Stuck in tradition

Can we develop a growth mindset and learn to forward-think? Not if we can’t recognize the extent of the damage that parochialism and insularity have brought upon Juan de la Cruz.

Let’s pause and ask: Did we foresee beyond our celebration of land reform or the OFW phenomenon, the BPO industry, and now POGO? Likewise, we applauded the resurgence of manufacturing since 2014 but ignored the efforts behind Arangkada, in both the Aquino and Duterte administrations. Note the latter is more investment-driven and with a more significant multiplier effect on employment and support industries. On the other hand, while the former showed an uptick in the global supply chain sector, the economy remains principally consumption-driven.

For reference purposes, you will note the following data points elsewhere in the posting to illustrate how forward-thinking can make us see beyond the obvious – and be liberating, the key to the pursuit of innovation and global competitiveness. But it demands moving beyond linear/logical thinking and developing lateral/creative thinking. For example, do we see how the dots connect and why every posting concludes with the same set of quotes per below? Or do we appreciate the import of the following?

(1) Online gambling revenue in Asia exceeds the $50 billion take for the region’s brick and mortar casinos; 

(2) Samsung Electronics posted $65.7 billion in sales in Vietnam; 

(3) Our top 8 listed companies in the Forbes list collectively can’t match the revenues of Samsung Vietnam – neither can Asia’s online gambling revenue;

(4) The target of Arangkada is to create $75 billion in new foreign investment, 10 million jobs, and over P1 trillion in revenue for the Philippine economy within this decade.

What is the point? If we are asking, do we distinguish between reactive and proactive? And that will explain why we keep taking the wrong turn at the fork. But not only. Why aren’t we geared to meet the 21st-century challenge of innovation and global competition? It demands to develop a growth mindset and learn to forward-think.

Those familiar with the blog will recall why it often references the writer’s presence in the most impoverished nation in Europe. In 2003, USAID assigned him a client, a micro-enterprise that hadn’t made a profit in 8 years that faced even daunting challenges as the country prepared for accession into the EU. Today Western global behemoths respect them. What is the secret? They’ve developed a growth mindset and learned to forward-think.

But what about the issue of globalization and the rise in right-wing nationalism in Europe? Will these countries not buy globally competitive products? Take Apple, Google, Microsoft, Samsung, or Toyota, to name a few. These brands are prospering even in “countries where nationalists got higher scores in European Parliament elections and opinion polls. Among them are Austria, Bulgaria, Czech Republic, Germany, Greece, Hungary, and Poland.” [BBC, 13th Nov 2019.] Beyond the above-named world-famous brands, the second biggest brand of the writer’s Eastern European friends that sell in 70 countries have these same nations among their top markets.

Recall that innovation and global competitiveness define the 21st century. The bottom line: water seeks its (own) level. Consumers prefer products and brands that are responsive innovation-wise to ever-changing human needs. Innovation is not for innovation’s sake.

Let’s get back to the Philippines. What about our leadership? Can they show us the way forward to become a developed, wealthy nation? 

Recall Lee, Mahathir, and Deng demonstrated visionary leadership that the world applauded them? Because they figured out and led their nations to traverse the road from poverty to prosperity. 

For example, instead of being consumed by a parochial, insular, and inward-looking bias, they “begged for Western money and technology.” While here we are, well into the 21st century, still mired in poverty.

Should the millennials give us hope? Not if we lag the rest of the region in education. Recall the McKinsey report on the performance of students, irrespective of socioeconomic background: Students with a “growth mindset” performed 9 to 17 percent better than those with a “fixed mindset.”

In other words, if the generation of this writer is toast, will the succeeding ones be any different? Not if Juan de la Cruz sticks with the paradigm of parochialism and insularity.

Consider: “Experts estimate online gambling revenue in Asia exceeds the $50 billion take for the region’s brick and mortar casinos.

“In the Philippines, live games stream from studios, with dozens of female dealers playing baccarat, roulette or other casino favorites at otherwise empty tables, perhaps with TV news showing in the background to prove the action is live.

“Online gambling is big business in Asia, and China wants to stop it. Cambodia seems to be playing ball with Chinese President Xi Jinping, but the Philippines, the region’s most developed cross-border gaming center, has resisted China’s call to shut it down.

“The crackdown in Cambodia is likely benefiting Philippine businesses, and it fattens Philippine state coffers. 

“The Philippines pioneered cross-border online gaming in Asia. The Cagayan Special Economic Zone, established in 1995, authorized subsidiary First Cagayan Leisure Corporation to license remote wagering operators for overseas players.

“First Cagayan expanded as fast as technology allowed, from sports betting by phone to full-fledged live-streamed casino games earlier this decade. The sparsely populated province in the northeast corner of Luzon, about 550 kilometers (330 miles) from Manila, lagged in telecommunications power for live dealer online (LDO) operations, a situation it continuously bids to address. It also lacked enough supply of competent dealers.

“So, First Cagayan licensees migrated outside the economic zone to Metro Manila, with live dealer studios and support services clustering in Makati.

“With tens of thousands of Chinese nationals working in POGOs, Manila residents have complained about rising property prices and multiplying enterprises catering to Chinese that make some Filipinos feel like outsiders in their own country.

“Security officials, meanwhile, have openly worried about potential POGO-related Chinese espionage; the Philippines and China have ongoing disputes over islands in the South China Sea and economic issues.” [“Why Duterte won’t fold on Chinese gambling,” MUHAMMAD COHEN, Asia Times, 7th Nov 2019]

Note that the crackdown of online gaming in Cambodia benefits the Philippines, and it fattens Philippine state coffers. Then consider, Cambodia is 97.9% Buddhists with a GDP per capita (PPP) of $4,000, while the Philippines is 80.6% Roman Catholic with a GDP per capita (PPP) of $8,400.

That is, Cambodia is more impoverished than the Philippines. Also, being proud Christians, the Philippines is the only nation other than the Vatican that disallows divorce; and dismisses reproductive health yet proud of the war on the drugs and extrajudicial killings. And it looks the other way given that money laundering comes with the gambling business as the world witnessed and made our banking system infamous. 

In other words, this is a stream of hot money for the Philippines, while a vehicle for capital flight from China, no wonder Xi wants to stop it. Of course, the Central Bank has all the rules to preempt wrongdoings; they can only play catch up. There is a reason why Manila residents are complaining about rising property prices. And it doesn’t end there. Fake realtors are sprouting that are adept in the workings of intermediaries and get a piece of the action. 

We aren’t a culture of impunity for nothing. We aren’t the rule of law. How do we rationalize it? If Marcos can get away with murder, why not Estrada or Arroyo or Juan de la Cruz? How else to explain why we’re a third-world country and the regional laggard to boot?

Not a surprise if we think of Rizal’s interpretation in the character of Padre Damaso. Or Fr. Jaime Bulatao’s treatise on our “split-level Christianity.”

“I hope that this recognition of Jesus’ and Paul’s emphasis on the cooperative nature of evil will increase both personal responsibility and human solidarity, instead of wasting time on feeling bad about ourselves, which helps nobody.

“Early Catholic moral theology taught that there were three prime sources of evil: the world, the flesh, and the devil.

“Yet, up to now, most Christians have placed almost all our attention on the ‘flesh’ level. We have had little education in or recognition of what Paul meant by ‘the principalities of the world’ and even less understanding of what he said by ‘the ruler who dominates the very air’ (Ephesians 6:12).” [Richard Rohr’s Daily Meditation, “Bigger Than Personal Moral Failure,” 14th Jan 2020]

Recall we’ve been talking about Vietnam, and for the right reasons: “Samsung Electronics posted 74 trillion won (US$65.7 billion) in sales in Vietnam in 2018, accounting for 28 percent of the Southeast Asian country’s gross domestic product (GDP). The sales figure in Vietnam amounted to 30 percent of the Korean tech giant’s total sales in 2018. Analysts say that these figures mean that Vietnam has solidified its position as the biggest production base of Samsung Electronics, outclassing China.” [“Samsung Electronics Accounts for 28% of Vietnam’s GDP,” Business Korea, 14th Mar 2019]

What is our response given our top 8 listed companies in the Forbes list collectively can’t match the revenues of Samsung Vietnam? See above capital flight from China.

“Rather than keep their extra funds in savings accounts with lower interest rates, it may be better for Filipinos to allocate their savings in other ways, such as by investing in various companies as a shareholder.

“One possible investment that our countrymen could make would be in a REIT, or a Real Estate Investment Trust. A REIT is a company that invests in and earns from the construction, operation, and maintenance of the real estate. It includes offices, apartment buildings, hotels, warehouses, shopping centers, and even highways—all of which can generate relatively secure income streams.

“REITs are required to distribute 90 percent of their annual income to shareholders. That makes them attractive for middle-income breadwinners and OFWs who can step in with their savings and potentially bolster their financial standing.” [“REITs: Real estate and economic development,” Sonny M. Angara, BETTER DAYS, BusinessMirror, 24th Jan 2020]

“What happened to Arangkada?” Consider: “The target is to create $75 billion in new foreign investment, 10 million jobs, and over P1 trillion in revenue for the Philippine economy within this decade.

“The original ‘Arangkada Philippines: A Business Perspective’ report published in December 2010 contained 471 policy recommendations that will accelerate the growth of seven big industry winner sectors and achieve certain targets in terms of revenues, foreign investments, and job generation.” [Significant gains in the plan to promote 7 ‘winner’ sectors, Amy R. Remo, Philippine Daily Inquirer, 24th Feb 2014]

Can we develop a growth mindset and learn to forward-think? 

Not if we can’t recognize the extent of the damage that parochialism and insularity have brought upon Juan de la Cruz. We were supposed to leave Vietnam and Cambodia in the dust – with the Asian Tigers well beyond our reach.

Vietnam’s growth mindset and forward-thinking bias are reaping the rewards in another sphere: “The energy-hungry country may need fewer coal-fired plants than it thought.

“SOLAR POWER played almost no part in Vietnam’s energy mix in 2017. To speed the technology’s adoption, the government offered that year to pay suppliers a generous $0.09 for every kilowatt-hour produced by big solar farms, but only if they started operations within the following two years. It expected to install some 850MW of capacity. Instead, by the end of 2019, the country found itself with 5 gigawatts—more than Australia, with an economy almost six times the size.

“Vietnam’s experience suggests they don’t need all the planned coal plants.” [Vietnam grapples with an unexpected surge in solar power, The Economist, 23rd Jan 2020]

And what about us? Sadly, we’re parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

In other words, Vietnam will indeed leave us in the dust. At the rate they are going, they will be wealthier than Singapore per the international institutions.

Gising bayan!

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

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

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

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

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

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

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