Tuesday, March 29, 2022

Is today the chance for Juan de la Cruz to reinvent himself?

It’s refreshing to hear from a Russian about democracy and autocracy. And not any Russian but its Foreign Minister, 1991-1996.

“Andrei Kozyrev says there can be no return to normal business with Russia once the war ends,” The Economist, 25th Mar 2022.

“The prospect of a westernizing, democratic, and prosperous Ukraine is the nightmare of the Putin regime because it will be a powerful motivation for Russians to follow suit. However, to change, [freedom-loving people] must recognize Russia as a nation under a belligerent and ruthless dictatorship and be treated accordingly.

“Mr. Putin has stoked nationalism as a means of maintaining power. For years the Kremlin has cracked down on free speech and democracy and proved its commitment to dominating Ukraine, undermining the West, and protecting dictatorships as far away as Syria, Cuba, and Venezuela.

“The West reacted with inadequate words and sluggish sanctions. (Dirty money has brought comfort to Russia’s elites and corruption to the West.) Mr. Putin demands that NATO backtrack from eastern and central Europe. The cold war’s divisive lines are back in Europe and beyond, like it or not. For the situation to change, Russia must change.

“America and its allies at last imposed tough sanctions on Russia in recent weeks because it again violated the civilized norms of behavior in Ukraine. Yet useful idiots or pseudo-experts on Russia who sympathize with autocratic leaders, such as Tucker Carlson on Fox News, are pushing for a prompt return to business “as usual” with Russia and its oligarchs. If they succeed, the sacrifices of Ukrainians and the discomfort of Western taxpayers will have been for nothing.

“If the Kremlin gets away with this war, and business relations return to normal in its aftermath, the country’s aggression will continue to grow—with or without Mr. Putin. The West should keep the bulk of its sanctions in place and maintain its military preparedness until the Kremlin respects the rights of its people and those in other countries, in line with international norms.

“Sadly, Russians will suffer from Western sanctions. But it will be impossible to hide the sanctions’ effects, even amid the mire of the Kremlin’s militarist propaganda.

“And only the country’s citizens can reform the regime.”

As the blog asserts, we Filipinos bend closer to autocracy than democracy because of our caste system. Unsurprisingly, political patronage and oligarchy undergird our economy. Do we want to mirror Russia?

Is today the chance for Juan de la Cruz to reinvent himself? From the former Russian Foreign Minister, “only the country’s citizens can reform the regime.”

For the umpteenth time, it’s worth restating that perfection is not of this world.

Consider: While America granted me citizenship for my contributions to my old MNC-company, I acknowledge its imperfections. And as a sign of protest, I don’t exercise the right to vote.

Why? American politics – and it explains its current polarized state – undermines its professed commitment to “the common good.” And the world is yet to see how that plays out in the medium- to longer-term. But the signs are ominous.

They are threading not the way forward but the reverse. Even the Supreme Court can’t stand away from backsliding – its failure to codify recusal norms within its August body. There is nothing wrong with feeling strongly about one’s belief, but what happens to the common good when lies justify these beliefs?

In other words, democracy is not about the “left or right.” And given its Judeo-Christian heritage, America must be the first to embrace the coming of Christ, specifically, how he battled the scribes and Pharisees for appropriating the faith.

“Paul is one of the most misunderstood and disliked teachers in the Church. We have tried to understand a nondual mystic with our simplistic, dualistic minds.

“Paul recognizes that the greatest enemy of ordinary daily goodness and joy is not imperfection, but the demand for “supposed perfection” or order.” [Richard Rohr’s Daily Meditations, Center for Action and Contemplation, 26th Mar 2022]

Why did Pope Francis take the name of St. Francis? The latter, like St. Paul, kept to the message of Christ – e.g., they were nondual mystics. For example, St. Francis recognized the Creation story and the independence of the universe. He saw the Creator not only in humans but in all of creation, including plants and animals.

News item: How Joe Manchin aided coal and earned millions. Manchin, the Democrat who rose through state politics to reach the United State Senate, where through the vagaries of electoral politics, is now the most critical figure shaping the nation’s energy and climate policy. [The New York Times, 27th Mar 2022]

The concept is beyond “climate change” but the imperative to sustain our lifeblood, the photosynthesis phenomenon.

And if we drill down said interdependence, it will facilitate our cognitive recognition of “forward, lateral, and creative thinking.” And they promote problem-solving and development, including the quantum leap we witness today in the 21st century. And they are best nurtured by freedom and democracy, not autocracy.

Question: How can parochialism and insularity cut into the dance of interdependence? Is that why we’re out of step that Juan de la Cruz suffers from abject poverty?

Given America’s commitment to freedom and democracy, I represented USAID in Eastern Europe as a volunteer – to assist Bulgarian MSMEs to gear up for the onslaught of global competition as the country prepared for accession to the EU.

And because these people demonstrated their embrace of freedom and the free market, I remained even after the USAID program ended. [With the pandemic ebbing, the wife and I will travel again and be Eastern Europe based, April through July.] I have done business across Eastern and Central Europe and showed these people how to pursue innovation and global competitiveness, the characteristics of this century.

There is a soft spot in my heart for the Ukrainians. They were not prepared to join NATO because of political patronage and oligarchy. Yet, the average Ukrainian has their heart in the right place. And the world no longer doubts that, given how they demonstrated their readiness to die for freedom and democracy.

These former Soviet satellite states are learning to live out a set of principles. They have cherished freedom, yet they know they have work to do. As in the case of Russia, political patronage dictated how the communist leadership farmed out and privatized state-owned entities that created the oligarchy. It is no different from the Philippines.

But that is why there is a group of us holding their hands and encouraging them to keep the faith. Their storied past helps because they know how autocracy robbed decades of their existence.

The wife hasn’t gotten over her visits to the museums in Ukraine, learning about “Holodomor” – derived from the Ukrainian words for hunger and extermination.

“Holodomor, “man-made” famine that convulsed the Soviet republic of Ukraine from 1932 to 1933, peaking in the late spring of 1933. It was part of a broader Soviet famine (1931–34) that also caused mass starvation in the grain-growing regions of Soviet Russia and Kazakhstan. However, the Ukrainian famine turned deadlier because of political decrees and decisions aimed chiefly or only at Ukraine.

“The origins of the famine lay in the decision by Soviet leader Joseph Stalin to collectivize agriculture in 1929. Teams of Communist Party agitators forced peasants to relinquish their land, personal property, and sometimes housing to collective farms. They deported so-called kulaks—wealthier peasants—and any peasants who resisted collectivization altogether. Collectivization led to (a) a drop in production, (b) the disorganization of the rural economy, and (c) food shortages. It also sparked a series of peasant rebellions, including armed uprisings, in parts of Ukraine.” [Britannica]

Can we Filipinos learn to recognize the distinctions between freedom and autocracy – and live them out? Can we commit to certain principles?

Please recall how I entered into a social contract with these people: You must commit to transparency, or I am out the door.

“Ukraine is not in the EU at this tragic hour because it could not meet Western standards on law and order and anti-corruption measures. It should make a more significant effort to reform after the war to open Europe’s doors.

“The West must double its support to the country as it rebuilds and recovers. Failing to do so could have dire consequences. A Marshall plan of sorts is imperative, and encouragement from the EU about its future membership is to inspire it. (Several states already have spoken in support of the application to join just days into the war.) A nation in the center of Europe subdued to Mr. Putin’s control would set a dangerous precedent.” [Kozyrev, op. cit.]

But isn’t the West to blame too?

Consider the sham justifications behind the Vietnam war and the attack on Iraq. Or the greed – care of Western financial institutions – that brought about the global recession of 2008 that impacted the entire world, especially developing economies. Even America did not fully recover from it and paved the way for the Trump presidency, i.e., right-wing populism.

“There is no dispute now that Mr. Putin wants to defend Russia’s sphere of influence. At the start of his speech on 24th Feb, as his forces invaded Ukraine, he criticized the “expansion of the NATO bloc to the east, bringing its military infrastructure closer to Russian borders.

“He embarked on a tirade against the actions of the Western powers and the Ukrainian government. He claimed an ongoing “genocide against the millions of people” in the Donbas region without evidence.

“However, for Professor John Mearsheimer (political scientist, University of Chicago) to reduce the causes of Russia’s invasion to the Bucharest declaration is simplistic and wrong. For a start, there were apparent frustrations, fears, and mistakes. Other, more crucial factors were at play. Professor Mearsheimer mentions that the continuing American strategic partnership with Ukraine may indeed have played a part, rubbing salt in the wound of NATO’s projected expansion.

“Ukrainian defiance in response to Russia’s huge military exercise on its border last year would have been hard for Mr. Putin to tolerate. A successful and democratic Ukraine undermines the Russian leader’s authoritarianism at home. And there was a faulty understanding of the situation: both America in Iraq and Russia in Ukraine have launched wars on terrible “intelligence.”

“Alongside these proximate causes, three other factors help explain the current Ukraine crisis. The most important and the most neglected is that the break-up of empires is often messy and traumatic. Usually, a foreign military intervention of some kind follows.

“The end of European colonial empires, and the collapse of the Soviet and Yugoslav empires in the 1990s, forced new or re-constituted states to make fateful decisions. What frontiers does the state have? Is citizenship based on ethnicity or simply residence? Should kin living outside the state have a right to citizenship? Or what friends and allies? What constitution? What language?

“Such questions have been at the heart of political crises and armed conflicts of the past hundred years. The dozens of UN peacekeeping missions established since 1945 have all addressed post-colonial and post-imperial problems.

“Both Georgia and Ukraine faced these quandaries in the 1990s—and faced them long before the question of NATO membership arose. From the beginning of their new existence, the status of Russian minorities in Georgia and Ukraine was complex.

"In Georgia, two breakaway republics provided a basis for occasional Russian intervention or at least a pretext. In Ukraine, too, defending the rights of its two Russian-supported breakaway republics was the ostensible reason for Russian military interventions there. And in these pro-Russian republics, there were “forced expulsions” of Georgians and Ukrainians, respectively, leading to calls to free passes to return to their homes.

“Second, nuclear weapons outside Russia necessitated Western involvement in security matters. An array of nuclear weapons remained in Ukraine (and in Belarus and Kazakhstan) following the collapse of the Soviet Union. The Budapest Memorandum on Security Assurances of 5th Dec 1994 addressed the problem of what to do with this arsenal.

“The three post-Soviet states agreed to hand these nuclear weapons over to Russia. In return, they received security assurances from Russia, Britain, and America, which all undertook to respect the sovereignty, independence, and existing borders of Ukraine and the other two states.

“Russia violated this provision by its takeover of Crimea in March 2014. The breakdown of the Budapest Memorandum left Ukraine in an awkward situation. It could not trust Russia’s word and had reason to doubt Western security guarantees. The idea of full-blooded membership in NATO appeared increasingly attractive but not necessarily more attainable.

“The third factor is color revolutions—the popular revolutions that occurred in many countries in the former Soviet Union in recent decades. They must have reminded Mr. Putin of the movements in eastern Europe in 1989 that precipitated the collapse of one communist regime after another.

“Mr. Putin was deeply suspicious of the revolutions, such as the Rose Revolution in Georgia in November 2003. It was the first successful assault in the former Soviet Union against the corrupt strongmen who had come to power immediately after communist party rule—then followed within a year by the Orange Revolution in Ukraine that threw out another such strongman, Viktor Yanukovych.

“It suits Mr. Putin to treat civil resistance movements as parts of a grand international conspiracy. I have been studying such movements for more than 50 years. And there were accusations that such movements were the pawns of outside forces. There is little evidence to support such theories.

“Professor Mearsheimer, in a lecture on “The Causes and Consequences of the Ukraine Crisis” at Chicago University in 2015, actually lent credence to the idea that such movements verge on being an American instrument. “Our basic strategy is to topple regimes all over the world,” but evidence for this generalization was missing. Throughout his analysis, Professor Mearsheimer pays remarkably little attention to people’s “ideals” and political desires in countries that have experienced “people power” revolutions.

“These factors suggest that the 2008 proposal to expand NATO to include Georgia and Ukraine is just one among developments that have made the current crisis acute. Indeed, it is arguable that the NATO expansion proposal made matters worse, as may other Western actions, but to assert that “the West is principally responsible for the Ukrainian crisis” goes too far.” [“Sir Adam Roberts rebuffs the view that the West is principally responsible for the crisis in Ukraine,” The Economist, 26th Mar 2022]

We Filipinos must learn from history. But it’s not a cakewalk.

“Four hundred and fifty-three years ago in Cebu, Miguel Lopez de Legazpi wrote out a report to the king describing the natural and human resources of the Philippines as the first step toward their exploitation.

“This description of lawlessness struck me: The inhabitants of these islands are not subject to any law, or king, or lord. Although there are large towns in certain regions, the people do not act in concert or obey any ruling body; but each man does what he pleases and takes care only of himself and of his “slaves.” He who owns most “slaves” and the strongest can obtain anything he pleases. No law binds “relative to relative,” parents to children, or brother to brother.

“Filipinos have not changed much in the last 450 years. The challenge of history is breaking the cycle, so the present will stop reading like the past.” [“History is a circle,” Ambeth R. Ocampo, LOOKING BACK, Philippine Daily Inquirer, 25th Mar 2022.]

“And only the country’s citizens can reform the regime.”

In other words, we shall perpetuate our caste system if we can’t undo our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

“What’s preventing Filipinos from getting rich? Extractive institutions allow a small group to extract incomes and wealth from the rest of society and block economic growth to safeguard its interests.

“Powerful groups often stand against the engines of prosperity,” write Daron Acemoglu and James A. Robinson in Why Nations Fail: The Origins Of Power, Prosperity And Poverty. Economic growth is not just a process of more and better machines and more and better-educated people but also a transformative and destabilizing process associated with widespread creative destruction.

“Growth thus moves forward only if not blocked by the economic losers to protect their economic privileges and by the political losers who fear the erosion of their political power.

“Worse, extractive institutions breed corruption and political oppression.

“Nations fail when they have extractive institutions, supported by extractive political institutions that impede and even block economic growth,” Acemoglu and Robinson.” [“Why Filipinos Remain Poor,” Panos Mourdoukoutas, Forbes, 1st Jun 2017; Mourdoukoutas is Professor and Chair of the Department of Economics at LIU Post in New York; and teaches at Columbia University.]

Are we more like Russia than our neighbors – better known as Asian Tigers?

What will it take for us to embrace the principles of freedom and democracy?

Is today the chance for Juan de la Cruz to reinvent himself?

Gising bayan!

Wednesday, March 23, 2022

Are we more catholic than the pope?

Is our caste system more powerful than the Roman Curia?

“Reforming the often unwieldy and out-of-touch Vatican bureaucracy, known as the Roman Curia, which governs a church of 1.3 billion faithful, was central for Francis’ election in 2013.

“The document, drafted by top cardinals chosen by Francis, was released on the ninth anniversary of his installation as pope. It explicitly states in its preamble that “the pope, bishops and other ordained ministers are not the only “evangelizers” in the church,” creating space for Catholic “laymen and laywomen” to have “roles of government and responsibility.” Another section, called “Principles,” states that the pope can appoint any Catholic he considers qualified to lead a Vatican office.

“Pope Francis issued a new constitution, nearly a decade in the making, to govern the bureaucracy that runs the Roman Catholic Church.

“The new constitution also places Francis’ abuse commission inside the powerful doctrinal office that often opposed the panel’s recommendations. The new structure, the constitution says, will help the church “protect minors and vulnerable persons from sexual abuse.”

“The constitution, signed by Francis on Saturday and published immediately, and only in Italian, will go into force on 5th Jun, replacing the charter “Pastor bonus,” or “Good Shepherd,” introduced in 1988 by Pope John Paul II.

“Francis has made a tradition of hammering the leaders of the Roman Curia — usually in a significant Christmastime address — for a host of sins, including being enamored with power and status and being far from the faithful.

“He has denigrated the Curia hierarchy as a self-important, “ponderous, bureaucratic customs house” plagued by “intrigues of little groups” that placed itself and the priesthood above parishioners, instead of being “shepherds, with the smell of sheep.”

“Francis has repeatedly sought to put his pontificate within the continuum of the Second Vatican Council, the landmark meeting of bishops in the 1960s that sought to embrace the modern world.

“He has recently cracked down on using the old Latin rite in celebrating Mass favored by traditionalists. Francis decided that they were divisive within the church, as they promoted a view that undercut the legitimacy of the modern church.” [“In a New Constitution, the Pope Sets Out to Overhaul the Vatican,” Jason Horowitz, The New York Times, 19th Mar 2022]

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.

The evidence? “The current Constitution has a provision that calls on Congress to pass an anti-political dynasty law. Of course, that never happened. Over the last 35 years, Congress ignored the Constitutional mandate. The old ruling elite, national and local, has succeeded in perpetuating power in their hands.” [“Family business,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 21st Mar 2022]

If the character of the Roman Curia isn’t perpetual, why can’t the Philippine caste system?

The universe we live in is dynamic, e.g., after winter comes spring. The universe is a 24/7 phenomenon. We can’t be bogged down by “winter” – and be sick and tired of democracy because “war and peace” is the human condition. Think of the story of Eden and Adam and Eve.

“So much of what we imagine to be new is old; so many seemingly novel illnesses afflict modern society is just resurgent cancers, diagnosed and described long ago. Autocrats have risen before; they have used mass violence before; broken the war laws.

“In 1950, in the preface to the first edition of The Origins of Totalitarianism, Hannah Arendt knew that what had just passed could repeat itself. She described the scant half-decade that had elapsed since the end of the Second World War as an era of great unease.

“Never has our future been more unpredictable. We have never depended so much on political forces that are unworthy to follow the rules of common sense and self-interest—forces that look like sheer insanity if judged by the standards of other centuries.” [“Why We Should Read Hannah Arendt Now,” Anne Applebaum, The Atlantic, 17th Mar 2022]

Unsurprisingly, Bongbong Marcos will be the next president.

A caste system is a system of entitlement, i.e., rank has its privileges. On the other hand, whoever is lower in the hierarchy deserves paternalism.

It is a vicious circle that Juan de la Cruz can’t seem to undo.

In the meantime, we thrive in “pwede na ‘yan,” as in the status quo.

“PH economy holding up,” Editorial, Manila Standard, 18th Mar 2022.

Are we holding up against what yardstick? Have we forgotten that we are the regional laggard and must borrow tons of money to keep Juan de la Cruz’s body and soul together?

Moreover, we had to borrow tons more because of the pandemic.

“The economy is hanging in despite the twin threats of the pandemic and rising commodity prices in the wake of the Russian invasion of Ukraine. The Philippine economy has more room to grow—it has not fully reopened since COVID-19 began two years ago, while millions of workers have yet to reclaim their jobs.

“Economic Planning Secretary Karl Kendrick Chua predicted confidently that the economy was on track to achieve the growth target of 7 percent to 9 percent in 2022, notwithstanding the sharp increase in crude prices and the escalating war in Europe.

“Mr. Chua is relying on the strength of the domestic economy that has not reached its full growth potential. Most of the Philippines is still under Alert Level 1, meaning COVID-19 is still restricting the mobility of the people and preventing the full reopening of commercial establishments.

“The Russia-Ukraine war, meanwhile, may initially impact the Philippine economy, especially domestic pump prices. The conflict, though, may not last. Moreover, the Philippines has limited trade links with Russia and Ukraine.

“The Philippines’ economic expansion, thus, will be driven mainly by the domestic side. The people who lost their jobs from the pandemic should rejoin the economy, and the students and teachers bottled up in their homes for months."

The following is a quote from an earlier posting. If it sounds sickening, it is. Yet, those familiar with the blog would know that it says the same thing over again for thirteen years.

Our predisposition for reform or to change lags those of our neighbors. It isn’t surprising given our “materiales-fuertes culture.” We grew up accepting perfection – and hierarchy and authority. And Padre Damaso didn’t help any.

And at the risk of being immodest, the blog keeps relating my experiences – because even in other countries, they are not typical. For example, two countries, one the wealthiest and the other the poorest in Europe, offered me citizenship.

When I say our best is not good enough, the countless encounters I’ve had in the real world attest to our inability to problem-solve.

Yet, I don’t take credit for myself. Instead, I share the principles that guided them.

For example, given my decades of experience in global business and competitiveness, my Eastern European friends assumed that I would spoon-feed them. But problem-solving is not about rules but principles.

Consider: Innovation is not R&D per se. In other words, no one discipline can take ownership of a problem-solving challenge – that will satisfy the character of this century, i.e., innovation and global competitiveness.

Please recall that I changed the planning and budgeting model in a 200-year-old Fortune 500. And I have done “oversight” at the local, regional, and corporate levels. In other words, even brilliant people from the best schools in the West can’t be the be-all and end-all.

Consider: When I first arrived at the corporate headquarters, the company was doing the plans and budgets for the ensuing year. Things were moving along and approved by Thanksgiving Day.

But I also knew from my time at the Philippine subsidiary and the region that plans and budgets can change. I was reporting to the new president of Asia Pacific, and so I put together a regional meeting, and we chose Bali as the venue. Being new to the company, I knew the region and the players better than her.

“We will invite the country managers and the global marketing and technology leaderships to present their respective approved plans and budgets. We will listen. Our task is to reconcile whatever differences that will come up. But we will not do it ourselves; we will ask them to align their thoughts to agree on how collectively they will manage and run their respective organizations. Still, the final numbers must satisfy the corporate commitment. It is a huge number. What is key is everyone goes away recognizing and accepting where we are, where we want to be, and how we will get there.”

I am thankful to the late Anacleto del Rosario for introducing me to Edward de Bono, the father of lateral and creative thinking.

While I was too young and naïve to run with the “de Bono ball,” it stayed in my subconscious that surfaced every time I encountered real-world challenges.

And here’s the quote again: “What’s preventing Filipinos from getting rich? Extractive institutions allow a small group to extract incomes and wealth from the rest of society and block economic growth to safeguard its interests.

“Powerful groups often stand against the engines of prosperity,” write Daron Acemoglu and James A. Robinson in Why Nations Fail: The Origins Of Power, Prosperity And Poverty. Economic growth is not just a process of more and better machines and more and better-educated people but also a transformative and destabilizing process associated with widespread creative destruction.

“Growth thus moves forward only if not blocked by the economic losers to protect their economic privileges and by the political losers who fear the erosion of their political power.

“Worse, extractive institutions breed corruption and political oppression.

“The Philippines is the 101 least corrupt country out of 175 countries, according to the 2016 Corruption Perceptions Index reported by Transparency International. The Philippines’ Corruption rank averaged 92.09 from 1995 until 2016, reaching an all-time high of 141 in 2008 and a record low of 36 in 1995. Meanwhile, the country is on and off “martial law.”

“That’s sad news for the future of the Philippines. “Nations fail when they have extractive institutions, supported by extractive political institutions that impede and even block economic growth,” Acemoglu and Robinson.” [“Why Filipinos Remain Poor,” Panos Mourdoukoutas, Forbes, 1st Jun 2017; Mourdoukoutas is Professor and Chair of the Department of Economics at LIU Post in New York; and teaches at Columbia University.]

The bottom line: There are “winners” and “losers.”

Sadly, we are the losers and don’t seem to know any better.

Is our caste system more powerful than the Roman Curia?

Are we more catholic than the pope?

Gising bayan!

Thursday, March 17, 2022

Recognize “cognitive challenge.”

Our best is not good enough!

If we can’t step up to the challenge, Juan de la Cruz is bound to suffer more.

Indeed, the worst is yet to come.

Because we can’t recognize our cognitive challenge – and it stems from our caste system.

The blog’s reason for being, after all these years, thirteen and counting, still stands.

We must reinvent ourselves!

We must learn to think “out of the box” – and we haven’t demonstrated the prospects.

Why?

We can’t think forward – and back.

It isn’t surprising. We’re into logical yet linear and incremental thinking. That’s how the world developed and pursued higher education. And that is why even in America, in the 1980s, they realized the failings of higher education.

Can we hold it right there?

Consider these two articles: (1) Public-private fusion for inclusive prosperity; (2) Five ways forward.

They are classic logical yet linear and incremental thinking.

What is it about thinking forward and back?

Have we ever met a “leader” that would be steps ahead of us?

That leader is beyond logical yet linear and incremental thinking.

It is also the distinction between “technocrats” and “leaders.”

Leaders can visualize beyond the logical and the obvious.

Let’s dig deeper into the assertion.

Why is public-private fusion not good enough in the case of the Philippines?

Consider that our GDP per person is less than half of Thailand’s and not even a third of Malaysia’s.

Moreover, they embraced the mantra articulated by Lee and Mahathir they shared with Deng: Beg for Western money and technology.

In other words, even if we double our budget for education and agriculture or whatever else, we will not match the scale – and the technology access – of these two neighbors.

Scale is another element that we can’t visualize.

We miss the view beyond the obvious and its magnitude.

And that explains why we’re the regional laggard.

And “five ways forward” won’t suffice. Why?

It does not visualize the “outcome” – which connotes the future. And why visionaries are few and far between. We want to be a developed, first-world nation.

In other words, the “playing field” of the future is beyond our grasp.

Those familiar with the blog may recall that when the wife and I first came to Eastern Europe, I had to spell out something fundamental: Freedom and the free market are not about rules but principles.

Put another way; rules are limiting; principles are mind-bending.

And so, despite their “outrage,” I did not spoon-feed them.

Consider their question: Do you think we can compete against the best in the West? They were the poorest nation in Europe, left behind under Soviet rule.

They had to see beyond the logical – that is, linear and incremental.

They had to learn to explore the brain chamber that houses forward, lateral, and creative thinking.

What about us Filipinos?

Our neighbors left us behind in “development,” which explains our “cognitive challenge.”

Sadly, our caste system gives us the mistaken belief that we can overcome the challenge.

Consider: Even America suffers from the failings of higher education. What makes us think that we don’t – when we lag our neighbors in education too?

Gising bayan!

In other words, the “playing field” of the future is beyond our grasp.

Consider this universe. How can we thrive in this demanding universe given our parochialism and insularity?

Or why are we closer to autocracy than democracy?

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.

In other words, we take the common good for granted – because our instincts nourish and perpetuate the crab mentality. And because the common good presupposes personal responsibility.

This universe is about dynamism and interdependence.

But why are we closer to autocracy than democracy?

Consider too that perfection is not of this world and why dynamism is imperative.

The invasion of Ukraine, for example, has again exposed the distinctions between democracy and autocracy.

Why is innovation more at home in a democracy than autocracy?

Why is the UK no longer a monarchy, for instance? Why did America overtake the UK in industrialization and innovation?

In other words, do we see how freedom-loving people and nations value dynamism and interdependence?

But because perfection is not of this world, the personal responsibility demanded by democracy is not a freebie. It is hard work and purposeful effort. And that’s why check-and-balance is imperative.

As my mother would say, birds of the same feather flock together, i.e., Trump, Putin, Duterte. And we can add the leaders of China, North Korea, and Syria, for example.

But why do we take for granted our instincts to veer closer to autocracy?

Unsurprisingly, Bongbong Marcos would be the next president.

To be sick and tired of freedom and democracy reveals how much we lack a principled outlook.

Freedom and the free market are not about rules but principles.

Our best is not good enough!

We must recognize our cognitive challenge.

If we can’t step up to the challenge, Juan de la Cruz is bound to suffer more.

Indeed, the worst is yet to come.

Gising bayan!

Sunday, March 6, 2022

Restructure. Restructure. Restructure.

But can we? Not if we keep our blinders.

Consider: Two administrations would come and go, and Arangkada won’t still give the quantum leap we need.

Why does the blog keep raising our instincts? Look at how we reacted to this news: EU lawmakers warn PH of losing trade “perks” due to rights records.

Have we forgotten that we acquiesced to EJKs? But even more fundamental is that our economy rests on political patronage and oligarchy. Fortunately, we have a solid economic driver thanks to over ten million OFWs and over a million “call center” workers.

Those are the elements of our blinders. And they boil down to our caste system.

Should we have a refresher on “oligarchy”?

“What is an oligarch?

“We’ve used the term a lot recently, so it’s worth providing a definition: Broadly speaking, an oligarch is an elite individual who wields considerable political influence in society. An oligarchy is a government characterized by few (often corrupt) oligarchs with an outsized grip on power.

“So why are they so prominent in Russia?

“To answer that, you have to go back to the collapse of the Soviet Union in 1991. In the years following its demise, the country now known as Russia began privatizing the valuable assets owned by the government during its communist days.

“But the auctions for these assets were as rigged as a game of Monopoly when we’re the banker. And if you had political connections, you could get your hands on precious companies at highly discounted prices. Abramovich’s story is an excellent example of how many oligarchs earned their fortunes.

“In 1995, Roman Abramovich acquired a 50% stake in Siberian Oil Co. (Sibneft, for short) for the rock-bottom price of ~$100 million, and later gained a majority stake. Ten years later, the Russian energy giant Gazprom bought Sibneft for more than $13 billion. Abramovich netted ~$10 billion of the proceeds.

“Abramovich has repeatedly denied that he has a relationship with Russian President Vladimir Putin, and he was not one of the many oligarchs sanctioned by the West in recent days. But he feels like he’ll be the next on the hit list as Western nations attempt to seize the luxury goods of Russian billionaires.

“And those seizures have begunGerman authorities have reportedly taken possession of the 512-foot mega yacht belonging to Russian billionaire Alisher Usmanov in the port city of Hamburg.” [“The oligarch garage sale has begun,” The Morning Brew, 3rd Mar 2022]

How do we want to react? That it is all about foreign interference violative of a nation’s sovereignty?

But what do we see if we drill down and peel that reaction? Why does the blog often reference the story of creation and the character of this universe, i.e., dynamism and interdependence? Given our parochialism and insularity, are they two elements that we take for granted?

Can we be more like our neighbors than Russia?

Here’s a quote from an earlier posting:

“Look at Russia. Tiny Singapore has zero natural resources yet is a wealthy nation, while Russia relies on oil with zero industry. Beyond oil, together with Ukraine, they are the world’s largest wheat producers.

“Russia relies on its oil – and political patronage and oligarchy as in the Philippines.

“Recall that Singapore’s debt ratio is over 100%. But it is irrelevant because they have no external debt.

“Singapore issues government securities to assist its national pension fund. And its GDP per capita is $93,400, even greater than that of the US ($60,200).

“Moreover, Singapore allots 173.3% of its GDP to export goods and services while we do 31%.”

On the other hand, “Because we are a consumption economy, household consumption accounts for 73.5% of our GDP end-use. Compare that to 49% for Thailand and 55% in the case of Malaysia.

“We allocate 31% for export initiatives, while Thailand puts 68% and Malaysia 71%.

“Unsurprisingly, the Philippine industry contributes a low-31% to GDP, against Thailand’s 36% and Malaysia’s 38%.

“That explains why the exports of these countries are 3.3 times in the case of Thailand and 2.6 times for Malaysia.

“Finally, where it hits Juan de la Cruz, Thailand’s GDP per capita is 2.2 times that of the Philippines, and Malaysia’s is 3.3 times.

“Instead of trumpeting a 6%-7% GDP growth rate, we must raise our allocation of 31% to export goods and services closer to our neighbors: Thailand = 68%, Malaysia = 71%, Singapore = 173.3%.

Restructure. Restructure. Restructure.

But why can’t we?

Consider: “Hard-working Filipinos remain poor, watching the people of other nations in the region get rich. Revolutions come and go in the Philippines, but the old villains –  corruption and political oppression – remain intact, preventing Filipinos from making the great leap forwards from poverty to riches.

“That happens for a familiar reason: every new regime uses the old mechanisms they had challenged before assuming office to advance its interests rather than the people’s interests at large.

“The Philippines is rich in natural resources (e.g., nickel, copper, gold, silver, and chromium) and human resources (close to 104 million people). But it remains poor. The Gross Domestic Product per capita in the Philippines was at 2639.90 US dollars in 2015, according to Tradingeconomics.com. That’s just 21 percent of the world’s average and well below the per capita GDP of neighboring countries like Indonesia, especially Singapore, which has become wealthy.

“That hasn’t surprised those following emerging markets closely, even though the Philippines’ equity market has outperformed Indonesia’s and Singapore’s in the last ten years. Nor has it been a surprise seeing the Philippines leave behind the old glory days of the 1960s, remaining poor six decades later.

“What’s preventing Filipinos from getting rich? Extractive institutions allow a small group to extract incomes and wealth from the rest of society and block economic growth to safeguard its interests.

“Powerful groups often stand against the engines of prosperity,” write Daron Acemoglu and James A. Robinson in Why Nations Fail: The Origins Of Power, Prosperity And Poverty. Economic growth is not just a process of more and better machines and more and better-educated people but also a transformative and destabilizing process associated with widespread creative destruction.

“Growth thus moves forward only if not blocked by the economic losers to protect their economic privileges and by the political losers who fear the erosion of their political power.

“Worse, extractive institutions breed corruption and political oppression.

“The Philippines is the 101 least corrupt country out of 175 countries, according to the 2016 Corruption Perceptions Index reported by Transparency International. The Philippines’ Corruption rank averaged 92.09 from 1995 until 2016, reaching an all-time high of 141 in 2008 and a record low of 36 in 1995. Meanwhile, the country is on and off “martial law.”

“That’s sad news for the future of the Philippines. “Nations fail when they have extractive institutions, supported by extractive political institutions that impede and even block economic growth,” Acemoglu and Robinson.” [“Why Filipinos Remain Poor,” Panos Mourdoukoutas, Forbes, 1st Jun 2017; Mourdoukoutas is Professor and Chair of the Department of Economics at LIU Post in New York; and teaches at Columbia University.]

Can we pause and ponder? 

Are we more like Russia than our neighbors?

Then consider: “Imelda intervened in the PLDT case. The Marcos family claimed that they owned PLDT. Eh, maging presidente s’ya (BBM), s’yempre, hahabulin n’ya ‘yan. Iipitin n’ya lahat ‘yan. Iipitin n’ya…

“In fact, Imelda also claims San Miguel. They own half of the shares of Danding Cojuangco. Iipitin n’ya lahat ‘yan. Sasabihin n’ya, ‘oy, amin ‘yan, hindi kayo? You got it; you did not pay us for our share.” Magkakagulo lahat ‘yan, magkakaablahan.

“Lucio Tan. The Marcoses have the “affidavit” of Lucio Tan that half of the companies of Lucio Tan belong to the Marcoses. And there’s a pending case now in the Supreme Court that will be decided soon on the claim of Mrs. Marcos that they own half of the companies of Lucio Tan. Madami ‘yan.

“Also, the properties of GMA-7, the Unilab. They will reopen all of that. Sasabihin nila, ‘half of your companies belong to us.’

“Magkakagulo tayo. That’s only one part of it.” [“Goodbye to hidden wealth, if BBM wins,” Federico D. Pascual Jr., POSTSCRIPT, The Philippine Star, 22nd Feb 2022]

Restructure. Restructure. Restructure.

“Instead of trumpeting a 6%-7% GDP growth rate, we must raise our allocation of 31% to export goods and services closer to our neighbors: Thailand = 68%, Malaysia = 71%, Singapore = 173.3%.

But why can’t we?

Because those we lionize — as in oligarchy — are out to protect their interests from the destabilizing process that comes with creative destruction. In other words, rent-seeking thrives not in innovation and global competitiveness — the character of the 21st century — but political patronage. The evidence? Our eight top companies combined can’t match the economic output of Samsung Vietnam.

If our economic managers and the media, and the Philippine elite class can’t show the way to Juan de la Cruz, are we a failed nation?

Gising bayan!