“You cannot solve a problem that you do not comprehend.”

That’s from Richard Rumelt, the Harry and Elsa Kunin Professor of Business and Society at the UCLA Anderson School of Management; adapted from his books (a) Good Strategy/Bad Strategy: The Difference and Why It Matters and (b) “The Crux: How Leaders Become Strategists.”

As the blog submits, we are floundering because (a) we are a rudderless ship and (b) we suffer from our version of the “Dutch disease.”

The excellent news is that we are not alone in our inability to comprehend. Look at the UK.

What can’t we comprehend?

Consider our instincts, an expression of our caste system: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

As Rizal pointed out, the impunity we submit comes from our love of tyranny – given our indolence.

The problem is that we keep pointing at Juan de la Cruz in the Philippine elite and chattering classes because of our standing in the hierarchy. And in one fell swoop, we confirm our values of “hierarchy and paternalism.”

They explain our parochialism and insularity. And that is what we can’t comprehend.

Why did humankind resort to conquest in ancient times? Or why did the first humans migrate from Africa? People – economies and nations – have needs to satisfy, and they must look beyond their shores to get the best of all worlds. Why is that difficult to comprehend?

If our forebears knew that they had to trade by bartering with other countries, how could we even imagine that we could be an island unto ourselves?

“Britain’s imploding government,” headlines The Economist, 14th Oct 2022. “The prime minister has not done enough to restore confidence in Britain’s finances or her premiership.”

But nothing happens overnight. Consider: “It was the autumn of 2016, and Brexiteers were still high on the fumes of the EU referendum earlier that year. Seventy-five Tory MPs called for a new royal yacht to mark Britain’s rebirth. Everything, they agreed, was going to be terrific. As for the fiddly detail of Britain’s new relationship with the EU, Boris Johnson, then the foreign secretary, had it covered. “Our policy is having our cake and eating it. We are Pro-secco but by no means antipasto.”

“Donald Tusk, the Polish president of the European Council, saw Britain’s predicament rather more clearly. Its wish to avoid the EU’s legal jurisdiction and to end the free movement of people left only the choice of a hard Brexit or no Brexit at all. The cozy deal many Britons imagined was an illusion. “There will be no cakes on the table for anyone. There will be only salt and vinegar,” he warned.

“The economic damage is plainer by the day. Britain’s GDP was 5.2% lower by the end of last year than it would have been if Brexit hadn’t occurred, calculates John Springford of the Centre for European Reform, a think-tank. Brexit has caused a sharp decline in Britain’s trade openness that will drag on productivity and wages in the years to come, according to a new Resolution Foundation paper. The Centre for Economic Policy Research reckons Brexit added 6% to food prices in two years. A promised burst of deregulation has not materialized. Salt and vinegar are plentiful; of cake, barely a crumb.” [The Economist, 23rd Jun 2022]

How many of us Filipinos saw Brexit as positive? Or why do we have a soft spot in our hearts for the monarchy? See above; Rizal and why we submit to tyranny.

What about our indolence?

Here’s a quote from an earlier posting: “Unsurprisingly, on the one hand, we’re stuck with our version of the Dutch disease courtesy of the over $50 billion generated by the OFW remittances and call centers. And on the other, we have no investment-industrial base to be competitive export-wise.

“Preeminent economist Ciel Habito captured why Juan de la Cruz suffers abject poverty and learning poverty. And why the Ramon Ang Bulacan initiative must be our rallying cry to generate $200 billion in exports.”

In the meantime, we spend an inordinate amount of time on our “kuro-kuro” addressing symptoms – not the crux of why Juan de la Cruz suffers from abject poverty and learning poverty.

Recall that we championed CARL (comprehensive agrarian reform), the OFW phenomenon, call centers, and 4Ps because we see poverty and jobs as the two sides of the same coin.

In the meantime, we can’t help but address the disasters we experience in the tourism sector, sugar supply, and competitiveness – and rice, even onions, agriculture in general, including the lost leadership of our coconut industry, water, and electricity, infrastructure in general, unlivable cities, on and on and on.

Consider: “The first known democracy in the world was in Athens. Athenian democracy developed around the fifth century BCE.”

In other words, the world hasn’t fully developed “democracy” despite the genius of the Greeks of ancient Greece.

What about education?

“Ancient Greece was famous for its educators like Plato, Sophists, and Isocrates, who are known and studied even today.

“Schools were established by the 5th century BC, before which education was supposed to have been given by private educators.”

And what are we debating today? Democracy and education?

And what can’t we comprehend?

We live in a dynamic universe, a dynamic world. And why our caste system and values have rendered us unfit for the 21st century.

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

Why are we the regional laggard?

“Beg for Western money and technology,” chimed Lee and Mahathir to Deng. In other words, be like the Asian Tigers.

“A need for a new economic model. Philippine economic performance in recent years revealed that the 6-7% GDP growth range seems to be the maximum growth trajectory. In comparison, East Asian countries expanded 8-10% to achieve developed status within a generation.” [“The Philippines and the middle-income trap,” Cesar Polvorosa Jr., The Philippine Star, 5th Oct 2022]

I was delighted to read the article of Professor Polvorosa until he asserts, “Rebalancing of the economy, food security, and industrial policy/strategy.

“While the economy is gearing toward greater export competitiveness, it would be a prudent strategy to achieve a balanced domestic market and export-driven economy. Future low growth and volatility could adversely affect export-dependent economies.

“The Philippines as a large nation can deviate from the export-dependent strategy of small nations like Singapore and Netherlands.” 

Why do I object to the above assertion?

It is too academic. It does not stress the imperative of choice. Recall that the blog never fails to raise Pareto and the “vital few” versus the “trivial many,” especially given our imperative to overcome abject poverty and “learning poverty” rapidly.

In the real world, we can only focus on one or two imperatives to ensure that we cease being a rudderless ship – and not hedge sucked into the “Dutch disease,” our reliance on the easy way out, i.e., the OFW remittances and call centers.

Focus. Focus. Focus.

“Do you, as a leader, make an explicit choice to grow? Or do you pay lip service to your growth ambitions and let your resolve falter if profit isn’t immediate?” [Rumelt, op. cit.]

“Preeminent economist Ciel Habito captured why Juan de la Cruz suffers abject poverty and learning poverty. And why the Ramon Ang Bulacan initiative must be our rallying cry to generate $200 billion in exports.”

Until we learn the ropes and become globally competitive, we cannot sustain a competitive economy in today’s world. It is not about being export-dependent – being competitive in a dynamic universe is the “context.”

Recall the three elements of cognitive development: (a) dualism or binary thinking, (b) multiplicity, (c) relativism or the imperative of context. 

Again, the excellent news is that we aren’t alone in being cognitively challenged.

But we must learn from our shortcomings, the crux of why Juan de la Cruz suffers from abject poverty and learning poverty.

Why does the blog keep talking about my Eastern European friends? They have become giant killers, demonstrated by the split of their revenues: 70% comes from exports, with the remaining 30% local. And they are into day-to-day products, not even high-tech electronic gadgets. Why? They can do business in over 70 countries because of their global competitiveness.

While still much smaller, they mirror my old Fortune 500 company, also into day-to-day products, doing business in over 200 countries. And their revenues are 70% exports and 30% local.

That’s why experience matters. Theory cannot explain how global competitiveness comes about the way it does in the real world.

You cannot solve a problem that you do not comprehend.

That’s from Richard Rumelt, the Harry and Elsa Kunin Professor of Business and Society at the UCLA Anderson School of Management; adapted from his books (a) Good Strategy/Bad Strategy: The Difference and Why It Matters and (b) “The Crux: How Leaders Become Strategists.”

As the blog submits, we are floundering because (a) we are a rudderless ship and (b) we suffer from our version of the “Dutch disease.”

The excellent news is that we are not alone in our inability to comprehend. Look at the UK.

What can’t we comprehend?

Gising bayan!