Beyond words, deeds.

With due respect to the business community, the above came to mind when the writer read this article: “Shared Prosperity: The business groups’ response to inequality and the pandemic,” BusinessWorld, 23rd Nov 2020.

“A historic event in the annals of Philippine Business happened on 5th Nov. In that event, 26 of the country’s largest business and professional associations signed a Covenant for Shared Prosperity.”

Over three decades ago, the writer sat in a committee under the umbrella of the PBSP (Philippine Business for Social Progress) to figure out how the business community can share prosperity.

But first, what is the PBSP? Says its website: “Philippine Business for Social Progress is the largest business-led NGO at the forefront of strategic corporate citizenship and business sector leadership, contributing to sustainable development and poverty reduction. Established in 1970, PBSP remains a consultant and partner of choice of companies and donors.

“PBSP scales up ‘impact’ by adopting the Collective Impact strategy to solve large, complex, systemic problems. PBSP organizes Platforms for Collective Engagements (PLACEs) to ensure alignment and sustainability of initiatives by multiple stakeholders.

“Responding to the changing landscape of CSR, PBSP’s brand of corporate citizenship taps into the core business competencies of companies and promotes inclusive business as a strategy. PBSP also continues to strategically engage companies through social investment, responsible business practices, and philanthropy.

“PBSP creates sustainable solutions to societal problems in its core program areas, which are Health, Education, Environment, and Livelihood and Enterprise Development. It also provides off-the-shelf options for the engagement of companies and their employees.

“With a proven track record, PBSP provides end-to-end services in development consulting which include project and grants management, events, and backroom management.”

The PBSP is half a century old. On the other hand, Mohamad Mahathir first became prime minister of Malaysia in 1981, eleven years after the Philippine business community created PBSP.

Where is Malaysia today?

“Since gaining independence in 1957, Malaysia has diversified its economy. From one that was initially agriculture and commodity-based to one that is host to robust manufacturing and service sectors, which have propelled the country to become a leading exporter of electrical appliances, electronic parts, and components.

“Malaysia is one of the most open economies globally, with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of Malaysia’s jobs linked to export activities. After the Asian financial crisis of 1997-1998, Malaysia’s economy has been on an upward trajectory, averaging 5.4% since 2010. It’s on the way to achieve its transition from an upper-middle-income economy to a high-income economy by 2024.” [World Bank}

And where are we, the Philippines? Indeed, our GDP has been growing. Yet, we can’t claim a most open economy like Malaysia with a trade to GDP ratio averaging over 130% since 2010. Because we remain a consumption-service economy, driven by OFW remittances and the BPO industry. And we are way too far from becoming a high-income economy.

Have we in the business community ever stopped to wonder why we can’t see what is going on within and around us? Try looking outward and ahead of the curve. But it demands beyond logical and linear thinking, forward and lateral thinking. 

Here’s a bit of anecdote: Colleagues at ECOP (Employers Confederation of the Philippines), another organization of business enterprises, founded in 1975, had just briefed Marcos following a trip to Malaysia. “That guy Mahathir is aggressively pushing the development of his country. You will not believe how magnificent the highways he is building. And you won’t know it until you drive on them. They are rubberized, and you can’t find anything like it, comfort-wise when you’re traveling.”

And there was also China, doing its thing. “In 1979, the Central Government of the People’s Republic of China announced that Guangdong Province would follow less restrictive economic policies and would be permitted to set up three Special Economic Zones (SEZs), including two in the Pearl River Delta, Shenzhen, and Zhuhai.

“Preferential policies included a 15 percent tax rate, tax holidays up to five years, the ability to repatriate corporate profits and capital investments after a contracted period. Plus, duty-free treatment of raw material imports and intermediate goods destined for exported products and exemption from export taxes.

“The Pearl River Delta Economic Zone accounted for 19.9 percent of GDP and 38.9 percent of total trade in 2005. As the most dynamic region in the Chinese Mainland, it is increasingly important as a market. Given the massive scale of its export sector, the region has become an important industrial market for all sorts of inputs, materials, and capital goods.” [Wikipedia]

And, of course, there is Singapore.

“Upon independence from Malaysia in 1965, Singapore faced a small domestic market and high levels of unemployment and poverty. Seventy percent of Singapore’s households lived in badly overcrowded conditions, and a third of its people squatted in slums on the city fringes. Unemployment averaged 14 percent, GDP per capita was US$516, and half of the population was illiterate.

“The oil crises (1973-1979) raised government awareness of economic issues. It slated the government to create a new form of economic change. The government highlighted a focus on technology and education to be the new wave of economic growth. It managed to minimize inflation and provide workers with the proper machinery to sustain growth.

“The Singapore government established the Economic Development Board to spearhead an investment drive and make Singapore an attractive destination for foreign investment. FDI inflows increased significantly over the following decades, and by 2001 foreign companies accounted for 75% of manufactured output and 85% of manufactured exports. Meanwhile, Singapore's savings and investment rates rose among the world's highest levels, while household consumption and GDP's wage shares fell among the lowest.  

“The economy of Singapore is a highly developed free-market economy. Singapore’s economy ranks as the most open in the world, 3rd least corrupt, most pro-business, with low tax rates (14.2% of gross domestic product (GDP)) and has the third-highest per-capita GDP in the world in terms of purchasing power parity (PPP).” [Wikipedia]

Sadly, beyond Malaysia, China, and Singapore, even Vietnam has overtaken the Philippines.

“Vietnam’s development over the past 30 years has been remarkable. Economic and political reforms under Đổi Mới, launched in 1986, have spurred rapid economic growth, transforming one of the world’s poorest nations into a lower-middle-income country. Between 2002 and 2018, GDP per capita increased by 2.7 times, to over US$2,700 in 2019, and over 45 million people overcame poverty. Poverty rates declined sharply from around 70 percent to below 6 percent (US$3.20/day PPP).

“In 2019, Vietnam’s economy continued to show fundamental strength and resilience, supported by robust domestic demand and export-oriented manufacturing. Real  GDP grew by an estimated 7 percent in 2019, similar to 2018, one of the fastest growth rates in the region.” [World Bank]

Let’s get back to PBSP. 

The writer represented his MNC-company that was recognized as a “Model Employer” for developing employees to attain their potentials, including getting them into its global management pool and paid well-above-average compensation. It had a worldwide program to promote dental health in grade school that conforms to its clinical norms in product innovation. Also, it supported track and field sports for the youth, among others.

What else? He didn’t have to think hard; Fr. Ben Beltran had approached the Christian community the writer and wife headed and suggested a livelihood project for the young folks in Smokey Mountain.

And it was easy given the writer’s MNC-company was in household products. Fr. Ben explained: Why not provide this youth group some inventory of your products that they can peddle to the Smokey Mountain residents, and they get the markups. And the cycle can continue because they will be able to pay you for the costs. The benefit to them is that they don’t have to raise the capital for the inventory. And if you give them for the least costs so much the better.”

Let’s stop right there.

We Filipinos, including those of us in the business community, see the challenge of Juan de la Cruz as poverty, period. 

In fairness, neuroscience says the chamber of the brain that triggers pleasure likewise triggers pride in charity-giving.

Consider our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

In other words, we are yet to internalize the heart of democracy and free enterprise. They demand self-government and personal responsibility in the pursuit of the common good.

The common good, as our neighbors demonstrated, is to traverse poverty to prosperity.

It is not to share prosperity. That is insulting and patronizing. But we don’t recognize it as such because of our value of hierarchy and paternalism.

And how do we traverse poverty to prosperity?

Benchmark. Benchmark. Benchmark.

Recall the posting on “behavioral economics.”

“Very little can surprise me anymore. But perhaps the most surprising is that many people, particularly economists, believe that we are perfectly rational. The interesting thing about economics is that it has become the main guiding principle for policymakers, lawmakers, and businesses.

“My hope for the kind of work I do, and for behavioral economics in general, is that by augmenting standard economics, it could help design better policies that work with what people can compute and the ways they reason.

“What motivates me the most is trying to take what we’ve learned from cognitive psychology and apply it to real-world problems to improve the way we live. 

“To remain aware of our irrationality.

“That is easier in situations where we have a history of acting irrationally.” [The Science of Irrationality: Why We Humans Behave So Strangely; Dan Ariely, scientificameric.com, 21st May 2008; Ariely is a behavioral economist at the Massachusetts Institute of Technology and author of the best-selling book, Predictably Irrational]

“Those familiar with the blog may recall it discussed the book, Thinking Fast And Slow by Daniel Kahneman, a Princeton University psychologist who won the Nobel prize in economic sciences in 2002 ‘for bridging economics and psychology.’

“And here are two of the three points Kahneman reinforces: (a) “2 systems determine your behavior in your mind – one conscious and the other automatic, (b) Your brain is lazy and causes you to make intellectual errors.”

See above; our instincts as Filipinos.

That is why the blog keeps speaking to our neighbors.

Given the sorry plight of Juan de la Cruz, it behooves us to figure out the way forward. 

Instead of PBSP 2.0, shouldn’t we rally the country behind Arangkada? 

And we can start by speaking up for a more open economy as our neighbors have done. If amending the Constitution is a long shot, why not lobby legislators and economic managers to move beyond our decades-old approach to fiscal and monetary policies? 

We have to overcome the shotgun model for a more targeted one. 

Prioritize. Prioritize. Prioritize.

It means going to school on the vital few over the trivial many.

Or, get over the crab mentality. But can we? See below; what Ninoy Aquino said of our fault.

That is why the blog raised these two priority initiatives that can be models for public-private partnerships. Neither can go it alone, i.e.,

(a) Replicate Vietnam's efforts, drive exports to the hilt, focus on the next electronic device after the smartphone and the Apple AirPod. That means attracting FDIs via an aggressive tax regime, among others, and

(b) Replicate the Pearl River Delta Economic Zone, which is several steps above the Philippine model.

See above; forward and lateral thinking.

In other words, we must find a way to traverse poverty to prosperity. 

Beyond our respective industries, we want a much larger economic pie, given we are over a hundred million people. We have been rationalizing the positives of a much smaller one, calling for inclusion.

That’s empty rhetoric. See above; the science of irrationality.

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]