Can we problem-solve?

Two articles can test if indeed we can problem-solve: (1) “Learning from our neighbors,” Richard Heydarian, Philippine Daily Inquirer; (2) “Eight Times Opinion columnists revisit their incorrect predictions and bad advice,” The New York Times.

The Times explains the article: “It’s not easy to admit you got something wrong. But here at Times Opinion, we still hold on to the idea that good-faith intellectual debate is possible, that we should all be able to rethink our positions on issues, from the most serious to the most trivial. It’s not necessarily easy for Times Opinion columnists to engage in public self-reproach, but we hope that in doing so, they can be models of how valuable it can be to admit when you get things wrong.”

And from our very own Richard Heydarian: “Three key leadership lessons I discussed with folks in Seoul. Primarily, we need, in the words of a Korean business leader, “clean and forward-looking” leadership. As Mahathir told us during a conversation on the sidelines of the conference in Seoul, incorrigibly corrupt leaders can end up poisoning society by spawning a whole culture of corruption, beginning with their very election to office.

“The strongman Park Chung-hee, whose brutal rule coincided with our own Marcos, was not only far less corrupt than many of his counterparts. He also helped build modern South Korea by effectively bullying the country’s oligarchs into becoming global industrial giants.

“Instead of building his cronies and drowning in shameless decadence, Park coaxed and cajoled the landed elite into shifting into risky yet strategically essential ventures, which benefited from the state’s initiative-taking trade and industrial policy.

“Mind you: Today’s largest shipbuilders and chip-makers in the world used to produce toothpaste and garments in impoverished South Korea.

“Second, we need leaders who invest in the country’s human capital. Our hosts didn’t forget to remind us of the contributions of Korean leaders, including the American-educated Syngman Rhee, to solid educational institutions. Korea’s public-school teachers, for instance, are among the best trained and best-paid civil servants worldwide.

“Lastly, we need truly dynamic leaders. For instance, Mahathir shared how many of his best policies, which contributed to the industrialization of Malaysia, were “plagiarized” from the best practices he observed in other countries.

“Moreover, Korean leaders tend to be anticipatory, constantly assessing challenges and opportunities in the global economy and regional geopolitics.

“This may partly explain why South Korea’s leaders tend to age significantly when in office, given the pressure of performance from a demanding electorate, which has little tolerance for incompetence and corruption.

“Interestingly, other countries are also learning from the Philippines, but not exactly for the best reasons. Over the news, I heard Sri Lankan analysts discuss the potential return of the Rajapaksa brothers, who recently fled to exile following a people power revolt in Colombo, after noting the return of the Philippines’ most notorious dynasty to Malacañang.”

Can we pause – and ponder?

Why can’t we move this nation forward? Can we problem-solve?

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.

“Interestingly, other countries are also learning from the Philippines, but not exactly for the best reasons. Over the news, I heard Sri Lankan analysts discuss the potential return of the Rajapaksa brothers, who recently fled to exile following a people power revolt in Colombo, after noting the return of the Philippines’ most notorious dynasty to Malacañang.”

News item: “Banks move to declare Davao’s Dennis Uy in default after missed Clark lease payments.” [Philippine Daily Inquirer, 23rd Jul 2022]

“Banco de Oro Universal Bank, the country’s largest private financial institution, moved to foreclose on the loan collateral of Dennis Uy of Davao late Friday. That’s the opening salvo in a series of moves that — depending on the ability of the controversial businessman to settle his obligations in four days — could lead to the largest corporate default in Philippine history.

“The Inquirer learned that BDO, which has provided the bulk of the financial muscle for Uy’s acquisition spree during the Duterte administration, sent a foreclosure notice to the businessman’s flagship holding firm, Udenna Corp., in a bid to force him to the negotiating table and agree to an orderly settlement.”

Why can’t we move this nation forward? Can we problem-solve?

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.

Between the election of BBM and the fate of Dennis Uy, do we see how our culture of impunity plays out?

And the onus is on us, the Philippine elite and chattering classes, to step up to our cognition challenge?

But we can’t respond to the challenge because unwittingly, per Daniel Kahneman, a psychologist and Nobel prize winner in economics in 2002, we are stuck in System 1 – intuitive yet biased “fast” – thinking that we can’t move up to System 2 – conscious or “slow” thinking.

And it applies to all people, including experts in their respective fields. And in our case, such expertise is our license to pull rank.

For example, our experts and cause-oriented groups can’t help but pander to populist sentiments and, in the process, even overextend our bias by conflating other nations’ challenges.

We don’t have to be experts to recognize that growth and development go in stages. That’s why we give adolescents elbow room to grow. On the other hand, we like to conflate our fate as a nation with that of more developed countries.

We are an underdeveloped economy and should be looking at our neighbors. See above; learning from our neighbors – because they successfully traversed the road from poverty to prosperity in recent times. And are held in awe by the rest of the world as economic miracles. Specifically, they put poverty in the rearview mirror.

On the other hand, we like to look at the West and raise their shortcomings, especially poverty and inequality.

We have a structural problem that we can’t grasp that we keep tripping ourselves, as we’re a disaster waiting to happen.

For example, while we pander to populist sentiments, we also worry about our debt ratio. Why? We can’t see beyond the paradigm of prudent fiscal policies. But that is just one data point concerning our economic managers.

Now that the debt ratio is over 60% post the pandemic stimulus, we are again shouting “fire.” The over $50 billion Juan de la Cruz brings in via remittances and call centers brought our obligations to less than 50%. Without the said economic driver, no tax-rationalization efforts would even be in the cards.

In the same manner that we justify the 4Ps, the pandemic stimulus was no different in putting Juan de la Cruz’s body and soul together. We better get off our high horse.

One more time with feelings: We cannot take credit away from Juan de la Cruz and turn around to patronize him. That is blatant “adding insult to injury,” another expression of our culture of impunity.

Have we forgotten about “self-government”? We brought upon ourselves that we are the laughingstock of the region.

Let’s get back to the debt ratio. One data point is a fallacy, as in linear thinking.

Consider: Singapore’s debt ratio is over 100% against our 60+% yet has a triple A credit rating. Moreover, Singapore’s GDP per capita is $93,400 against our $8,000. And their exports are $600 billion against our $80 billion. And their forex reserves are $280 billion to our $82 billion.

Why are we between “a rock and a hard place”?

Why? 

As Kahneman points out, the availability of the “rule of thumb” – or heuristic – helps explain how some issues are highly salient in the public’s mind than others. Matters retrieved easily from memory tend to be of relative importance to the public. And this is determined by the extent of coverage in the media.”

Can we pause – and ponder?

See above; we need (a) clean and forward-looking leadership, (b) invest in the country’s human capital, and (c) genuinely dynamic leaders.

Recall this quote from an earlier posting: “Leadership” is taking people from where there are to where they have never been before.

“That’s why populism per se is not the answer to the challenge of development. Sadly, because of “Pinoy compassion,” we constantly fall into its trap and why the world has left us behind.

“We know the jeepney is an excellent example of Filipino ingenuity. Unfortunately, if we had the leadership today, we would have an efficient public transportation system. Or, if we had one, we would have had a blueprint to bring us from the comprehensive agrarian reform program to global competitiveness in agribusiness.

“Recall how Lee Kuan Yew spoke to Singapore about moving from third-world to first-world. In other words, he defined the problem faced by Singapore not by the symptom of poverty but by the recognition that it was a third-world economy and nation.

“Beg for Western money and technology said Lee and Mahathir to Deng.”

See above: “Mahathir shared how many of his best policies, which contributed to the industrialization of Malaysia, were “plagiarized” from the best practices he observed in other countries.”

Here are more quotes from prior postings: “Industrialize. Industrialize. Industrialize.

“It was amusing to read so many misinformed opinions from otherwise intelligent observers regarding President Junior’s veto of the law providing “perks” for the Bulacan airport economic zone. They thought the airport project, which had already broken ground, was a goner.

“That’s because Ramon Ang of San Miguel is an enigma to policy wonks and business rivals. He doesn’t make business decisions the way they do. He takes risks others won’t dream of taking. It’s partly jealousy too. They can’t accept that the upstart Tondo boy, who has not taken an economics course and with no MBA from some fancy foreign business school, is doing better than they are.” [“Airport economic zone,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 8th Jul 2022]

Consider: “THE NEW growth targets set by President Ferdinand R. Marcos, Jr.’s economic team are achievable if the government will continue to reopen the economy, address its debt burden, and pursue aggressive infrastructure spending.

“The Development Budget Coordination Committee (DBCC) on Friday approved the medium-term macroeconomic assumptions and fiscal program for 2022 to 2028. The DBCC set the gross domestic product (GDP) growth target at 6.5-7.5% this year, lower than the 7-8% given by the previous administration. However, it expects a 6.5-8% growth from 2023 to 2028, higher than the previous administration’s assumption of 6-7% from 2023 to 2025.” [“Marcos economic team’s targets achievable — experts,” BusinessWorld, 11th Jul 2022.]

“That is what the blog calls logical yet linear and incremental thinking. And it comes from a lack of experience in development to match our neighbors.

“Let’s bring it up one more time: “The economic development of the Pearl River Delta Economic Zone took off explosively. The region’s GDP grew from just over US$8 billion in 1980 to more than US$89 billion in 2000 and US$221.2 billion in 2005. During that period, the average real GDP growth rate in the Pearl River Delta Economic Zone exceeded 16 percent, well above the People’s Republic of China’s national figure of 9.8 percent.

“Since the onset of China’s reform program, the Pearl River Delta Economic Zone has been the fastest-growing portion of the fastest-growing province in the fastest-growing large economy in the world. In the process, a region that was once largely agricultural has emerged as a manufacturing platform of global importance. It is a world leader in producing electronic goods, electrical and electronic components, watches and clocks, toys, garments and textiles, plastic products, and various other goods.” [Wikipedia]

“Why is that over our heads? Answer: Our caste system – expressed in our value of hierarchy and paternalism – consigns us to mediocrity.”

“Our caste system explains why we can’t get beyond System 1 thinking above.”

Those familiar with the blog may recall how often it speaks to “forward and lateral and creative thinking” and learn to overcome “logical yet linear and incremental thinking.” And the latter comes from our lack of experience in development.

Unsurprisingly, we can’t grasp the simple model the blog never fails to discuss, the GPS model: Where are we; Where do we want to be; How do we get there.

“Think of the (1) jeepney, (2) comprehensive agrarian reform program, (3) 4Ps, (4) OFW phenomenon, (5) call centers, (6) party-list system, and (7) Mandanas law, among others.

“They respond to the “here and now.” Sadly, this universe is in constant motion and expansion. It explains why the world has left us behind. For example, this century demands innovation and global competitiveness.”

Can we internalize this challenge in the Philippine elite and chattering classes? “Eight Times Opinion columnists revisit their incorrect predictions and bad advice – and reflect on why they changed their minds,” The New York Times, 22nd Jul 2022.

Can we problem-solve?

Gising bayan!

We can’t be too close to the trees that we miss the forest!

“Pinoy compassion” is in our DNA. But that’s why there is “leadership.”

If we think of a successful leader, we know that person would be “two steps” ahead of everyone else.

Leadership is looking at the trees but not missing the forest. Or, more profoundly, “leadership” is taking people from where there are to where they have never been before.

That’s why populism per se is not the answer to the challenge of development. Sadly, because of “Pinoy compassion,” we constantly fall into its trap and why the world has left us behind.

We know the jeepney is an excellent example that we call Filipino ingenuity. Unfortunately, if we had the leadership today, we would have an efficient public transportation system. Or, if we had one, we would have had a blueprint to bring us from the comprehensive agrarian reform program to global competitiveness in agribusiness.

Aren’t we yet horrified that we continue to pander to populist sentiments despite being the regional laggard?

And we in the Philippine elite and chattering classes have the onus of taking the leadership mantel?

What to do?

Those familiar with the blog may recall that it has spoken to Daniel Kahneman’s book, Thinking, Fast and Slow.

It may not interest many, yet the body of knowledge produced by Kahneman and Amos Tversky appeals across disciplines. It’s from “years of studying and documenting biases of intuitive thinking in various tasks – assigning probabilities to events, forecasting the future, assessing hypotheses, and estimating frequencies.

“Kahneman and Tversky presented their findings in Science magazine, a publication read by scholars in many disciplines. They documented systemic errors in the thinking of “normal” people. They traced these errors to the machinery of cognition rather than the corruption of thought by emotion.

“Their work is one of the most highly cited works in social science (more than three hundred scholarly articles in 2010.) And scholars in other disciplines found it useful, and the ideas of heuristic [translates to “roughly” or “rule of thumb”] and biases have been used productively in many fields, including medical diagnosis, legal judgment, intelligence analysis, philosophy, finance, statistics, and military strategy.

“For example, policy students noted that the availability of the “rule of thumb” – or heuristic – helps explain how some issues are highly salient in the public’s mind than others. Matters retrieved easily from memory tend to be of relative importance to the public. And this is determined by the extent of coverage in the media.

“When confronted with a problem, the machinery of intuitive thought does the best it can. If the individual has relevant expertise, she will recognize the situation, and the intuitive solution that comes to her mind is likely to be correct.

“When the question is complex, and a professional solution is not available, intuition still has a shot: an answer may come to mind quickly – but it is not an answer to the original question. That is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.

“Many psychologists have explored the distinction between fast and slow thinking. Kahneman describes the mental life by the metaphor of two agents, System 1 and System 2, producing fast and slow thinking.”

Let’s hold it right there.

Recall how Lee Kuan Yew spoke to Singapore about moving from third-world to first-world. In other words, he defined the problem faced by Singapore not by the symptom of poverty but by the recognition that it was a third-world economy and nation.

Let’s try to “think slow.” Let’s not jump straightway to poverty and jobs as the problem and the solution. Or, for that matter, our neighbors, including the latest Asian Tiger, Vietnam, did not fall into the trap of “thinking fast,” as we did – and sadly, are still doing.

They begged for Western money and technology to rapidly pursue industrialization. Why? Doesn’t the world call wealthy nations the most industrialized or developed economies?

Here’s a quote from an earlier posting: “In other words, forward-thinking brings about lateral and creative thinking beyond logical yet linear and incremental thinking.

“Think of the (1) jeepney, (2) comprehensive agrarian reform program, (3) 4Ps, (4) OFW phenomenon, (5) call centers, (6) party-list system, and (7) Mandanas law, among others.

“They respond to the “here and now.” Sadly, this universe is in constant motion and expansion. It explains why the world has left us behind. For example, this century demands innovation and global competitiveness.

“Industrialize. Industrialize. Industrialize.

“It was amusing to read so many misinformed opinions from otherwise intelligent observers regarding President Junior’s veto of the law providing “perks” for the Bulacan airport economic zone. They thought the airport project, which had already broken ground, was a goner.

“That’s because Ramon Ang of San Miguel is an enigma to policy wonks and business rivals. He doesn’t make business decisions the way they do. He takes risks others won’t dream of taking. It’s partly jealousy too. They can’t accept that the upstart Tondo boy, who has not taken an economics course and with no MBA from some fancy foreign business school, is doing better than they are.” [“Airport economic zone,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 8th Jul 2022]

Consider: “THE NEW growth targets set by President Ferdinand R. Marcos, Jr.’s economic team are achievable if the government will continue to reopen the economy, address its debt burden, and pursue aggressive infrastructure spending.

“The Development Budget Coordination Committee (DBCC) on Friday approved the medium-term macroeconomic assumptions and fiscal program for 2022 to 2028. The DBCC set the gross domestic product (GDP) growth target at 6.5-7.5% this year, lower than the 7-8% given by the previous administration. However, it expects a 6.5-8% growth from 2023 to 2028, higher than the previous administration’s assumption of 6-7% from 2023 to 2025.” [“Marcos economic team’s targets achievable — experts,” BusinessWorld, 11th Jul 2022.]

“That is what the blog calls logical yet linear and incremental thinking. And it comes from a lack of experience in development to match our neighbors.

“Let’s bring it up one more time: “The economic development of the Pearl River Delta Economic Zone took off explosively. The region’s GDP grew from just over US$8 billion in 1980 to more than US$89 billion in 2000 and US$221.2 billion in 2005. During that period, the average real GDP growth rate in the Pearl River Delta Economic Zone exceeded 16 percent, well above the People’s Republic of China’s national figure of 9.8 percent.

“Since the onset of China’s reform program, the Pearl River Delta Economic Zone has been the fastest-growing portion of the fastest-growing province in the fastest-growing large economy in the world. In the process, a region that was once largely agricultural has emerged as a manufacturing platform of global importance. It is a world leader in producing electronic goods, electrical and electronic components, watches and clocks, toys, garments and textiles, plastic products, and various other goods.” [Wikipedia]

“Why is that over our heads? Answer: Our caste system – expressed in our value of hierarchy and paternalism – consigns us to mediocrity.”

In other words, our caste system explains why we can’t get beyond System 1 thinking above.

“Pinoy compassion” is in our DNA. But that’s why there is “leadership.”

If we think of a successful leader, we know that person would be “two steps” ahead of everyone else.

Leadership is looking at the trees but not missing the forest. Or, more profoundly, “leadership” is taking people from where there are to where they have never been before.

And we in the Philippine elite and chattering classes have the onus of taking the leadership mantel?

Gising bayan!

“Our forerunners did their best.”

That’s not an original. Here’s the full quote: “Our forerunners did their best for the times in which they lived. It is time we did ours.” [“What a Reckoning at the Supreme Court Could Look Like,” Ezra Klein, The New York Times, 10th Oct 2022]

“We treat American government’s creaking, cracking structure with a strange mix of awe and fatalism; either we think it is heretical to question, or we’re so pessimistic about the prospect of change that we don’t even bother. But to dive into the history of court reform, as the commission does, is to be reminded that human minds imagined the Supreme Court and made and remade by human hands. We honor the idea of the American experiment, but we have lost the spirit of experimentation that made it work. We did not discover, finally, the ideal structure for the Supreme Court in 1869. Our forerunners did their best for the times in which they lived. It is time we did ours.”

Then consider: “Former House Speaker Paul Ryan said he was ‘sobbing’ as he watched the 6th Jan attack [on] the Capitol. In his new book, “Thank You for Your Servitude: Donald Trump’s Washington and the Price of Submission,” journalist Mark Leibovich said Ryan told him, “I spent my whole adult life in that building. I saw my friends, a lot of cops, some of my old security detail – I’m still friends with a bunch of those guys. It disturbed me, foundationally.”

“In June, Ryan said more House Republicans would have voted to impeach the former president after the attack on the Capitol if they had the “guts” to do so.” [“Paul Ryan was ‘sobbing’ while watching 6th Jan attack on Capitol, the upcoming book says,” Merdie Nzanga, USA TODAY, 11th Jul 2022]

What’s the point? As the blog never tires of raising, freedom, and democracy demands personal responsibility to pursue the common good. And it presupposes that perfection is not of this world. The thought of “perfection” reflects binary or dualistic thinking when the world is in “living color,” not black and white.

It is a dynamic universe – in constant motion and expansion.

And Franciscan theology comes to mind. Recall the Vatican’s battle with the Copernican theory that triggered the Scientific Revolution – the Sun rather than the Earth is at the center of the universe. And the inquisition and condemnation of Galileo Galilei, a suspected heretic who became the “Father of Modern Science.” [Wikipedia]

The controversy stood the test of time and why no pope took the name of Francis until Pope Francis. In other words, it explains why the conservative wing of the Vatican continues to battle. The excellent news is that Franciscan theology stands for and preaches non-binary thinking. Translation: Christ preaches neighborly love and community – as in the common good.

Consider: “We humans are connected to the universe,” “Webb Telescope Reveals a New Vision of an Ancient Universe,” The New York Times, 12th Jul 2022.

“The universe was born in darkness 13.8 billion years ago, and even after the first stars and galaxies blazed into existence a few hundred million years later, these too stayed dark. Their brilliant light, stretched by time and the expanding cosmos, dimmed into the infrared, rendering them — and other clues to our beginnings — inaccessible to every eye and instrument.

“Until now. On Tuesday, the James Webb Space Telescope, the most powerful space observatory yet built, offered a spectacular slide show of our previously invisible nascent cosmos. Fledgling stars are shining out from deep cumulus clouds of interstellar dust—hints of water vapor in the atmosphere of a remote exoplanet. Ancient galaxies carpet the sky like jewels on black velvet.

“Their sum is (a) a new vision of the universe and (b) a view of the universe as it once appeared new.

“That was always out there,” said Jane Rigby, an astrophysicist at NASA’s Goddard Space Flight Center in Greenbelt, Md., and the telescope’s operations manager. “We had to build a telescope to see what was there.”

“The Webb telescope — NASA’s vaunted successor to the Hubble Space Telescope, 30 years and $10 billion in the making — is equipped to access this realm of cosmic history, study the first stars and galaxies, and look for nearer, potentially habitable worlds.

“We’re looking for the first things to come out of the Big Bang. The image of a distant star cluster revealed the presence of still more-distant galaxies spilled across the sky. The light from those galaxies, magnified into visibility by the gravitational field of the “cluster,” originated more than 13 billion years ago.

“To look outward into space is to peer into the past. Light travels at a constant 186,000 miles per second, or close to six trillion miles per year, through the vacuum of space. To observe a star 10 light-years away is to see it as it existed ten years ago when the light left its surface. The farther away a star or galaxy lies, the older it is, making every telescope a kind of time machine.

“Astronomers theorize that the most distant, earliest stars may be unlike the stars we see today. The first stars were composed of pure hydrogen and helium left over from the Big Bang. They could grow far more massive than the sun — and then collapse quickly and violently into supermassive black holes that now populate the centers of most galaxies.

“The most striking image was of the Carina nebula, a vast, swirling cloud of dust that is both a star nursery and home to some of the most luminous and explosive stars in the Milky Way. The nebula resembled a looming, eroded coastal cliff dotted with hundreds of stars that astronomers had never seen before.

“We humans are connected to the universe. We’re of the same stuff in this landscape.”

And Saint Francis saw that much earlier or before humankind invented the Webb telescope. It explains why he understood the oneness of creation, the photosynthesis phenomenon being a great example. And why he is beyond binary or dualistic thinking.

On the other hand, we Filipinos are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

We like to think Asians must come together – as in we went to bed with China – despite its bullying in the WPS. But our confusion is insidious. For example, we can’t recognize that we are undermining freedom and democracy by applauding Duterte’s EJK. Or do we give Putin the benefit of the doubt because the West turned Ukraine into an existential threat to Russia?

Wasn’t it Russia that invaded Georgia? And also Crimea?

China and Russia are autocracies. Are we Filipinos closer to tyranny than democracy – given our value of hierarchy and paternalism?

In other words, in the hierarchy of human needs, those closer to the “basic” or physiological and security and safety needs are predisposed to embrace tyranny? Why? Because democracy presupposes personal responsibility to pursue the common good – a higher level need.

Over the course of the blog’s existence, we have seen three presidents, PNoy, Du30, and BBM. Still, we are perpetual optimists. We wax poetic every time we have new leadership.

Yet, the headlines remain intact: “Marcos Jr.’s big promises to the Philippines face economic reality.”

Why? We have a structural problem that we can’t grasp.

Industrialize. Industrialize. Industrialize.

“It was amusing to read so many misinformed opinions from otherwise intelligent observers regarding President Junior’s veto of the law providing “perks” for the Bulacan airport economic zone. They thought the airport project, which had already broken ground, was a goner.

“That’s because Ramon Ang of San Miguel is an enigma to policy wonks and business rivals. He doesn’t make business decisions the way they do. He takes risks others won’t dream of taking. It’s partly jealousy too. They can’t accept that the upstart Tondo boy, who has not taken an economics course and with no MBA from some fancy foreign business school, is doing better than they are.” [“Airport economic zone,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 8th Jul 2022]

Consider: “THE NEW growth targets set by President Ferdinand R. Marcos, Jr.’s economic team are achievable if the government will continue to reopen the economy, address its debt burden, and pursue aggressive infrastructure spending.

“The Development Budget Coordination Committee (DBCC) on Friday approved the medium-term macroeconomic assumptions and fiscal program for 2022 to 2028. The DBCC set the gross domestic product (GDP) growth target at 6.5-7.5% this year, lower than the 7-8% given by the previous administration. However, it expects a 6.5-8% growth from 2023 to 2028, higher than the previous administration’s assumption of 6-7% from 2023 to 2025.” [“Marcos economic team’s targets achievable — experts,” BusinessWorld, 11th Jul 2022.]

That is what the blog calls logical yet linear and incremental thinking. And it comes from a lack of experience in development to match our neighbors.

Let’s bring it up one more time: “The economic development of the Pearl River Delta Economic Zone took off explosively. The region’s GDP grew from just over US$8 billion in 1980 to more than US$89 billion in 2000 and US$221.2 billion in 2005. During that period, the average real GDP growth rate in the Pearl River Delta Economic Zone exceeded 16 percent, well above the People’s Republic of China’s national figure of 9.8 percent.

“Since the onset of China’s reform program, the Pearl River Delta Economic Zone has been the fastest-growing portion of the fastest-growing province in the fastest-growing large economy in the world. In the process, a region that was once largely agricultural has emerged as a manufacturing platform of global importance. It is a world leader in producing electronic goods, electrical and electronic components, watches and clocks, toys, garments and textiles, plastic products, and various other goods.” [Wikipedia]

Why is that over our heads? Answer: Our caste system – expressed in our value of hierarchy and paternalism – consigns us to mediocrity.

“One source of new investment is the foreign direct investment community. The Duterte government showed little regard for the rule of law by raising the effective corporate income tax for extant PEZA (Philippine Economic Zone Authority) locators from 17% (the equivalent of the 5% gross income tax by Department of Finance calculation) to 25% without adequate compensation. The PEZA investment commitments have been falling ever since.

“Perhaps for potential PEZA locators, a 17% corporate income tax offer for ten years (Vietnam’s offer) would be assuaging.” [“It’s a race between the economy and the debt,” Raul V. Fabella, Introspective, BusinessWorld, 10th Jul 2022]

What to do?

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

Consider: There is “analysis” and “leadership,” yet they are not mutually exclusive — but are two sides of the same coin.

Moreover, the blog often distinguishes the “real world” and the “academic world” or ivory tower. 

Or why beyond “analysis” is “analytics.” Take the “vital few” or Pareto, for example. Has our crab mentality dropped us into the maze of the “trivial many” that execution is our Achilles heel?

In other words, forward-thinking brings about lateral and creative thinking beyond logical yet linear and incremental thinking.

Think of the (1) jeepney, (2) comprehensive agrarian reform program, (3) 4Ps, (4) OFW phenomenon, (5) call centers, (6) party-list system, and (7) Mandanas law, among others.

They respond to the “here and now.” Sadly, this universe is in constant motion and expansion. It explains why the world has left us behind. For example, this century demands innovation and global competitiveness.

Recall that the blog often references my experience as a practitioner and mentor of innovation, that it is beyond R&D – and it is not for innovation’s sake. Innovation must respond to human needs. And as our neighbors demonstrated, nation-building is beyond economics – and why the rest of the world holds them in awe as economic miracles.

Then think of the hierarchy of human needs. Beyond the physiological, security, and safety needs are “community” or social needs. Why have our neighbors put poverty in the rearview mirror?

What’s the point? As the blog never tires of raising, freedom, and democracy demands personal responsibility to pursue the common good. And it presupposes that perfection is not of this world. The thought of “perfection” reflects binary or dualistic thinking when the world is in “living color,” not black and white.

It is a dynamic universe – in constant motion and expansion.

Why are we accepting for the economy to grow by 6.5-8% annually from 2023 to 2028? Indeed, that’s better than 7%.

Consider: The average real GDP growth rate in the Pearl River Delta Economic Zone exceeded 16 percent, well above the People’s Republic of China’s national figure of 9.8 percent.

"How can the Philippines grow higher and faster? Thru rapid industrialization and expanded export earnings, says Ang. He thinks the country can easily generate $200 billion in exports annually, from the disappointing $60 billion to $76 billion in recent years." ["A $200B export plan," Tony Lopez, Virtual Reality, manilastandard.net, 8th Jul 2022]

In other words, we must move beyond binary thinking that keeps us to a percentage GDP growth target and instead set a $200 billion goal in exports per the above article.

“Our forerunners did their best for the times in which they lived. It is time we did ours.”

Gising bayan!

Are we finally on the cusp of becoming an industrialized nation?

News item: “Lawmakers to refile Bulacan airport ecozone bill after Marcos veto.”

It’s heartening that two pillars of our chattering classes are flexing their muscles. But before we go any further, we better not drop the ball as we did with Arangkada.

“Amid the gravest food, energy, education, and geopolitical crises ever to pummel the Philippines, can the country be prosperous on a path of more robust growth?

“Yes, says Ramon S. Ang (RSA), the president and CEO of San Miguel Corp., the country’s largest diversified industrial conglomerate. With P316 billion in sales in the first quarter, SMC is on track to chalk up a record P1.2 trillion in revenues in 2022.

“How can the Philippines grow higher and faster? Thru rapid industrialization and expanded export earnings, says Ang. He thinks the country can easily generate $200 billion in exports annually, from the disappointing $60 billion to $76 billion in recent years.” [“A $200B export plan,” Tony Lopez, Virtual Reality, manilastandard.net, 8th Jul 2022]

“We can be more competitive in the Southeast Asian region and ASEAN in terms of attracting locators specializing in various industries, aviation, technology, science, medicine, manufacturing, and many others.

“This will bring much-needed jobs, livelihood – and valuable experience – to our people. Even local industries throughout Luzon will benefit from increased employment and livelihood opportunities, tourism, economic activity, and the improvements in infrastructure that will come with the development.

“In a briefing, RSA explained that the expected export revenues would come from four areas: (1) the new airport, (2) the ecozone focused on semiconductor manufacturing and industrial goods like batteries for EVs and renewable energy power plants; (3) a university city in tie-up with leading universities in the US, Europe, and China; (4) a world-class medical center with research facilities in a partnership with a university with the caliber of Stanford.

“Taiwan Semiconductor Manufacturing Co. or TSMC is the world’s largest contract manufacturer of the semiconductor chips – otherwise known as integrated circuits – that power our phones, laptops, cars, watches, refrigerators, and more. Its clients include Apple, Intel, Qualcomm, AMD, and Nvidia.

“TSMC is said to be scouting for new locations to spread their manufacturing facilities. That will protect their clients from any supply shortage if China invades Taiwan, similar to Russia's invasion of Ukraine.

“RSA said he intends to create a science and technology export hub with the cheapest “logistics” cost because it is next to the airport and less than half an hour to the Manila seaport via an expressway he is also building.

“I got the impression he was already in conversation with potential locators, including TSMC and others, which will manufacture battery power storage systems, electric vehicle makers, and modular nuclear power assemblies. He thinks the zone can export $200 billion annually.” [“Airport economic zone,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 8th Jul 2022]

Those familiar with the blog may recall that it has raised the challenge for industry leaders Messrs. Ang and Dominguez to lead the effort of replicating the success of Vietnam in attracting Samsung and Apple. And the object is to accelerate the Philippines’ industrialization and set export targets of $200 billion to approximate the GDP levels of our neighbors.

And why the blog quoted Ciel Habito’s article a couple of times: “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 in a conversation. He came from knowing how far behind we have been left by our comparable Asean peers in export performance.

“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 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.” [“Doing a Vietnam,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 31st May 2022]

But let’s get back to Boo: “Ramon Ang of San Miguel is an enigma to policy wonks and business rivals. He doesn’t make business decisions the way they do. He takes risks others won’t dream of taking. It’s partly jealousy too. They can’t accept that the upstart Tondo boy, who has not taken an economics course and with no MBA from some fancy foreign business school, is doing better than they are.” [“Airport economic zone,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 8th Jul 2022]

At the risk of sounding like a broken record, let’s hear from a preeminent Filipino economist, Bernardo M. Villegas: “I would heed the advice of George Santayana, another famous professor who taught at Harvard. Santayana gave the world the following advice: “Those who cannot remember the past are (condemned) to repeat it.” [BusinessWorld, 28th Jun 2022]

“During these last 30 years, the world experienced three severe global crises: (1) the East Asian Financial Crisis of 1997 to 2000, (2) the Great Recession of 2008 to 2012, and (3) the more recent global economic crisis precipitated by the COVID-19 pandemic and further aggravated by the Russian invasion of Ukraine, the Philippine economy was among the most resilient in the world.

“Given the incoming Administration of President Ferdinand R. Marcos, Jr.’s choices for his economic team of very competent and experienced technocrats, one can expect a continuation of the yearly GDP growth rate of at least 6% to 7%. If the next administration can significantly improve governance and minimize corruption, there is an upside: the growth rate can accelerate from 8% to 10%.

“Those who cannot remember the past are (condemned) to repeat it.

“Who can disagree with that? For example, which of the following can’t we remember?

• The comprehensive agrarian reform program failed to “connect the dots,” i.e., is Philippine agriculture a dismal failure?
• The party-list system did not even the playing field, i.e., local lords continued to rule local governments.
• The OFW phenomenon created over 10 million “high-paying” jobs; it is today a pillar of the Philippine economy. Yet, poverty and joblessness remain.
• The call centers – nor the OFW phenomenon – did not eliminate the challenge of industrializing.
• The Philippine Competition Commission did not undo our oligarchic economy.
• The Duterte war on drugs did not eradicate the drug menace.
• The tax rationalization measures – from GMA to Du30 – did not raise our FDIs to match our neighbors.
• To add insult to injury, we are not acknowledging the toils that Juan de la Cruz expended to bring to the country over $50 billion in remittances; instead, we want to claim credit because of our “outstanding economic managers.”

In other words, the Ang initiative faces other detractors beyond the Marcos veto, given our long history of economic mismanagement.

And why we have been the regional laggard for the longest time.

What to do?

Recall the 3Cs of the hardy mindset. Messrs. Ang and supporters can revisit the discussions from the blog: (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.

It is not easy to get Juan de la Cruz to embrace and commit to a sense of purpose and meaning especially given our instincts of “stability,” as in our caste system. And why we value hierarchy and paternalism. And since Messrs. Ang and supporters don’t have control over Juan de la Cruz, they have to figure out how to get him on board.

And recall the GPS model often discussed by the blog: Where are we; Where do we want to be; How do we get there.

In defining where we want to be, a great model is to identify a benchmark that we want to replicate. And the Pearl River Delta Economic Zone is such a benchmark.

“In 1979, the Central Government of the People’s Republic of China announced that Guangdong Province would be allowed to follow less restrictive economic policies; and would be permitted to set up three Special Economic Zones (SEZs), including two in the Pearl River Delta.

“Preferential policies in the SEZs included features designed to attract foreign investment, such as a 15 percent tax rate, tax holidays of up to five years, and the ability to repatriate corporate profits and capital investments after a contracted period.

“They also included duty-free treatment of imports of raw materials and intermediate goods destined for exported products, as well as exemption from export taxes.

“Guangdong’s early experience with reform allowed a market-oriented culture to develop earlier than in other places in the Chinese Mainland. From 1979, Guangdong Province and the SEZs received more significant political and economic autonomy than other jurisdictions in the Chinese Mainland. Areas of greater “autonomy” included finance and fiscal matters, foreign trade and investment, commerce and distribution, allocation of materials and resources, labor, and prices.

“In 1988, Guangdong was granted expanded powers to set its economic direction and was designated a “comprehensive economic reform area.” That gave rise to (a) the creation of the Shenzhen Stock Exchange and (b) the development of a land lease system and some housing privatization. Shenzhen became a leader in foreign exchange markets, operation of foreign banks, land reforms, and stock market development.

“The economic development of the Pearl River Delta Economic Zone took off explosively. The region’s GDP grew from just over US$8 billion in 1980 to more than US$89 billion in 2000 and US$221.2 billion in 2005. During that period, the average real GDP growth rate in the Pearl River Delta Economic Zone exceeded 16 percent, well above the People’s Republic of China’s national figure of 9.8 percent.

“Since the onset of China’s reform program, the Pearl River Delta Economic Zone has been the fastest-growing portion of the fastest-growing province in the fastest-growing large economy in the world. In the process, a region that was once largely agricultural has emerged as a manufacturing platform of global importance. It is a world leader in producing electronic goods, electrical and electronic components, watches and clocks, toys, garments and textiles, plastic products, and various other goods.” [Wikipedia]

In other words, we don’t have to reinvent the wheel. That is not rocket science yet remains a hard nut to crack because of our parochialism and insularity.

Benchmark. Benchmark. Benchmark.

It is the guardrail to meet the demands of the 21st century – innovation and global competitiveness. We cannot measure our efforts with our instincts or the same thinking that created our problems in the first place – and turned us into the laughingstock stock of the region, if not the world.

See above; those that cannot remember the past are (condemned) to repeat it.

It’s heartening that two pillars of our chattering classes are flexing their muscles. But before we go any further, we better not drop the ball as we did with Arangkada.

Gising bayan!