Friday, June 24, 2022

“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!

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