This generation is toast!

Consider this Editorial that countless must have read: “Reaching the academic top means fixing school problems from the ground up.”

Is education the problem, or are we – this generation is – the problem?

Education in a country is an expression of its culture. Education did sprout out of a vacuum.

Every challenge we face, our impulse is to talk mechanics or the “how-to.” For example, we offer up strategic planning as an elixir. Think of Arangkada and the scores of industry road maps we proudly created.

Similarly, we like to dissect and do “analysis.” 

Those familiar with the blog may recall I did strategy in a Fortune 500. And it demands strategic thinking beyond jumping into the mechanics. 

And beyond “analysis” is “analytics.” In both cases, the imperative is forward-thinking. And that is where the untrained can fall flat on their face. For example, why can’t we overcome the “crab mentality”? Because we can’t figure out the “vital few” from the “trivial many.” Or what the “drivers” are versus the “enablers.”

What to do? 

We justify our fate and point the finger at the West because of their outsized influence in the global community. Indeed, they failed in that sense.

Yet, we betray our misunderstanding of what “community” is, including the global community.

A community is the product of individuals coming together for the common good. There is no free lunch.

Sadly, our instincts – aka the caste system – are the prism that informs our worldview. We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Unsurprisingly, do we take our instincts for granted that we don’t even know who Juan de la Cruz is?

In other words, we measure everything by individual achievements that only make us proud.

How can we crow about political patronage and oligarchy? But that’s why we misplaced our values. For example, our value of hierarchy comes with our value of paternalism. And the latter undermines personal responsibility. In other words, they reinforce each other.

Translation: In the community at large, the common good is supreme. And that is our biggest failing.

The good news is that we’re not alone. Even America, the world’s acknowledged measure of freedom and democracy, has dropped the ball.

Let’s assess the assertion again – and it is not a new theme dissected by the blog.

Our parochialism and insularity are beyond the pale. Unlike our neighbors, we never outgrew an inward-looking bias.

How? We can’t fathom the reality demonstrated by these neighbors. They begged for Western money and technology.

While we celebrated oligarchy and the handful of dollar billionaires we created, and worse, to undermine personal responsibility, we nurtured paternalism.

In other words, we respect hierarchy because it comes with the value of paternalism.

And so, we proudly pursued poverty alleviation efforts in conjunction with employment generation.

In the process, we institutionalized our “crab mentality.”

Translation: We, including our economic managers, touted efforts that propagated the “trivial many” while undermining the “vital few.” Pareto is foreign to us!

And that explains why we failed miserably both in agriculture and industrialization.

Sadly, we can’t look at ourselves in the mirror. And the Philippine elite and chattering classes won’t own up to our failings.

Instead, we like to dwell on the failings of the global community.

What to do?

There is no free lunch. Underdeveloped as we are as an economy and nation, we have the onus to put our own house in order. It’s called “personal responsibility” – in the global community context.

That’s why the blog never tires of speaking to the efforts of my Eastern European friends.

They could have pointed to the decades under Soviet rule that turned them into the poorest country in Europe.

Yet, over the last nineteen years, they have achieved something beyond a flash in the pan – because it has endured.

While the wife and I have been in Eastern Europe since April of 2022, we took holidays because I was confident they no longer need my hand-holding – their training wheel.

“I cannot teach you better than your experience.” That was the message I gave when they asked me to do a session in “crisis management.”

In case they took them for granted, I recalled the success stories under their belt. “You have gained an enviable depth of experience over the years.” Over 30 of the senior managers listened to me. Yet, they didn’t expect that I would call on specific individuals to narrate the details of these success stories.

In turn, I challenged them to be a one-billion-dollar company. “You were less than a ten-million-dollar company and unprofitable for eight years, yet you over-delivered beyond the challenge to be a one-hundred-million-dollar company.”

For example, despite the war in Ukraine, the Ukrainian business is up 32% year-to-date. And Poland, supporting the Ukrainians against the Russian invasion, is doing better with sales of 67% over last year. And in the West, Germany’s business is ahead of the prior year by 39%. And all three countries deliver double-digit profitability.

And in the Americas, Latin America’s business is 69% up, and the US is ahead by 44%.

But what about the bigger world? They also asked me to launch the company’s “sustainability” – or green – initiative.

And the message was, “Ours is a simple business. We make things and sell things. We must prioritize sustainability efforts to give us the biggest bang for the buck and a competitive advantage in our products. And to do the same in making these products and in the factories where we make them. And to optimize the efforts, we must partner with third-party providers, e.g., raw and packing materials and trade partners. That will ensure that the initiatives are extensive yet relevant – and benefit all stakeholders.

Let’s get back to the Philippines.

I again call on Philippine industry leaders like Messrs. Ang and Dominguez to lead the effort to replicate the success of Vietnam to lure Samsung and Apple, making Vietnam the latest Asian Tiger.

In other words, we must fight our “crab mentality” and aggressively pursue the “vital few.” We now know that putting up over 300 export processing zones is not the answer to our poverty.

For the last time, we must recognize that our academic bag of tricks is not up to the task demanded by the real world. It is the real world. We learn from experience.

Editorial: “Reaching the academic top means fixing school problems from the ground up.”

Is education the problem, or are we – this generation is – the problem?

Education in a country is an expression of its culture. Education did sprout out of a vacuum.

What to do?

We justify our fate and point the finger at the West because of their outsized influence in the global community. Indeed, they failed in that sense.

Yet, we betray our misunderstanding of what “community” is, including the global community.

A community is the product of individuals coming together for the common good. There is no free lunch.

Gising bayan!

“New Year’s resolutions” are “a pie in the sky."

Indeed, they are pleasant to contemplate yet unlikely to succeed.

Didn’t GMA designate herself the czar against illegal drugs? And Du-30 did one “better” via EJKs?

And given our value of hierarchy and paternalism, we celebrate these “great ideas.”

They confirm that we can’t forward-think and instead resort to knee-jerks – as in, we’re in a constant reactive mode.

In other words, to be “pro-active” is foreign to us – and why we can’t free ourselves from a ceaseless “perfect storm.” And it explains why beyond impunity, ours is a damaged culture?

They confirm that we are a disaster waiting to happen. Whether public or private, our undertakings aren’t equal to the task.

“We believe that only the president can jumpstart the gargantuan task of rehabilitating local agriculture from the carnage created by those at the helm of the DA these past years.” [“Marcos to head Agriculture dept.,” BusinessWorld, 21st Jun 2022]

Our challenges are indeed gargantuan, and they extend beyond agriculture.

We have been the regional laggard for the longest time. And because we can’t learn from others, we are the poster child of Einstein’s “insanity,” definition?

We’re in the 21st century. Putin can idolize “Peter the Great,” but he can’t be our model.

Moreover, we must rise beyond “Pinoy kasi.” It is binary thinking – and out of place in this universe.

How do we find our place in the sun? That’s the question we must ask ourselves.

We can’t rely on our instincts to leapfrog us into the 21st century.

For example, beyond productivity, agriculture’s North Star must be “competitiveness,” i.e., this century is about “innovation” and “competitiveness.” And like the universe, “dynamism” must be the characteristic. It is anathema to our caste system that values hierarchy and paternalism – while our worldview and mindset are static.

Consider: While we acknowledge that we lag in education, our mindset and problem-solving “default” are very academic. Yes, logical yet linear and incremental!

Unsurprisingly, agriculture to us is “productivity.” Yet, “productivity” presupposes investment.

And economies of scale are fundamental to investment, especially when embarking on a significant enterprise. And scale informs one’s ability to forward-think. But we can’t imagine the magnitude of “scale” if we can’t figure out the “what” and “how” – to connect the dots between “innovation” and “competitiveness.”

And it starts with human needs. And they are beyond the requirements of Juan de la Cruz. Translation: How did our neighbors become world-class exporters?

Parochialism and insularity (a) explain our stunted and shortsighted view, (b) distort the potential “scale” offers, and (c) undermine creativity and the pathways to innovation.

Consider: “Data compiled by researchers at the Organization for Economic Co-operation and Development (OECD) show that in the Philippines, producer supports in 2020 represented 27 percent of gross farm receipts, averaging 22.2 percent over 20 years. That is much higher than in Vietnam (-6 percent in 2020, average of 1 percent), Indonesia (20 percent in 2020, average of 14.7 percent), and China (12.2 percent in 2020, average of 10.9 percent).

“The problem appears to lie in the support we give our farmers, mainly in trade protection via import restrictions and high tariffs, which OECD puts at 40 percent, well above Vietnam’s—10 percent and Indonesia’s 24 percent. Salceda notes that not only is Vietnam not supporting its farmers but also taxing them for exporting their produce—yet far outdoes us and Indonesia in farm performance.

“I've long argued that we should help our farmers, but the market discipline pushes us to keep abreast with our neighbors’ productivity.

“We complain that our government has not done enough to make farm inputs cheaper. But Salceda shows how our tariffs on critical “inputs,” including fertilizers, pesticides, seeds, and farm machines, are already down to the minimum of three percent, from as high as 46 percent in the 1980s. The Department of Agriculture has also perennially procured such farm inputs to pass on cheaply to farmers (at taxpayers’ loss).

“Our problem has been that the government has focused support on direct farm inputs, where the benefits last for only one crop season but fall short on public goods with long-lasting benefits like irrigation, postharvest facilities, transport, and “logistics.”

“Unbridled liberalization” in agriculture has penalized our farmers since joining the World Trade Organization. In truth, we had precisely bridled trade in farm products with various waivers, exemptions, and “sensitive lists” that persisted for decades, especially for vital food products like rice, corn, meat, and vegetables.” [“Myths and misconceptions," Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 21st Jun 2022]

How do we summarize the above article? Consider 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.

Even our so-called mega enterprises can’t stand up to regional if not global competition? Hasn’t the blog raised our instincts over the last dozen years? And isn’t Ciel Habito confirming our instincts to explain why we are the regional laggard in agriculture?

What to do?

As the blog argues, we have no development experience, which explains why we can’t figure out how to pursue industrialization.

Unsurprisingly, we rely on our academic bag of tricks. But then again, we confine ourselves to logical yet linear and incremental thinking.

The good news is that we are not alone. Higher education stands on logical yet linear and incremental thinking.

The evidence? We’re prisoners of the “mechanics” or the “how-to” even of significant undertakings.

For example, we can’t think along with parallel efforts. Our neighbors had infrastructure challenges, yet all aggressively pursued industrialization by begging for Western money and technology.

And we brought the same mindset to developing our MSMEs. And so we keep raising the imperative of access to finance – that the government and the financial services sector aren’t doing that. Yet, look at how we spoon-fed agriculture and still failed miserably?

And why can’t we execute Arangkada and the scores of industry road maps we proudly created?

Why? Because our reliance on political patronage and oligarchy taught us to think logically – but linearly and incrementally.

How do we get a grip on our fundamental challenge of industrialization?

Didn’t the blog raise the challenge for Messrs. Ang and Dominguez to lead the effort of replicating Vietnam’s success in luring Samsung and Apple? We must get a big hit and follow it with another one and not do an academic exercise as in developing scores of industry road maps.

The first order of business is to generate wealth. And it starts with the first “million.” And the exercise of getting one big hit will give us the experience and the confidence to follow it with another one – and another while getting better each time. It’s the real world. We learn from experience. On the other hand, dissertations don’t need to see the light of day.

Consider: We have over 300 export processing zones across the country, given our focus on creating jobs. Aren’t they a great example of the “trivial many” given the persistent challenge of employment and poverty – and stuck at the bottom, i.e., the regional laggard? Conversely, Vietnam – and the early Asia Tigers before – has demonstrated the wisdom of the “vital few.”

And at the risk of immodesty, the blog kept narrating my experiences at my old MNC company and with my Eastern European friends. Whether the challenge is to a Fortune 500 or an Eastern European MSME that hasn’t made money in eight years, the model is not a mystery. How did our neighbors become Asian Tigers?

New Year’s resolutions are a pie in the sky.

Indeed, they are pleasant to contemplate yet unlikely to succeed.

Didn’t GMA designate herself the czar against illegal drugs? And Du-30 did one “better” via EJKs?

And now BBM is the agriculture czar?

Gising bayan!

Tap dancing like mad

Are we “tap-dancing like mad” to justify our fate?

Consider: “The Philippines should open further to foreigners if it wants to corner more job-generating investments, Asia-based Hinrich Foundation said.

“After reaching a record-high $10.1 billion net inflows in 2017, data showed FDI to the Philippines started declining from that peak, with the pandemic worsening the downtrend.” [“Gov't urged to open up the Philippines to more foreign investments,” Philstar.com, 15th Jun 2022]

“How we wish our next secretary of the Department of Trade and Industry (DTI) would be known as the champion and booster of Philippine exports,” someone mused. “He knew how far behind our comparable Asean peers have left us in export performance.” [“Doing a Vietnam,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 31st May 2022]

Que sera, sera?

The simple formula the world learned from our neighbors is to beg for Western money and technology – because the object is to accelerate industrialization. In other words, the first order of business is to generate wealth that can fund and support the common good. Even in the Nordic countries, industrialization was the key that paved the way for their brand of democracy.

But we’re the Philippine elite – and rank and privileges are supreme.

And to protect our standing, as in hierarchy, we held Western money and technology at bay – except when we benefited from political patronage and oligarchy.

But we can’t look in the mirror – and left to tap dance like mad.

Do we want to sweep Juan de la Cruz’s reality under the carpet?

“Angara says PHL debt of P12.7 trillion still ‘reasonable,’” Alyssa Nicole O. Tan, BusinessWorld, 16th Jun 2022.

“I think that one way of looking at it is attacking the spending side. The Philippines should spend on things that benefit the people and will pay dividends over the long term, such as education, health, and infrastructure. Those are the things that we can’t compromise. I suppose we have to be more judicious in our expenditure to pay and bring public debt (to manageable levels),” Mr. Angara said.

“What matters more is how you spend that debt and whether it’s sustainable,” he added.

In other words, we aren’t thinking beyond monetary and fiscal interventions. And which explains why we can’t do a Vietnam?

Consider: “The debt-to-GDP ratio was 63.5% as of the end of the first quarter, exceeding the 60% threshold considered by multilateral lenders to be manageable for developing economies. The pre-pandemic level was 39.6% of GDP at the end of 2019.

“Finance Secretary Carlos G. Dominguez III has said that the Philippines may need at least ten years before its debt-to-GDP ratio returns to about 40%.

“The senator said that the right mix of policy and economic incentives for the private sector will ensure recovery from increased revenue.

“As the budget grows yearly, Mr. Angara said the challenge is to make revenue grow proportionally.

“However, Mr. Angara said increasing taxes may not be the solution as the people still suffer from the after-effects of the pandemic. “You want to grow your economy in this period. You want it to recover,” he said, “and increased taxation might be sending the wrong message during this time.

“Economic managers target GDP growth of 7-8% this year.

“Mr. Dominguez has said the Philippines needs to grow an average of 6% annually in the next six years to reduce debt effectively.”

What (ever) happened to Arangkada and the scores of industry road maps?

When are we going to put “industrialization” front and center?

Should we pause — and ponder?

“Industrialization” is real-world stuff. Recall that the blog raised the question, how many dissertations ever find the light of day? 

Weren’t we impressed at ourselves as we created the scores of industry road maps? 

In other words, there is a reason why even in America, they had to grapple with the shortcomings of higher education. And it boils down to the imperative to forward-think, distinguishing the “vital few” from the “trivial many” and “drivers” from “enablers.”

Recall the 613 rules of the scribes and Pharisees and their battles with Christ, who came down with the Great Commandments. Or how Pareto influenced economics.

On the other hand, think of our crab mentality. It explains our inability to separate the wheat from the chaff. And why “innovation” is foreign to us. And why we can’t wrap our heads around “competitiveness.”

That’s why the blog wants to recall that over two administrations, PNoy and Duterte, we failed to overcome a critical obstacle to Philippine economic development. And at the rate we’re going, the BBM administration will emerge empty-handed too.

What are we missing?

We aren’t thinking beyond monetary and fiscal interventions. And which explains why we can’t do a Vietnam?

We did 6%-7% GDP growth from 2009 to 2019 – or over a decade – and yet remained the regional laggard.

Now we want 7-8% growth this year? We can’t think of “one year” if we’re going to set up a sustainable path of explosive economic growth – the way our neighbors did.

In other words, we can’t seem to toss logical yet linear and incremental thinking.

What do you want to be when you grow up? Weren’t our ears bent by our elders when we were growing up?

Forward-thinking came to us early in life. What happened?

Consider our caste system and 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.

In other words, has destiny defined Juan de la Cruz – that we have fallen into the trap of “learned helplessness”?

“Learned helplessness occurs when an individual continuously faces a negative, uncontrollable situation and stops trying to change their circumstances, even when they can.

“The term was coined in 1967 by the (American) psychologists Martin Seligman and Steven Maier.

“Seligman later developed the concept of learned optimism: By explaining events to ourselves constructively and developing a positive internal dialogue, people can break free from a cycle of helplessness.” [https://www.psychologytoday.com/us/basics/learned-helplessness]

In other words, the “destiny” of Juan de la Cruz is our creation. And – wittingly or not – aren’t up to undo it.

And in such a confused state – aka a damaged culture – how can we ever attain clear-headedness?

And it explains our inability to forward-think, distinguish the “vital few” from the “trivial many” and “drivers from enablers.”

In short, we confused the meaning of “inclusiveness” – as in, an economy.

“Inclusiveness” is an oxymoron in a caste system, full stop.

The challenge, unfortunately, is way beyond our heads. The evidence? After Vietnam, will Cambodia be the next to leave us in the dust?

In other words, if our society at large (a) can’t execute Arangkada and the scores of industry road maps and (b) tap monetary and fiscal interventions – that did not work for us for decades – what else is in our bag of tricks?

Is BBM our savior? Did we not think of Marcos as one too? Or Duterte?

Juan de la Cruz is back to square one – or is he in a worse position? Moreover, no one has demonstrated the vision, leadership, and “miracle” that can propel the nation to glory.

On the contrary, as the blog never ceases to stress, ours is a culture of impunity.

Consider: “Reporters Without Borders writes that mainstream media in the Philippines has seen increasing levels of ownership concentration and that in some corporate newsrooms, journalists have little editorial autonomy, self-censorship is the rule, and respect for journalistic ethics is not guaranteed.

“The imagined difficulty for journalism under another Marcos administration varies from journalist to journalist. Some fear a martial law redux. Others say the press would bog down by battling bogus court cases. Most are grappling with the decline in trust in journalism.

“During the presidential campaign, stories criticizing the Marcoses were sanitized. Some stories would not even be published online to limit circulation. And it will get worse following Marcos’ win.

“Reporters Without Borders, which monitors press freedom, notes the return of “red-tagging” – a practice inherited from the colonial era and the Cold War, i.e., branding journalists who do not toe the government line as “subversive elements” or “reds." That amounts to pointing them out to law enforcement as legitimate targets for arbitrary arrest or, worse still, summary execution.

“Others are swamped by a steady stream of online harassment that can get foul. Writes Regine Cabato of the Washington Post, “I'm almost relieved when someone calls me a slut or some other generic slur because I’m always expecting something worse.”

“It’s not like Marcos Jr. would be starting from scratch. The administration of his predecessor, President Rodrigo Duterte, relentlessly attacked independent and critical media. The Philippine Daily Inquirer is financially weaker. Rappler faced several court charges. ABS-CBN is gone from free TV.” [“Filipino journalists find selves at crossroads after Marcos Jr. victory,” Xave Gregorio, Philstar.com, 17th Jun 2022] 

Are we “tap-dancing like mad” to justify our fate?

Gising bayan!

Why we can’t forward-think

Or why is “innovation” foreign to us? More fundamentally, why can’t we wrap our heads around “competitiveness”?

On the other hand, we in the chattering classes believe we are doing Juan de la Cruz a favor by raising a dire need, poverty – for all to appreciate. And we get psychic “income,” a sense of purpose and fulfillment, in our efforts.

And in the process, we haven’t recognized the barrier posed by cognitive development – or underdevelopment.

But that is not surprising given our lack of development experience.

And that even understates the challenge. But then again, cognitive impairment explains why the ability to connect the dots is not universal. Otherwise, Steve Jobs would not be a genius per the body of knowledge advanced by the folks at Yale.

For example, take democracy. Why is America fumbling like an amateur despite being the epitome of democracy and the free market?

And it comes down to the basic human need for survival, as in physiological “needs.”

In other words, even Americans – human as they are – struggle to move beyond self or parochial or tribal bias and into the community, as in the common good. And it explains the greed at the base of the “2008 Great Recession.”

America is supposed to be the great experiment in “the pursuit of life, liberty, and happiness.” And that presupposes that the common good is supreme.

If we circle back and connect the dots, what do we see? The imperative to forward-think.

And to forward-think is beyond foresight. And why “innovation” and “competitiveness” are not a walk in the park.

And neuroscience explains why. And why Daniel Kahneman, a psychologist, won the Nobel Prize in Economics in 2002.

In other words, our “knee jerk” is fraught with peril, including shortsightedness, and why we must learn to switch from an “automatic” to a “conscious” mode of thinking.

Why have our efforts to prioritize “poverty” and “jobs” failed consistently?

Should we stop and ponder? Why do we fall into the trap of “insanity” like clockwork — yet remain oblivious?

Recall “learned helplessness” — and why the blog never tires of raising the folly of comprehensive agrarian reform, the OFW phenomenon, and our celebration of the BPO industry over industrialization, among others.

Even more fundamentally, we can’t imagine defining our challenge as replicating the success of Vietnam in attracting Samsung and Apple to make it the latest Asian Tiger.

And so we launched Arangkada, developed scores of road maps – and even attained the ideal 6%-7% GDP growth rate over ten years – but still left behind by Vietnam.

Have we ever internalized “creative destruction”?

Because of our caste system, we can’t fathom that “change” rather than “stability” is the norm. Why? We are a subset of this “universe” in constant motion and expansion.

Yet, we, wittingly or not, want to preserve our rank and its privileges.

We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Our instincts explain why we can’t find our place in the sun. It is not about embracing a colonial mentality but internalizing the distinctions between freedom and autocracy.

The universe is not about autocracy – and why the blog often discusses the photosynthesis phenomenon.

Our tendency to celebrate autocracy – think Marcos and Duterte – reveal our backwardness. Why did the world applaud Harry for bolting out of royalty? Or why does Putin recall Peter the Great? His backwardness ignores the Bolshevik revolution, for example.

Let's get back to cognitive development. Why can't we determine why our neighbors left us in the dust one after the other?

We rely on our academic laurels despite the embarrassment of our underdevelopment.

Experience is the best teacher. And why the blog frequently highlights the effort of Fortune 500 companies to address the shortcomings of American higher education.

For example, the experience would have taught us forward-thinking to distinguish the “vital few” from the “trivial many” as well as “drivers” from “enablers.”

But then again, our value of hierarchy and paternalism robs us of the opportunity to embrace community and experience a sense of purpose and meaning.

Recall the 3Cs of the hardy mindset: (1) Commitment, as in the sense of purpose and meaning, (2) Challenge, that “change” rather than “stability” is the norm; and (3) Control, i.e., we can’t problem-solve because our caste system taught us that we could control others when we only have control over ourselves. And that reinforces the reality imposed by this universe, i.e., change and not stability.

Over the past dozen years, the blog risked modesty by relating my private sector experiences – in global competition and mentoring my Eastern European friends.

Recall how my 200-year-old former MNC-company demonstrated the opposite of rank and privileges by allowing me to change its planning and budgeting model, buy technology from the outside, and lead investment efforts in China and India, among others.

On the other hand, my Eastern European friends had to accept that despite my background, I would not prescribe the free market rules but instead share relevant principles that they would then encounter in the real world.

Why? They had to learn to forward-think, distinguish the “vital few” from the “trivial many” and “drivers” from “enablers.”

Why is innovation foreign to us? Why can’t we wrap our heads around “competitiveness”?

Why have our efforts to prioritize “poverty” and “jobs” failed consistently?

Gising bayan!

Can Juan de la Cruz ever learn to challenge our worldview?

Sadly, the Philippine elite and chattering classes – wittingly or not – have an ironclad hold on our psyche.

Consider: “The “high performing Asian economies” (HPAEs) that pulled off the so-called “East Asian Miracle” in the 1980s and 1990s, documented by the World Bank in a book with the same title, had one thing in common: they pursued and attained very rapid export growth.” [“Doing a Vietnam,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 31st May 2022]

And we are not one of them. The reference book came out in 1993. And almost three decades later, this is what we read in the local media:

“A game-changer and pace-setter, this is the single most significant investment by any company in the Philippines. No private enterprise has had a more pervasive impact on the life and work of Filipinos than San Miguel Corporation.

“SMC produces public goods at a scale, intensity and costs never undertaken before by any other corporation." ["Megaprojects," Tony Lopez, Virtual Reality, manilastandard.net, 8th Jun 2022]

What are we missing?

“We lack grounded, levelheaded, future-oriented leaders. And like it or not, that means we need a more middle-aged politics and culture.” [“Why Are We Still Governed by Baby Boomers and the Remarkably Old (?), Yuval Levin, The New York Times, 3rd Jun 2022]

“We should wish them many more healthy years and be grateful for their long service. But we should also recognize the costs of their grip on American self-government and the country's self-conception.

“It’s often said that Americans now lack a unifying narrative. But maybe we have such a narrative, only it's organized around the life arc of the older baby boomers, and it just isn't serving us well anymore.”

What to do?

“An export breakout exemplified by the HPAEs would be vital in getting out of this trap. That is why the Philippine Export Development Plan (PEDP) 2023-2027, now spearheaded by the DTI, must receive far wider attention and commitment than all past PEDPs crafted since the enactment of the Export Development Act (Republic Act No. 7844) in 1994.

“People now like to say that an “all-of-government” effort is a must on this-or-that initiative; for the PEDP, an “all-of-nation” push is what the country needs. That is because achieving export expansion entails far more than what the DTI does. The PEDP should not be merely a DTI plan, for it is a plan that requires unison among all the moving parts—including exchange rate policy, infrastructure development, agricultural development strategy, human resource development, and fiscal and monetary policies, among others.

“Vietnam, it seems, has conducted the complex symphony orchestra better than everyone else has. Can our sterling new economic team manage to do a Vietnam in a country where unity, solidarity, and teamwork have traditionally been in deficit?” [Habito, op. cit.]

Those familiar with the blog may recall that in earlier posts, I raised the challenge to Messrs. Ang and Dominguez to lead the effort of replicating the success of Vietnam in attracting Samsung – and more recently, Apple – and making Vietnam the latest Asian Tiger.

Let’s hear it one more time, with feelings: “We lack grounded, levelheaded, future-oriented leaders.”

And from a prior post, “To be “first-world” must be the outcome that we seek – so that we can (a) learn to forward-think, (b) distinguish the “vital few” from the “trivial many," and (c) “drivers” from “enablers.” That presupposes learning to move across the “binary” to “relative” thinking continuum.

If Mr. Ang alone cannot deliver the future of Juan de la Cruz, so does BBM!

“An “all-of-nation” push is what the country needs.” [Habito, op. cit.]

In other words, if we must set an urgent direction for the country, it is to put “industrialization” front and center.

“Beg for Western money and technology” is not new. It was how our neighbors did it.

We cannot keep to our caste system, to 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.

The blog never tires raising the distinctions between a “fixed mindset” and a “growth mindset.” [“Mindset: The new psychology of success,” Carol Dweck]

“Success is about being your best self, not about being better than others; failure is an opportunity, not a condemnation; effort is the key to success. But we can’t put this into practice because of our basic mindset — the belief in fixed traits. It tells us something entirely different: success is about being more gifted than others, failure does measure you, and effort is for those who can’t make it on talent.”

In other words, we in the Philippine elite are more gifted than Juan de la Cruz; we are not the ones that must exert effort, but Juan de la Cruz.

Consider: “The numbers are indeed glaring: over the last five years, we averaged only $70 billion a year in merchandise exports, while Indonesia earned $182, Thailand $246, Malaysia $248, Vietnam $268, and Singapore $401 billion. We’re not even anywhere near half of what Indonesia made, the closest neighbor we trail.

“The new government simply must give focused and determined attention to this abysmal export performance, as in it lies the key to solving the major perennial challenges our economy keeps facing, namely: (1) lack of quality jobs, (2) low incomes and high levels of poverty, and (3) higher prices, especially of food, leading to wide food insecurity and malnutrition among our poor—in short, the basics of presyo, trabaho, and kita.” [Habito, op. cit.]

I read the book quoted by Ciel Habito, The East Asian Miracle. And I understand why we struggle to make heads or tails figuring out how our neighbors did it. For example, we proudly developed scores of industry road maps, yet we aren’t any closer to an industrial miracle.

The good news is that countless countries and economies failed to comprehend it too. Why? Because higher education – as the world knows it – stands on logical yet linear and incremental thinking.

That’s why the blog keeps raising Edward de Bono’s treatise on lateral or creative thinking.

In other words, the world recognizes the challenge of the 21st century and hence the skills humankind must learn to navigate it. They are the 4 Cs to 21st-century skills: (1) Critical thinking, (2) Creative thinking, (3) Collaboration, and (4) Communication.

We in the Philippine elite epitomize the “fixed mindset.” We in the chattering classes have written about the 4Cs, yet internalizing information is something else. And it isn’t surprising given our caste system.

“Success is about being your best self, not about being better than others; failure is an opportunity, not a condemnation; effort is the key to success. But we can’t put this into practice because of our basic mindset — the belief in fixed traits. It tells us something entirely different: success is about being more gifted than others, failure does measure you, and effort is for those who can’t make it on talent.”

In other words, we in the Philippine elite are more gifted than Juan de la Cruz; we are not the ones that must exert effort, but Juan de la Cruz.

Gising bayan!

Why we are in deep doo-doo

The post is a rehash from December 2021, “We are in deep doo-doo.”

Consider what we read in our media, counting from PNoy to Du-30 and BBM.

“We can go into denial mode, but that can mean we shall keep missing the turn at every fork.

“In other words, a vicious circle does not happen by accident. It is the convergence of various miscarries.

“We’ve been kicking up a perfect storm.

“That's why the postings would often reference the blog’s genesis.

“In the 80s, my old MNC-company chose me to be the regional manager over colleagues, including Australians and Canadians. We were supposed to be the most sophisticated nation in the region. And I owe it to that impression – by the outside world, especially the Americans – that we would be the next “big thing.”

“But what happened?

“Let’s hold it right there.

“How did we become the regional laggard when we were supposed to be the next “big thing”?

“We can only point to 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.

“That is one heck of a barrier: We ceded the region to our neighbors and then to the world and became the supplier of low-skilled labor. The biggest insult I hear from my introduction, especially in Europe, is that I am a New Yorker, not a Filipino.

“On the other hand, we celebrated the OFW phenomenon.

“And recall that several years ago, at the Ateneo and UP economic briefings, I questioned the manufacturing uptick our economists and “economic managers” were celebrating. We are a consumption-service economy. That is our reality, irrespective of what the manufacturing numbers were saying. It’s called context. And no financial mumbo jumbo would suffice.

“And our instincts, again, get in the way. “Context” deserts us because of our crab mentality. It comes from Pareto, whose principle influenced economics. In other words, we can’t distinguish between the “vital few” and the “trivial many.” Or between “drivers” and “enablers.”

“Then consider: If we can’t even admit to ourselves that we blew it, where would we get the courage to change, to reinvent Juan de la Cruz?”

Let’s hear from Ciel Habito: “Our economy remains trapped in the vicious cycle of a limited internal market constraining the economy’s growth, leading to low average income and extreme poverty, bringing us back to the little internal market.

“The new government simply must give focused and determined attention to this abysmal export performance, as in it lies the key to solving the major perennial challenges our economy keeps facing, namely: (1) lack of quality jobs, (2) low incomes and high levels of poverty, and (3) higher prices, especially of food, leading to wide food insecurity and malnutrition among our poor—in short, the basics of “presyo, trabaho, and kita.” [“Doing a Vietnam,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 31st May 2022]

The good news is that we’re not alone. For example, governments and economies, including America, are yet to leverage neuroscience.

In other words, people think “activity” – or procedure, if not system – instead of “outcome.”

Unsurprisingly, Daniel Kahneman, a psychologist, won the Nobel Prize in 2002 for his work, “Thinking, fast and slow.”

“Its main thesis is that of a dichotomy between two modes of thought: “System 1” is fast, instinctive, and emotional; “System 2” is slower, more deliberative, and more logical. The book delineates rational and non-rational motivations or triggers associated with each type of thinking process and how they complement each other.” [Wikipedia]

Every time we elect a new president, we wax poetic and take it for granted that finally, we shall triumph.

We’ve been the regional laggard for the longest time. What are we thinking?

And we can ask it from the Americans too.

Consider: “Why Are We Still Governed by Baby Boomers and the Remarkably Old (?), Yuval Levin, The New York Times, 3rd Jun 2022.

“We lack grounded, levelheaded, future-oriented leaders. And like it or not, that means we need a more middle-aged politics and culture.

“Many American institutions seem locked in battles between well-meaning but increasingly uncomprehending leaders in their 70s. And a rising generation, in their 20s and early 30s, bent on culture war and politicization and unconcerned with institutional responsibilities. Our politics has the same problem — simultaneously overflowing with the vices of the young and the old and so often falling into debates between people who behave as though the world will end tomorrow and those who think it started yesterday. The vacuum of middle-aged leadership is palpable.

“There are politicians of that middle generation — i.e., members of Congress and governors, even our vice president. Yet they have not broken through as defining cultural figures and political forces. They have not made this moment their own or found a way to loosen the grip of the postwar generation on the nation’s political imagination.

“A middle-aged mentality traditionally has its vices. It can lack urgency, and at its worst, it can be maddeningly immune to both hope and fear, which are essential spurs to action. But if our lot is always to choose among vices, wouldn’t the temperate sins of midlife serve us well just now?

“Generational analyses are unavoidably sweeping and crude and no one is simply a product of a birth cohort. But in our frenzied era, it’s worth looking for potential sources of stability and considering what we have too much of in America and should want to demolish and be rid of and what we do not have enough of and should want to build up."

We’ve been the regional laggard for the longest time. What are we thinking?

Consider: “Being the best performer in ASEAN and East Asia, the Philippine economy’s impressive 8.3% Q1 GDP growth has brought the economy to pre-pandemic levels (Q1 of 2019 and 2021) and has likely kindled greater optimism among firms.” [“Economic reopening seen bolstering growth into Q2 — FMIC, UA&P,” BusinessWorld, 1st Jun 2022]

In other words, our economic briefings – past and present – have one thing in common: The glass is half-full.

On the other hand, this is what Americans read: “A middle-aged mentality traditionally has its vices. It can lack urgency, and at its worst, it can be maddeningly immune to both hope and fear, which are essential spurs to action.”

Will that explain why we have been in a downward spiral compared to our neighbors?

“Liberal governance has developed a puzzling preference for legitimating government action through processes rather than outcomes.” [“What America Needs Is a Liberalism That Builds,” Ezra Klein, The New York Times, 29th May 2022]

Consider: “Balisacan seeks to balance infra with social spending,” BusinessWorld, 1st Jun 2022.

“INCOMING Socioeconomic Planning Secretary Arsenio M. Balisacan said that he will seek a review of “Build, Build, Build” infrastructure spending and seek to strike a balance between erecting public works and alleviating poverty.”

But haven’t we prioritized poverty alleviation all this time?

Even The Economist gives us credit for the effort: “Since 2008, the Philippines has run one of the world’s biggest and most successful welfare schemes: the Pantawid Pamilyang Pilipino Program, or the 4Ps. It provides cash grants to poor households that comply with certain conditions, such as sending their children to school and attending health checks. The program covers over 4m households or about 20% of the population. By 2015 it had helped lift 1.3m Filipinos out of poverty, a threshold the government set at around 12,000 pesos ($230) per month for a family of five in 2021. School enrolment for children in 4Ps households is near-universal.” [“Rodrigo Duterte’s drug war pushed poor families deeper into penury,” The Economist, 2nd Jun 2022]

But why can’t we put poverty in the rearview mirror like our neighbors?

“The new government must give focused and determined attention to this abysmal export performance; it holds the key to solving our economy's major perennial challenges.” [Habito, op. cit.]

And here’s what the economic managers have to say: (1) “Diokno touts ‘promising economy’ to investors,” BusinessWorld, 1st Jun 2022. (2) “Incoming Trade Secretary Pascual focused on expanding MSME markets,” BusinessWorld, 1st Jun 2022.

“Mr. Diokno said the Philippines is currently in a demographic sweet spot, with a young cohort entering the workforce.

“The country has a younger population compared with the rest of the world. It has a rich talent pool, having an annual average of 750,000 graduates across disciplines, forming a deep workforce pool of 45 million (who are) well-educated and industrious. In an aging world, having a population with a median age of 25.7 is an asset,” Mr. Diokno said.

“Moreover, the Philippines’ location is favorable for critical markets, situated at the heart of major trading routes.

“At the height of the pandemic, we didn’t sit idly by and wait for the virus to recede. Instead, we pushed for game-changing reforms. We continued to invest in physical infrastructure and human capital. That will improve the Philippines’ competitiveness, boost its productive capacity, and make it an even more attractive investment destination.”

Let’s hear it: “Liberal governance has developed a puzzling preference for legitimating government action through processes rather than outcomes.” [Klein, op. cit.]

“We need to focus on MSMEs. Those small businesses that closed due to the pandemic must find a way to start their businesses again,” Mr. Pascual, the incoming Trade Secretary, said.

“We will (also) help them have the capability to participate in the bigger market through e-commerce. So, we also need the capacity for digital transactions, accounting, and record-keeping, aided by digital technology.

“Mr. Pascual said he plans to prioritize improving the mix of job skills available to serve better the information technology and business process outsourcing (IT-BPO) industry.

“The industry is one of the country’s top earners, but it stands to improve to fulfill its potential.”

Question: Aren’t these the same initiatives that the economic managers during the PNoy administration touted? Moreover, did we not create scores of industry road maps to ensure their execution? But why are we back to square one?

Our bias to paint a positive picture of the Philippine economy reinforces our caste system and undermines our “mantra” of “inclusion.”

We are replicating the US monetary and fiscal blueprint. They have attained economic equilibrium while we have not; we are a developing economy driven by the OFW phenomenon and the BPO industry – neglecting to pursue industrialization for decades.

And that shortsightedness explains why we did not proactively pursue infrastructure development – while proud of population growth and the resulting consumption economy. Today, our urban areas are more unlivable than Delhi, for instance.

Of course, the Americans messed up their economy too when the financial sector went overboard – as in, greed – by creating the subprime lending programs, e.g., derivatives.

What to do?

Our instincts gave us a contrary worldview to our neighbors and the Nordic countries.

We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Recall that Lee, Mahathir, and Deng, for example, focused on industrialization – begging for Western money and technology. And so did the Nordic countries.

And why the blog has the banner, “Philippine Economy: Reinventing ourselves.” That is beyond infrastructure development and poverty alleviation. And beyond the OFW phenomenon and the BPO industry.

In other words, we have to look beyond “activity” – or system or procedure – and think “outcome.”

Are we surprised why Lee proudly spoke to Singapore about moving from third- to first-world?

To be “first-world” must be the outcome that we seek – so that we can (a) learn to forward-think, (b) distinguish the “vital few” from the “trivial many," and (c) “drivers” from “enablers.”

That presupposes learning to move across the “binary” to “relative” thinking continuum.

Let’s hold it right there.

Is the above challenge beyond us, given our instincts? We take it for granted that rank has its privileges. For example, how can we internalize the distinctions between a growth mindset and a fixed mindset? Is that why our neighbors – if not the world – have left us behind?

If the US has embarrassed itself with its politics – and undermined its standing as the epitome of democracy and the free market – it is because polarization feeds on binary thinking, as in the extremes of “right” and “left” wings.

We can go into denial mode, but that can mean we shall keep missing the turn at every fork.

In other words, a vicious circle does not happen by accident. It is the convergence of various miscarries.

We’ve been kicking up a perfect storm.

Gising bayan!