Social change

“True social reform has little to do with politics, for genuine cultural change operates on cycles far longer and more invisible than the perpetual churning of immediacies that occupy the political state and the political conscience.”  [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862; Social change, Maria Popova, Brain Pickings, 20th Feb 2020]

Let’s pause and recall the day Marcos fled to Hawaii, and then the day ECQ (enhanced community quarantine) was declared by Duterte because of the COVID-19 pandemic. That’s counting 34 years, a generation. In a prior posting, the blog discussed “teachable moments.”

Those are two completely different circumstances, yet both should have presented Juan de la Cruz a lesson or two. Weren’t they a watershed, a turning point, or historic moment for the Philippines? Because despite being one of the fastest-growing economies, poverty remains our scourge. And too weak in the face of a pandemic and, more fundamentally, too weak to thrive in the 21st century.

We’ve had six presidents since Marcos. What did Duterte promise, again, that we elected him? See above; “true social reform” has little to do with politics.

Those familiar with the blog will remember that the writer, a Fil-Am, hasn’t voted in the US elections. On the other hand, he responded to the call for volunteerism after 9/11 and has been a volunteer development worker in Eastern Europe, going 17 years and counting. Consider: Their country was under Soviet rule for four decades. Minimally, he represents American exceptionalism, as in its unique mission to transform the world.

Says Jamie Dimon, JPMorgan Chase (JPM) CEO, amid the pandemic, “America was an idea borne on principles, not based upon historical relationships and tribal politics.”

But let’s get back to Thoreau. “To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal:

“All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant. A man’s life should continuously be as fresh as this river. It should be the same channel, but a new water every instant.

“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.”

In other words, can we imagine something more virtuous than the power structures in the Philippines that we credit for being one of the fastest-growing economies – yet have failed to overcome poverty, unlike our neighbors?

Consider the comparison: “Directly or indirectly, the economies of all 13 British colonies in North America depended on slavery. By the 1620s, Virginia established the labor-intensive cultivation of tobacco for European markets, with white indentured servants performing most of the heavy labor. Before 1660 only a fraction of Virginia planters held slaves. By 1675 slavery was in place, and by 1700 slaves had almost entirely replaced indentured servants. With plentiful land and slave labor available to grow a lucrative crop, southern planters prospered, and family-based tobacco plantations became the economic and social norm.” [https://www.monticello.org/slavery-at-monticello/jsam-main-nav]

We may claim that slavery is not in the Philippines, yet OFWs primarily drive our economy, with over 10 million of them paying the social costs. And here we are, the elite class, enjoying the vibrant consumption economy served us as though on a silver platter.

What happened to political patronage, oligarchy, and the top eight enterprises that are in the Forbes list, beyond the OFW phenomenon and the BPO industry? Within the Philippine economy’s ecosystem, there are 775,000 MSMEs and 3,000 large enterprises. Yet, we remain a service-consumption economy.

Since the time of the PNoy administration, we understand that we need incremental export revenues of $100 billion to move us closer to the performance of our neighbors and overcome poverty. But our enterprises – big and small – haven’t been able to get us there for the longest time. Still, we keep foreign direct investment at bay instead of begging for Western money and technology, as demonstrated by Lee, Mahathir, and Deng.

There lies the imperative of social change. For example, until we follow the footsteps of our neighbors that have moved up to an industrial-investment economy, our per capita income will ensure that we remain the regional laggard.

What are our chances to pursue social change? Consider our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

Who will go up against the Philippine power structures to deliver the message? “Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.”

But parochialism and insularity undermine forward-thinking. Because as the writer’s Eastern European friends repeatedly shared with him, you don’t think of tomorrow, i.e., tyranny rules. You take it one day at a time.

Isn’t that what we went through and are still going through given our value of hierarchy and paternalism? That is why the blog has discussed the distinction between analysis and analytics.

Consider: We saw and still see the Americans as colonizers and thus superior to us when “America was an idea borne on principles, not based upon historical relationships and tribal politics.” Ergo: We better kick out the US military; otherwise, we shall never be free people.

How come, as we know from recent, if not current events, Ukraine is begging for the US military to protect them – as well as other former Soviet satellite states?

Or why did Lee, Mahathir, and Deng beg for Western money and technology?

We can analyze our situations, but absent forward-thinking, we will miss the analytics. Recall that analytics demand forward-thinking. To foresee, to be ahead of the curve, and distinguish the vital few from the trivial many.

That explains why more impoverished Vietnam was able to attract Samsung to make Vietnam the hub of Samsung’s electronic manufacturing. And that one single entity can generate more revenues than our top eight enterprises combined.

Because we assume analytics is technology, it sounds highfalutin. Like all disciplines, there is an art to it. It presupposes looking forward beyond the obvious and logical. Which, as the blog has raised, characterizes “Pinoy abilidad.”

On the other hand, we know the Tatang Sy story. He knew America had developed ahead of other markets that he kept watch of their progress. He was outward-looking. But the only technology he tapped was the helicopter. And presto, with that helicopter-view, he saw the future SM City North Edsa and SM Mega Mall. He had imagination, an art, not a science.

But Juan de la Cruz insists on quick fixes. Try that with Metro Manila traffic or rural poverty. Or MSMEs or POGOs. Insane? But hasn’t insanity been our brand? How do we overcome it? 

The blog has raised the story of creation as a very fundamental model, and it is dynamic, not static. That the universe is an ecosystem, for example, photosynthesis – that we teach kids and its elements: sunlight, oxygen, carbon dioxide, and water. The ecosystem allows organisms to thrive, including humankind. That is us, and we have our hierarchy of needs.

If we translate that to an undertaking, big and small, we must imagine the elements of an ecosystem, assemble and pull them together. And given that the humankind has its hierarchy of needs, that is what the undertaking must address, including innovation. The object is to create a sustainable enterprise, a virtuous circle to mirror the ecosystem that makes humankind thrive.

“Social change is essentially an act of imagination first.”

The COVID-19 pandemic will take its toll on our weaknesses as a nation and as an economy. But there is always tomorrow.

How many more watershed moments will it take before we “finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us”?

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development is informed by a people’s worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Teachable moment – the opportunity we must seize

“The concept was popularized by Robert Havighurst in his 1952 book, Human Development, and Education. A developmental task is a task that one learns at a specific point and which makes the achievement of succeeding tasks possible. When the timing is right, the ability to learn a task will be possible. That is a ‘teachable moment.’ It is crucial to keep in mind that unless the time is right, learning will not occur. Hence, it is important to repeat important points whenever possible so that when a student’s teachable moment occurs, s/he can benefit from the knowledge.” [Wikipedia]

Consider: “Innovation and ingenuity against COVID-19,” Sonny M. Angara, BusinessMirror, 3rd Apr 2020.

“COVID-19 is teaching us many hard lessons. But I hope that once we emerge from this pandemic, it will finally be drilled into our heads to provide even more excellent support and encouragement for the science, research, technology, and manufacturing sectors.

“The COVID-19 pandemic is unfolding at a critical juncture in our nation's history. Thankfully, in the face of such a gargantuan crisis, Filipinos have reached deep within themselves to find ingenious ways of rising to the challenge.

“Aside from those in the frontline of the pandemic, inventors and innovators are actively participating in addressing the crisis.

“I can’t help but be impressed and inspired by all of these developments. On the one hand, they demonstrate that, in certain instances, we already possess some of the major components needed to fight this pandemic effectively.

“On the other hand, they underscore the importance of building up our technological know-how and our capacity to innovate as a nation. That is one of the broad aims of the Tatak Pinoy initiative I have written extensively about before. Indeed, technology has the potential to be used in many ways other than its original purpose. If we develop local technologies and innovations for our economic well-being, we also gain the ability to equip ourselves for future challenges, aside from expanding our toolset for economic development.”

Indeed, we must seize the opportunity. We’ve heard it before, that in Mandarin Chinese, “crisis” is the combination of the words “disaster” and “opportunity.” It is about the “yin” and “yang” or the balancing of the two.

News item: “Philippine Leader Announces $3.9 billion Economic Stimulus Package.” Indeed, it is the most massive economic aid package in Philippine history.

“For scale, Malaysia, with less than one-third of the Philippine population, announced a stimulus package worth $57 billion (about P2.9 trillion).

“Fitch Solutions is of the view that the first fiscal stimulus package worth P27.1 billion may not have a ‘considerable’ impact on the economy or consumer spending.

“The P27.1 billion stimulus program announced by economic managers early in the lockdown was focused on supporting the tourism sector. The program also includes a package for the health sector and some subsidies for affected workers and establishments.

“The P200 billion package for vulnerable Filipinos recently announced by President Rodrigo R. Duterte may help to boost consumer spending outlook in the second half of 2020 and 2021.

“The government has allotted P200 billion to aid low-income households to support those who lost jobs during the lockdown. Cash assistance for the vulnerable population will range from P5,000 to P8,000.

“Fitch Solutions downgraded its 2020 growth outlook for the Philippines to 4% in late March from an earlier forecast of 6% mainly due to the outbreak’s impact on tourism, remittances, the supply chain, and foreign direct investment.

“If realized, this projection will be lower than the 5.9% recorded in 2019 and the official target of 6.5% to 7.5% set by the government. [“Fitch Solutions reduces PHL consumer spending 2020 growth outlook,” Luz Wendy T. Noble, BusinessWorld, 1st Apr 2020.]

In other words, while we are consciously and collectively standing up against this pandemic, the reality is the other side of the coin. That even our best efforts won’t suffice: The crisis will deliver a staggering blow to the people, the nation, and the economy. In the Western world, where countries are wealthier than the Philippines, analysts are recalling the Great Depression.

We are too weak for the 2020 pandemic, and, more fundamentally, we are too weak for the 21st century.

We have in our hands a teachable moment.

“COVID-19 is teaching us many hard lessons. But I hope that once we emerge from this pandemic, it will finally be drilled into our heads to provide even greater support and encouragement for the science, research, technology, and manufacturing sectors.” [Angara, op. cit.]

Let’s pause and ask ourselves: Why did we allow science, research, technology, and manufacturing sectors to lag?

See above: A developmental task is a task one learns at a specific point and which makes the achievement of succeeding tasks possible.

In other words, our failings in science, research, technology, and manufacturing are not isolated cases. We had many chances in the past to seize teachable moments.

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

If we were a piece of land, we are not arable. There was no way we can “sow and reap.” That is why “pwede na ‘yan” – as in the kneejerk – became our invention. The evidence? We are the regional laggard and have been left behind by our neighbors. Yet, we remain the happiest people imaginable. Try denial. [See below; the tribalism of the USSR and its extinction.]

How many reacted to the “shoot the kill” order to unruly demonstrators from DU30? But “Pinoy kasi,” so it was not an order, “pala.” Let’s not forget what Rizal said, “We submit to tyranny because we love it.” See above; we value hierarchy and paternalism. 

We have been on an uphill battle – figuring out if we’re coming or going, i.e., our confused reality, aka damaged culture – precisely because we take these instincts as values and virtues. It explains our parochialism and insularity. And have yet to learn how to relate to superior entities. Take the US, our hated and loved former colonizer. Recall the bestseller, “I’m OK – You’re OK.” But that won’t register because of who we are.

That is why the writer was asked by USAID to assist a couple of micro-enterprises in Eastern Europe – to disabuse their minds that there is a superior-subordinate relationship in the trade or foreign relations. Sadly, one did not take heed, and so it foundered. Recall that for decades, they were at the beck and call of Mother Russia, when the USSR was the poster child of tribalism – and, unsurprisingly, is now extinct.

Consider: We had the first chance among the neighbors to learn about Western progress and development because of that former colonizer. These neighbors were coming in droves to see the marvel of the Ayala Commercial Center and the gated communities around it.

The Tatang Sy story is not unfamiliar; he visited US department stores periodically to keep track of Western progress and development. And so, he took a helicopter to get a birds-eye view of Metro Manila – to see the concentration of pedestrian traffic. That gave birth to SM City North Edsa and SM Mega Mall – and the rest, as they say, is history; he became the wealthiest Filipino. 

On the other hand, what did those ahead of Tatang Sy do? They analyzed the task at hand. Yet, they weren’t forward-looking and missed the analytics. Recall analytics demands forward-thinking. To foresee, to be ahead of the curve, and distinguish the vital few from the trivial many.

They partnered with American interests and focused on import substitution. They couldn’t get over the instincts: to keep their rank in the local hierarchy and be the monopolies and oligopolies and keep the economy to themselves by shutting out everyone else – other than their American friends.

Compare that to Lee, Mahathir, and Deng: Beg for Western money and technology. And now it’s Vietnam’s turn. Unsurprisingly, their most substantial enterprise today, Samsung Vietnam, delivers more economic benefits to Vietnam. That is when compared to our top eight companies – in the Forbes list – combined to the Philippines.

Because in our case, after import substitution, instead of seizing the teachable moment, we concluded that we were too inferior to become an industrial economy. Enter: Overseas employment.

But not to worry. Our economists are foreign-trained, and they can craft a powerful weapon: fiscal and monetary policies.

But they were not lifting Juan de la Cruz economically. Enter: The BPO industry.

To quote an earlier posting: “What makes up the ecosystem of the Philippine economy? We know that by heart: The two drivers of the economy, OFW remittances, and the BPO industry. And, the top eight enterprises in the Forbes list. The picture we see is that of a service-consumption economy. Indeed, it is responsible for the 6%-7% GDP growth rate that we’ve had for several years now.

“Yet, we know from the international institutions that even at this pace, it will take us a generation to see the light at the end of the tunnel. That is why Arangkada came into being. We must strive to move twice as fast. We must be looking at incremental export revenues of $100 billion.” 

How do we pull things together? Beyond Arangkada, we have AmBisyon, and now Tatak Pinoy.

Once more, here’s something from an earlier posting: “We need 1,000 micro-enterprises as dynamic as the writer’s Eastern European friends to be on the way to make Arangkada a reality. That means we require that many more substantial enterprises with revenues of $100 million per entity. And we cannot get there at the rate we generate businesses until we attract very significant foreign investments. Think of Samsung Vietnam. Consider: The Philippines has 775,000 MSMEs against 3,000 large enterprises.

“What about the MSMEs? We must start on the right foot. Create high-margin products. That means undoing the mindset of selling ‘economy’ brands because cheap products are more natural to sell. In a word, our mindset must shift to ‘innovation.’ It will mean borrowing money. But before that, we need an altogether new business model – so that financial institutions will give us the time of day – because it mirrors a virtuous circle.”

We must be in a new ballgame. That is how to test if we are seizing the moment, the teachable moment.

If we are a piece of land, we are not arable. There is no way we can “sow and reap.” That is why “pwede na ‘yan” – as in the kneejerk – became our invention. The evidence? We are the regional laggard and have been left behind by our neighbors. Yet, we remain the happiest people imaginable. Try denial. [See above; the tribalism of the USSR and its extinction.]

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Dynamism, not any other isms

“We don't have to accept the world that we’re born into as something fixed and impermeable.” — Laurene Powell Jobs.

That’s from “Laurene Powell Jobs Is Putting Her Own Dent in the Universe,” David Gelles, Corner Office, The New York Times, 27th Feb 2020. “She’s the 35th-richest person in the world, who is funding efforts on immigration, education, and independent media.

‘It’s not right for individuals to accumulate a massive amount of wealth that’s equivalent to millions and millions of other people combined. There’s nothing fair about that.’

“And yet Ms. Powell Jobs is hardly apologetic. ‘I inherited my wealth from my husband, who didn’t care about the accumulation of wealth. I am doing this in honor of his work, and I’ve dedicated my life to doing the very best I can to distribute it effectively, in ways that sustainably lift individuals and communities.

‘I’m not interested in legacy wealth buildings, and my children know that. Steve wasn’t interested in that. If I live long enough, it ends with me.’”

“Bill and Melinda Gates are giving their three kids a ‘minuscule portion’ of their wealth. ‘It will mean they have to find their way. It will compel them to rely on themselves. It’s not a favor for kids to have them have huge sums of wealth. It distorts anything they might do, creating their path.'”

There are others too, “7 billionaires who won’t leave their fortunes to their kids,” Emmie Martin, CNBC, 6th Jul 2017. They include Mark Zuckerberg, Warren Buffett, Michael Bloomberg, Andrew Lloyd Webber, Pierre Omidyar.

It is about dynamism, not any other isms. “We don’t have to accept the world that we’re born into as something fixed and impermeable.” — Laurene Powell Jobs.

Does that run counter to the instincts of Juan de la Cruz? Recall who we are: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Why are graft and corruption second nature to us? Because of our caste system, we accept our rank as fixed and impermeable. Think of our value of hierarchy and paternalism, as in entitlement as opposed to personal responsibility.

Or that we shall forever be the colonized, while the former colonizers will perpetually be superior. And they owe us paternalism.

Or that isms like socialism and capitalism are fixed and permanent. They are a human construct that man’s dynamism can undo. That is why the blog keeps raising the story of Eden and the banishment of Adam and Eve and the migration of the first homo sapiens from Africa. And that the prophets and Jesus, while respecting tradition, criticized aristocracy. The story of creation – as in the universe – is dynamic.

For example, greed is a human construct and brought about the 2008 Global Recession and its aftermath of greater inequality – and, surprise, surprise, populism.

Enter: the 2020 pandemic. Whatever happened to parochialism and insularity? To win against future pandemics, Bill Gates stepped down from his Microsoft role to focus on this global challenge, global health being the centerpiece of his philanthropy.

The story of creation teaches us lots of things. For example, organisms thrive in this universe because of its ecosystem, best described by photosynthesis. It is an excellent lesson in creating a virtuous as opposed to a vicious circle.

Think of how vicious greed – a human construct – is that it upended the global economy. The answer is not any other isms but dynamism, as in the story of creation. 

If the universe was created for organisms to thrive, shouldn’t we learn from it?

For example, “innovation” is not for innovation’s sake. It must raise a man’s well-being. The challenge is, how do we replicate a virtuous circle like the ecosystem, so that progress and development will make the humankind thrive?

AI scares lots of people. But then again, it is a human construct. It is not fixed and impermeable.

Why does the blog keep raising Vietnam’s visionary leadership and that it mirrors Lee, Mahathir, and Deng? Because Samsung Vietnam generates far more significant economic benefit for that nation than our top eight listed companies – in the Forbes list – combined for the Philippines.

What makes up the ecosystem of the Philippine economy? We know that by heart: The two drivers of the economy, OFW remittances, and the BPO industry. And, the above-referenced top eight enterprises. The picture we see is that of a service-consumption economy. Indeed, it is responsible for the 6%-7% GDP growth rate that we’ve had for several years now.

Yet, we know from the international institutions that even at this pace, it will take us a generation to see the light at the end of the tunnel. That is why Arangkada came into being. We must strive to move twice as fast. We must be looking at incremental export revenues of $100 billion. 

See below how to become a 100-million-dollar enterprise. But that is for a micro-enterprise in a country with a population of less than 10 million. We are over ten times more.

And we need 1,000 micro-enterprises as dynamic as these people to be on the way to make Arangkada a reality. Which means, we require that many more substantial enterprises. And we cannot get there at the rate we generate businesses until we attract very significant foreign investments. Consider: The Philippines has 775,000 MSMEs against 3,000 large enterprises. 

In the face of the 2020 pandemic, given the sheer number of MSMEs, the stimulus-relief package will not suffice, and many will fall by the wayside. It applies as well to the US despite its $2-trillion funding. That is why the blog shared the efforts of a nephew and friends to keep their restaurant afloat and at least cover the payroll. 

So, what lesson can we learn?

Let’s pause briefly to illustrate why correct analysis can miss the impact of analytics. Because MSMEs represent 99.6 percent of our establishments, we have, for the longest time, stressed the importance of their role in developing the economy. It reveals a failing in analytics. Recall analytics demands forward-thinking. To foresee, to be ahead of the curve, and distinguish the vital few from the trivial many.

We are looking at incremental export revenues of $100 billion to bring us closer to the performance of our neighbors that have addressed poverty better than us. It is not the outsized number of our MSMEs that will deliver our desired revenues. Analysis per se doesn’t equate to forward-thinking. 

See below how a micro-enterprise must shift its mindset to “innovation” and be in an altogether new ballgame. That is what the analysis misses. The challenge is beyond access to finance, which has been our go-to prescription.

As the blog has repeatedly raised, we look at MSMEs as livelihood undertakings because of our value of hierarchy and paternalism. And that translates to entitlement, not personal responsibility. That lack of dynamism extends to our acceptance that our top eight listed companies combined cannot match Vietnam’s mightiest private entity because Juan de la Cruz is inferior to MNCs.

The bottom line: Our ecosystem is deficient. Both our large enterprises and MSMEs fail to deliver the revenues that will put us on the road to prosperity. That is why poverty remains our top emotional concern because it is reality.

We must go back to the drawing board and craft a different ecosystem. For example, if we benchmark against our neighbors, we must move up to an industrial-investment economy.

Yet, it does not mean relying on the same patrons – political patronage and oligarchy. As our neighbors did, we must learn to look outward, not inward.

Let’s digress anew to build on the evil of patronage – and our culture of impunity. If there is truth to the following assertion, where is the outrage? Recall the controversies involving the two water companies. This time, it’s electricity. Two fundamental needs if we are ever to provide the necessities of Juan de la Cruz and build towards an industrial economy.

“From the biggest income-generating government agency, Napocor was bankrupted by the do-gooders with PSALM doing the rehabilitation.

“On the contrary, the independent power producers recklessly violated their part of the obligation when supposedly they are mandated to liquate all their overdue accounts with Napocor. Even before Napocor could fully pay Westinghouse, it accumulated an even more considerable amount of uncollectible account, which reason why it sold its geothermal plants, hydropower dams, and in maintaining, expanding, and securing our transmission grid.

“As one observed, the de-monopolization law is more of a farce. The modern-day oligarchs practically acted like living gods, dictating, and shaping the country’s economic and political life.” [Saving the National Power Corporation, Rod Kapunan, Backbencher, Manila Standard, 28th Mar 2020]

But we must resume the posting:

Recall innovation and global competitiveness characterize the 21st century. Sadly, because of our caste system, we don’t see Juan de la Cruz able to pursue such 21st-century challenges. It is a repeat of how we chose the overseas employment route versus the pursuit of industrialization.

We see Juan de la Cruz as inferior to MNCs, for example. But dynamism opened the world to Vietnam; also, Singapore, Malaysia, and China earlier. See above Vietnam’s visionary leadership. 

But what about our MSMEs. That is why the blog continually speaks to the writer’s Eastern European friends. They didn’t bow to a fixed and impermeable world or ism despite decades under Soviet rule – that turned them into the most impoverished nation in Europe. That is why the writer was motivated to help them voluntarily. They demonstrated that they were dynamic.

“You are a micro-enterprise, losing money for eight years now. You are competing against global behemoths from the West – in this business you chose. Yours indeed was your competition. And I know how they can crush you. That is why USAID asked me to come and assist you.

“Your dynamism and ambition are a good starting point. Next, if you want me around, transparency will be the rule. I am out the door once you step on that line. For decades as an MNC manager, every year, I signed an undertaking that I have not indulged in any practice that violates this principle. And my expenses are being covered by a US government entity, and I gave the same commitment. 

“Now, for the new reality that you must understand and accept: You will be a 100-million-dollar enterprise. That is where you must be if you are not going to be crushed by the competition. Your first investment is on a product that doesn’t raise the consumer’s well-being and thus cannot command high margins.

“We must start on the right foot. Your country is too tiny, even to have a chance. It is good that you are looking at your next-door neighbor. But that still won’t suffice. You must be a regional player, at the very least. But then, the big boys will again kick your butt.

“The good news is you can create other similar products, but this time, they must be high-margin ones. That means undoing your mindset of selling “economy” brands because cheap products are more natural to sell. In a word, your mindset must shift to “innovation.” It will mean borrowing money. But before that, you need an altogether new business model – so that financial institutions from the West will give you the time of day – because it mirrors a virtuous circle.

“Your country is in the accession process to join the EU. That is a great asset. Your market will include wealthier nations that will pay for high-quality and innovative products. That is why you must be looking at first becoming a 100-million-dollar business. You will be in a new ballgame.”

Long story short, three years later, they turned into a profitable going concern, and in 2011 the EU Competitiveness Commission recognized them as a model. It was a no brainer because they came out of the 2008 Global Recession a much stronger enterprise, after kicking the butts of their Western competition.

And they will again come out more robust post the 2020 pandemic. How? Their profitability more than doubled in 2019 from the prior year. It comes from their growing portfolio with every product development effort guided by innovation, as in raising a consumer’s well-being. Moreover, in the first quarter of this year, their top line has grown much more as with their profitability. 

In other words, they have the firepower to fight and win in an economic slowdown, much more so than they had in the 2008 Global Recession. Because they are dynamic, geared to creating a virtuous circle, an ecosystem that will make their enterprise thrive against the demands of the 21st century.

Let’s get back to the Philippines. If there is a theme for this posting, it is dynamism.

“We don’t have to accept the world that we’re born into as something fixed and impermeable.” — Laurene Powell Jobs.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]