Ensconced in our echo chamber

The period 1970-73 would resurface as the writer figured out the genesis of the OFW phenomenon – beyond the Jose de Venecia coup in the Middle East. Yet like today, up until the impact of martial law hit, the GDP growth rate (%) then was on an uptick: 1970 = 3.765; 1971 = 5.429; 1972 = 5.447; 1973 = 8.921. [And in 1974 it was, of course, down – to 3.558, slower than 1970; and by 1983 we were in a debt crisis that gave birth to the Binondo Central Bank for government to intervene in the forex black market. Thanks to the Chinoys who today dominate PH economy.]

Not surprisingly, given those GDP numbers – despite being a relatively new entrant (1968) to industry and a lazy student and voted least likely to succeed by his high school class to boot – his career got a boost. It was during this period that he had his third to fifth jobs, averaging 13 months from the first to the fourth. Millennials would cheer that!

And it was in this timeframe that he met Dr. Edward de Bono who was invited by his mentor, the late Anacleto del Rosario (the PH first marketing consultant) to share his work with the local advertising and marketing community. And was also invited by a retired former boss to his new office, he had turned headhunter. And because he and his partner were ex-Caltex, through their network, they were able to win the Aramco (of Saudi Arabia) account, where the engagement moved beyond executive recruiting, to OFW recruiting.

And Dr. de Bono? Reads an Ateneo Graduate School conference announcement, “Critical and Creative Thinking and More … Using the Edward de Bono’s Six Thinking Hats; Conference Dates: May 9-11, 2011. 

Thinking of de Bono influenced the title of this posting, “ensconced in our echo chamber.” Consider: in the 1970s we were already ripe for the OFW phenomenon – despite the above-quoted GDP growth rates – and we remain so today. “The Philippines proved to be a bonanza for Aramco recruiters. In the Philippines recruiters found large numbers of well-educated professional and technical people, almost all of them fluent in English, and nearly all willing to work for wages much lower than those required by their counterparts in Western countries.

“In just three years, Filipinos became the largest expatriate group in Aramco. The first Filipinos were hired in 1977. By the end of 1979 there were 3,820 Filipinos on the payroll, surpassing North Americans, who had been the largest expatriate group in Aramco since the founding of the company.” [www.saudiaramco.com]

Decades later and despite over 10 million OFWs, PH still ranks the worst in the region in unemployment. And, of course it follows, poverty. Add food security when the poorest of the poor find rice prices too high – and would rather indulge in “shabu”? Ergo? The war on drugs has turned into the war against the poor aka EJKs. 

In a previous posting the blog pointed out that beyond unemployment, we suffer in GDP per capita, FDIs, exports, among others, making us the regional laggard. 

More to the point, what current initiatives in both the public and private sectors will yield (a) better employment conditions than that enjoyed by over 10 million OFWs that (b) drive our consumption economy and (c) make our local economy bigger than that of our neighbors? Yet we’ve stayed underdeveloped and poor – and that’s where the rub is!

Of course, we in the opining business have been advocating fly swatters to swat away the pests that have bugged us for decades. Sadly, foresight isn’t well-developed in the modern man – a recent finding in the social science – and explains why the world appears to have turned upside-down.

And in our case, we’re ensconced in our echo chamber … that we are amplifying and reinforcing our beliefs. Where do jobs come from and why is PH poverty so tenacious? Are we reading too much US media that we are aping their mantra? Poverty in a well-developed economy cannot be compared with poverty in underdeveloped Philippines.

Misery loves company and so we are conflating the problems of the world with our own. The writer’s Eastern European friends are exploiting AI via robotics to raise productivity in the factory and thus margins – and be more competitive to generate greater income and wealth. 

The caveat: they have 15 years under their belt learning and relearning innovation and global competitiveness that is founded on outward-looking marketing. One that is constantly responding to ever changing human needs while tapping state-of-the-art technology wherever they may be. [Enterprises like nations must create an ecosystem to mirror the dynamism of creation. And approximate “good” because it is where humans thrive. Yet we Pinoys take being parochial and insular for granted, i.e., it undermines transparency and accountability – which the Vatican is also learning – as well as keeps us out of the loop re the interdependence of creation – and why we haven’t learned to create, mirror and leverage an ecosystem.]

We can exploit technology as well like AI if we are to aggressively pursue industrialization – and create a bigger economic pie to support our needs, including social ones. 

In fairness, if we’re not the business-type or an economist, the dots won’t connect as easily as it sounds.

On the other hand, no amount of MSME rhetoric from our Trade people can match the economic impact of over 10 million OFWs given our economic profile and fundamentals – and why we remain uncompetitive in exports, for example. Notwithstanding the grandstanding of our economic managers that we are doing great, thank you very much! News item: “DOF: Drop in competitiveness ranking both wake-up call and false alarm.”

As the blog has pointed out, we are managing the P&L but not the economy. And why Vietnam is well on its way to push us farther down the abyss. 

In other words, winners don’t think the way we do – and why we’ve been losers for decades.

The Six Thinking Hats of Edward de Bono isn’t confined within the Ateneo campus. We in the elite class can use it too. Because there are more perspectives beyond the ones that we embrace and share collectively – as in our instincts.

We’ve turned into an ideology aka tribalism. Think of the last 50-70 years. Not only Vietnam is shaming us – of course the Asia Tigers already did – when we consider what Indonesia was like not that long ago.

But ensconced in our echo chamber, we see no evil, hear no evil and speak no evil. What a disservice to Juan de la Cruz. Rizal must be turning in his grave – he who rightly predicted that we love tyranny.

“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]

Square the circle

Taking the wrong turn every time there’s a fork in the road … will explain why we can’t square the circle?

More to the point, “Change or face extinction … We must embrace change, otherwise we become products of the past instead of being brands of the future … There are questions about whether old guards can radically transform themselves to stay relevant and keep up with the speed and flexibility of disruptive startups, but change should start in the boardroom … Technology is unstoppable. No matter how much we resist, the market will choose what is beneficial for them …” [Change or face extinction, businesses told, Krista Angela M. Montealegre, BusinessWorld, 21st May 2018]

That is motherhood, but what is reality for PH? “Philippines drops the most in Asia in competitiveness ranking,” Ian Nicolas Cigaral,philstar.com, 24th May 2018.

Why? “[C]ompared to other countries like Indonesia and specifically Vietnam, it is lacking appeal for foreign investors when it comes to establishing plans and operations there.”

Ergo? “The Philippine economy experienced the most significant decline in the region in terms of competitiveness dragged by ‘worsening’ tourism, employment and public finances, as well as concerns about the country’s education system.

“The country fell nine notches to 50th spot out of 63 economies tracked in this year’s World Competitiveness Ranking … The Philippines also slipped to 13th place from its 11th ranking in 2017 among 14 Asia-Pacific nations.”

And they explain why the “Tall order for PHL to hit 2018 export goal–experts,” Cai U. Ordinario & Bernadette D. Nicolas, BusinessMirror, 10th May 2018.

“The Philippines would be hard-pressed to meet its export and import targets this year due to the lackluster trade performance of the country in the first quarter … [T]he country’s export performance in the first quarter ‘leaves more questions than answers’ … [T]he figures are ‘puzzling’ considering that the country’s manufacturing output grew by more than 20 percent during the period …

“[T]he Philippine government should double its efforts in marketing the country’s export products to international consumers …”

How do we square the circle, with due respect to our economic managers? We’ve been talking about an uptick in manufacturing since the Aquino administration, yet our exports continue to be lethargic. Why? Ours is a consumption-driven economy, which we always hear from our economists, and with the close to $50-B receipts from OFW remittances and the BPO industry our domestic economy is bigger than that of our neighbors.

That we are still blindsided speaks volumes. Because we take our economic profile and fundamentals for granted, how can we ever square the circle?

And it has nothing to do with “PH government should double its efforts in marketing … to international consumers,” not in the way we define marketing. Which is doing road shows to peddle Philippine products. That is no different from door-to-door selling of decades ago, a hit-or-miss effort. Marketing is outward-looking, not inward-looking. In other words, it is not about what we have and want to sell but what the market, more precisely what humans, need ... to raise their well-being. 

Let’s revisit how we stand – and it’s not new as pointed out by the blog’s reason for being 9 years ago – against our neighbors and why we “lack appeal for foreign investors when it comes to establishing plans and operations [in PH].”

And it confirms that our FDIs are pitiful. In billion dollars, PH = 67.25; TH = 205.5; VN = 128.3; MY = 133.2; ID = 247.7. And because foreign investment comes with technology and competitive practices as well as an outward-looking mindset, our export receipts are woeful: PH = 53.22; TH = 228.2; VN = 194.6; MY = 188.2; ID = 188.2.

And the bottom line is, even when our domestic economy is larger, our GDP per person (at purchasing price parity), which roughly represents our tax base (and why no matter how much TRAIN is supposed to bring we will still be the regional laggard), is miserable: PH = 8,200; TH = 17,800; VN = 6,900; MY = 28,900; ID = 12,400.

We beat Vietnam – a relative newcomer to the free market – yet given their strong investment cum exports performance, their poverty rate stands at 11.3% against our 21.6%. And look at Indonesia, it will deflate our celebration for being over a hundred million strong and with a young population, i.e., their GDP per person is more than 1.5 times, with a population that is more than 2.5 times ours.

How do we square the circle again? “Con-com’s halftime performance: 80% of work’s done, but how near are we to adopting a federal constitution (?),” Bernadette D. Nicolas, BusinessMirror, 26th May 2018.

Messing up with the Constitution is indeed a major response. But are we taking the wrong turn again? Recall that the blog has called out our lack of foresight, thus our inability to craft a vision and to prioritize and assemble and erect the must-dos of development and nation building. In other words, we must create the ecosystem for a developed and wealthy PH.

Remember how we celebrated OFW remittances instead of pursuing industrialization? And 50 years ago, shouldn’t we have created the blueprint for a subway system in Metro Manila instead of figuring out in the 21st century what to do with the jeepney? And remember how we celebrated being an inward-looking and consumption-driven economy? Because we can’t compete against Japan anyway? Yet Korea followed suit and industrialized as did Taiwan, Thailand, Malaysia and more recently Vietnam? 

Where is our fixed mindset coming from? When we should embrace a growth mindset and learn from the dynamism of creation – as in its oneness manifested by its ecosystem? And why the blog references Franciscan theology often. Because what we learned from religion, sadly, is “an authoritarian church that tells people how they should think and act.” [Can Ireland be Catholic without the Church (?), Eamon Maher, The New York Times, 26th May 2018]

And indeed, our instincts stem from our “culture” or way of life. And to quote from previous postings, “We are parochial and insular. We value hierarchy given the expected paternalism that comes with it. [See above re an authoritarian church]. And we value patronage and rely on political dynasties and oligarchies that dispense its spoils.”

“It means tossing ‘crab mentality’ and embracing the priorities dictated by the demands of rapid development aka the Pareto principle and the 1-percent phenomenon.” Specifically, pursuing (a) rapid infrastructure development, (b) industrialization and (c) innovation and global competitiveness where the bulk of the economy is generated: (1) Luzon, from Hacienda Luisita down to Metro Manila and Calabarzon, (2) Cebu, (3) Davao and (4) Cagayan de Oro.

And a good starting point would be the 10 biggest export industries and where we have more knowledge than others, but we must raise their competitiveness with the right portfolio of products and scaled up the value chain. Competitiveness doesn’t mean greenfield but being responsive to ever changing human needs. And that means investing in technology (including partnering with the world’s best) and innovation in product development as well as market development and people development. 

In order words, is upending the Constitution a priority? Are we running away from change? [See above re our culture aka a “damaged culture”?] Or is it the absence of personal experience in development that our reflective judgment is suspect? How long will the Con-com exercise take our eye away from the ball? In the meantime, how do we address our economic profile and fundamentals? With due respect to our economic managers, a consistent GDP growth rate of 6-7% won’t leapfrog PH to be equal to our neighbors. We can’t keep managing the P&L and not the business.

The blog started out on a hopeful note when the business community, through the JFC, geared up to present to the incoming Aquino administration “Arangkada Philippines.” Sadly, at end of its term, the JFC didn’t hide its frustration. And we are nowhere near that enthusiasm to drive industrialization.

And why we can’t seem to square the circle. We in the elite class are calling the shots, why would we want change? Who cares if we leave something behind worse than we got it?

“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]

Stop and smell the roses

“Beautiful Keukenhof Gardens, the largest and most spectacular flower gardens in the world, where a sea of multicolored tulips stretches out over the flat Dutch landscape as far as the eye can see,” reads the flyer of the 11-day tulip time river cruise the wife and writer took recently. 

Indeed, it’s spectacular! And instead of strolling around Keukenhof to feast on the tulips the writer says to the wife, “let me find a place to sit … to stop and smell the roses.” Being color blind, he is especially starved of green. And why he feels liberated whenever he’s taking in an abundance of green – more so a sea of multicolored tulips.

And so, for the first time since the blog came into being 9 years ago, it was orphaned for over 2 months. Let’s see where we left off. Thanks toinquirer.net for picking and keeping a blog post in cyberspace – for 9 months and counting – that talked about foresight like the latest one that appeared in the blog’s website.

And over the past several weeks, the writer read news reports as though he was simply a consumer.

Over the lifetime of the blog we Pinoys have witnessed the typical cycle of our way of life. President Arroyo became history with the election of President Aquino. And President Duterte will become history too? Unless he puts a RevGov in place?

And certain quarters are entertaining the thought. In the meantime, our economists are saying PH exports will most likely miss the goals this year – and over the medium-term as well. And every May 1 we talk about “Jobs, Jobs, Jobs.” It’s like a broken record. Ditto for poverty and food security.

In the meantime, we are debating TRAIN-2 and the reality of “Build, Build, Build.” As well as which airport proposals will become reality. Not to forget the “crises” we continue to confront: energy, water, traffic, etc., etc.

Which brings us back to foresight. To our opinion makers: Over the lifetime of the blog, we have all been opining. Yet the reality is despite a consistent GDP growth rate in the 6-7% range – principally driven by OFW remittances and the BPO industry – it will take us a generation to see the light at the end of the tunnel. And given we are mostly of the same generation, many of us will be gone, and PH will still be a poor underdeveloped nation. 

It’s interesting to note that in the US, someone had the audacity to write: “How baby boomers broke America.” [Steven Brill, Time Magazine, 17th May 2018]

The writer started his career in the Philippines 50 years ago, spending 20 years before moving to New York (as an expatriate in an MNC.) And since retirement, 15 years and counting (as a volunteer consultant at the instance of USAID), he calls Sofia his second home. And what we read back home about emerging, developing and developed economies are realities he has personally experienced.

And they bring back memories of Econ 101 – with images of the hammer and sickle that meant a centrally planned economy against that of the Star-Spangled Banner and the US, which from its Constitution was established as a mixed economy. 

Where does foresight come in? The jeepney comes to mind. Our love affair with the jeepney has morphed into compassion, i.e., it means jobs, jobs, jobs. Consider: 50 years ago, the leadership of Bulgaria created the blueprint of a subway system in Sofia, the capital – a teeny tiny city compared to Metro Manila.

And on weekends the wife and writer would enjoy the breeze commute from the metro station near their apartment to either the city center or one of the malls.

One story the writer’s Bulgarian friends like to hear repeatedly is how his former MNC company grew to be 4 times bigger: after deliberately restructuring the business and cutting its revenues in half and focusing on its core, largest and most profitable brand to fend off a takeover attempt. And through his tenure he participated in this growth journey. 

And his friends, to their credit, are on their way to repeating history – without the need to scale back the company in half but multiplying the largest business, the home market, four-fold having expanded beyond their borders. 

And what a great joy the wife and writer would share every time they visit the homes of these friends. Because the contrast from 15 years ago is a virtual time warp. Imagine a crumbling communist-era apartment building in a town that time cruelly left behind against that of a 21st century condominium in a residential development put up by a German developer in the capital city. It would fit right among the desirable communities in suburban New York. Think of evolving from an emerging to a developing to developed community over a period that is not even a generation.

Ever since they geared up to join the EU, these friends developed an outward-looking mindset. Because it meant living with Western competition. Which is why the writer was tapped to assist them in the first place. They had to learn what it means to move from a closed, centrally planned economy to one that is open, competitive and global.

It was not a cakewalk. And why the blog constantly addresses our “culture” or way of life: We are parochial and insular. We value hierarchy given the expected paternalism that comes with it. And we value patronage and rely on political dynasties and oligarchies that dispense its spoils.

And more to the point, we can take our instincts for granted yet how do we develop the sense of foresight when we’ve created set ways within our own isolated world? The Brits call it “island mentality.” And why Brexit had to come, sooner or later.

Disclosure: The writer is teeing up the concept of “reflective judgment” as a characteristic of knowledge in humans. “That reflective judgment skills can be influenced by education but with no significant effect; that personal experience could determine the effect to which one may possess better reflective judgment skills.” [Johnson, David D., Dualistic, Multiplistic, and Relativistic Thinking as it Relates to a Psychology Major; 1994, Honors Theses, Paper 202]

The thesis explains the polarization in the US, for example. Consider: Ideology, rational or not, reflects an either/or mindset – you are of my tribe or not … thus a foe. Recall “the world is flat.” Or how Christ responded to the question on working on the Sabbath. And Christ also talked about the oneness of creation, including foreigners … and sinners.

In the above-referenced study, religion is the most profound example of dualism. Not surprisingly, there is such a thing as “intifadas” – and for that matter, the Crusade. And why ideologues had to crucify Christ, who is about forgiveness and love as Francis would remind the world. Of course, man can reject such unconditional love, as in the distinction between the good and the bad thief.

In any case, the reality is we are all from Africa. Imagine cramming 7 billion people on the continent of Africa. Migration in fact reflects the dynamism of creation. Think of the universe being a 24/7 dynamic phenomenon. And of the solar system, including photosynthesis, that demonstrates the oneness of creation. And there is a word for it, “ecosystem.”

Which brings us to the concept of a fixed mindset versus a growth mindset – or linear thinking and lateral thinking and creativity. Put another way, the world isn’t meant to be an either/or – as in black or white. It is in living color and in constant motion.

Simply put, creation equals creativity. Which is how Franciscan theology explains dynamism. It is not about rationalizing morality. Consider: we’re in the 21st century yet the dynamism of the Trinity lives on via the Holy Spirit – not unfamiliar to born-again Christians. Which also explains our capacity for discernment, i.e., we’re created in the image and likeness of the Creator.

Which brings us back to economics or business. Think of bean counters or managing the P&L versus managing the business. Or managing the GDP as opposed to the economy.

Bean counters like to see that the numbers add up and when costs are beyond budget they make certain things fall in line. It makes logical sense except that managing the business means something much broader and grander, if you will. It is creating an ecosystem that mirrors a virtuous circle. How? Constantly upgrade if not innovate to elevate the performance of the products and/or services that make up the top or revenue line – to raise man’s well-being.

And foresight demands that beyond quarterly profits – for which Wall Street has been pilloried – is the imperative of creativity, i.e., innovation and global competitiveness, which drives the revenue line. And it is where the relevance of personal experience – beyond education – comes into play.

Consider: Those of us in the business of opining have been prescribing cures for development even when PH has never been a developed economy. See above re the limitations of education. And consider: How many dissertations in business graduate education meant for an idea to succeed as a new business ever get off the ground?

And our mental model of a successful enterprise is principally that of oligarchy and/or monopoly. Which explains why the wealthiest Pinoy is in retail – a low-margin business compared to high-value added enterprises – but dominant in the local market. On the other hand, how many Western retailers are in decline? Because in the broader global market, retail’s (i.e., brick and mortar) inherent low margins cannot compete against Amazon, for example. 

And it brings us to why we cannot meet our export targets – and why we suffer from our own Dutch disease, the reliance on OFW remittances and the BPO industry instead of a globally competitive industrial base. And until we learn to manage the economy beyond managing the GDP, we will be the regional laggard.

We are not focused on creativity or the top line or the products and/or services that can compete beyond our shores. Which explains why innovation and global competitiveness is alien to us. It takes personal experience – to which the writer’s Eastern European friends attribute their success – to learn the trade and compete at world-class levels.

It also suggests the reality of the Pareto principle and the 1-percent phenomenon. We cannot be everything to everybody. Fifty industry road maps, for example, are an exercise in futility. Not even Germany can win with 50 industries. 

And it also explains why we see structure as the solution to our problems – as in federalism. In the 80’s the Western world realized structure was the problem not the solution. Remember the bad word “restructuring”? Even Western companies with subsidiaries in the Philippines weren’t spared.

Japan Inc. had overwhelmed Western enterprises – because of the gap in productivity and quality – as Western business structures turned into the dreaded word, bureaucracy, i.e., inflexible, ineffective and unproductive. What more of the public sector?

But we saw ourselves – or more precisely Filipino employees of MNCs – as victims of restructuring. Productivity and quality weren’t near and dear to our hearts because we weren’t an industrialized economy in the first place. We only saw the negative outcome of restructuring.

And as an economy we have an even bigger challenge: What products and services must be the focus and platform of a PH industrialization effort? Because we are yet to figure out what the global market is about as well as what human needs are about. To successfully compete in a globalized competitive world, we must create an ecosystem, i.e., a virtuous circle.

If we are looking for that one word, it is development. And until we recognize what we are missing, we shall continue to talk about jobs, jobs, jobs … and poverty … and food security ... like a broken record. 

Which brings us back to the Pareto principle and the 1-percent phenomenon aka the law of big and small numbers – its inverse being “crab mentality.” And why we’ve been left behind in: (a) infrastructure development; (b) industrialization and (c) innovation and global competitiveness.

Think of Kurt Levin’s “force field” theory. And smartly manage the two opposite forces working for and against change. Given two-thirds of the PH economy is generated by Luzon – from Hacienda Luisita down to Metro Manila and Calabarzon – and thus driving economic development, we must leverage this strength and not stifle it.

On the other hand, we must raise development efforts in the rest of the country as warranted – i.e., recognize the reality of the Pareto principle and the 1-percent phenomenon – and not rob Paul to pay Peter.

Which brings us back to the unsolicited offers for new airports and the upgrade of NAIA. If we were a global private enterprise, we will celebrate the reality that 2/3 of the economy is generated by one contiguous area. Because it is easier to drive an undertaking that generates such scale. It is the laws of physics. And this is where big data and analytics come into play. And why the writer was delighted to read about the idea of creating a vast agro-industrial zone in Central Luzon.

The bigger and the sooner we can drive the revenue line of the PH economy the greater and bigger our GDP per person will become. It doesn’t matter where it comes from. The bigger the economic pie or output the bigger the tax base. But we don’t see that. What we see is the need to spread out the spoils of taxation even when our tax base equates to that of an underdeveloped poor economy. It is minuscule for our needs. 

Consider: TRAIN is meant to raise tax revenues from 17% to 20% of GDP. In driving growth, that is only one piece of the equation. The other piece is to raise the tax base – i.e., focusing on rapidly increasing the products and services PH produces via a hard-nosed industrialization effort – so that the ultimate tax take of government will increase much, much greater.

Yet we want to embrace federalism because it is the be-all and end-all ... without figuring out how to enlarge the economy? See above re: (a) managing the GDP as opposed to the economy or managing the P&L versus managing the business; and (b) reflective judgment.

The blog isn’t promoting the idea of neglecting the rest of the country. For example, if we add Cebu, Davao and Cagayan de Oro to Luzon, they make up the bulk of the economy. And we can replicate the model that will rapidly drive economic output in these three areas. And that means: (a) rapid infrastructure development, including modern airports except that we need more in Luzon; (b) industrialization and (c) innovation and global competitiveness.

It presupposes tossing “crab mentality” and embracing the priorities dictated by the demands of rapid development aka the Pareto principle and the 1-percent phenomenon. Sadly, we as a people haven’t personally experienced such rapid development undertakings that we can only succumb to “crab mentality” that in turn explains our inability to move beyond an underdeveloped economy and nation. 

Beyond development we must develop our sense of foresight. Indeed, it is an uphill battle. What we should pray for is a leadership that is endowed with vision. FDR comes to mind (for transforming the US from an agriculture to an industrial economy on top of overcoming the Great Depression and saving Europe from its propensity to engage in destructive wars) or closer to home, Lee or Mahathir or Deng (for making Asia the home of economic tigers.)

What about Duterte? See above re our “culture” or way of life. It explains why we have been running around in circles. Think of the last 50-70 years. And it doesn’t appear we’re predisposed to shifting paradigm. And we want to pray for that too.