“To a hammer, everything looks like a nail . . .”

Justice Elena Kagan of the US Supreme Court in a recent decision wrote the quote. But it’s not an original. Countless would have already heard it before; for example, in leadership programs when different leadership styles are discussed and dissected. Unfortunately, in PHL, the import of the quote mirrors our go-to economic driver; and that is, OFW remittances, with the latest addition being hot-money, both of which are boosting our foreign exchange reserves. And, unsurprisingly, our monetary authorities have not been shy in boasting that we’re on a winning streak?

Classical economics looks at inputs like monetary and fiscal policies as economic drivers – and, of course, to this day Greenspan wouldn’t take responsibility for the outcome of his monetary policy yet had taken pride in uttering “irrational exuberance,” which was not even an original. But if we are to “start with the end in view” – as would characterize innovators (that created tangible values through tangible products) like Edison, Jobs and Gates, among others – we would be looking at . . . what precisely generates greater “good and services,” the aggregate of which spells a nation’s GDP?

Beyond infrastructure would be a strategic and a competitive industry base. And so It was refreshing to read: “Finance Secretary Cesar V. Purisima: Create local brands.” [Philippine Daily Inquirer, 18th Jul 2013] “Franchising firms, he noted, must make an effort not to give in to the easy way, which is to import everything. Instead, companies must reach out to local suppliers, train them and teach them the necessary technical know-how that will allow these suppliers become partners in their businesses. Purisima likewise urged the creation of local brands “that can transcend cultures” and can represent the Philippines abroad.”

And beyond “amen” we could add, especially with reference to “import everything,” a very crucial qualification; and that is, “technology and state-of-the-art manufacturing.” Recall that President Ramos had talked emphatically about “Global Philippines,” yet it hasn’t had traction to this day? And in this blog I’ve made reference to the parable of the talents numerous times – i.e., we instinctively measure most things by local yardsticks as though we could be an island unto ourselves? And especially in the case of technology, we have to get off the “linear-thinking mode,” and worse, assuming that we could leapfrog global developments given where we are – a developing economy for the longest time?

It is critical that we start to be serious about R&D but it doesn’t mean that we have to let competition, or the rest of the world, access contemporary technology at our expense. Where does the disconnect lie? Because of our inward-looking bias it’s unnatural to imagine a scenario where we are able to market to the world? Because: (a) we think it is costly and/or (b) we recognize our own “uncompetitiveness”? That is why I talk about my Eastern European friends, because assumptions like those are simply that, assumptions! Fortunately they’ve learned over the last ten years that a people’s inherent or native capacity [i.e., like “Pinoy abilidad”] couldn’t overcome the world’s continuing accumulation of knowledge and experience. That they had to tap technology from the developed parts of the world; the key being, to “start with the end in view” – e.g., it is margins (which come from innovation) not costs that must drive the pursuit of competitiveness.

In the meantime, given our ambivalence about oligarchy, we found OFW remittances as a counterweight, forgetting that in a consumption economy, oligopoly owing to their dominance would be the biggest beneficiaries of OFW remittances? And our real challenge is best captured in: “to a hammer everything looks like a nail”? For instance, the success model that we’ve grown up with and reinforced by our cacique culture is . . . oligopoly, and thus instead of moving up to an innovation economy, franchises like electricity, water, telephone, etc., have remained our biggest industry players.

And what is the fallout? We don’t think beyond the local market and we don’t think beyond oligopoly – and hence the “consuelo de bobo,” a consumption economy? And worse is we’re out of synch with the 21st century. And it is not destiny that has put us in this very untenable position; it is the natural outcome of our failure to be in lock-step with progress and development? And even worst is what we’ve mistakably believed: our ownership of old-world values – when even Pope Francis has taken the church to task for being ‘holier-than-thou’?