“We need to make dramatic changes.”

That’s a direct quote from Senator Sonny Angara.

“Our GDP per capita has been increasing but only incrementally. We must change this direction if we want more dramatic increases than the current.” [“Moving toward high-value industries and higher-paying jobs,” by Senator Sonny Angara, BETTER DAYS, Manila Bulletin, 4th Sep 2022]

Before we get any further, here are perspectives to help us look outward (a) to ensure we don’t fall back on our inward-looking bias, (b) see, recognize and appreciate the “bigger picture,” and (c) more fundamentally, to do a bit of forward, lateral, and creative thinking.

“What has happened over the past two decades is a textbook illustration of Joseph Schumpeter’s creative destruction: if a business doesn’t disrupt itself, a more innovative “business” will disrupt it instead.

“We believe that large companies can be innovative, but only if they are willing to encourage risk-taking and stop worrying so much about quarterly earnings. The most intelligent investors know this, and our research shows that these investors drive share prices long-term. A quarter’s return will not define the future.

“Although they pay attention to quarterly earnings for clues about a company’s prospects, they don’t want companies to meet quarterly earnings at the expense of long-term health and growth.” [“Reflections on 20 years of McKinsey on Finance—and three challenges ahead,” McKinsey Quarterly, 1st Jun 2022]

“All Biden was doing – confront MAGA agenda for taking the country backward – was reflecting where we are as a nation.

“Until we change, our government will not. Until we learn to talk to those we disagree with, the people we elect will not. And until we pick leaders genuinely interested in uniting the country, the division will worsen.

“At the end of the day, the government we elect is the government we deserve. We need to show that we deserve better as a people.” [“We, the people, have broken our country. Division in Washington reflects that” by Mick Mulvaney, USA Today, 3rd Sep 2022. Mulvaney served as White House acting chief of staff under President Donald Trump until naming him special envoy to Northern Ireland. Mulvaney was also director of the Office of Management and Budget and a Republican in the House of Representatives.]

The McKinsey article – looking 20 years back – made me smile. Those familiar with the blog may recall that over thirty years ago, with seven years of experience in the Philippine subsidiary and as a regional manager in my old MNC company, I saw the shortcomings of its planning and budget model.

And this was confirmed when I visited New York and attended the top managers’ meeting of the company – where the CFO presented the Wall Street expectations for the company that influenced the budget process for the ensuing year.

The CFO saw that I was wearing my emotion on my sleeve: You did not like my presentation? Bob, Wall Street’s perspective is to be expected. We are doing worse than our competitors. But we know our business better and can figure out where we are, where we want to be, and how we will get there. Those numbers don’t mean a thing unless we do our homework.

And the rest, as they say, is history. We changed the planning and budget model of a 200-year-old Fortune 500 after the president saw how the model we developed in the Asia Pacific addressed the company’s challenges more profoundly – and “get the best out of its people.”

Recall how the blog explains freedom, democracy, and free enterprise: Personal responsibility is imperative to pursue the common good.

Translation: The president and the CFO weren’t tyrannical. They understood the common good and embraced the “personal responsibility” demonstrated by the folks in the Asia Pacific.

Recall, too, that despite the company securing me a US passport to be able to travel unrestricted across its markets of over 200 countries, I chose not to vote in American elections.

Why? There was tyranny inherent in the election process. For example, my city and state are Democratic bailiwicks controlled by one party. Even if it were a Republican, it doesn’t matter, given the gerrymandering engaged by both parties.

In other words, American politics don’t reflect the American professed values of freedom, democracy, and free enterprise. Or fair play, as in the free market, for example.

On the other hand, given my experience, the private sector does – despite its imperfections. And so, after retirement, I volunteered as a development worker in Eastern Europe to share those values.

And so the USA Today opinion piece made me smile. “Until we change, our government will not.”

Let’s get back to the Philippines. Recall this assertion from the blog: We are a rudderless ship – that we can’t right the ship we call the Philippines.

“We never seem to learn to stand on our own feet because we are confident that the family will always be behind us to prop us up.

“We have been conditioned by our family experience to expect somebody to pick us up when we fail. But the boss is not our “itay” or “inay.” We are no longer children.” [AN EDUCATOR’S REACTION TO ‘AMBISYON NATIN 2040’ – A WAKE-UP CALL TO THE TROUBLED SOUL OF OUR NATION (PART 1), Preciosa S. Soliven, The Philippine Star, 7th Sep 2017]

Ergo: We are a rudderless ship because we never seem to learn to stand on our own feet. We are no longer children.

Yet, as Rizal pointed out, we struggle to internalize our reality: He who submits to tyranny loves it. The “slaves” of today will be the tyrants of tomorrow.

Let’s assess that: “Liberal leaders must find ways to identify liberal rights with nationalism and its role in improving the quality of life for the “common” people.

“Failure to do so will allow autocrats and populists to continue winning the war for the people’s hearts and minds.” [“Liberalism and nationalism,” Elfren S. Cruz, BREAKTHROUGH, The Philippine Star, 4th Sep 2022.]

Recall how the blog explains freedom, democracy, and free enterprise: Personal responsibility is imperative to pursue the common good. Translation: Self-government is as bad as we conduct ourselves.

“Until we change, our government will not.”

But can we? Consider: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Shouldn’t we upend our culture of impunity instead of “passing the buck” to liberal leaders and invoking liberalism and nationalism?

Wittingly or not, we project our caste system: we defer to those above us in the hierarchy and pull rank on those below us.

He who submits to tyranny loves it. Translation: We deserved Marcos and the Duterte EJKs, too. And why do freedom-loving nations see us as pariahs?

Consider: We are a subset of the Universe that is in constant motion and expansion.

Here’s another quote from an earlier posting: Benchmark. Benchmark. Benchmark.

We won’t know and recognize the “state-of-the-art” if we don’t benchmark.

We are the least developed amongst our neighbors, notwithstanding our knowledge base.

Should we stop right there?

Why are we tripping all over?

We can’t prioritize if we can’t do forward, lateral, and creative thinking. But it all starts with upending our parochialism and insularity.

For example, we can’t prioritize because of the sacredness we put to the 6%-7% GDP growth metric. And explains the Diokno snap-back that the economy has already recovered from the health crisis.

That is classic “The surgery was successful, but the patient died.” In other words, it is an academic assessment devoid of real-world consequences.

That brings us back to McKinsey: “What will the next 20 years bring? We don’t have a crystal ball. One ignores the likelihood of immense changes at one’s peril. But we do have a compass: long-term value creation.”

Given that the Universe is in constant motion and expansion, our North Star must be “long-term value creation.”

And that is what the Philippines ignored when it celebrated the OFW phenomenon and call centers – despite our neighbors demonstrating that “industrialization” equates to “long-term value creation.”

Understandably, economics is about trade-offs. If it is not apparent, the blog has raised the wisdom of our economic “trade-offs” for over a dozen years. But what we missed, again, is the mantra of “long-term value creation.”

It works even in MSMEs. My Eastern European friends were an MSME that was a losing proposition for eight years. Yet, we defined how they could be globally competitive instead of aggressively driving profitability per se. Still, three years later, they attained profitability and never looked back.

The long-term value proposition challenge they faced was to be on equal footing with the median MNC subsidiary, with sales or revenues of one hundred million dollars.

See above; our GDP per capita has been increasing but only incrementally. We must change this direction if we’re looking for more dramatic increases.

In real-world terms, we need $200 billion in export revenues to be on equal footing with our neighbors.

Enter: The Philippine version of the Pearl River Delta Economic Zone.

In other words, we need more than Bulacan airport. The excellent news is that Ramon Ang of San Miguel has a similar model that will generate $200 billion in export revenues.

Prioritize. Prioritize. Prioritize.

In an earlier post, the blog raised the following: NEDA, DTI, our think tanks, and legislators should do a rigorous benchmarking exercise to learn how Guangdong did it.

In other words, we can continue with the zillion other LGU initiatives we want, take them as the “trivial many,” but prioritize our version of the Pearl River Delta Economic Zone.

The object of the exercise is for the GDP to take a quantum leap.

If Mr. Diokno is listening, we can’t shove the responsibility to the LGUs to take on more accountability; the national government must get the GDP to take a quantum leap.

We need to make dramatic changes.

That’s a direct quote from Senator Sonny Angara.

“Our GDP per capita has been increasing but only incrementally. We must change this direction if we want more dramatic increases than current.”

Before we get any further, we must look outward (a) to ensure we don’t fall back on our inward-looking bias, (b) see, recognize and appreciate the “bigger picture,” and (c) more fundamentally, to do a bit of forward, lateral, and creative thinking.

I will be in Manila in February. If NEDA, DTI, any of our think tanks, and Senator Sonny Angara want to dialogue with me, all they need is to let me know. I can dive into more specificity in a face-to-face setting.

Those familiar with the blog know I have been a volunteer development worker in Eastern Europe – going almost twenty years. The blog is committed to the Philippines winning in the 21st century, not to promoting my interests.

In the meantime, the entities mentioned above must sit down with Ramon Ang. And also dig as much as they can about the Pearl River Delta Economic Zone.

I haven’t met Messrs. Ang and the former Finance Secretary, although the blog suggested that they figure out how we could replicate the success of Vietnam in attracting Samsung and Apple. Mr. Ang has done the spade work. And we can build on his efforts.

The challenge we face is not a walk in the park.

Gising bayan!