Given how Vietnam has performed as an economy over the last dozen years – while we continue to be the regional laggard – is it time to unfreeze our minds?
Are we too smart for our “own” good? See below; even the most inscrutable problems have solutions.
Every possible source of hubris (nations have) has been demolished by today’s reality, the year of COVID-19. The good news is it spared no country.
Take our case. And we can point to our caste system. It explains why we can’t think “development” – as in a growth mindset. Because we value hierarchy and paternalism, “poverty” – that afflicts Juan de la Cruz – defined our North Star.
Those familiar with the blog may remember that the chamber of the brain associated with (a) the sense of “pleasure” and (b) acts of charity is the same. It’s from neuroscience minus the jargon.
And since we in the elite class don’t suffer from poverty, why should we undo the system? Why fix something that isn’t broke? Because of our caste system, internalizing the common good won’t come with ease. “The very highest human life, however, consists in the contemplation of the greatest goods.” [Aristotle]
If we are to unfreeze our minds – and absorb a new experience, as in benchmarking and learning from others – Vietnam is an excellent model to emulate.
Let’s establish a starting point so that we can compare apples to apples. Vietnam thinks “development” while we “think poverty.” Vietnam is forward-looking while we’re backward-looking.
Consider the last dozen years: Vietnam has broken the back of poverty while we’re still fighting this ugly war. Their poverty rate is a fraction of ours, a third.
How did they generate the wealth to succeed – while we continue to fail?
From the above base year, the exports of the two countries were roughly equal at $49-B. Fast-forward to 2019, their exports were up 525% against our 43%. That is a whopping increase of $256-B compared to ours, $21-B.
How do these numbers translate to poverty reduction?
We want LGUs and Federalism so that we can equitably allocate tax revenues. The problem with our premise is we don’t ask the question, “Where do tax revenues come from”?
Translation: Our premise reflects our value of hierarchy and paternalism, i.e., the big brother must shelter us. What are we missing? The sense of personal responsibility that as a people, we must respond to the demands of self-government, as in the common good. For example, we cannot mix apples and oranges and seek happiness, while Juan de la Cruz can’t keep our bodies and souls together.
What are the sources of tax revenues?
They come from national income. And here’s a simple exercise for Juan de la Cruz to (a) attract FDIs and (b) be on the road toward Vietnam’s export performance.
Let’s assume (a) we decrease our tax rate to 20%, from 30%, to be as attractive as Vietnam, (b) lure a global market leader in electronic devices as Vietnam did, and (c) double our exports to $140.6-B. That is not relatively equal to Vietnam’s $304.3-B. But it will be a lot more than (1) what we get from the drivers of the economy – OFW remittances and BPO revenues – and (2) will dwarf the combined output of our eight top companies.
The bottom line: We will generate incremental tax revenues of $7-B.
That is the kind of quantum leap we need in national income or GDP if we want to break the Philippine poverty line. Higher tax revenues to respond to our growing social needs can come from exports where we lag our neighbors – and the magic behind these economic miracles, the Asian Tigers.
Still, it isn’t easy to unfreeze our minds, given our history – and instincts and worldview. But can we learn how to problem-solve better?
“Even the most inscrutable problems have solutions—or better outcomes than have been reached so far.” [Six problem-solving mindsets for very uncertain times, Charles Conn and Robert McLean, McKinsey Quarterly, 15th Sep 2020]
“Great problem solvers are made, not born. That’s what we’ve found after decades of problem-solving with leaders across business, nonprofit, and policy sectors.
“These leaders learn to adopt a remarkably open and curious mindset and adhere to a systematic process for cracking even the most inscrutable problems.
“They’re terrific problem solvers under any conditions. And when conditions of uncertainty are at their peak, they’re at their brilliant best.
“Six mutually reinforcing approaches underlie their success: (1) being ever-curious about every element of a problem; (2) being imperfect with a high tolerance for ambiguity; (3) having a ‘dragonfly eye’ view of the world, to see through multiple lenses; (4) pursuing occurrent behavior and experimenting relentlessly; (5) tapping into the collective intelligence, acknowledging that the smartest people are not in the room; and (6) practicing ‘show and tell’ because storytelling begets action (exhibit).
“Being ever-curios. Think of the never-ending ‘whys’ that make little children so delightful—and relentless. For the very young, everything is new and wildly uncertain. But they’re on a mission of discovery, and they’re determined to figure things out. And they’re good at it!
Natural human biases in decision making often cause us to shut down the range of solutions too early.
“Tolerate ambiguity—and stay humble! When we think of problem-solvers, many of us tend to picture a poised and brilliant engineer. We may imagine a mastermind who knows what she’s doing and approaches a problem with purpose.
“The reality, though, is that most good problem solving has a lot of trial and error; it’s more like the apparent randomness of rugby than the precision of linear programming.
“The real world is highly uncertain. Reality unfolds as the complex product of stochastic events and human reactions.
“The impact of COVID-19 is but one example: we address the health and economic effects of the disease, and their complex interactions, with almost no prior knowledge.
“We have to be comfortable with estimating probabilities to make the right decisions, even when these guesses are imperfect.
“That’s why one of the keys to operating in uncertain environments is epistemic humility, defined as ‘the realization that our knowledge is always provisional and incomplete—and that it might require revision in light of new evidence.
“Recent research shows that we are better at solving problems when we think in terms of odds rather than certainties. Perfect knowledge is in short supply, particularly for ‘complex’ business and societal problems. Embracing imperfection can lead to more effective problem-solving.
“Take a dragonfly-eye view. Dragonfly-eye perception is common to great problem-solvers. Dragonflies have large, compound eyes, with thousands of lenses and photoreceptors sensitive to different wavelengths of light.
“Although we don’t know precisely how their insect brains process all this visual information, by analogy, they see multiple perspectives not available to humans.
“Think of this as widening the aperture on a problem or viewing it through multiple lenses. The object is to see beyond the familiar tropes into which our pattern-recognizing brains want to assemble perceptions. By widening the aperture, we can identify threats or opportunities beyond the periphery of vision.
“The secret to developing a dragonfly-eye view is to ‘anchor outside’ rather than inside. Take the broader ecosystem as a starting point. That will encourage you to talk with customers, suppliers, or, better yet, players in a different but related industry or space.
“Pursue occurrent behavior. Occurrent behavior happens in a time and place, not what was potential or predicted behavior. Complex problems don’t give up their secrets easily. But that shouldn’t deter problem solvers from exploring or running experiments to test hypotheses.
“You can think of this approach as creating data rather than just looking at collected data. It’s critical for new market entry—or new market creation. It also comes in handy should you find that crunching existing data is leading to stale solutions.
“Problem-solving organizations can ‘bootstrap’ themselves into highly uncertain new spaces, building information, foundational assets, and confidence as they take steps forward.
“Risk-embracing problem-solvers find a solution path by continually experimenting. Statisticians use the abbreviation EVPI—the expected value of perfect information—to show the ‘value’ of gaining additional information that typically comes from samples and experiments.
“It’s a mistake to think that your team has the smartest people in the room. They aren’t there. They’re invariably somewhere else. Nor do they need to be there if you can access their intelligence via other means.
“Tap into collective intelligence and the wisdom of the crowd. It’s a mistake to think that you have the smartest people in the room on your team. They aren’t there. They’re invariably somewhere else.
“In an ever-changing world where conditions can evolve unpredictably, crowdsourcing invites the smartest people in the world to work with you.
“Accept that it’s OK to draw on diverse experiences and expertise other than your own. Start with brainstorming sessions that engage people from outside your team. Try broader crowdsourcing competitions to generate ideas.
“Or bring in deep-learning talent to see what insights exist in your data that conventional approaches haven’t brought to light. The broader the circles of information you access, the more likely your solutions will be novel and creative.
“Rookie problem-solvers show you their analytic process and math to convince you they are smart. Seasoned problem-solvers show you differently.
“Show and tell to drive action. Show and tell is how you connect your audience with the problem and then use combinations of logic and persuasion to get ‘action.’
“The show-and-tell mindset aims to bring decision-makers into a problem-solving domain you have created. The most elegant problem-solving is that which makes the solution obvious.
“To get better at ‘show and tell,’ start by being clear about the action that should flow from your problem-solving and findings: the governing idea for change. Then find a way to visually present your logic so that the path to answers can be debated and embraced.
“Present the argument emotionally as well as logically, and show why the preferred action offers an attractive balance between risks and rewards.
“But don’t stop there. Spell out the risks of inaction, which often have a higher cost than imperfect actions have.
“The mindsets of great problem-solvers are just as important as the methods they employ. An attitude that encourages curiosity and embraces imperfection, rewards a dragonfly-eye view of the problem, creates new data from experiments and collective intelligence, and drives action through compelling show-and-tell storytelling creates radical new possibilities under high levels of unpredictability.
“Of course, these approaches can be helpful in a broad range of circumstances, but in times of massive uncertainty, they are essential.”
The bottom line: Are we on a downward spiral yet keep clinging to our instincts and worldview? That’s why the blog keeps pointing to the blindness courtesy of our caste system. It is the converse of self-government — as in a democracy.
It is neither about the East nor West. See above; self-government is what democracy is. It demands personal responsibility if people aspire for the common good.
We must recognize, especially in the elite class, that we brought this nation to infamy.
The above article from McKinsey is a product of extensive research. And if we can’t acknowledge the folly of our instincts and worldview, God forbid us.
The ideas that will solve our problems are not in our room. That is a fundamental finding by McKinsey. We can’t continue to be inward-looking. And we in the chattering classes can do a lot to upend this blindness.
Let’s frame the challenge differently. The challenge of problem-solving is akin to the pursuit of innovation. And “innovation” is not our cup of tea. “Innovation” at its core is thinking out-of-the-box.
For example, with due respect to our economic managers, our challenges are beyond economics.
That’s not new news. Even the supposedly best enterprises in the West can’t claim omnipotence. Or even the US itself. Or the UK.
And it’s about time we toss our mistaken notion of sovereignty and nationalism.
This notion can only reinforce our inward-looking bias — as in our inability to think out-of-the-box. We like to recall Marcos, yet continue to build walls around us.
We cannot pull ourselves out of the abyss on our own, with due respect to our tycoons. We don’t have the building blocks imperative for nation-building.
When will we ever recognize the prescience of Rizal? It is the 21st century.
Unsurprisingly, we are the regional laggard, a backward and the pariah nation.
Gising bayan!
“Here is a land in which a few are spectacularly rich while the masses remain abjectly poor. And where freedom and its blessings are a reality for a minority and an illusion for the many. Here is a land consecrated to democracy but run by an entrenched plutocracy, dedicated to equality but mired in an archaic system of caste.
“But the fault was chiefly their own. Filipinos profess the love of country, but love themselves – individually – more.” [Ninoy Aquino, Foreign Affairs magazine, July 1968; Stanley Karnow, New York Times Magazine, “Cory Aquino’s Downhill Slide,” 19th Aug 1990.]
“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]
“True social reform has little to do with politics. To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal. All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant.
“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.” [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862]
“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]
“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]
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