Can we forward-think?

“World Bank Approves a US$600 Million New Project to Help Cushion the Pandemic’s Impact on Poor Households in the Philippines.” [The World Bank, Press Release, 28th Sep 2020]

Consider: “Mass poverty continues to be a serious problem in the rural areas because of a failed agrarian reform program. The alleviation of poverty among our rural masses must be on top of the priorities of Philippine governments for decades to come.” [Consumers as guilty as capitalists, Dr. Bernardo M. Villegas, CHANGING WORLD, Manila Bulletin, 28th Jan 2021]

Between the World Bank and a respected Philippine economist, how much more confirmation does Juan de la Cruz need to swear that poverty is our be-all and end-all?

The excellent news is confirmation bias is universal.

“THIS IS AN awkward moment for the QAnon conspiracists who put their considerable faith in Donald Trump. Inauguration Day came and went with no mass execution of Satanist Democratic pedophiles. The Storm, as million-odd QAnon followers called that wished-for event, was a shower. So, there was no Great Awakening—a post-slaughter celebration of Mr. Trump—either. ‘No plan, no Q, nothing,’ grumbled one follower, referring to the conspiracy’s shadowy prophet, an imagined Trump aide, on the Telegram messaging platform to which the group has flocked. [“QAnon and other delusions,” The Economist, 28th Jan 2021]

What is confirmation bias? “It occurs from the direct influence of desire on beliefs. When people would like a particular idea/concept to be accurate, they believe it to be true. They are motivated by wishful thinking. This error leads the individual to stop gathering information when the evidence gathered so far confirms the views (prejudices) one would like to be true.

“The so-called ‘evidence’ that convinces us that what we already believe is what is true does not have to be very strong, because our predisposition (or prejudice) affects what we take in from any situation. It turns out that even scientists, supposedly objectively dealing with unbiased research results, can fall victim to confirmation bias, seeing in the results of their research what they expected to find in the first place.” [How Confirmation Bias Affects You Every Single Day: Research shows how confirmation bias silently impacts us all; F. Diane Barth, Psychology Today, 31st Dec 2017]

How badly do we need a modern airport? “A white elephant in 50 years,” Solita Collas-Monsod, GET REAL, Philippine Daily Inquirer, 30th Jan 2021.

“Good intentions, right? They build, operate it for profit, and after 50 years, they transfer it to the government, which hasn’t spent a single centavo on it. That appears to benefit everyone – what can be better?

“The first thing that has gone wrong with this project is that the government is, after all, going to subsidize it. Why? Because Congress passed a bill, which President Duterte conveniently allowed to lapse into law (Republic Act No. 11506), that gives San Miguel Aerocity the following tax privileges: For ten years, it is exempt from paying all direct and indirect taxes and fees related to the project, such as income taxes, value-added taxes, percentage taxes, excise taxes, documentary stamp taxes, customs duties, and tariffs, as well as property taxes on land, buildings, and personal property.

“Moreover: For the rest of the 50-year term, the company will remain exempt from paying income and real estate taxes until a ‘competent authority’ declares that the company has ‘fully recovered its investment cost’ on the project. Who that ‘competent authority’ is, we are yet to know? The point is that theoretically, the government, in 50 years, may not get a single centavo in taxes. Nor partake in the ‘profit-sharing scheme’ that looks so good on paper where the government receives any windfall beyond the 12 percent annual rate of return allowed the Aerocity (again to be determined by unnamed competent authority).

“Jesus, Mary, and Joseph. When it doesn’t collect those taxes and duties, isn’t the government essentially giving those amounts to the corporation? How can it not be a subsidy in whatever form?

“You may say, ‘So what? After 50 years, the government takes over the entire shebang, and it will be making money hand over fist!’

“Ah! But in 50 years, that airport may be underwater. As we speak, that airport location is sinking. In 50 years, it will have sunk below sea level.”

There is probably a big debate going on about Aerocity, but what about Philippine poverty?

Recall the blog keeps speaking to our neighbors – from Japan to Vietnam. These neighbors are among the world’s top exporters – and became first-world nations while we remain third-world.

They demonstrated that the West, including the US, did not have all the answers. And that piece of history is near and dear to my heart because it was when my old MNC-company relocated me (and the family) to New York – and covered the region for a good decade. It gave me a ringside view of how these countries – i.e., economic miracles – awed the rest of the world. I also understood how proactive they were as I negotiated joint ventures. For example, they came to us. “We want to partner with you. Our resources are limited, but we need your capital and technology.”

In the meantime, what was happening in the West?

“The shock of losing the war opened Japanese minds to the need for change. In 1954, I went to Japan to speak at the Japanese Federation of Economic Organizations’ invitation – the Keidanren – and the Japanese Union of Scientists.

“What I told the Japanese was what I had been telling audiences in the United States for years. The difference was whose ears heard it.

“The people who attended my two-day lectures in Japan turned out to be 140 chief executives from the largest manufacturing companies in the country. After those sessions, two other groups, 150 senior Japanese managers, spent two weeks with me.

“When I gave lectures in the United States, the audiences consisted of engineers and quality control managers. Not before my 1954 trip – nor since – has the industrial leadership given me so much of its attention.

“In their postwar anxiety to change their quality reputation, Japanese companies evolved means of measuring customer satisfaction, competitive quality, and performance.

“These measures contributed to CEO decision making. In contrast, US companies, widely perceived as being among the world’s quality leaders, were not anxious to tamper with their reputation. US CEOs had long taken the quality function for granted.

“The most publicized example took place in the auto industry. Japanese cars were of such low quality in the 1950s that they could hardly sell them in the United States.

“But then the Japanese automakers adopted the concept of quality improvement, applied it at an unprecedented rate, and kept at it year after year. In 1975, by my estimate, after more than two decades of work, the Japanese caught up with and surpassed US automakers in product quality.

“In the spring of 1993, I addressed a meeting of the Business Roundtable in Washington.

"The Roundtable had convened 70 CEOs for a day devoted to the subject of quality. It showed every sign of being a watershed event in the United States' quality movement history.

“As I spoke, I couldn’t help wondering whether the Americans would follow up on their first quality conference as effectively as the Japanese have over the past 40 years.

“The critical variable in Japanese quality leadership is the extent of participation by senior managers. The same will be true in the United States. We will regain that quality leadership, rung by rung, when our senior managers carry out the quality-management roles they cannot afford to delegate. Only then can ‘Made in the USA’ become a symbol once again of world-class quality.” [WHAT JAPAN TAUGHT US ABOUT QUALITY, Joseph M. Juran, The Washington Post, 15th Aug 1993]

Recall that during the 80s, corporate America paid the price for losing its manufacturing edge to Japan, and since we have US MNCs in the Philippines, we also suffered.

That is why the blog keeps speaking to the dynamism of this universe. 

For example, the US regained its economic footing with the advent of information technology that spawned the digital age, from personal electronic devices to social media and beyond. And not to forget the acceleration of globalization, from the Asian Tigers to China and, most recently, Vietnam.

Corporate America and the West had to keep expanding their markets to satisfy the expectations of their shareholders. There are the mega ones, yet half of the Americans are in the market because of their pension benefits. And why, despite the baby boomers moving into their twilight years, the US remains a significant consumption economy.

Now that the millennials are taking their place in the American economy, given they are digital savvy, we can expect a more pronounced acceleration in disruptive innovations. This universe will be spinning like never before. 

In the meantime, between Washington DC – or US politics – and the financial services sector came deregulation that gave birth to subprime mortgages – and instruments the world came to know as derivatives – cum the Great Recession.

The bottom line, between China’s rise as the world’s manufacturing hub and the financial crisis of 2008, middle America saw how old skills that once made up the middle class became irrelevant. Enter: populism.

But let’s get back to the Philippines.

If the US, powerful as they are, would learn from the Japanese, why can’t we Filipinos learn from our neighbors?

Consider these news reports: (1) Philippines slides two spots in Corruption Perceptions Index; (2) Philippine GDP shrank by a record 9.5% in 2020; (3) Infrastructure spending down in 2020.

“In the Corruption Perceptions Index (CPI) 2020, the Philippines was tied with Moldova at 115th place out of 180 countries or territories.

“Topping the 2020 Corruption Perceptions indexes were Denmark and New Zealand, which both had 88 points. Finland, Switzerland, Singapore, and Sweden ranked 3rd, with the same score of 85.

“Malaysia took the 57th spot, while Indonesia ranked 102nd spot. Thailand and Vietnam shared the 104th place.

“The Philippine score is below the global average of 43.” [Philippines slides two spots in Corruption Perceptions Index, Jenina P. Ibañez, BusinessWorld, 29th Jan 2021]

How bad are we? Here’s what we can read about Moldova, our equal in corruption: “Moldova’s business environment is one of the most challenging in the region and weakened by pervasive government corruption and a burdensome regulatory environment. The government lacks transparency, and Moldova’s public officials commit acts of corruption with impunity.” [https://www.ganintegrity.com/about-us/]

Can we see ourselves reading about Moldova? Then consider: “European Chamber of Commerce of the Philippines President Nabil Francis said that transparency is crucial in making the country attractive for trade and investment needed during the public health and economic crisis.” [Ibañez, op. cit.]

Recall the blog keeps raising our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

In the meantime, consider how the world is moving forward: (1) GM aims to end the sale of gasoline, diesel-powered cars, SUVs, light trucks by 2035; (2) BlackRock Chief Pushes a Big New Climate Goal for the Corporate World.

That’s the perspective from corporate America. But as we know, there is also Washington DC. Recall that I have no respect for US politics and don’t exercise the right to vote. Except for the last presidential election, i.e., to test if America was ready to dump Trump. And I was not disappointed. But that does not mean I will do it again.

America must know better – top of the heap in human (cognitive) development, not at the binary level. Consider these articles: (1) Some Republicans are switching parties — but not many; (2) The Capitol Attack Is Looking More and More Like a Right-Wing Plot; (3) How to Defeat: America’s Homegrown Insurgency: We don’t need new laws. We need law enforcement, accountability, and a willingness to listen.

In other words, I have represented corporate America and lived through the effort of self-criticism and self-improvement. On the other hand, US politics is like from another planet – it is not what the American experiment is about – “to form a more perfect union.”

But here’s a breath of fresh air: “Anti-Trump Republican Adam Kinzinger accepts his fate, whatever it is,” Ellen McCarthy, The Washington Post, 26th Jan 2021.

“’The only hope you have is to accept the fact that you’re already dead,’ the Republican congressman from Illinois says. ‘And the sooner you accept that the sooner you’ll be able to function as a soldier is supposed to function.’

“Kinzinger, who is also a pilot with the Air National Guard, took those words as an order.

“His embrace of this fatalistic credo made it easier for him to fly planes into enemy territory during tours in Iraq and Afghanistan. It made it easier for him to object late last year as President Donald Trump’s congressional colleagues amplified the myth of an (a) ‘rigged’ election, (b) stoking violent revenge fantasies (among the party’s politically valuable contingent.) And it made it easier for Kinzinger, a young, square-jawed Republican with his whole political life ahead of him, to vote to impeach Trump in the aftermath of the failed insurrection in the US Capitol.

‘I’m willing to blow this whole thing out of the water at all times,’ Kinzinger said of his career in politics. The 42-year-old congressman, who last fall won reelection easily, spoke to The Washington Post from his office a week after the Capitol attack. He was the only Republican to vote in favor of a resolution urging Vice President Mike Pence to invoke the 25th Amendment and strip Trump of his presidential powers and one of 10 Republicans to vote to impeach Trump for inciting a riot at the Capitol.”

Can we pause for one moment? The Japanese can learn from the past. The Americans can – although I can only keep my fingers crossed when it comes to politics – and the Asian Tigers can, including most recently, Vietnam.

What will it take for us Filipinos to turn over a new leaf? It won’t be comfortable until we toss our instincts because we take them as strengths: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of corruption.

If we can’t establish a starting point and commit to doing better, what more of learning how to forward-think? Poverty is our be-all and end-all because we suffer from confirmation bias. We can’t figure out that we will perpetuate our caste system until we commit to traverse poverty to prosperity.

And that’s not bad for us in the Philippine elite class. The caveat: See above; given the millennials are digital savvy, expect this universe to spin like never before.

Consider: I have recently gone to school under the tutelage of a 27-year-old and brought my Eastern European friends along despite our enviable global business and marketing experience because this young fellow can teach us some about the digital world.

Gising bayan!