan de la Cruz from poverty.

“And that is why we need another building block. But first, we must recognize how (a) Vietnam did it and (b) Mahathir turned Malaysia into a favored FDI destination.

“That means we must (a) become a regional manufacturing hub for techno products and (b) lure the world’s best tech companies and most significant investors to the Philippines.

“Sadly, Duterte, being a pariah to freedom-loving people – owing to his war on drugs, aka EJKs – has no credibility to attract investors. Neither has Bongbong – the world knows about Marcos’s unexplained wealth.

“That is why the blog was delighted to see Mayor Isko as a potential candidate. He has demonstrated leadership as Manila mayor, and he needs to prove now, beyond “forward” and lateral thinking capability, the abhorrence of corruption.”

Let’s pause once again.

To turn our paradigm on its head, we must likewise address politics. Again, the blog won’t offer the US as a best-practice model.

It is American dynamism that keeps America enviable. Conversely, American politics today undermines its sworn ideal of freedom and democracy. 

But there is welcome news in the “climate change” debate: The “progressives” are moving a bit away from their dogma. Instead of merely badmouthing “supply-side” economics and prescribing “wealth redistribution” to generate demand, they recognize the imperative of (a) innovation to develop alternative energy sources rapidly, (b) building and scaling up an industry, (c) that will be viable and sustainable because of affordability.

We Filipinos need to learn more about dynamism to counter our parochial and insular instincts. 

And that means we must figure out how to overcome populism in politics.

And it will not be easy given that Juan de la Cruz suffers from abject poverty.

That’s why we in the Philippine elite and chattering classes owe it to Juan de la Cruz to demonstrate how we can shift paradigms. 

For example, we cannot define leadership as we did in endorsing Duterte. He – and Juan de la Cruz that he represents – is now a pariah to freedom-loving people.

We know that we must attract FDIs the way our neighbors did. 

And that’s why the blog pointed out Duterte and Bongbong’s lack of credibility to attract foreign investment. Should that be the yardstick we must use to decide whom to endorse this time? 

In other words, we must commit to overturning our culture of impunity.

The Philippines needs more than OFW remittances and the BPO industry, and the three pending bills in Congress.

We need the equivalent of an ecosystem – best exemplified by the photosynthesis phenomenon. See above; our building blocks in nation-building fall short and cannot lift Juan de la Cruz from poverty.

Should we pause — and ponder?

Consider: Our neighbors built their respective ecosystems rapidly to the amazement of the world.

We must turn our paradigm on its head. 

Please recall the GPS model: Where are we; Where do we want to be; How do we get there.

Where we want to be is to traverse poverty to prosperity rapidly. It is beyond addressing poverty.

That explains why despite borrowing tons of money for the 4Ps, we can’t arrest poverty while Vietnam did – and our other neighbors before them.

For example, we need another building block in our nation-building.

Consider: Apple is the most valuable enterprise ever, and Vietnam latched into the industry via Samsung.

This industry is in continual innovation; we cannot predict its demise. Look at how Vietnam lured Apple AirPods too.

There is no one bright idea to figure this challenge. See above; brainstorm the Monday to Sunday versions.

And when brainstorming, look out for the nuances between “drivers” and “enablers.” That is why there is much professional jealousy in the education field because no one will accept that they could be offering “enablers” but not “drivers.” And that is why “photosynthesis” is a great mental model – it reconciles conflicts and, even more, visualize how the “dots connect.”

Consider this quote from an earlier posting: “We in the chattering classes have repeatedly raised the point that Lee Kuan Yew successfully ran Singapore like a business.

“In other words, he knew that Singapore had to traverse poverty to prosperity rapidly, and he had to aggressively drive GDP – i.e., Singapore’s revenues or the top line.

“That is how a private enterprise thinks, and that the lifeblood of the company is Sales – because they drive revenues.

“Recall that in Eastern Europe, while my role would suffice as consulting, I agreed to organize, run, and develop the sales force to show them the ropes of aggressively driving revenues.

“Still, they must recognize the imperative to connect the dots. And why they still want me to hold their hands, especially with the pandemic and with me working from home.

“And what are the dots to connect? They are the three dynamics of (1) the marketing mix (and its foundation is the product portfolio that must continually respond to the challenge of raising one’s well-being; not the dead-end of “serving the bottom of the pyramid”); and between the portfolio of products and markets is the challenge of analytics: where to sell which products, why, how, and what is the priority as in Pareto — to get the biggest bang; (2) the resource mix (and it includes the access to finance, and banks favor businesses that have credible game plans, and credibility isn’t free; (3) the execution mix: who will do what, when, where, and how.”

The challenge we face is not a cakewalk.

That’s why the imperative to brainstorm.

For example, innovation is not a one-person entity but the power of group dynamics — as in the common good. And Steve Jobs and Apple demonstrated that and why Apple is up in the stratosphere — way beyond any enterprise. 

And why our caste system has killed our prospects for development. 

Similarly, we cannot be entertaining the power of authoritarianism over freedom and the free market. Nor is there a perfect system – systems being mere human constructs.

Consider: “Empowerment is the idea that an enterprise is most productive when all its people are empowered to make and take decisions on their own when authority devolves down to all levels of the organization. It is a feel-good idea that seems to prove what all sensitive, liberal folk believe should be the case.

“The idea was most closely associated with Rosabeth Moss Kanter, a Harvard Business School professor who also edited Harvard Business Review, and it was central to her influential book ‘When Giants Learn to Dance.’ 

Kanter argued that companies need to liberate their employees from stultifying hierarchies if they can ‘dance’ in the flexible, fast-changing future. Too many employees still needed ‘the crutch’ of ‘hierarchy.’ These ‘powerless’ people ‘live in a different world; they may turn instead to the ultimate weapon of those who lack productive power—oppressive power.’

“The idea harks back to Douglas McGregor’s Theory X and Theory Y but gives McGregor’s framework a new spin by adding information technology (IT.) That IT can put into the hands of Theory ‘Yers’ (self-motivating individuals) the raw material (knowledge, or power) that they need to act responsibly and make decisions for themselves.

“Ten years after Kanter’s book was published, another Harvard Business School professor, Chris Argyris, wrote an article in Harvard Business Review entitled ‘Empowerment: The Emperor’s New Clothes.’ 

“Everyone is talking about Empowerment, but it is not working. Chief executives subtly undermine it. On the other hand, employees are often unprepared or unwilling to assume new responsibilities.

“To understand why it was not working, Argyris set Empowerment in the context of commitment, an individual’s commitment to their place of work. He said that there are two types of commitment:

“External commitment, or contractual compliance. It is the sort of commitment that employees display under the command-and-control type of structure when they have little control over their destiny and little idea of how to change things.

“Internal commitment. It occurs when employees are committed to a particular project or person for their reasons. Internal commitment, said Argyris, is closely allied with Empowerment.

“Argyris argued that the problem with many corporate programs designed to encourage Empowerment was that they created more external than internal commitment. For example, programs were riddled with contradictions and sent out mixed messages, such as ‘do your own thing—but do it the way we tell you.’ Thus, employees felt little responsibility for the program, and people throughout the organization felt less empowered.

“Empowerment has its limits. It should not be a goal in itself; it is only a means to the ultimate goal of superior performance. Organizations should then set out to establish working conditions that will encourage their employees’ internal commitment, clearly recognizing how this differs from the external variety.” [“Empowerment,” The Economist, 27th Oct 2008]

Superior performance must be the measure of governance and nation-building.

Consider: Duterte’s term is almost at its end. Why are the Philippine elite class and chattering classes piling on him today? Who endorsed him in the first place?

Our caste system — that informs our instincts — will elect the wrong candidate and — worse — kill our prospects for development. 

Gising bayan!

Our backs are against the wall.

And we must turn our paradigm on its head. We cannot fall into the trap of “insanity.”

But it will not be easy because of our instincts. 

Our caste system gives us the license to be perfect, especially in the Philippine elite and chattering classes.

Here’s a quote from an earlier posting: “In the winter of 1848, a 26-year-old Prussian pathologist, upon the authorities' instructions, named Rudolf Virchow, investigated a typhus epidemic raging in Upper Silesia, in what is now mainly Poland.

“After three weeks of meticulous observation of the stricken populace — during which he carefully counted typhus cases and deaths by age, sex, occupation, and social class — he returned with a 190-page report that ultimately blamed poverty and social exclusion for the epidemic and deemed it an unnecessary crisis. ‘I am convinced that the epidemic would not recur if you changed these conditions,’ he wrote.

“Dr. Virchow was only a few years out of medical school, but his report became the foundational document of the new discipline of social medicine. His vision for health went far beyond individuals and the pathogens lurking inside them: He pioneered the careful epidemiological examination of social conditions such as housing, education, diet, and lifestyle, and he denounced the rigid social stratification perpetuated at the time by the Catholic Church.” [“Science Alone Can’t Heal a Sick Society,” Jay S. Kaufman, The New York Times, 10th Sep 2021; Dr. Kaufman is a professor of epidemiology at McGill University. He was recently the president of the Society for Epidemiologic Research.]

Is it surprising that Rizal defined the Catholic Church via Padre Damaso? 

It also explains the tribalism that characterizes US politics. The far-right elements see their faith as the license to be perfect. Unsurprisingly, the far-left takes the opposite claim.

Consider: Christianity has moved beyond the laws of the scribes and Pharisees. And it had to take a Christ to demonstrate it. Yet, habits are hard to break.

That’s why in the Philippines – given our caste system – come hell or high water, and we invoke our license of perfection.

For example, even the international agencies have repeatedly stressed that a 6%-7% GDP growth rate will take a generation to see the light at the end of the tunnel. And with the economy shrinking, that cannot be the be-all and end-all. 

We are yet to recognize the importance of cognitive development. That beyond binary or dualistic thinking is relativism.

Why can’t people see that? It is because of the 1-% phenomenon. It would take an Einstein to edify the world on the relativity theory. And still, take over a hundred years for humankind to demonstrate it.

That’s why the blog argues that our caste system killed our prospects for development. And our elders were prescient and created Juan Tamad and Bondying.

Why can’t we see beyond the 6%-7% GDP growth rate metric? Or beyond the debt ratios?

Because we claim learnedness – aka our license of perfection –  we embrace logical yet linear and incremental thinking.

What did we kill in the process? We can’t drive GDP – or revenue itself – because we see only one perspective.

Here’s a simple business exercise in appreciating the nuance: When a trader buys goods for one peso apiece and sells them at one-and-ten, ten is his markup. But what is his margin for the one-and-ten selling price? It is eleven.

In other words, if the object is to generate a 10-margin, it does not need a 10-markup but a lower one (9.09.) And that matters when the trader scales up the enterprise, i.e., set a lower selling price and be more competitive.

There are such nuances as “markups and margins,” i.e., different perspectives.

And here’s why MSMEs seldom break away from the umbrella of “trivial many.” 

Because they don’t have the scale, their perspective is limited to “markups,” which perpetuates linear and incremental thinking. They can’t imagine that “markups” and “margins” are two sides of the same coin.

But which comes first, the chicken or the egg? 

The concern of MSMEs is occupied disproportionately by the inadequacy of capital that they can’t forward-think. Yet, resources will always be limited. 

And so, most of them can’t become business ventures that they settle and “accept” their fate — to be livelihood efforts. 

Recall that when I first arrived in Eastern Europe, I guided them (my then-new friends) to define and establish where they wanted to be. Despite being an MSME, and not making money for eight years, they wanted to be in the industry, consumer packaged goods.

Unfortunately, Western behemoths control this industry. And they must, at the very least, be equal in size to the median MNC subsidiary, i.e., $100 million. Why? They must be able to stand toe-to-toe in competition; else, they get blown away.

What about MSMEs in the Philippines? To move from a livelihood effort to a business enterprise, they must design the business to compete successfully with the best in their respective industries.

Recall the GPS model, which facilitates forward- and lateral thinking: Where are we; Where do we want to be; How do we get there.

In other words, they must generate revenues approximating the industry leader. If that is $20 million, that must be “where they want to be.”

Sadly, to forward-think is not how our exporters do it per the DTI official I spoke with many years ago. “It is typical when they get their first substantial export order, the first thing they do is go on a European holiday or some grand holiday in the West. And before long, they lose the business to Thailand or Malaysia.” 

But let’s get back to a macro example.

And there are also nuances between GDP growth rates and absolute GDP amounts.

Recall that the blog argues that we don’t know how to drive revenues or the top line because of our oligarchic enterprises. And why our eight top companies – combined – can’t match the output of one Vietnam enterprise, Samsung Vietnam.

And that is why the blog challenged raising GDP by an incremental $200 billion.

Why $200 billion? That is to leapfrog our neighbors – because we are lagging in GDP per capita.

That is beyond linear and incremental thinking.

For example, our economic managers emphasize the imperative to raise agriculture’s productivity to feed into manufacturing and industrial development.

That is classic linear thinking. And we should have done that decades ago.

We must leapfrog and toss linear and incremental thinking.

We in the chattering classes have repeatedly raised the point that Lee Kuan Yew successfully ran Singapore like a business.

In other words, he knew that Singapore had to traverse poverty to prosperity rapidly, and he had to aggressively drive GDP – i.e., Singapore’s revenues or the top line.

That is how a private enterprise thinks, and that the lifeblood of the company is Sales – because they drive revenues.

Recall that in Eastern Europe, while my role would suffice as consulting, I agreed to organize, run, and develop the sales force to show them the ropes of aggressively driving revenues.

Still, they must recognize the imperative to connect the dots. And why they still want me to hold their hands, especially with the pandemic and with me working from home.

And what are the dots to connect? They are the three dynamics of (1) the marketing mix (and its foundation is the product portfolio that must continually respond to the challenge of raising one’s well-being; not the dead-end of “serving the bottom of the pyramid”); and between the portfolio of products and markets is the challenge of analytics: where to sell which products, why, how, and what is the priority as in Pareto — to get the biggest bang; (2) the resource mix (and it includes the access to finance, and banks favor businesses that have credible game plans, and credibility isn’t free; (3) the execution mix: who will do what, when, where, and how.

That’s why the blog raised the challenge – lift GDP by an incremental $200 billion. The Philippines cannot just aspire to be a first-world economy, and it must work its butt off.

What does that mean? It is the difference between “analysis” and “analytics.” 

“Analysis” is why we celebrated the uptick or resurgent manufacturing back in 2015. In contrast, “analytics” says that our premise was shortsighted.

Recall the GPS model: Where are we; Where do we want to be; How do we get there.

Philippine manufacturing is inward, not export-focused, and its output cannot match our neighbors. What is there to celebrate?

Forward-thinking comes with lateral thinking. And how do we get there?

Think of the following as subsets or building blocks in our nation-building efforts: (1) OFW remittances; (2) the BPO industry; (3) our being a consumer market – that we like to call “sweet spot” because ours are young consumers; (4) the 4Ps; (5) the eight top companies; (6) MSMEs that account for almost 99% of registered enterprises.

But why are we still GDP-starved? All those building blocks collectively fall short of lifting Juan de la Cruz from poverty.

And that is why we need another building block. But first, we must recognize how (a) Vietnam did it and (b) Mahathir turned Malaysia into a favored FDI destination.

That means we must (a) become a regional manufacturing hub for techno products and (b) lure the world’s best tech companies and most significant investors to the Philippines.

Sadly, Duterte, being a pariah to freedom-loving people – owing to his war on drugs, aka EJKs – has no credibility to attract investors. Neither has Bongbong – the world knows about Marcos’s unexplained wealth.

That is why the blog was delighted to see Mayor Isko as a potential candidate. He has demonstrated leadership as Manila mayor, and he needs to prove now, beyond “forward” and lateral thinking capability, the abhorrence of corruption.

Recall how my Eastern European friends became a model enterprise for Europe. Beyond commercial success and innovation, they’re a paragon of business ethics.

Those familiar with the blog may recall my message to them when I first arrived in Eastern Europe: (a) Democracy and the free market is not about rules but principles; (b) You must commit to integrity in your conduct of the business, or I am out the door. I represented an American MNC for many years and today the USAID, and I cannot go against my principles.

I did not tell them what my mother drilled into my head: Honesty is the best policy. That is why I have to be true to myself. That’s why I can disagree with the president of my old MNC-company, with the CFO, with the technology community, with the financial function, among others.

That is why I questioned the very makeup of the Philippine economy from the first day of this blog’s existence – over a dozen years ago. And I can disagree with our economic managers.

What we’ve done over decades has proved us wrong. Dead wrong. There’s no way to sugarcoat that.

What did I mean that democracy and the free market are not about rules but principles?

Recall that my Eastern European friends were pumping me for rules because they were untrained in the free market. And this reminds me of Philippine education and its fundamental problem. The good news is that even in the West, they acknowledged the shortcomings of higher education.

Everyone wants to learn about “techniques” – or the “how-to” – as though they’re the be-all and end-all, and it is about the science of “thinking.”

And so, my Eastern European friends were surprised that while conducting workshops, I won’t dish out “rules” and instead break them into small groups to practice and learn problem-solving – i.e., to internalize the principles relevant to the subject.

Let’s get back to the Philippines.

Our backs are against the wall.

If we in the Philippine elite and chattering classes can’t lead Juan de la Cruz to reinvent himself, this country is doomed.

That is because our inward-looking bias won’t desert us. Why?

Our caste system gives us – in the Philippine elite and chattering classes – license to be perfect. Why?  The Catholic Church?

What are we missing? That Christianity has moved beyond the laws of the scribes and Pharisees. And it had to take a Christ to demonstrate it. Yet, habits are hard to break.

That’s why in the Philippines – given our caste system – come hell or high water, and we invoke our license of perfection.

Gising bayan!