Bleak Christmas in the Northeast (US)

Poverty is not our monopoly

The past two Sundays’ collections in the writer’s parish (in a New York suburb) reminded him of the upsurge of “spirituality” in the period from 1980 (a period of global economic slowdown) through the Ninoy assassination and People Power – when we saw a great many becoming Born-Again Christians.

The parish weekly bulletin reports the collections and they were $10,500 and $12,500, respectively. There are 1,322 registered parishioners and the $10,500 equates to the parish meeting its annual operating budget of $550,000. And the $12,500 is clearly over the top. For years the average weekly collection was $8,500, despite a third of the parishioners having their contributions directly debited from their bank accounts. And to cover the shortfall the parish has been holding a summer fair that has become a (town) tradition: it nets the parish beyond its operating needs and the surplus is accumulated to cover capital expenditures. There are a number of “2nd collections” throughout the year to cover the Bishop’s Appeal (which goes to Rome plus supports the diocesan’s seminarians) and charity programs that the parish sponsors. (The writer and his wife were once trustees in a Manhattan church and understand the challenges of church funding.)

What is going on? As reported in the news, unemployment in America is at 10% and if underemployment is factored in, 17% are going to have a bleak Christmas.

Reality hit home when the writer’s wife invited over the community developer’s “key people” – i.e., the ones she deals with – and was surprised that the Sales Manager who sold them the property had been laid off. But she came over still and so the conversation had to touch, albeit briefly, the bleak Christmas people were facing. The maintenance person was most positive, and said he never had government in his mind and that he has always fended for himself. He’s such an engaging person that the writer’s wife would typically call him to do chores, and make extra bucks in the process. (The family had moved to an energy-efficient – natural-gas fueled, multi-zone thermostat controlled heating and cooling and contemporary insulation system – to meet their lifestyle – i.e., frequent travelers – while supporting Copenhagen.)

The story goes on: the cleaning lady who comes with a team of 4 (between visits husband and wife team does the chores from vacuuming and steaming to doing the laundry and most everything in-between; it’s what the doctors ordered) and had a thriving maid-service business, lost the investment apartment she bought at the height of the housing boom. And is about to lose her own home. Her option is to rent.

Even high profile folks are facing the same bleak Christmas: in a family friend’s neighborhood by the Long Island Sound, three Wall Streeters lost their jobs. And the writer’s daughter adds that a broker friend, a successful Manhattan realtor, is experiencing the worst of the New York property market.

It is not surprising that Americans are again turning to the Church; the local church gets filled on Sundays and the weekly collections are on an uptick. Americans, like Filipinos, know how to turn to the Lord.

The writer sends his and his family’s best wishes – “Maligayang Pasko . . . and a blessed New Year!”

Excesses and greed: “Made in USA”

What can the public sector learn from the follies of the private sector?

General Motors and Coca-Cola two revered companies and brands in America had shared a common folly: focusing on financial management as opposed to marketing value-added products.

Coca-Cola has regained its bearings – instead of playing the numbers game, i.e., creating the Coca-Cola Enterprise and managing revenue and cost reporting between them and the original entity; it has again focused on marketing value-added products: they redrew their core product architecture to develop and market non-cola beverages, creating a new range of products while expanding the cola category.

But as people now know, General Motors had to be bailed out by the American taxpayers. For decades General Motors given their market dominance early on and the size of their revenues (and later to preserve profitability in a challenging market) focused on the financials (and over time experienced declining market share) while missing to strengthen their core business: developing cars that customers prefer. They tried to create a marketing culture (e.g., hiring an ex-Proctor & Gamble) but it did not take them long to realize that a culture is not easy to change – financial management is more manageable than change management.

It’s like the “Dutch disease”: why worry about fixing a country’s fundamental economic problem when there is an income stream keeping GDP afloat? (The lesson of the “hole in the dike” comes to mind.)

In the case of the Netherlands, their extraction industry gave them a false sense of economic security until they realized that they had to develop a sustainable manufacturing economic base.

In the case of the Philippines, is the over $15 billion remittances from the OFWs giving us a false sense of economic security – they benefit participants (from investors to consumers and everyone between them) in our consumer-driven economy but have not achieved our national development goal of reducing poverty to 17%; that we have yet to develop a larger, more sustainable income stream? Or why the OFWs declared: “The Philippine trade union movement takes issue with the way the government has exploited the Filipino migrant and contract workers over the years,” in a manifesto circulated during the international forum on migration in Manila in October, 2008?

If private business struggles to manage change clearly the public sector (or the country at large) faces an even greater challenge whenever it attempts change. For example it will take some doing for us to witness the realization of: Lee Kuan Yew’s exhortation about discipline; Nobel Prize-winning economist Paul Krugman‘s prescription that “the only way to achieve long term sustainable growth was to have much higher export growth, by attaining export competitiveness” – c/o Cielito Habito, October 19, 2008, Inquirer; and a UK business group’s suggestions on how to encourage greater foreign investments.

The Kosovo war gave pause to the Europeans to the point of embarrassment. Why did it take the Americans to lead the efforts to deal with a conflict within their borders?

In private conversations Europeans were entertaining self-doubt: Are we not over religious persecution yet? Did we not resolve not to allow any more adventurers to disturb the peace in Europe? What do the Americans have that we don’t have? Why is America more progressive? Surely it has nothing to do with brainpower because we had led the world for centuries? Are we too tied down to our proud and glorious past and heritage that we have yet to learn to look forward?

Since then the world has seen the European Union evolve into a more cohesive union while continuing to deal with the challenges inherent in such a human undertaking. Hence the label “Old Europe” is invoked to guard against any tendencies to look back as opposed to looking forward.

Today Americans are themselves entertaining self-doubt and the new president (Obama) has his hands full – aggressively driving his economic agenda beyond the stimulus plan; while the rest of the world has not been spared by the global economic meltdown – with bankruptcies mounting and unemployment in every other country soaring closer if not yet at double-digit levels – clearly traceable to the excesses and greed that Americans acknowledge were “Made in USA”.

The Philippines is experiencing these fallouts first-hand (and local news reports and commentaries are becoming pessimistic even when our initial reactions sounded quite positive) and whatever efforts we had exerted before would not suffice given the enormity of the challenge the world is and by extension we are facing? (The NEDA director in a recent Q&A in Malacanang pointed out that we could not isolate ourselves from the rest of the world given that oil imports account for a large chunk of our foreign exchange needs, among others.)

It is understandable that countries big and small are manifesting a knee-jerk reaction to the global financial crisis: we will protect our interests first. It is noteworthy that level-headed world leaders have expressed opposition to protectionist thoughts by the U.S. and France to name just a couple. The reality, as the NEDA director expressed by using our oil imports as an example, is that the world is interconnected.

As a country we have to deal with the here and now and we are fortunate that we have the OFWs’ remittances – they have been the engine of our economy; and at the same time provide our needed foreign exchange reserves. But the challenge we have as does the rest of the world is both the here and now and the ensuing economic order.

And that brings us back to the fundamental, structural issue of our economy: plugging the hole in the dike is a stop gap measure.

We have to do a better fix on our financial management but the more difficult part is managing change? For instance, the NEDA’s national development agenda spells out these fixes yet we have been unable to execute and tackle the fundamental, structural issue in our economy.

To begin with, we need to drastically raise revenues, i.e., we cannot raise them internally – our aggregate investments are inadequate to generate the level of GDP that we need. (Thanks to our tycoons for their aggressive investment efforts; they are doing their herculean share in filling in our investment void – to raise or double investments to 28% of GDP as set by NEDA and approach the GDP of Thailand and Malaysia and bring poverty to below 20 %.)

Millions of Filipinos have figured that there are not enough jobs in the country to give them the level of income that they need; and so roughly 10 million of us had to bite the bullet and become OFWs. OFW remittances were supposed to be a stop-gap measure – they were in exchange for draining talent – which we had to resort to until we get a fix on our economy.

Whenever the exception becomes the rule, chaos reigns?

What about managing change?

How do we raise our revenues? What products and services do we need to produce? Who will produce, what, when, where and how?

We are a people steeped in culture and tradition yet facing these fundamental questions requires that we start with a clean slate?

We cannot start our problem-solving efforts with a mindset that limits our options? And hence the ideology or cultural beliefs and tradition that we espouse must be held at bay, i.e., push the driving forces and restrict the restraining forces in order to gain traction and move us forward in our development efforts, and win our fight against poverty? Our ideology, beliefs and tradition may be very Filipino – we being the only Christian country in this part of the world – but where do we draw the line between our Christian values and our comfort zone? Like Europeans drawing the line between New and Old Europe? Like Obama drawing the line between American entrepreneurial spirit and greed?

If we do not have the means to substantially raise our investments, should we more than welcome them, i.e., how do we solicit, attract and secure them like our tycoons are doing via their foreign partners? If we don’t have the products and services or the technology to produce them, how do we develop and/or acquire them? If we don’t have the market to sell them, how do we create and win them?

We don’t have to go it alone – to pull together: capital formation, investment, market, technology, efficiency, productivity, competitiveness – we need to partner with the right global players? For instance, as reported in the local papers: (NEW YORK, Feb. 1, Reuters) “emerging markets will likely remain a viable alternative for private-equity investors seeking returns during the deepening global financial crisis, according to an official with the International Finance Corporation”.

But the bigger reason is: the developing world will be the engine of the global economy over the next several years if not decades. This was stressed by Jeff Immelt, the CEO of GE in a recent Q&A forum sponsored by the Wall Street Journal, i.e., GE’s plans are designed to generate greater revenues outside the U.S. over domestic U.S. sales. (This writer spoke, together with a couple of other Fortune 500 representative-companies generating greater revenues overseas, before GE managers in 1992 when GE was stepping up their globalization plans as part of their benchmarking efforts.)

Why? China and India despite their recent economic booms (and last year’s and this year’s projected slowdown) have a lot more room to develop – from their infrastructure needs as well as consumer demands: non-durable and durable goods like housing, cars, appliances, among others. And this also applies to other developing countries like the Philippines which is why even with the global economic meltdown our economy grew and did not contract in 2008.

America: Our romanticized view?

Recent developments have seen us gushing with either love or hate for America.

A Singaporean scholar (see www.phileconomy.blogspot.com) argues that while “the 19th and 20th were European and American centuries, respectively, the 21st will be the Asian century – not because Asia has rediscovered some old Asian wisdom: what the Asians have finally figured out are the 7 pillars of Western wisdom which enabled the West to succeed”, including pragmatism – “it is an ancient western practice”.

Does America define pragmatism in our relationship akin to differentiating between family and neighbor? That America does not see us as family but as a neighbor in the global community – where there are 200 of us? Is part of our romanticized view the belief in the extended family – which we share with other Asians and Europeans but not America? But we fought side-by-side with them? Like they did with the French among others, and similarly their relationship is like a roller coaster?

Among neighbors people don’t expect to be invited to family reunions but they gladly share leftovers from feasts?

Puerto Rico comes to mind.

It is just a hop away from New York (which many Porto Ricans call home) and easily accessible to candidates during primaries. Senator Clinton spent lots of time in Puerto Rico and was rewarded, winning over then Senator Obama.

Puerto Rico is not a state of the union but a commonwealth (like we once were) entitled to benefits like currency, foreign affairs, defense, infrastructure (e.g., roads and bridges) and postal services, among other. They don’t pay federal taxes yet carry U.S. passports (the U.S. president being chief of state while the head of government is an elected governor) but cannot vote in presidential elections and lack voting representation in both Houses of Congress. The Porto Ricans are divided on whether they want to become a state and so the status quo remains. Are both parties being pragmatic?

Unfortunately for the Porto Ricans they have not developed like the Asian tigers: totally independent –with none of the crutches of Uncle Sam to lean on – and had the greater need and desire to stand on their own.

In espousing pragmatism, the Singaporean scholar calls the Asian tigers the “best copycat nations in the world. As Deng Xiaoping said: "it doesn't matter if a cat is white or black, if it catches mice". In most of Asia, the ideological debates are left behind.”

Fortunately or unfortunately the Philippines is 10,000 miles from Washington and almost a day, not just a hop, away. And given our desire for independence, we cannot have a similar relationship like that of Puerto Rico.

As a neighbor to the Philippines is the U.S. adhering to a “good-neighbor policy”? And if we adhere to the same policy we would not suffer the angst from our romanticized view?
In our respective neighborhoods do we ourselves tend to favor those that abide by the good-neighbor policy – neither would bother the other but can be pleasant and helpful as the need arises? And instinctively reciprocity reigns?

But whenever one is aggrieved they can assert their rights and protect their interests?

Secretary Clinton’s emerging pragmatic and blunt diplomacy may be refreshing. If she can be as blunt about her expectations in Asia, e.g., she does not expect China to step-up efforts to address human rights, that she expects a leadership crisis in North Korea, etc., we should be as blunt when we address our issues with the U.S.? But we’re a small country? Being blunt does not mean irrational so size does not matter? Expressing a mature reaction to something egregious is what pragmatism is about? Her pragmatism should be welcomed too – a departure from the omnipotent-like ideology of “if you are not for us you are against us”?

In the couple of decades after WWII when foreign companies came over to join and partake in the rebuilding of the country and the resulting economic boom, one of the many cultural do’s and don’ts that they had to learn was paternalism – that Filipinos respond better to leadership that mirrors a personal relationship; and hence must acquiesce when they are offered to be godparents in a baptism or wedding. Westerners struggled with this given their belief that such leadership style that offers help, advice and protection has unintended consequences: the neglect of individual choice and personal responsibility. (A Filipino priest-psychologist adds: “it reinforces one’s sense of entitlement which is a reflection of the false-self or ego.”)

In 1969 a best seller came out and every other Filipino manager and aspiring manager read it: I’m OK, You’re OK. The author (a doctor who based his treatise on experiments related to neurology) talked about the adult-to-adult conversation model that should ideally apply to the work setting, i.e., the manager-subordinate relationship should reflect the adult-to-adult model; not the adult-to-child or child-to-adult.

A deceased relative would retell his children time and again an incident he witnessed on his first trip to America: He was in a park and saw a toddler running around and then tripping. His first impulse was to run to the child who had broken into tears and help . . . until he heard the parents say: “Come on stand up”, and the child stopped crying and stood up. The mother then said, “Remember this is just the first not the last time you will trip, everytime you fall you must stand up; if you are in pain, cry but stand up” and kissed the child. The toddler resumed running and tripped a couple more times, and each time stood up while yelling with a smile on his face: “Mom, it’s not painful.”

A couple of Filipino Ivy League students who had sat in a class in one of our premier universities when asked how similar or different it was from theirs said: “It’s different; there’s spoon-feeding.”

If Westerners struggled with paternalism, do we Filipinos struggle with “I’m OK, You’re OK?

Is our tendency to romanticize our relationship with America . . . or our response to our economic challenge . . . or to poverty . . . or to corruption . . . a reflection of our comfort zone? Do we wish we could do something about it?

For instance, if we put our mind to it we can confront corruption? Corruption has become a monster –that saps our moral fiber and makes us less confident of the future – yet it would take baby steps for us to slay it?

To address corruption we need to realize that it is an inside-out process? It starts within each of us – from the head down; a rotten fish smells from the head down?

This writer wishes to acknowledge the priest who conducted the retreat he attended and admonished: “beyond the Filipino focus on family we have the community to sanctify”.

As an example, within our respective families we can start with three rules?

1. Observe road courtesy when we drive or are a pedestrian?
2. Donate to our favorite charity or church whatever “fine we owe” from traffic violation whether we bribed our way out or were not apprehended – it is like counting all our strokes in golf or reliving “honesty is the best policy”?
3. Rule no. 3 – anyone can build on, modify and own the list or reject it?