We must keep our eyes on the ball.

Here’s a quote from an earlier posting: “How come we in the Philippine elite class can’t keep our eyes on the ball? The reality is only Juan de la Cruz is impacted by our meager GDP per capita ($8,908) because we make even more than the average Malaysian’s $28,364. 

“Denial is how we perpetuate our caste system – and preserve our rank and privileges.

“Over decades, we kept managing our economy via logical and incremental thinking – instead of lateral or creative and forward-thinking – and proudly celebrated a GDP growth rate of 6%-7%. Yet, we remained the regional laggard – and must borrow tons of money for the 4Ps so that Juan de la Cruz can put body and soul together.

“Sadly, that paradigm is not the answer. Why? Because as our neighbors demonstrated, it is about traversing poverty to prosperity. It is not charity per se. Charity is not what ‘inclusive’ means. ‘Inclusive’ means to become prosperous as an economy and nation.

“But we want to keep to our puny minds – aka binary or dualistic thinking – even when our neighbors already scaled the cognitive development ladder. So, they embraced dynamism and interdependence that wealthy nations opted to partner with them – pouring loads of money and technology.

“Should we stop and ponder?”

The challenges posed by the Mandanas law and, say, the backlog in housing are merely symptoms of our underdeveloped economy.

Of course, there is more to nationhood than GDP. But with a GDP per capita just a fraction of Malaysia’s, there is no way we can lift Juan de la Cruz from poverty – and be as well off as the average Malaysian.

Maslow has edified the world about human needs. At the very basic are the physiological “needs.” Juan de la Cruz is at that level.

That is why we talk of food security and the housing backlog, for example. But, in short, poverty is our reality – and then some. 

The problem is, we in the Philippine elite class can’t keep our eyes on the ball. And that comes from our caste system.

There must be a way to feed Juan de la Cruz and to put a roof over his head – if only we can be more charitable?

There is none.

One more time with feeling, there is none – given the reality of our GDP per capita and, worse, the impunity inherent in the war on drugs. In short, charity and EJKs aren’t the answer to Philippine poverty.

Question: What’s the difference between economics and business? With the latter, you pay the price when you miss your plans at the heart of the compensation program. You cannot just rationalize a miss. Recall that I changed the planning and budgeting system in a 200-year-old Fortune 500 company. And every manager is equipped via the-house course they must take.

For example, will the implementing rules and regulations for CREATE and SIPP accelerate raising GDP in absolute dollars? Take $200 billion. Over what period? In other words, a growth rate of 6%-7% did not lift us from regional laggard. And if the IRR will, what, industries and products will ensure that they do?

Think of Vietnam and how one enterprise, i.e., Samsung, delivers more revenues than our eight top companies combined. We cannot be theoretical in this effort. We must step up to the real world of Juan de la Cruz.

How many times did FVR talk about the imperative to make the Philippine pie bigger? He wanted Juan de la Cruz to appreciate the challenge we faced. 

Yet, we can’t be conflating the challenges of developed economies with ours. That is comparing apples and oranges.

That is why the blog keeps speaking to the Asian Tigers – and, most recently, Vietnam. These Asian economies can’t compare with where the US is, economic development-wise. For example, the US spends over $700 billion in defense because it has a role to play as a hegemon. Think of the need to defend Ukraine from Russia. Or think of the need to protect South Korea and neighboring countries from North Korea.

We are more comparable to our neighbors. That is how we can keep our eyes on the ball.

In foreign relations, think of what happened to Germany and Japan. Should they fear the US because the US brought them to their knees?

Recall the Marshall Plan: “It was also known as the European Recovery Program, a US program providing aid to Western Europe following the devastation of World War II. It was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent. It was the brainchild of US Secretary of State George C. Marshall and crafted as a four-year plan to reconstruct cities, industries, and infrastructure heavily damaged during the war and remove trade barriers between European neighbors, and foster commerce between those countries and the United States.

“In addition to economic redevelopment, one of the stated goals of the Marshall Plan was to halt the spread of communism on the European continent.

“Implementation of the Marshall Plan has been cited as the beginning of the Cold War between the United States and its European allies and the Soviet Union, which had effectively taken control of much of central and eastern Europe and established its satellite republics as communist nations.

“The Marshall Plan is also considered a key catalyst for forming the North Atlantic Treaty Organization (NATO), a military alliance between North American and European countries established in 1949.

“Post-war Europe was in dire straits: Millions of its citizens had been killed or seriously wounded in World War II, as well as in related atrocities such as the Holocaust.

“Many cities, including some of the leading industrial and cultural centers of Great Britain, France, Germany, Italy, and Belgium, had been destroyed. In addition, reports provided to Marshall suggested that some regions of the continent were on the brink of famine because the fighting had disrupted agricultural and other food production.

“In addition, the region’s transportation infrastructure – railways, roads, bridges, and ports – had suffered extensive damage during airstrikes, and the shipping fleets of many countries sunk. One could easily argue that the only world power not structurally affected by the conflict had been the United States.

“The reconstruction coordinated under the Marshall Plan was formulated following a meeting of the participating European states in the latter half of 1947. Notably, the Soviet Union and its satellite states received invites.

“However, they refused to join the effort, allegedly fearing US involvement in their respective national affairs.

“President Harry Truman signed the Marshall Plan on 3rd Apr 1948 and distributed aid to 16 European nations, including Britain, France, Belgium, the Netherlands, West Germany, and Norway.

“To highlight the significance of America’s largesse, the billions committed in aid effectively amounted to a generous 5 percent of US gross domestic product at the time.” [History.com]

What about Japan?

“Occupation and Reconstruction of Japan, 1945–52: After the defeat of Japan in World War II, the United States led the Allies in the occupation and rehabilitation of the Japanese state. Between 1945 and 1952, the US occupying forces, led by General Douglas A. MacArthur, enacted widespread military, political, economic, and social reforms.

“The groundwork for the Allied occupation of defeated Japan emerged during the war. In a series of wartime conferences, the leaders of the Allied powers of Great Britain, the Soviet Union, the Republic of China, and the United States discussed how to disarm Japan, deal with its colonies (especially Korea and Taiwan), stabilize the Japanese economy, and prevent the remilitarization of the state in the future. Finally, in the Potsdam Declaration, they called for Japan’s unconditional surrender; by August 1945, they did.

“In September 1945, General Douglas MacArthur took charge of the Supreme Command of Allied Powers (SCAP) and began the work of rebuilding Japan. Although Great Britain, the Soviet Union, and the Republic of China had an advisory role as part of an ‘Allied Council,’ MacArthur had the final authority to make all decisions. And the occupation of Japan consists of three phases: the initial effort to punish and reform Japan, the work to revive the Japanese economy, and the conclusion of a formal peace treaty and alliance.

“The first phase, roughly from the end of the war in 1945 through 1947, involved the most fundamental changes for the Japanese government and society. First, the Allies punished Japan for its past militarism and expansion by convening war crimes trials in Tokyo. At the same time, SCAP dismantled the Japanese Army and banned former military officers from taking roles of political leadership in the new government.

“In the economic field, SCAP introduced land reform, designed to benefit the majority tenant farmers and reduce the power of wealthy landowners, many of whom had advocated for war and supported Japanese expansionism in the 1930s. MacArthur also tried to break up the sizeable Japanese business conglomerates, or zaibatsu, to transform the economy into a free-market capitalist system. Finally, in 1947, Allied advisors essentially dictated a new constitution to Japan’s leaders. Some of the most profound changes in the document included (a) downgrading the emperor’s status to that of a figurehead without political control, (b) placing more power in the parliamentary system, (c) promoting greater rights and privileges for women, and (d) renouncing the right to wage war, which involved eliminating all non-defensive armed forces.

“By late 1947 and early 1948, the emergence of an economic crisis in Japan alongside concerns about the spread of communism sparked a reconsideration of occupation policies. This period is sometimes called the ‘reverse course.’ In this stage of the occupation, which lasted until 1950, the economic rehabilitation of Japan took center stage. SCAP became concerned that a weak Japanese economy would increase the influence of the domestic communist movement. Moreover, with a communist victory in China’s civil war increasingly likely, the future of East Asia appeared to be at stake.

“Occupation policies to address the weakening economy ranged from tax reforms to measures aimed at controlling inflation. However, the most serious problem was the shortage of raw materials required to feed Japanese industries and markets for finished goods. The outbreak of the Korean War in 1950 provided SCAP with just the opportunity it needed to address this problem, prompting some occupation officials to suggest that ‘Korea came along and saved us.’

“After the UN entered the Korean War, Japan became the principal supply depot for UN forces. The conflict also placed Japan firmly within the confines of the US defense perimeter in Asia, assuring the Japanese leadership that no real threat would be made against Japanese soil whatever the state of its military.

“In the third phase of the occupation, beginning in 1950, SCAP deemed the political and economic future of Japan firmly established and set about securing a formal peace treaty to end both the war and the occupation. Moreover, the US perception of international threats had changed so profoundly in the years between 1945 and 1950 that the idea of a re-armed and militant Japan no longer alarmed US officials; instead, the real threat appeared to be the creep of communism particularly in Asia.

“The final agreement allowed the United States to maintain its bases in Okinawa and elsewhere in Japan, and the US Government promised Japan a bilateral security pact. In September of 1951, fifty-two nations met in San Francisco to discuss the treaty, and ultimately, forty-nine of them signed it. Notable holdouts included the USSR, Poland, and Czechoslovakia, all of which objected to the promise to support the Republic of China and not do business with the People’s Republic of China that was forced on Japan by US politicians.” [history.state.gov]

What about China? Should China fear the US?

Didn’t Deng Xiaoping tell (upon the advice of Lee and Mahathir) the West that China needed Western money and technology if they were to lift their people from poverty?

Or should Russia fear the US? What happened to former Soviet satellite states after the fall of the Soviet empire? Why did they want to join NATO, for example? Of course, there will always be exceptions. But these are nations that kept to the tyrannical rule they knew from the days of the old Soviet empire. And Belarus is a good example.

And even wealthy Germany saw local town folks lament the pronouncement of Trump that the US military will shut down the US facility in their backyard – because they were like family. They could also use the economic benefits generated by the US military base. Thank God for Biden. What a relief to said people.

Of course, it’s not a perfect world as the EU continues to demonstrate – with Brexit in particular. And I have a ringside view, working and living with Eastern Europeans for almost 20 years, and assisted them when they geared up for ascension – and beyond – into the EU. Recall too that I covered the Asia-Pacific region for a decade, including China and Vietnam – and have many friends in these countries.

Perfection is not of this world. Even Pope Francis warned the US bishops about assuming that the Catholic faith is the epitome of perfection. Because even spiritual development is a work in progress, recall John Paul VI would start his morning prayers with the admission that he comes to the Creator as a sinner.

And that’s why the blog never stops asserting that democracy is the mirror image of Christianity, i.e., the imperative of personal responsibility for the common good – a work in progress if indeed there is one.

Why are freedom-loving nations again rallying around America – or Biden in particular? Because the global community must seek to demonstrate personal responsibility for the common good. And America, like it or not, has the resources and capability to take the lead in this collective undertaking.

To be sure, the US isn’t perfect either. Recall that I have no respect for US politics – seeing through the culture wars – and chose not to exercise the right to vote. But as the world saw, the majority of Americans won’t submit to tyranny.

But how does Juan de la Cruz find his place in the sun?

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

In other words, why do we struggle with trade and foreign relations?

In both cases, we remain an adolescent given our lack of (a) development experience – and why we are closer to dualism or binary thinking than relativism; and (b) failure to move up from a consumption-service economy to an investment-industrial economy.

Consider: “Opening the economy to trade and long-term capital flows need not make the poor worse off. The key is to put the appropriate domestic policies and institutions in place – to help shift production to more marketable goods and help workers enter new jobs.

“Contrasting case studies of countries make this quite apparent. For example, although the island economies of Mauritius and Jamaica had similar per capita incomes in the early 1980s, their economic performance has diverged dramatically, with the former having better participatory institutions and the rule of law and the latter mired in crime and violence.

“South Korea and the Philippines had similar per capita incomes in the early 1960s. Still, the Philippines languished in political and economic institutions (especially because power and wealth concentrated in a few hands), so it remains a developing country. In contrast, South Korea has joined the ranks of the developed.

“Botswana and Angola are two diamond-exporting countries in southern Africa, the former democratic and fast-growing, the latter ravaged by civil war and plunder.” [“Globalization and Poverty,” Pranab Bardhan, Scientific American, 26th Mar 2006]

“How come we in the Philippine elite class can’t keep our eyes on the ball? The reality is only Juan de la Cruz is impacted by our meager GDP per capita ($8,908) because we make even more than the average Malaysian’s $28,364. 

“Denial is how we perpetuate our caste system – and preserve our rank and privileges.”

Gising bayan!