Juan de la Cruz has hit rock bottom.

How come our old merry ways still grip us?

It’s not unprecedented if we consider how Venezuela or Brazil, or African countries suffered similar fates.

Sadly, denial is worse than blindness. We in the Philippine elite class, best positioned to upend our fate, are also the prime enablers of this downward spiral because we can use our influence either way.

Let’s start with our values of hierarchy and paternalism. We don’t begin to look at ourselves but those lower in the “hierarchy” – as in poverty and its source, i.e., employment.

Recall the comprehensive agrarian reform – and how we trumpeted it as a triumph of Filipino compassion. And the overseas employment phenomenon. And again, we celebrated it as an expression of “Pinoy abilidad” – and rightly so because over 10 million OFWs to this day are driving the Philippine economy.

And beyond the agrarian reform, we also were proud to champion farms-to-market roads and irrigation initiatives. Moreover, we created the LGUs and felt fulfilled.

Yet, instead of lifting rural folks from poverty and elevating Philippine agriculture, we import rice while Vietnam is exporting them. 

And now, with the education crisis, we want to focus on the rural areas once more – even when our supposed top universities, all located in Metro Manila, have all sank in the global rankings.

Why? Because of our values of hierarchy and paternalism. And they are merely subsets of our value system – as in our instincts: We are parochial and insular. So, we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

And the best example is among us, the Philippine media. That’s why the blog keeps calling us out, us in the Philippine elite class.

Let’s pause right there.

Who are the ones raising the barriers to open the Philippine economy? To be sure, we in the elite class have company, i.e., Juan de la Cruz. He personifies parochialism and insularity – and the rest of our value system.

I laugh every time I come across our focus on MSMEs. Did we ever learn about Pareto? We did, but our values of hierarchy and paternalism get in the way. And Padre Damaso springs to mind. Indeed, we are the present-day Padre Damaso.

I laugh too every time I come across our focus on the rural areas. Did we ever learn about the multiplier effect of investment? We did, but we are the elite class, and we can’t own up to our failings; it has to be somebody else.

Would you please think of how Vietnam put poverty in its rearview mirror? Because Vietnam’s investment already was through the roof as they opened their economy. And it was evident as early as over a dozen years ago when the blog started.

It is not rocket science. All Vietnam did is replicate the efforts of the Asian Tigers.

Let’s stop right there. Can we not figure that out? Why does Singapore attract loads of FDIs? Do foreigners own Singapore? Or Vietnam?

We won’t figure that out because we want to keep to our old merry ways, i.e., we in the Philippine elite class lord it over Juan de la Cruz. And unsurprisingly, Juan de la Cruz pays the price. One Vietnam enterprise, i.e., Samsung Vietnam, delivers far more economic benefits than our eight top companies combined. We have a classic double whammy, yet we like to lionize our tycoons.

If it were not for the dynamism of this universe, I would have given up on our nation. [Recall why I accepted the challenge faced by my then-new friends, the Eastern Europeans. Yet, they turned giant killers, giving Western behemoths a run for their money. “Why are we in this god-forsaken place,” asked the wife.]

We are so unequipped to face the 21st century.

But then again, even empires come and go. And that means nations that are up today won’t be there forever.

And the world is seeing today how China will overtake the US as an economy.

Still, our hurdles as Juan de la Cruz are daunting. Beyond our denial is our inexperience. As our neighbors sustain progress and development, they will keep distancing themselves from us. That’s why despite proudly broadcasting our 6%-7% GDP growth rate, we remain the regional laggard.

And we can relate the said phenomenon to the crisis in Philippine education. We’re still of the old mold.

The good news is, even the US is yet to internalize the skills demanded by the 21st century: (1) Critical Thinking, (2) Creativity, (3) Collaboration, (4) Communication.

Here’s a quote from an earlier posting: “Like many K-12 institutions, Shawnee Mission School District in Kansas has embraced 1:1 technology. But connecting the classroom to the outside world has helped students address real-world problems in new ways.

“During a problem-based learning process called “Genius Hour,” students identify issues they’re interested in exploring and, with the help of their teachers, connect via video with working professionals including engineers, physicians, scientists – even professional athletes. After one classroom of 5th graders at Sunflower Elementary engineered prosthetic tails for injured dolphins, they were able to meet prosthetic developers over a video to communicate about their work.

“Students get so excited about these professionals taking the time to speak with them.

“Experiential learning is where the power of the technology ties in.” [“Rethinking Teaching: How K-12 and higher education leaders can facilitate collaborative learning with technology”;  https://media.erepublic.com/document/CDE18_BRIEF_Cisco_V.PDF]

The blog often speaks to experiential learning. That’s why it brings up our lack of experience in development.

For example, when I first learned that DTI was working on roughly 50 industry road maps, I would only shake my head. That smacks of a classroom mentality.

And more recently, look at the implementing rules and regulations for CREATE and SIPP. Did we not learn from the early days of the BOI? We continue to write investment priority initiatives as though a dissertation in policymaking. And it is no different from our focus on MSMEs.

Recall that I mentored a Ph.D. candidate and guided her in developing her dissertation. To a practitioner like me, the draft of her outline approved by her professor would not pass muster in the real world. How many dissertations are schoolwork per se? 

“I will only assist you if you commit to utilizing the outcome for a real-world challenge.” Those familiar with the blog will remember today, she’s the global marketing director of one of the world’s most popular brands.

That is not to say academic exercises are wrong. That is why the blog often cites bodies of knowledge. For example, pure math advances science while applied math solves contemporary challenges.

However, applied math does not mean higher math. Even Jeff Bezos admits that driving Amazon’s business requires simple math. For example, AI today generates big data, yet the analytics necessary to leverage them don’t demand higher math but forward-thinking.

And that is why the blog questions why the simple metric of GDP growth rates traps us. Analytics is about forward- and lateral-thinking.

We want a bigger pie, a larger GDP. That’s why the blog offered the hypothesis of raising Philippine GDP by $200 billion. That is to leapfrog the economic output of our neighbors; moreover, it opens the mind to a lateral-thinking exercise. Instead of a narrow path, we unshackle the “mind” to ask: What industries and products must we disproportionately support that will most likely get us sooner than later to an incremental GDP of $200 billion? And which foreign money and technology are they?

Juan de la Cruz has lived in abject poverty despite our 6%-7% growth rates. 

Then consider: We are not the United States that is a highly-developed economy, and fiscal policies will generate incremental outcomes. Think again of the US GDP of over $20 trillion, growing at 6%-7%. That explains why the Philippines, despite similar growth rates, is still the regional laggard.

Sadly, we lack the experience in development that the classroom approach is all we have in our bag of tricks.

On the other hand, we in the chattering classes have written about big data and analytics.

And that is why the blog often speaks to forward-thinking and the GPS model. If we can’t forward-think, we can’t do justice even if we try to define the common good, for example. In other words, big data and analytics aren’t merely “numbers” exercises.

Consider these questions: (1) Where are we? (2) Where do we want to be? (3) How do we get there?

To begin with, because we are in denial, we can’t answer the question: Where are we? And if we can’t answer that, how can we respond to “Where do we want to be?”

And they explain why we keep tripping ourselves as we think through “how do we get to where we want to be?”

That is why we are focused on the rural areas and MSMEs. But none of them can match the economic contributions of Samsung Vietnam, for example. The display of dynamism and interdependence made Vietnam able to lure foreign partners – and overcome poverty.

We are yet to internalize dynamism and interdependence because we can’t overcome parochialism and insularity. And as necessary, to define, pursue, and attain the common good.

Recall that the blog often speaks to democracy being the mirror image of Christianity, i.e., the imperative of personal responsibility for the common good. And if we extend the analogy, it also explains why we struggle with foreign relations. We want to be in bed with China or Russia, or North Korea? Yet, despite their imperfections, freedom-loving nations come together precisely for the said purpose.

But Rizal knew us. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity. The converse is: autocratic nations are a culture of impunity. That’s why Trump saw Duterte and Putin, to name just two, as friends.

Let’s get back to the Asian Tigers.

The Asian Tigers did not follow the US model. They became tiger economies by throwing the book out the window. Instead, they begged for Western money and technology. And bingo! Look at how rapidly they moved up from developing to developed.

The universe is dynamic. As we speak, new and innovative initiatives are evolving elsewhere in the world.

But because we are the Philippine elite class, we stick to our values of hierarchy and paternalism.

Aren’t we surprised why beyond being the regional laggard, we lag in education, in infrastructure development, in industrialization, in traversing poverty to prosperity?

Juan de la Cruz has hit rock bottom.

How come our old merry ways still grip us?

Gising bayan!     

A narrow metric traps us.

We smart from being colonized by the West even if physically we are free. But how about our minds? Aren’t we trapped in a narrow metric?

Recall the cognitive development scale that runs the spectrum – from binary or dualistic to relative thinking. Sadly, it is the reality inherent in human development. For example, ours reflect the lack of experience in development. But that touches on a particular chamber of the brain – when there are others (without being technical about it.) And in its absence, humankind relies on the intellect.

In other words, why can’t Juan de la Cruz be dynamic?

Of late, many are up in arms: Because of CREATE, the BIR wants to tax for-profit educational institutions.

Yet, we all know we are not only economic laggards; the Philippines lags the region in education. But education is a humongous test. Beyond taxes, there are also 21st-century skills that impose a much higher hurdle for education.

For example, the challenges we face are (1) money, as in our limited means – because of our mediocre tax revenues than our neighbors – owing to our lower GDP per capita; (2) upending the existing educational system.

The good news is that even a wealthy nation like the US, despite its bloated education budget, must also overcome the shortcomings of its educational system. Recall that when I relocated to my old MNC-company’s New York headquarters, I was involved in figuring out how to deal with higher education challenges.

And at that time, the Western world faced the rapidly rising Japanese competitiveness – aka Japan Inc. – driven by their “quality” culture. And it saw the beginning of the decline in American manufacturing, once the envy of the world.

And if China put the nail on the coffin of US manufacturing, it only confirms the dynamism of this universe – because Japan no longer leads in this arena.

And the history of modern Western industrial development illustrates the said reality. Post-WWII saw the need to rebuild the world, and America had a head start because the war did not physically impair it. Instead, it was riding a momentum – from the manufacturing efforts of wartime armaments.

But manufacturing is one piece of industry and commerce, and there are others. For example, marketing became a challenge as significant manufacturers like General Motors, organized along with the concept of command-and-control lifted from the military, saw the need to move beyond manufacturing. Procter & Gamble, for instance, realized the need to cut through the bureaucracy of a command-and-control environment and pioneered the concept of brand management.

Then finance’s turn came and then legal and then information technology. But how does industry pull these disparate functions and disciplines together? The Japanese quality culture led the way.

But then, this world is dynamic. It had to move from analog to digital. Enter: the tech giants; they started small – in family home garages – and then conquered the world.

That brings us to the 21st-century skills of (1) Critical thinking, (2) Creativity, (3) Collaboration, (4) Communication.

We in the chattering classes have discussed these skills. But talk is cheap.

For example, take critical thinking. If adults don’t own critical thinking, what more of students?

“Like many K-12 institutions, Shawnee Mission School District in Kansas has embraced 1:1 technology. But connecting the classroom to the outside world has helped students address real-world problems in new ways.

“During a problem-based learning process called “Genius Hour,” students identify issues they’re interested in exploring and, with the help of their teachers, connect via video with working professionals including engineers, physicians, scientists – even professional athletes. After one classroom of 5th graders at Sunflower Elementary engineered prosthetic tails for injured dolphins, they were able to meet prosthetic developers over a video to communicate about their work.

“Students get so excited about these professionals taking the time to speak with them.

“Experiential learning is where the power of the technology ties in.” [“Rethinking Teaching: How K-12 and higher education leaders can facilitate collaborative learning with technology”;  https://media.erepublic.com/document/CDE18_BRIEF_Cisco_V.PDF]

But what is critical thinking? “It is the practice of solving problems, among other qualities. In addition to working through issues, solving puzzles, and similar activities, critical thinking also includes an element of skepticism.

“This is important in the 21st century because it’s more complicated than ever to verify accurate information (primary thanks to the Internet).

“Critical thinking empowers students to discover the truth in assertions, especially when it comes to separating fact from opinion.

“With critical thinking, students don’t just learn a set of facts or figures. Instead, they know how to discover the facts and figures for themselves.

“They ask questions. They become engaged in the world around them. They help others think critically, too.

“That might be the most crucial part of critical thinking. Once one student has it mastered, it quickly spreads to their peers.

“Whether they learn how to think critically from spending time online or simply asking ‘Why?’ in everyday life, this skill prepares students for a life of independence and purposeful thought.

“Still, critical thinking is just one of the four C’s in 21st Century skills.” [What Are the 4 C’s of 21st Century Skills (?), Bri Stauffer, Applied Educational Systems, 7th May 2020]

What have I learned from the shortcomings of US higher education? That experiential learning is crucial. And so, instead of lectures, educators must learn to conduct workshops. See above re the “Genius Hour,” which also incorporates technology.

In other words, no one function or discipline can deal with the challenges posed by this century.

“The habits of Steve Jobs, Jeff Bezos, and other innovative CEOs reveal much about the underpinnings of their creative thinking. Research shows that five discovery skills distinguish the most innovative entrepreneurs from other executives.

“Dyer, of Brigham Young University; Gregersen, of Insead; and Christensen, of Harvard Business School, reveal how innovative entrepreneurs differ from typical executives. Their study demonstrates that five ‘discovery skills’ distinguish the most creative executives: Associating helps them discover new directions by making connections among seemingly unrelated questions, problems, or ideas. Questioning allows innovators to break out of the status quo and consider new ideas. Through observing, innovators carefully and consistently look for small behavioral details—in the activities of customers, suppliers, and other companies—to gain insights about new ways of doing things. In experimenting, they relentlessly try on new experiences and explore the world. And through networking with diverse individuals from an array of backgrounds, they gain radically different perspectives.” [“The Innovator’s DNA” by Jeffrey H. Dyer, Hal Gregersen, and Clayton M. Christensen; Harvard Business Review, December 2009]

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

Sadly, our discussions on the Philippine education crisis come from our inward-looking bias. We don’t recognize the imperative of establishing benchmarks whenever we dissect a problem.

And it explains why we all speak from our respective expertise. And that reveals how much the world has left us behind.

Consider: We have a problem with money, as in GDP. We have an education crisis. We again demonstrated our backwardness in our response to the pandemic.

Yet, we can’t go beyond the need to trumpet our good deeds when our best hasn’t proved good enough.

And that’s why the blog keeps raising that “the ball is in our court,” us in the Philippine elite class.

For example, beyond the failure of a GDP growth rate of 6%-7% (that paved the way to raising our credit ratings) to lift us from regional laggard, we like to broadcast that manufacturing has moved up – not just services. But what is our yardstick? Consider: Our top eight companies combined can’t even match the revenues of one Vietnam enterprise, i.e., Samsung Vietnam.

Or course, the Constitution stands in the way. But the Constitution is merely an expression of our instincts. What goes around comes around.

In other words, we cannot measure success against a parochial metric because the 21st century is one of innovation and global competitiveness. Nor can we lionize our tycoons when they are the significant barriers to the opening of the Philippine economy.

Unsurprisingly, we smart from being colonized by the West even if physically we are free. But how about our minds? Aren’t we trapped in a narrow metric?

Gising bayan!

Why can’t Juan de la Cruz be dynamic?

It is because of our instincts – which we manifest in our caste system that makes destiny a given. And so, rank has its privileges.

Unsurprisingly, “South Korea and the Philippines had similar per capita incomes in the early 1960s. Still, the Philippines languished in political and economic institutions (especially because power and wealth concentrated in a few hands), so it remains a developing country. In contrast, South Korea has joined the ranks of the developed.” [“Globalization and Poverty,” Pranab Bardhan, Scientific American, 26th Mar 2006]

In fairness, Western financial institutions nudge us and reinforce said instincts because we value the same metric. And so, they raised our credit ratings to recognize our GDP growth rates of 6%-7% — despite our reliance on OFW remittances and failure to move up from a consumption-service economy to an investment-industrial economy.

What is wrong with this scenario? Even The New York Times, in the obituary for PNoy (May he rest in peace!), recognized our GDP growth rates under his presidency.

Question: How come, despite several years of growing at the said pace, we are still the regional laggard?

On the other hand, consider the US economy that is fast recovering from the pandemic, it is growing at the same metric of 6%-7%.

What’s the difference? The US GDP is over $20 trillion. Ours is a drop in the bucket. Yet, we like to believe that we are better than our neighbors whenever they report a lower growth rate because of this metric.

What is our reality? We are the regional laggard. And only Mongolia is the last neighbor left to leave us in the dust.

It is grade 5 arithmetic. The laws of big and small numbers govern percentages.

And because we aren’t dynamic – in mindset and thinking – we can’t see beyond a narrow metric.

Recall that I changed the planning and budgeting system in a 200-year-old Fortune 500. And did several restructuring initiatives in different parts of its worldwide markets.

Let’s hold it right there.

Don’t we like to say that being Pinoys, we are different? But “reality” is, everyone is different; otherwise, we are as predictable as robots.

Many postings ago, some may recall that I shared this anecdote: Over dinner, the country manager where I was doing a restructuring said, “My wife asked me to ask you if you are firing me.”

I always had a ready answer for these questions: I am here to guide you and your team to figure out three things: (1) Where are you as an enterprise; (2) Where do you want to be; and (3) How do you get there.

It is a classic exercise in defining the common good. And as the Franciscans would say, it is about unity, not uniformity. Uniformity undermines creativity and innovation. While the search for the supposed unknown benefits from differences — and diversity.

That’s why Juan de la Cruz sits in abject poverty. Consider: We want homogeneity to the nth degree that we can’t even live with our Muslim brothers and sisters.

Why can’t we think beyond the 6%-7% GDP growth rate despite missing our plans? If we were a Fortune 500 company, we would have done a restructuring exercise by now. Why? So that we can figure out three things: (1) Where are we as an economy; (2) Where do we want to be; and (3) How do we get there.

Why? We will be running like a headless chicken if we can’t articulate a vision or forward-think.

For example: (1) Our economy has a structural problem. Think of the Miami condo that collapsed. We failed to move up from a consumption-service economy to an investment-industrial economy. While our neighbors begged for Western money and technology, we designed our economy to be restrictive.

(2) We want to traverse poverty to prosperity.

(3) Firstly, we must establish a benchmark, and the Asian Tigers are it. We do not have to reinvent the wheel and let our egos get in the way. And that comes from our caste system. We in the Philippine elite class must recognize that we failed this nation. We cannot cherry-pick our good deeds. We have countless accountants and know the distinctions among assets, liabilities, and net worth. Our net worth equates to the lowest GDP per capita in the region because we lag in competitiveness save for Mongolia.

The textbook metrics that we rely on are very narrow and reflect our lack of experience in development – and where we are in the cognitive development scale.

As the Franciscans would say, St. Francis of Assisi knew the laws like the back of his hands that he could go beyond them. That is why he’s the patron saint of the environmentalists; he saw the broader universe and the oneness and interdependence of creatures. Yet, as the Franciscans would explain, all he was doing was internalize what Christ did while on earth – and why he had to suffer on the cross, being a contrarian and a radical.

There are metrics, and there are metrics.

And we must not be surprised, especially us in the Philippine elite class – and chattering classes. We like to talk about the social responsibility inherent in a business enterprise. Or a sense of purpose. Or to save the planet, or whatever.

On the other hand, we see the West as overly profit-driven and miss the humanity of commerce and industry.

Yet, we’re stuck with the one narrow metric of 6%-7% GDP growth. 

That’s why the blog asked, what’s the difference between economics and business? For example, in the latter, you pay the price for missing your plans. And you cannot just rational a miss.

How many times have we missed our growth targets as an economy and nation? But there is no sanction, and we never pay the price – except that Juan de la Cruz sits in abject poverty.

On the other hand, our neighbors awed the West – and acknowledged them as economic tigers. They were not prisoners of a narrow metric. Instead, they knew they had to beg for Western money and technology.

But why can’t we? Consider: We are parochial and insular. So, we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

And because of our instincts, there is no “dynamism” to pull out from our quiver.

Consider: Even the conservative US bishops did not follow through with their instincts. “They won't withhold Communion from politicians. Days after a vote triggered a tsunami of Catholic debate about Communion and politics, leading US Catholic bishops working on an upcoming pronouncement about the sacrament are now deemphasizing confrontation with President Biden or other Catholic politicians who support abortion rights.

“A public document on the Eucharist is very appropriate. But it must focus on ‘How do we attract people and make the beauty of what it means to us more evident to our young people and for them to understand why it’s so significant, instead of being focused on who can and who cannot receive.’” [The Washington Post, 25th May 2021]

Recall that the blog often speaks to the cognitive development ladder. That Franciscan theology, supported by the Jesuits, recognizes the spectrum of binary and relative thinking. Relativity isn’t solely Einstein’s – who also recognized a Creator because humankind, he included, can’t figure out the totality of the universe.

Recall that the blog never fails to raise the elements of dynamism and interdependence as inherent in an organism’s ability to thrive in this universe. And that includes humankind – and Juan de la Cruz. But that’s not foreign, given Darwin’s “survival of the fittest.”

But why can’t Juan de la Cruz be dynamic?

Unsurprisingly, “South Korea and the Philippines had similar per capita incomes in the early 1960s. Still, the Philippines languished in political and economic institutions (especially because power and wealth concentrated in a few hands), so it remains a developing country. In contrast, South Korea has joined the ranks of the developed.”

Here’s a quote from an earlier posting: “Will the implementing rules and regulations for CREATE and SIPP, accelerate raising GDP in absolute dollars? Take $200 billion. Over what period? In other words, a growth rate of 6%-7% did not lift us from regional laggard. And if the IRR will, what, industries and products will ensure that they do?

“Think of Vietnam and how one enterprise, i.e., Samsung, delivers more revenues than our eight top companies combined. We cannot be theoretical in this effort. We must step up to the real world of Juan de la Cruz.”

Gising bayan!

We must keep our eyes on the ball.

Here’s a quote from an earlier posting: “How come we in the Philippine elite class can’t keep our eyes on the ball? The reality is only Juan de la Cruz is impacted by our meager GDP per capita ($8,908) because we make even more than the average Malaysian’s $28,364. 

“Denial is how we perpetuate our caste system – and preserve our rank and privileges.

“Over decades, we kept managing our economy via logical and incremental thinking – instead of lateral or creative and forward-thinking – and proudly celebrated a GDP growth rate of 6%-7%. Yet, we remained the regional laggard – and must borrow tons of money for the 4Ps so that Juan de la Cruz can put body and soul together.

“Sadly, that paradigm is not the answer. Why? Because as our neighbors demonstrated, it is about traversing poverty to prosperity. It is not charity per se. Charity is not what ‘inclusive’ means. ‘Inclusive’ means to become prosperous as an economy and nation.

“But we want to keep to our puny minds – aka binary or dualistic thinking – even when our neighbors already scaled the cognitive development ladder. So, they embraced dynamism and interdependence that wealthy nations opted to partner with them – pouring loads of money and technology.

“Should we stop and ponder?”

The challenges posed by the Mandanas law and, say, the backlog in housing are merely symptoms of our underdeveloped economy.

Of course, there is more to nationhood than GDP. But with a GDP per capita just a fraction of Malaysia’s, there is no way we can lift Juan de la Cruz from poverty – and be as well off as the average Malaysian.

Maslow has edified the world about human needs. At the very basic are the physiological “needs.” Juan de la Cruz is at that level.

That is why we talk of food security and the housing backlog, for example. But, in short, poverty is our reality – and then some. 

The problem is, we in the Philippine elite class can’t keep our eyes on the ball. And that comes from our caste system.

There must be a way to feed Juan de la Cruz and to put a roof over his head – if only we can be more charitable?

There is none.

One more time with feeling, there is none – given the reality of our GDP per capita and, worse, the impunity inherent in the war on drugs. In short, charity and EJKs aren’t the answer to Philippine poverty.

Question: What’s the difference between economics and business? With the latter, you pay the price when you miss your plans at the heart of the compensation program. You cannot just rationalize a miss. Recall that I changed the planning and budgeting system in a 200-year-old Fortune 500 company. And every manager is equipped via the-house course they must take.

For example, will the implementing rules and regulations for CREATE and SIPP accelerate raising GDP in absolute dollars? Take $200 billion. Over what period? In other words, a growth rate of 6%-7% did not lift us from regional laggard. And if the IRR will, what, industries and products will ensure that they do?

Think of Vietnam and how one enterprise, i.e., Samsung, delivers more revenues than our eight top companies combined. We cannot be theoretical in this effort. We must step up to the real world of Juan de la Cruz.

How many times did FVR talk about the imperative to make the Philippine pie bigger? He wanted Juan de la Cruz to appreciate the challenge we faced. 

Yet, we can’t be conflating the challenges of developed economies with ours. That is comparing apples and oranges.

That is why the blog keeps speaking to the Asian Tigers – and, most recently, Vietnam. These Asian economies can’t compare with where the US is, economic development-wise. For example, the US spends over $700 billion in defense because it has a role to play as a hegemon. Think of the need to defend Ukraine from Russia. Or think of the need to protect South Korea and neighboring countries from North Korea.

We are more comparable to our neighbors. That is how we can keep our eyes on the ball.

In foreign relations, think of what happened to Germany and Japan. Should they fear the US because the US brought them to their knees?

Recall the Marshall Plan: “It was also known as the European Recovery Program, a US program providing aid to Western Europe following the devastation of World War II. It was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent. It was the brainchild of US Secretary of State George C. Marshall and crafted as a four-year plan to reconstruct cities, industries, and infrastructure heavily damaged during the war and remove trade barriers between European neighbors, and foster commerce between those countries and the United States.

“In addition to economic redevelopment, one of the stated goals of the Marshall Plan was to halt the spread of communism on the European continent.

“Implementation of the Marshall Plan has been cited as the beginning of the Cold War between the United States and its European allies and the Soviet Union, which had effectively taken control of much of central and eastern Europe and established its satellite republics as communist nations.

“The Marshall Plan is also considered a key catalyst for forming the North Atlantic Treaty Organization (NATO), a military alliance between North American and European countries established in 1949.

“Post-war Europe was in dire straits: Millions of its citizens had been killed or seriously wounded in World War II, as well as in related atrocities such as the Holocaust.

“Many cities, including some of the leading industrial and cultural centers of Great Britain, France, Germany, Italy, and Belgium, had been destroyed. In addition, reports provided to Marshall suggested that some regions of the continent were on the brink of famine because the fighting had disrupted agricultural and other food production.

“In addition, the region’s transportation infrastructure – railways, roads, bridges, and ports – had suffered extensive damage during airstrikes, and the shipping fleets of many countries sunk. One could easily argue that the only world power not structurally affected by the conflict had been the United States.

“The reconstruction coordinated under the Marshall Plan was formulated following a meeting of the participating European states in the latter half of 1947. Notably, the Soviet Union and its satellite states received invites.

“However, they refused to join the effort, allegedly fearing US involvement in their respective national affairs.

“President Harry Truman signed the Marshall Plan on 3rd Apr 1948 and distributed aid to 16 European nations, including Britain, France, Belgium, the Netherlands, West Germany, and Norway.

“To highlight the significance of America’s largesse, the billions committed in aid effectively amounted to a generous 5 percent of US gross domestic product at the time.” [History.com]

What about Japan?

“Occupation and Reconstruction of Japan, 1945–52: After the defeat of Japan in World War II, the United States led the Allies in the occupation and rehabilitation of the Japanese state. Between 1945 and 1952, the US occupying forces, led by General Douglas A. MacArthur, enacted widespread military, political, economic, and social reforms.

“The groundwork for the Allied occupation of defeated Japan emerged during the war. In a series of wartime conferences, the leaders of the Allied powers of Great Britain, the Soviet Union, the Republic of China, and the United States discussed how to disarm Japan, deal with its colonies (especially Korea and Taiwan), stabilize the Japanese economy, and prevent the remilitarization of the state in the future. Finally, in the Potsdam Declaration, they called for Japan’s unconditional surrender; by August 1945, they did.

“In September 1945, General Douglas MacArthur took charge of the Supreme Command of Allied Powers (SCAP) and began the work of rebuilding Japan. Although Great Britain, the Soviet Union, and the Republic of China had an advisory role as part of an ‘Allied Council,’ MacArthur had the final authority to make all decisions. And the occupation of Japan consists of three phases: the initial effort to punish and reform Japan, the work to revive the Japanese economy, and the conclusion of a formal peace treaty and alliance.

“The first phase, roughly from the end of the war in 1945 through 1947, involved the most fundamental changes for the Japanese government and society. First, the Allies punished Japan for its past militarism and expansion by convening war crimes trials in Tokyo. At the same time, SCAP dismantled the Japanese Army and banned former military officers from taking roles of political leadership in the new government.

“In the economic field, SCAP introduced land reform, designed to benefit the majority tenant farmers and reduce the power of wealthy landowners, many of whom had advocated for war and supported Japanese expansionism in the 1930s. MacArthur also tried to break up the sizeable Japanese business conglomerates, or zaibatsu, to transform the economy into a free-market capitalist system. Finally, in 1947, Allied advisors essentially dictated a new constitution to Japan’s leaders. Some of the most profound changes in the document included (a) downgrading the emperor’s status to that of a figurehead without political control, (b) placing more power in the parliamentary system, (c) promoting greater rights and privileges for women, and (d) renouncing the right to wage war, which involved eliminating all non-defensive armed forces.

“By late 1947 and early 1948, the emergence of an economic crisis in Japan alongside concerns about the spread of communism sparked a reconsideration of occupation policies. This period is sometimes called the ‘reverse course.’ In this stage of the occupation, which lasted until 1950, the economic rehabilitation of Japan took center stage. SCAP became concerned that a weak Japanese economy would increase the influence of the domestic communist movement. Moreover, with a communist victory in China’s civil war increasingly likely, the future of East Asia appeared to be at stake.

“Occupation policies to address the weakening economy ranged from tax reforms to measures aimed at controlling inflation. However, the most serious problem was the shortage of raw materials required to feed Japanese industries and markets for finished goods. The outbreak of the Korean War in 1950 provided SCAP with just the opportunity it needed to address this problem, prompting some occupation officials to suggest that ‘Korea came along and saved us.’

“After the UN entered the Korean War, Japan became the principal supply depot for UN forces. The conflict also placed Japan firmly within the confines of the US defense perimeter in Asia, assuring the Japanese leadership that no real threat would be made against Japanese soil whatever the state of its military.

“In the third phase of the occupation, beginning in 1950, SCAP deemed the political and economic future of Japan firmly established and set about securing a formal peace treaty to end both the war and the occupation. Moreover, the US perception of international threats had changed so profoundly in the years between 1945 and 1950 that the idea of a re-armed and militant Japan no longer alarmed US officials; instead, the real threat appeared to be the creep of communism particularly in Asia.

“The final agreement allowed the United States to maintain its bases in Okinawa and elsewhere in Japan, and the US Government promised Japan a bilateral security pact. In September of 1951, fifty-two nations met in San Francisco to discuss the treaty, and ultimately, forty-nine of them signed it. Notable holdouts included the USSR, Poland, and Czechoslovakia, all of which objected to the promise to support the Republic of China and not do business with the People’s Republic of China that was forced on Japan by US politicians.” [history.state.gov]

What about China? Should China fear the US?

Didn’t Deng Xiaoping tell (upon the advice of Lee and Mahathir) the West that China needed Western money and technology if they were to lift their people from poverty?

Or should Russia fear the US? What happened to former Soviet satellite states after the fall of the Soviet empire? Why did they want to join NATO, for example? Of course, there will always be exceptions. But these are nations that kept to the tyrannical rule they knew from the days of the old Soviet empire. And Belarus is a good example.

And even wealthy Germany saw local town folks lament the pronouncement of Trump that the US military will shut down the US facility in their backyard – because they were like family. They could also use the economic benefits generated by the US military base. Thank God for Biden. What a relief to said people.

Of course, it’s not a perfect world as the EU continues to demonstrate – with Brexit in particular. And I have a ringside view, working and living with Eastern Europeans for almost 20 years, and assisted them when they geared up for ascension – and beyond – into the EU. Recall too that I covered the Asia-Pacific region for a decade, including China and Vietnam – and have many friends in these countries.

Perfection is not of this world. Even Pope Francis warned the US bishops about assuming that the Catholic faith is the epitome of perfection. Because even spiritual development is a work in progress, recall John Paul VI would start his morning prayers with the admission that he comes to the Creator as a sinner.

And that’s why the blog never stops asserting that democracy is the mirror image of Christianity, i.e., the imperative of personal responsibility for the common good – a work in progress if indeed there is one.

Why are freedom-loving nations again rallying around America – or Biden in particular? Because the global community must seek to demonstrate personal responsibility for the common good. And America, like it or not, has the resources and capability to take the lead in this collective undertaking.

To be sure, the US isn’t perfect either. Recall that I have no respect for US politics – seeing through the culture wars – and chose not to exercise the right to vote. But as the world saw, the majority of Americans won’t submit to tyranny.

But how does Juan de la Cruz find his place in the sun?

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

In other words, why do we struggle with trade and foreign relations?

In both cases, we remain an adolescent given our lack of (a) development experience – and why we are closer to dualism or binary thinking than relativism; and (b) failure to move up from a consumption-service economy to an investment-industrial economy.

Consider: “Opening the economy to trade and long-term capital flows need not make the poor worse off. The key is to put the appropriate domestic policies and institutions in place – to help shift production to more marketable goods and help workers enter new jobs.

“Contrasting case studies of countries make this quite apparent. For example, although the island economies of Mauritius and Jamaica had similar per capita incomes in the early 1980s, their economic performance has diverged dramatically, with the former having better participatory institutions and the rule of law and the latter mired in crime and violence.

“South Korea and the Philippines had similar per capita incomes in the early 1960s. Still, the Philippines languished in political and economic institutions (especially because power and wealth concentrated in a few hands), so it remains a developing country. In contrast, South Korea has joined the ranks of the developed.

“Botswana and Angola are two diamond-exporting countries in southern Africa, the former democratic and fast-growing, the latter ravaged by civil war and plunder.” [“Globalization and Poverty,” Pranab Bardhan, Scientific American, 26th Mar 2006]

“How come we in the Philippine elite class can’t keep our eyes on the ball? The reality is only Juan de la Cruz is impacted by our meager GDP per capita ($8,908) because we make even more than the average Malaysian’s $28,364. 

“Denial is how we perpetuate our caste system – and preserve our rank and privileges.”

Gising bayan!

Instincts. Denial. Cluelessness. Destiny.

Translation: Our instincts feed on our denial, and the outcome is cluelessness and the embrace of destiny.

Consider: “OFWs save the day,” EDITORIAL, Philippine Daily Inquirer, 21st Jun 2021.

Question: Have we forgotten that remittances are the driver of the Philippine economy?

Let’s dissect the assertions: We are parochial and insular. So, we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

In other words, our paradigm can only shrink our playing field – beholden to our value of hierarchy and paternalism and manifested in our caste system – and cannot expand it.

Let’s pause and ponder.

We have been trumpeting OFW remittances and proudly proclaiming our monetary and fiscal policies. But, in fairness, financial institutions enable us when they value logical and incremental thinking – as in our GDP growth rates in the 6%-7% range.

Yet, we also know that financial institutions move “hot money” in and out of countries as often as they need to window-dress their investment performance to satisfy investors – and half of the American population invests in the market via their pension funds.

In other words, financial institutions don’t care about the Philippines navigating poverty to prosperity.

It is for Juan de la Cruz to manifest personal responsibility for the common good.

Consider: “The visiting team from the International Monetary Fund highlighted the need to continue helping poor sectors with the crisis. The government may need to invest more to beat the coronavirus pandemic to ensure the country’s return to sustainable economic growth this year and in 2022.” [“OFWs save the day, EDITORIAL, Philippine Daily Inquirer, 21st Jun 2021.]

But we don't want to bloat our budget deficit further.

Translation: Our instincts feed on our denial, and the outcome is cluelessness and the embrace of destiny.

In other words, we want to keep a squeaky-clean balance sheet, said like a proper fiscal person.

[Prof. Jesus P. Estanislao was my Economics 101 professor. And he required a paper re why governments pursue deficit financing – aka Keynesian economics. And it also works in real life. For example, when I took a mortgage loan to finance our dream house in a much-preferred gated community, my mother was so concerned: “Can you afford such a humongous loan?” And my old MNC-company maximizes borrowings – beyond the textbook “acid-test ratio,” yet is acknowledged a “dividend king” by Wall Street – to sustain investment and growth. And when my Eastern European friends had to invest in a state-of-the-art facility to be the leading edge, a Western bank stepped up to the plate.]

Recall that the blog never fails to raise our structural problem, with the economy driven by OFW remittances.

Question: When do we break the vicious cycle?

Or can we? That’s why the blog often says that to be dynamic is not in our bag of tricks. And we can’t sweep that under the carpet.

In other words, the Philippine economy’s structural problem comes from a weak income stream. Playing the musical chair — as in devolution or the Mandanas ruling — is merely window dressing. 

Whether it is an individual, a company, or a nation, the enterprise must break its paradigm and create a substantial income stream. Think of Vietnam and how it overtook us just recently. It lured Samsung to make them the regional manufacturing hub for their smartphones.

And that lack of dynamism explains why our economic managers – going decades – have not led the way in moving up the Philippines from a consumption-service economy to an investment-industrial economy. As the blog asserts, the Constitution is merely an expression of our instincts. We can point the blame only on Juan de la Cruz.

Here’s a quote from an earlier posting: “The country still lags in the region, as it ranked 13th out of 14 Asia-Pacific economies. At the 60th spot, Mongolia was the only Asia-Pacific economy behind the Philippines.

“After being overtaken by Vietnam, Mongolia is the only country left to leave us in the dust.

“Has our day of reckoning come and gone? Where to the Philippines?”

That lack of dynamism will leave us farther and farther behind. Why? Our caste system is anathema to innovation.

Here’s more from an earlier posting: “The habits of Steve Jobs, Jeff Bezos, and other innovative CEOs reveal much about the underpinnings of their creative thinking. For example, research shows that five discovery skills distinguish the most innovative entrepreneurs from other executives.

“Dyer, of Brigham Young University; Gregersen, of Insead; and Christensen, of Harvard Business School, reveal how innovative entrepreneurs differ from typical executives. Their study demonstrates that five ‘discovery skills’: (1) Associating – it helps them discover new directions by making connections among seemingly unrelated questions, problems, or ideas; (2) Questioning – it allows innovators to break the status quo and consider new ideas. Through (3) observing, innovators carefully and consistently seek small behavioral details—in the activities of customers, suppliers, and other companies—to gain insights about new ways of doing things. In (4) experimenting, they relentlessly try on new experiences and explore the world. And through (5) networking with diverse individuals from an array of backgrounds, they gain radically different perspectives.” [“The Innovators’ DNA” by Jeffrey H. Dyer, Hal Gregersen, and Clayton M. Christensen; Harvard Business Review, December 2009]

“Those familiar with the blog know that this is not the first time it spoke to the innovators’ DNA. For example, ‘the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields is central to the innovator's DNA.’”

For example, we rely on our economic managers to manage the Philippine economy. And our "kuro-kuro" reflects our respective fields of expertise. But who will pull them together?

Our caste system reinforces our dilemma.

The bottom line: Very soon, we will be aghast when Mongolia overtakes us. But why haven’t we responded to our reality all this time?

Habits are too hard to break. And when it means preserving our rank and privileges, all the more.

Translation: Our instincts feed on our denial, and the outcome is cluelessness and the embrace of destiny.

Gising bayan!