“The buck stops here”

"The sign 'The Buck Stops Here' that was on President Truman's desk in his White House office was made in the Federal Reformatory at El Reno, Oklahoma. Fred A. Canfil, then United States Marshal for the Western District of Missouri and a friend of Mr. Truman, saw a similar sign while visiting the Reformatory and asked the Warden if a sign like it could be made for President Truman.

"On more than one occasion President Truman referred to the desk sign in public statements ... In his farewell address to the American people given in January 1953, President Truman referred to this concept very specifically in asserting that, 'The President - whoever he is --has to decide. He can not pass the buck to anybody. No one else can do the deciding for him. That's his job. "[ Https://www.trumanlibrary.org/buckstop.htm ]

Truman came to mind because of this: "I never thought he was a great dealmaker, to be honest with you ... [While] in terms of taking the responsibility for the buck, he just would never do it. It's not in his DNA. He's never responsible. It is always someone else's fault.

"And the number of deals he's made over the years ... have overwhelmingly been failures ... Trump was really one of the worst dealsmakers [one can] come across." [From Trump's The Art of the Deal co-author  Tony Schwartz  and former longtime Trump Organization executive  Barbara Res . Former Trump Organization VP Spills Beans On Donald Trump's Awful Dealmaking Skills, Lee Moran, HuffPost, 11th Jan 2019]

What has that got to the with the Philippines? Can we say that "the buck stops here"? Where ... we stand versus Vietnam as an economy, for example! Recall a recent posting in the blog ... That before we can right the ship we call the Philippines, Juan de la Cruz must first right himself.

Consider where we are in attracting foreign direct investment. Recall that a senator pointed at oligarchy behind our restrictive economy: While over the last 10 years on a compounded basis we've been growing FDIs by 16%, if we project that 5 years forward, our FDIs will be at $ 163.04-B. On the other hand, Vietnam, because they beat us to the gun, despite a slower pace of 14% will have a whopping $ 253.69 in FDIs. Which means we will be at a mere 64%.

And if we do not do anything about exports and we stay flattish, growth-wise, our exports five years hence will be even worse, $ 47.65-B or 11% fluctuate against Vietnam's $ 451.84-B. And why in a previous posting the blog identified our five biggest enterprises that can drive exports. Because at this order of magnitude, MSMEs are not going to cut it. Exports must be driven by the big boys.

Why are exports critical? If we back out exports from the GDP numbers of PH, Vietnam, Thailand and Malaysia, in the net portion attributable to the local economy, PH is ahead of all three. Yet, our poverty rate is the worst at 21.6%, to wit: Vietnam = 8%; Thailand = 7.2%; Malaysia = 3.8%. Even Indonesia with a population 2.5 times ours has a much lower poverty rate, 10.9%

Exports where the bulk is made up of tangible products have a greater knock-on or multiplier effect on the economy because of the auxiliary or sub-industries they generate - which translate to greater employment.

Ten years have come and gone ... and we have nothing to show. Because we can not keep our eye on the ball.

We can debate isms and the problems of the world but why do not we first figure out how to feed Juan de la Cruz? Think Maslow. It does not mean he needs a dole out. He has a hierarchy of needs that is a continuum. He is not destined to be servile. 

The buck stops here!  Consider what we read in local media and figure out how relevant they are to the reality of Juan de la Cruz. 

We can talk politics and government incessantly but why do not we first figure out how to toss our culture of impunity? What must we do with a Marcos or an Arroyo ... or Enrile, Estrada, Revilla? They must be our leaders? 

We can cheerlead for the big boys but why do not we first figure out how to undo oligarchy? Think media. Media must challenge them to demonstrate foresight, dream big and be global players. They can not be as fixed in their mindset as Juan de la Cruz, who represents a third-world, underdeveloped, poverty-gripped nation ... not a titan industry.

The old playbook of "stay with the knitting" and "pursue the bottom of the pyramid" is just that, an old playbook. Tom Peters talked about his treatise "In search of excellence" to the local business community in the early 80's. But how many of those excellent companies are still around? 

CK Prahalad introduced the dynamic of product promise and pricing to explain the value chain. And he followed it up with "The bottom of the pyramid." But what happened to Nokia that focused on the cheapest cellphone and ceded the smartphone to competition? 

The universe is a dynamic 24/7 phenomenon that no one can stand still fixated in his or her mindset. Not even human need. It is fundamental that man's need is ever changing. Juan de la Cruz can not be perpetually poor. Is not finding a "kasambahay" today more challenging than yesterday? It is well and good because old aristocracy is just that, old ... and passé.

And if we cling to the past it follows that we are scared of the future ... like AI. As though the world will come to a screeching halt. See below re we're two generations behind. The price we pay for being backward-looking.

And why nations need leadership not ideologues. Ideologues have a fixed mindset. Think FDR and how he led America to overcome the Great Depression and ... bring about world peace, to boot. He fixed the problems of America, as in charity begins at home but does not end there. It's called American exceptionalism. 

Or Kennedy and how he defused the Cuban missile crisis that could have ignited WWIII. And his decision-making skills that defined how the two sides effectively settled the impasse became a model for the course, Negotiation 101. But not only, it elevated group dynamics and brainstorming to an art form ... given how Kennedy led a team within his cabinet and with brother Robert playing devil's advocate. [Today it is called "6 Thinking Hats" developed by Edward de Bono.] And more recently, a model for innovation ... being an egalitarian and a cross-discipline exercise. [For example, "Design Thinking" which was developed in Stanford University.]

Do we wonder why in the Philippine context innovation is not an instinct? And even more fundamentally, why we're the regional laggard? [Recall the online course offered by Oxford University, From poverty to prosperity: Understanding economic development; https://www.youtube.com/watch?v=ChY8BjeigaY ]

But then again our mindset explains why we are accepting of the status quo despite its dire consequences? Think poverty and the need for over 10 million OFWs to work overseas and be separated from families. We may be in denial, but the rise in our HIV incidence is among the highest. Que sera, sera?

The sad reality is we've long kicked up a perfect storm given both the haves and have-nots are in the same boat, that is, the "Pinoy kasi" worldview. And it is the constant theme of the blog: We are parochial and insular; We value hierarchy and paternalism; We rely on political patronage and oligarchy ... That at the end of the day, ours is a culture of impunity.

Our worldview explains why ours is a "Fixed mindset." Recall the work of Dr. Carol Dweck of Stanford University. It is characterized as: "Failure is the limit of my abilities; I'm either good at it or not; My abilities are unchanging; I can either do it, or I can not; I do not like to be challenged; My potential is predetermined; When I'm frustrated, I give up; Feedback and criticism are personal; I stick to what I know. "

On the other hand, a "Growth mindset" is best described as: "Failure is an opportunity to grow; I can learn to do anything I want; Challenges help me to grow; My effort and attitude determine my abilities; Feedback is constructive; I am inspired by the success of others; I like to try new things. "

Does it confirm why we're not keen on industrialization? Two administrations have come, and where are we with Arangkada? This is the first attempt by a cross-section of society to address the challenge of industrialization ... and we failed the test, miserably! Que sera, sera!

Where is our fixed mindset coming from? Try our value of hierarchy and paternalism. We accept that we can be low in the totem pole but we expect those above us to take care of us. Unsurprisingly, we accepted the war on drugs! We love tyranny! [So says Rizal.]

Our value of hierarchy and paternalism has stunted the progress and development of this country ... And where does the buck stop? 

Unsurprisingly we are two generations behind: (a) the region has left us in infrastructure development and industrialization; and (b) beyond these structural deficits is the 21st century's demand - of innovation and global competition.

Consider: "A culture of silence can be dangerous ... One [of the deadliest accidents] from the airline industry [was] a crash between Boeing 747s in the Canary Islands in 1977 when a co-pilot felt unable to query his captain's decision to take off based on a misunderstanding of instructions from air-traffic control.

"Another case [is] that of the Columbia space shuttle in 2003; an engineer who has diagnosed damage to the shuttle's wing before the flight felt unable to speak as he was 'too low down' at NASA.

"In a corporate culture based on fear and intimidation, it may appear that targets are being achieved in the short term. But in the long run the effect is likely to be counterproductive. Studies show that fear inhibits learning. And when confronted with a problem, scared workers find ways of covering it up or getting around it with inefficient practices. "[Companies will perform better if employees are not cowed into silence, Bartleby, The Economist, 10th Jan 2019]

Fear and intimidation in the culture? How is our culture of impunity undermining the rule of law? Consider the plunder case against Marcos. And what about Arroyo? Or the three senators, Enrile, Estrada and Revilla? When is enough, enough?

And why good governance is a critical building block of nation building. Ditto for infrastructure development, industrialization, innovation and global competitiveness.

With due respect to our (a) economic managers, beyond the enablers of development like TRAIN 1 and 2, and (b) our legislators working on the Central Luzon development initiative, beyond monetary and fiscal policies, it is high time we drill down to the drivers of growth as well.

And why we must focus on (a) driving exports and (b) pursuing development beyond the Makati and BGC models. Think the China model and the Pearl River Delta economic zone in particular.

We must rapidly learn what a growth mindset is ... and imagine and visualize a developed, wealthy, first-world nation. Not a third-world, underdeveloped, poverty-gripped nation. It's a good first step to develop our sense of foresight. 

And next would be to project our FDIs and exports versus Vietnam five years out. Then to learn from the decision-making skills of Kennedy. And as we progress we will be more confident about innovation and global competition.

The ball is in our court. The buck stops here.

"Why independence, if the slaves of today will be the tyrants of tomorrow? And 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]

"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]

New Year’s resolutions are meant to be broken

But there's an abundance of reminders that one comes across as we get back to our daily routine. To wit:

"Jesus' first public word,  metanoeite,  referred to  a primal change of mind, worldview, or way of processing and perceiving -and only by corollary about a specific change in behavior. This common misunderstanding puts the cart before the horse; we think we can change a few externals while our underlying worldview often remains narcissistic and self-referential. "[Richard Rohr's Daily Meditation, 5th Jan 2019]

"[A] shared dream calls for positive and substantive transformation to be delivered by everyone-individuals as the ultimate governance assets; families and teams as the ultimate performance delivery units; and multi-sector groups anchored in civil society and the academe as the ultimate development and transformation agents.

"This is a tall order that demands the en masse mobilization of many live forces to be able to work properly. Indeed, it counts on the good will of many Filipinos, and for now it seems it will take a miracle for us to be able to face and take on the practical issues surrounding public governance. But this is what the Dream Philippines is about: the who, the how, and the what. "[An open letter about our Dream Philippines,  Dr. Jesus P. Estanislao ,  inquirer.net , 5th Jun 2017]

"More than Charter change, what we need is character change. Good people change others, better people change the system, the best ones change themselves. This I paraphrase from Leo Tolstoy's 'everyone thinks of changing the system but no one thinks of changing himself.' And Alexander Pope wrote, 'for forms of government let fools contest, whate'er is best administered is best.' "[Not Charter, but character, change;  RENE SAGUISAG , The Manila Times, 4th Jan 2019]

Do Tolstoy and Pope answer this challenge? "If we do not see a revolution in capitalism, then the world will be increasingly dominated by populism and socialism." [Failure of billionaire philanthropy,  Elfren S. Cruz , BREAKTHROUGH, The Philippine Star, 6th Jan 2019]

Over the holidays chatting with Pinoy friends, one who is ten thousand miles away like the writer gets a grasp of the gut level issue re PH underdevelopment.

That at the end of the day, we are not predisposed to change. Pinoy kasi! Why? Look at the latest rating of President Duterte, did the A and B classes drive it up, not lower? Because people still are able to go about their business. Even the biggest enterprises are pleased and raking it in.

In the meantime, recall what economist Ciel Habito laments: "The sad reality is that it's clearly something we're doing domestically that is leading us to perform so differently, and so badly, compared to our neighbors, and we only have ourselves to blame for our unique (and alarming) performance. "[Our yawning trade gap,  Cielito F. Habito , NO FREE LUNCH, Philippine Daily Inquirer, 18th Dec 2018]

Consider: Electronics related products are our biggest exports at roughly 45%. And Ayala's IMI is in the business. News report: Ayala chip-maker IMI's net income up 21% as revenues breach $ 1B in 2017.

But what is IMI's business? " Integrated Micro-electronics, Inc. (abbreviated as IMI,  PSE :  IMI ) provides electronics manufacturing services (EMS) and power semiconductor assembly and test services (SATS) with manufacturing facilities in  Asia ,  Europe , and  North America . Its headquarters is located in  Biñan ,  Laguna ,  Philippines . "[Wikipedia]

It is assembly and services. In other words, it is an intermediate-product or a third-party provider not an end-user industry. And this business model has become our DNA, eg, garments, export processing, BPO, etc. And why PH industrialization is half-baked, resulting in our stagnant export initiatives. 

Consider our exports vs. Vietnam's. Most current: PH =  US $ 48.2-B; Vietnam = $ 214.1-B. Ten years ago: PH = $ 49.32-B; Vietnam = $ 48.07-B.

Then consider (a) what and (b) how long it will take to overcome this 10-year gap and revenue gap in exports; and (c) Vietnam's lead in FDIs: $ 129.5-B against our $ 78.79-B.

In the meantime, a swallow does not make a summer and why foresight is a constant theme of the blog. Four years ago the writer raised the challenge at both the Ateneo and UP economic briefings that the uptick in manufacturing was not to crow about. 

Because until we make the requisite structural fix - ie, infrastructure development, industrialization, FDIs and good governance, among others - and gear up PH economy to be innovation-driven and globally competitive ... we will continue to perform badly in the global arena.

And these are our five top companies that can drive exports: San Miguel (industrial conglomerates), PLDT (telecommunications services), Ayala (industrial conglomerates), Aboitiz Equity Ventures (industrial conglomerates), Alliance Global Group (industrial conglomerates).

Four are conglomerates and one is engaged in services. They are reflective of 20th century enterprises - think of GE, once the paragon of American industrial power, recently booted out of the Dow Index - and can not be characterized as leaders in innovation and global competition.

Of course given our restrictive economy, these enterprises are raking it in. Which explains our bias to preserve the status quo. In the first place, to shift paradigms is not a cakewalk that in turn undermines forward-thinking. And ... why be outward-looking when it's a struggle?

The bottom line: Who will reject the spoils courtesy of a third-world, underdeveloped and poverty-gripped nation - and where rank has its privileges with no command responsibility to boot? In other words, our worldview aka parochial and insular will explain our inability to shift paradigms and why we are stuck in our fixed mindset. If we are forward-thinking and outward-looking, we would learn from the South Koreans who beat the Japanese in their own game. So that instead of Sony or Toshiba, the world is today talking LG if not Samsung.  

Several years ago a senator pointed at oligarchy's influence and why we keep to our restrictive economy. Should we hear from him again?

On our export radar screen there are lesser known smaller enterprises that can be nurtured. But then again, these entities must recognize that the global arena demands lots of foresight and big dreams: Acbel Polytech Philippines (electric static converters, primary batteries); Calfurn Mfg. Philippines (bamboo / wood furniture, kitchenware, tableware); Yuenthai Philippines (shirts, blouses); Pacific Paint Boysen Philippines (polymers, oils); Aruze GA Philippines Branch (machine tools, printers, copiers, operated games).

What to do? Let's get back to Dream Philippines and Dr. Estanislao: "We are the who, being called to change our mindset about who should take the lead in the governance of our public affairs. For too long and on the part of too many, we have assumed that it should rest only on the shoulders of our President and, to some extent, on the shoulders of our other elected and appointed public officials. But governance only from the top down has never been all that effective, especially in our country. The challenge, and the revolutionary way, is to complement it from the bottom up.

"As responsible citizens, we must demand leadership that will realize our Dream Philippines in the long term. Elected and appointed officials come and go. They are subject to the term limits imposed by law. We therefore need civil society organizations, think tanks, universities, and other citizen groups to take up the cudgels for articulating, monitoring, and assessing a long-term strategy for public governance. "

And let's recall a recent posting in the blog: In the 21st century beyond (a) structural interventions there is the imperative of (b) innovation and global competition. Simply put, we are two generations behind and why we can not seem to see beyond the horizon ... and may have fallen into the Dunning-Kruger effect Paul Krugman speaks to ... and why we can not figure out how deep down the abyss we are. 

Putting our best foot forward as in Pinoy optimism, if it is not obvious yet, is in reality a manifestation of denial. That before Juan de la Cruz can right the ship we call the Philippines, he must first right himself. And why we can not shed our fixed mindset and develop a growth mindset. Which in turn explains our inability to develop our sense of foresight. 

Consider: Then we could not be a Singapore. Or even a Thailand. Today we can not even be a Vietnam. Let's just take our eye away from the ball and talk isms. [If NAIA can embarrass us, should not this embarrass us many times over?]

Why? Here's something from the work of Dr. Carol Dweck, Stanford University, so that we can compare and contrast the perspectives of the growth mindset versus the fixed mindset: "Growth mindset: Failure is an opportunity to grow; I can learn to do anything I want; Challenges help me to grow; My effort and attitude determine my abilities; Feedback is constructive; I am inspired by the success of others; I like to try new things.

"Fixed mindset: Failure is the limit of my abilities; I'm either good at it or not; My abilities are unchanging; I can either do it, or I can not; I do not like to be challenged; My potential is predetermined; When I'm frustrated, I give up; Feedback and criticism are personal; I stick to what I know. "

What to do? "This I paraphrase from Leo Tolstoy's 'everyone thinks of changing the system but no one thinks of changing himself.' And Alexander Pope wrote, 'for forms of government let fools contest, whate'er is best administered is best.' "[Saguisag, op. cit.]

"Why independence, if the slaves of today will be the tyrants of tomorrow? And 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]

"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]