Problem-solve or spin wheels?

“The numbers are indeed glaring: over the last five years, we averaged only $70 billion a year in merchandise exports, while Indonesia earned $182, Thailand $246, Malaysia $248, Vietnam $268, and Singapore $401 billion. We’re not even anywhere near half of what Indonesia made, the closest neighbor we trail.

“The new government simply must give focused and determined attention to this abysmal export performance, as in it lies the key to solving the major perennial challenges our economy keeps facing, namely: (1) lack of quality jobs, (2) low incomes and high levels of poverty, and (3) higher prices, especially of food, leading to wide food insecurity and malnutrition among our poor—in short, the basics of “presyo, trabaho, and Kita.”

“There are those who ask, “But why focus on exports when we must worry about providing for our people’s needs first?” The question misses the point: by exporting more, we would be able to create more jobs and raise people's incomes so that Filipinos can have more. In the same way, a family would not limit itself to producing only for its own members’ needs; neither could it feasibly produce everything they need or want. It must sell goods and services outside of the household (that is, “export”) for its members to earn the income to gain access to the many other things they cannot economically produce.

“The high performing Asian economies (HPAEs) that pulled off the so-called “East Asian Miracle” in the 1980s and 1990s, documented by the World Bank in a book with the same title, had one thing in common: they pursued and attained very rapid export growth.

“High-performing” meant they achieved rapid growth in average incomes and immediate poverty reduction. Led by Japan, they included the four “tigers” of Hong Kong, South Korea, Singapore, and Taiwan, and by the early 1990s were joined by Indonesia, Malaysia, and Thailand. The book noted that creating an export push was vital in all these HPAEs.

“Now comes Vietnam, the newest export miracle story in Asia, having multiplied its export earnings 23 times over the past 21 years. The rest of its Asian peers only saw theirs expand two to four times in the same period (and ours grew the slowest). It has achieved the most rapid export growth seen in Asia. The critical elements of its export strategy are hardly unique: trade liberalization, vigorous foreign direct investment promotion, currency undervaluation, aggressive entry into free trade agreements with key trading partners, and vast markets like the United States.

“Meanwhile, our economy remains trapped in the vicious cycle of a limited internal market constraining the economy’s growth, leading to low average income and high poverty, bringing us back to the little internal market.

“An export breakout as exemplified by the HPAEs would be vital in getting out of this trap. That is why the Philippine Export Development Plan (PEDP) 2023-2027, now being spearheaded by the DTI, must receive far wider attention and commitment than all past PEDPs crafted since the enactment of the Export Development Act (Republic Act No. 7844) in 1994.

“People now like to say that we need an “all-of-government” effort on this-or-that initiative; for the PEDP, an “all-of-nation” push is what the country needs. That is because achieving export expansion entails far more than the DTI does. The PEDP should not be merely a DTI plan. We need a program that requires unison among all the moving parts, including exchange rate policy, infrastructure development, agricultural development strategy, human resource development, and fiscal and monetary policies.

“Vietnam, it seems, has conducted the complex symphony orchestra better than everyone else has. Can our sterling new economic team manage to do a Vietnam in a country where unity, solidarity, and teamwork have traditionally been in deficit?” [“Doing a Vietnam,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 31st May 2022]

Are we finally “problem-solving” instead of “spinning wheels”?

That is a long-winded way to say “thank you” to Ciel Habito.

Ciel will recall that seven years ago, at the 2015 Ateneo and UP Economic briefings, I stood up, and to the crowd, I must have sounded stupid – if not crazy.

I could not believe what I heard from the briefings. We were celebrating the resurgence of manufacturing. But what is the context?

In other words, we were not problem-solving but spinning wheels.

And Ciel explains it now better than I did.

Will we finally wake up?

Consider: “Social democracy, the best alternative,” Elfren S. Cruz, BREAKTHROUGH, The Philippine Star, 2nd Jun 2022. “Social democracy is a system of government that has values similar to socialism but under a capitalist framework. The ideology has people having a say in government actions and supports “a competitive economy with money while also helping people whose jobs don’t pay a lot.” That has proven successful in Nordic countries.”

Are we problem-solving or spinning wheels?

“Tourism should be a principal foreign exchange earner and a major job creator for us. Many of our islands look like paradise on earth, but our people also are among the most hospitable.” [“Tourism,” Boo Chanco, SUPPLY AND DEMAND, The Philippine Star, 3rd Jun 2022.]

Let’s get back to Ciel:  “The high performing Asian economies” (HPAEs) that pulled off the so-called “East Asian Miracle” in the 1980s and 1990s, documented by the World Bank in a book with the same title, had one thing in common: they pursued and attained very rapid export growth.”

The blog often raised the point: “Beg for Western money and technology,” was how Lee and Mahathir explained the East Asian Miracle to Deng” – and if China is to lift its people from poverty.

Should we talk about social democracy or tourism or focus on problem-solving?

There are distinctions between a standalone system – or an industry – and an “ecosystem.”

As Ciel puts it, it is an “all-of-nation” push beyond an “all-of-government” effort.

And that is why the blog never tires of raising our instincts – aka our caste system: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

For example, the blog asserts that democracy is a mirror image of Christianity – and presupposes personal responsibility for the common good, as in love thy neighbor. It is not unfettered freedom. And which explains why America continues to stumble.

Let’s say it differently: Democracy is not about the “right” or “left” but the common good.

On the other hand, because of our instincts, we take it for granted that rank has its privileges – so long as we demonstrate paternalism for those lower in the hierarchy.

And in the process, we fall into the trap of “groupthink,” a “phenomenon that occurs when a group of well-intentioned people makes irrational or non-optimal decisions spurred by the urge to conform or the belief that dissent is impossible.” [Groupthink | Psychology Today]

Here’s a quote from an earlier posting, “With due respect to Senator Lina, what body of knowledge would support Du30’s war on drugs?

“More to the point, nations tried and failed to combat this menace, and the one singular success story – and has become the model and best practice – as far as the UN is concerned is that of Portugal.

“Conversely, the rest of the world saw us as the pariah. Still, our blindness was so profound that we rallied behind Duterte.”

Let’s talk about the Nordic countries – that embraced social democracy – vis-à-vis the East Asian Miracle.

“Industrialization gave rise to democracy and became fully established in the Nordic countries following the First World War. Although the Nordic Region remained neutral during the First World War, Denmark and Norway were forced into the Second World War when, in 1940, Germany attacked and occupied both countries. Sweden remained neutral throughout the war, while Finland initially sided with Germany. Finland suffered massive losses in the fight, first against the Soviet Union and subsequently against Germany. Norway was also severely affected by the war.

“Iceland, the Faroe Islands, and Greenland were under American and British control and had no actual contact with the rest of the region during the war. In just a few years, the American presence in Greenland led to the rapid development of the previously isolated community that had supported itself primarily through hunting and fishing.

“After the war, economic development took hold throughout the Nordic Region, helped by the US Marshall Plan. Finland’s foreign policy balanced a close relationship with the Soviet Union with closer ties with the West and thus the other Nordic countries. As dictated by Russia, the country maintained a strict policy of neutrality and traded with both the West and the Soviet Union. While Sweden maintained its neutrality, Denmark, Iceland, and Norway joined the Atlantic military pact NATO in 1949.” [The history of the Nordic Region | Nordic cooperation (norden.org)]

In other words, industrialization spawned democracy in the Nordic countries, not the other way around.

It is worth repeating, “The high performing Asian economies pulled off the so-called “East Asian Miracle” in the 1980s and 1990s, documented by the World Bank in a book with the same title, had one thing in common: they pursued and attained very rapid export growth.”

And how do they stand versus the Nordic countries? What metrics must we bring to bear?

Let’s start with poverty. While PHL is at 16.7%, Indonesia, Malaysia, Thailand, and Vietnam have less than a 10% poverty rate. And in Singapore, it does not even apply. On the other hand, the Nordic countries have over a 10% poverty rate.

Export-wise, Indonesia, Malaysia, Singapore, Thailand, and Vietnam outdo Finland and Norway. But Denmark did more than Indonesia; Sweden beat Indonesia and Malaysia.

And as far as mouths to feed are concerned, Indonesia, Malaysia, Thailand, and Vietnam have much more than all the Nordic countries – at less than 6 million – except Sweden with over 10 million. Malaysia, however, has over three times Sweden’s population.

And the preceding explain why the Nordic countries deliver more in GDP per capita. Yet, Singapore dwarfs all of them.

The bottom line: PHL must benchmark against our neighbors if we want to compare apples to apples.

Let’s shift to tourism and its impact on the Philippine economy.

“Before the pandemic, the Philippines Travel & Tourism sector’s contribution to GDP was ​​22.5% of the total economy (worth US$92.6 billion). However, due to damaging travel restrictions, it then plunged by 80.7% to a mere US$ 17.8 billion, dropping to just a 4.8% share of the country’s GDP.

“But in 2021, this rose to US$ 41 billion, representing a 10.4% share of the nation’s total economy, which signals the recovery of the sector is well underway.” [https://wttc.org/News-Article/WTTCs-latest-Economic-Impact-Report-reveals-significant-recovery-in-the-Philippines-Travel-and-Tourism-sector-in-2021]

In other words, we may have the fourth fastest Travel & Tourism GDP growth rate for any country in the world in 2021, yet we are still to recover our pre-pandemic scores. Sadly, those better numbers mean we lag our neighbors in GDP per person, including Vietnam.

The San Miguel project may be our best shot tourism-wise to date, but it will not appreciably raise PHL GDP per capita as exports did to Vietnam. “We averaged only $70 billion a year in merchandise exports, while Indonesia earned $182, Thailand $246, Malaysia $248, Vietnam $268, and Singapore $401 billion. We’re not even anywhere near half of what Indonesia made, the closest neighbor we trail.”

Beyond the sheer numbers, the multiplier effect — given the required skills, subindustries, and parts and components — of export products, especially techno-based, is far more significant than tourism and allied service industries.

Moreover, this is not the first time we hear that there is a silver bullet or a magic wand that will wipe our problem away.

For example, “There seems to be no indication that the party-list system in the Philippines can ward off traditional political elites in the national legislature and instill democratic principles. If anything, the party-list system seems to have accommodated traditional political and elitist structures. At the same time, having such strong attachments to elitist politics may hinder the capacity of the party-list system to provide a platform that can be an effective counterpoint to authoritarian tendencies.

“We can trace the inadequacies and conflicting features of the party-list system law to its key designer – Congress. They may have looked upon the party-list organizations as potential competitors or useful platforms in their quest to retain the power and privilege of their positions. Either way, the lasting effect of the party-list system can be regarded as one that undermines (rather than reinforces) the legacy of People Power.” [“The party-list system in the Philippines: Is it better or worse for democracy (?), Jorge Villamor Tigno, Asia Dialogue (theasiadialogue.com)]

In other words, think and pursue outcomes beyond system, procedure, or activity.

Outcomes define the successful pursuit of an effort. Take the American experiment: “the pursuit of life, liberty, and happiness.”

“What Biden is trying to push is much more about actually remaking our economy to do different things and regularly produces different outcomes.

“But its execution has lagged its vision. And the reason for this is uncomfortable for Democrats. You can’t transform the economy without first “transforming” the government.

“In April, Brian Deese, the director of Biden’s National Economic Council, gave an important speech on the need for “a modern American industrial strategy.” The question should move from “Why should we pursue an industrial strategy?” to “How do we pursue one successfully?”

“Do we have a government capable of “building”? The answer, too often, is no. We have a government that is extremely good at making building difficult.

“The first step is admitting you have a problem, and Deese did exactly that to his credit. “A modern American industrial strategy needs to demonstrate that America can build — fast, as we’ve done before, and fairly, as we’ve sometimes failed to do,” he said.

“He noted that the Empire State Building took just over a year to construct. We are more prosperous than we were then, and our technology far outpaces what was available in 1930. And yet does anyone seriously believe such a project would take a year today?

“One answer worth wrestling with was offered by Brink Lindsey, the director of the Open Society Project at the Niskanen Center, in a 2021 paper titled “State Capacity: What Is It, How We Lost It, and How to Get It Back.” His definition is admirably terse. “State capacity is the ability to design and execute policy effectively.”

“When a government can’t collect the taxes it’s owed or build the sign-up portal for its new health insurance plan or construct the high-speed rail it’s already spent billions of dollars on, that’s a failure of state capacity.

“What is needed most is a change in ideas: namely, a reversal of those intellectual trends of the past 50 years that have brought us to the current pass.

“A place to start is offered in another Niskanen paper by Nicholas Bagley, a law professor at the University of Michigan. In “The Procedure Fetish,” he argues that liberal governance has developed a puzzling preference for legitimating government action through processes rather than outcomes. We need to build more homes, trains, clean energy, research centers, and disease surveillance. And we need to do it faster and cheaper.

“He suggests, provocatively, that that’s because American politics in general and the Democratic Party, in particular, are dominated by lawyers. Biden and Kamala Harris hold law degrees, as did Barack Obama and John Kerry and Bill and Hillary Clinton before them. And this filters down through the party.

“Lawyers, not managers, have assumed primary responsibility for shaping administrative law in the United States,” Bagley writes. “And if all you’ve got is a lawyer, everything looks like a procedural problem.”

“So this is what I have become certain of Democrats spend too much time and energy imagining the policies that a capable government could execute and not nearly enough time imagining how to make a government capable of executing them. It is not only markets that have failed.” [“What America Needs Is a Liberalism That Builds,” Ezra Klein, The New York Times, 29th May 2022]

Are we finally “problem-solving” instead of “spinning wheels”?

This post is a long-winded way to say “thank you” to Ciel Habito.

Ciel will recall that seven years ago, at the 2015 Ateneo and UP Economic briefings, I stood up, and to the crowd, I must have sounded stupid – if not crazy.

I could not believe what I heard from the briefings. We were celebrating the resurgence of manufacturing. But what is the context?

In other words, we were not problem-solving but spinning wheels.

Gising bayan!

Groupthink and linear thinking

[This is a reprint from 2017, with an expanded discussion on “groupthink.” And as the blog argues, our instincts and caste system have rendered us “helpless,” mutually reinforcing one another. Its scientific name is “learned helplessness,” expounded by the blog before. “A mental state that occurs when people find out that nothing they do matters.”]

Wittingly or not, we are falling into the trap of “Que sera, sera.”

Or why PHL isn’t synonymous with innovation. “Pinoy abilidad” is classic linear thinking and inside-the-box thinking?

“President Duterte has a valid point. He has the support of many Catholics, especially those who have grown tired of toothless pastoral messages that hardly anyone pays attention to nowadays.” [Can local clergy do more to combat the drug menace (?), Atty. Joey D. Lina, Former Senator, Manila Bulletin, 23rd Aug 2017]

Recalls Lina, “We protested against fascism, militarism, and your wife (referring to the dictator Ferdinand Marcos’ profligate wife, Imelda.)

“Despite his years of activism, Lina’s animosity against Imelda melted away when she attended his concert and praised him for his talent.

“‘Ngayon, kaibigan ko na siya (Now she’s my friend),’ Lina admits with a smile, proving that the adage ‘music gets people together’ is true. ‘In fact, we had dinner a few weeks ago.’” [Dreaming the Impossible Dream in an evening with Joey Lina, Simeon G. Silverio, Jr., Publisher & Editor in Chief, Asian Journal San Diego, Our Life & Times, 3rd Jul 2016]

All’s well that ends well.

Yet, if Juan de la Cruz is to lift himself from poverty, he must learn to think “outside the box.”

With due respect to Senator Lina, what body of knowledge would support Du30’s war on drugs? And which the blog has discussed before. More to the point, nations tried and failed to combat this menace, and the one singular success story – and has become the model and best practice – as far as the UN is concerned is that of Portugal.

Conversely, the rest of the world saw us as the pariah. Still, our blindness was so profound that we rallied behind Duterte – including the business sector that is now applauding the recycling of economic managers?

But our streets feel safer? Like a police state feels safer because tyranny appropriates the rule of law, paraphrasing Garry Kasparov, arguably the greatest chess player. And why he became an activist and a symbol of opposition to Putin. Tyrants are accountable to no one, yet Juan de la Cruz loves tyranny that he submits himself – first to Marcos and now to Duterte?

“In a police state, there is no drug problem. [The wife and I experienced what a police state is like during earlier visits to Bulgaria. Within 48 hours of arrival, we report to the police, where their dossiers are updated each time.] The dictatorship insulated them from the drug culture in Portugal – until freedom descended. And “freedom” is what “freedom” is – the freedom to experiment.” [https://news.vice.com/article/ungass-portugal-what-happened-after-decriminalization-drugs-weed-to-heroin; 20th Apr 2016]

But let’s come back to PHL. Because of groupthink and our hierarchical instincts, we swear by Du30’s war on drugs? And so we view everyone that does not toe the Du30 line as unpatriotic? Do we like to talk about history yet easily forget the past? Do we need to be reminded of where a cult of personality can lead?

“Both Hitler and Mussolini built their empires on a cult of personality with themselves at the center.” [http://www.media-studies.ca/articles/fascism.htm]

Yet even the well-informed among us would be forwarding trolls and fake news, wittingly or not, spreading propaganda? Is it called groupthink or our hierarchical instincts?

Let’s get back to the Portugal experience.

“Today, Portuguese authorities don’t arrest anyone found holding less than a 10-day supply of an illicit drug — a gram of heroin, ecstasy, or amphetamine, two grams of cocaine, or twenty-five grams of cannabis. Instead, drug offenders receive a citation, ordered to appear before so-called “dissuasion panels” of legal, social, and psychological experts. Individuals who repeatedly come before the panels may be prescribed treatment, ranging from motivational counseling to opiate substitution therapy. And they suspended most cases.

“‘We had much criticism at first,’ recalled Goulão, a physician specializing in addiction treatment whose work led Portugal to reform its drug laws in 2000 and is today its national drug coordinator. After decriminalizing, the first inquiries Portugal received from the International Narcotics Control Board — the quasi-judicial UN oversight body established by the UN drug convention system — were sharp and scolding.

“‘Now things have changed completely,’ he went on. ‘We are pointed to as an example of best practices inside the spirit of the conventions.’ Indeed, Werner Sipp, the board’s new head, said as much at the UN’s Commission on Narcotic Drugs in Vienna.

“Though often narrowly assessed about its decriminalization law, Portugal’s experience over the last decade and a half speak as much to its free public health system, extensive treatment programs, and the hard-to-mimmer trickle-down effects of the legislation. Though at least twenty-five countries have introduced some form of decriminalization, Portugal’s holistic model and its use of dissuasion panels set it apart. In a society where drugs are less stigmatized, problem users are more likely to seek care. Police, even if they suspect someone of using drugs, are less likely to bother them.

"Usually, the focus is on the decriminalization itself, but it worked because there were other services. The coverage increased for needle replacement, detox, therapeutic communities, and employment options for people who use drugs. The combination of the law and these services made it a success. It's tough to find people in Portugal who disagree with this model.

“In the run-up to the UN General Assembly’s special session, Goulão cautioned that countries had to consider their domestic environments first in learning from Portugal’s experience.

“We don’t assume that this is the silver bullet, but in my view, it has been crucial because it introduced coherence into the entire system. If our responses come from the idea that we are talking about addiction, chronic disease, and health issues, having it out of the penal system is a clear improvement. It was crucial for our society because it allowed us to drop the stigma.’”

The blog’s consistent theme speaks to how we as a people and a nation have yet to learn to be forward-thinking to undo linear thinking, think beyond “Pinoy abilidad,” and overcome groupthink.

Are we the regional laggard because we can’t “think outside the box” – and beyond the cult of Du30’s personality? And we’re back to the Marcos cult?

“Groupthink is a phenomenon that occurs when a group of well-intentioned people makes irrational or non-optimal decisions spurred by the urge to conform or the belief that dissent is impossible. A particular agenda may fuel the problematic or premature consensus characteristic of groupthink—or it may be due to group members valuing harmony and coherence above critical thought.

“The term “groupthink” was first introduced in the November 1971 issue of Psychology today by psychologist Irving Janis. Janis had conducted extensive research on group decision-making under conditions of stress.

“Since then, Janis and other researchers have found that in a situation characterized as groupthink, individuals tend to refrain from expressing doubts and judgments or disagreeing with the consensus. In making a decision that furthers their group cause, members may also ignore ethical or moral consequences. While it is often invoked at the level of geopolitics or within business organizations, groupthink can also refer to subtler social or ideological conformity processes, such as participating in bullying or rationalizing a poor decision by one’s friends.” [Groupthink | Psychology Today]

Let’s speak to our go-to initiative of addressing poverty and job generation, being the two sides of the same coin.

And we argue that economic development has failed to address inequality.

That brings us to why the blog keeps raising our instincts, reinforced by our caste system. 

We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Can we pause and ponder?

We like to point to the inequality of the West, forgetting that we are comparing apples and oranges. Specifically, the West has attained economic equilibrium being a well-developed economy – as evidenced by their GDP per person that is many folds ours.

In short, indeed, there is an argument against the Western model.

But that is why we must benchmark not against the West but our neighbors. They have moved from third- to first-world.

We have indulged in a fallacy for the longest time despite the price we had to pay. And it comes from our “fixed mindset.”

In other words, the comprehensive agrarian reform program, the OFW phenomenon, and the priority we put on call centers – over industrialization, for example – are elements of the reality we can’t admit.

They were all meant to address poverty and job creation, leaving our GDP per person at underdeveloped levels.

Unsurprisingly, that is not how our neighbors pursued economic development.

Beg for Western money and technology was how Lee and Mahathir explained it to Deng.

What is so mysterious about that? Why is Vietnam succeeding in adopting the same playbook?

Beyond groupthink and linear thinking, the blog again discussed the “fixed mindset” versus “growth mindset” and the 3 Cs of a sturdy mindset: commitment, challenge, and control.

Recall cognitive development. It is not IQ but the ability to move across the continuum of dualism (or binary thinking) and relativism. And it is a function of experience – in development, for example. It explains why Singapore has overtaken the US in competitiveness and GDP per person.

We are in deep doo-do. We can’t keep falling into the trap of a fixed mindset.

Let’s say that one more time: We are between a rock and a hard place because we don’t have the development experience of our neighbors, yet we can’t “think out of the box.” 

In other words, we are the regional laggard, yet we keep celebrating our “experts.”

The evidence? We keep recycling economic managers across administrations, confirming our caste system. Unsurprisingly, business groups are applauding the appointments. 

Question: How do we explain why even Vietnam left us in the dust? And how do we ensure we stop the bleeding, our downward spiral – despite growing GDP by 6%-7% over a decade – that Juan de la Cruz suffers from abject poverty? What about the volatility the world faces given the Russian invasion of Ukraine, among others? And why can’t we grasp that PHL suffers from a structural problem and why Arangkada was a welcome effort yet failed to exploit over two administrations?

In other words, we are riding on the back of Juan de la Cruz – the over ten million OFWs and over a million call center workers – yet we in the Philippine elite want to take the credit. 

Consider: “Because of the proper handling of our macroeconomic affairs over the past two decades, only 10 to 15 percent of our national budget now pays our debts.” [“Continuity in our economic policy,” Sonny M. Angora, Better Days, BusinessMirror, 27th May 2022.]

“Your view of yourself can determine everything. If you believe that your qualities are unchangeable — the fixed mindset — you will want to prove yourself correct over and over rather than learning from your mistakes.” [Carol Dweck: A Summary of The Two Mindsets (fs.blog)]

Why is PHL not synonymous with innovation?

We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Gising bayan!

Philippine prognosis

Why did the blog stop post after the 8th of April 2022? Events, personal and otherwise, were taking place.

The Philippine presidential election would be a month away, the 9th of May. And there’s the news report from Reuters, “Russia launched a large-scale invasion of Ukraine on the 24th of February.”

On a personal note, in March, the wife and I took our first plane travel – since covid, outside road trips – and flew to Florida. (The last one was to return to New York after our annual visit to the Philippines at the end of February 2019, when covid had reared its ugly head.)

We spent two weeks driving from Tampa to Sarasota to Naples to Boca Grande – visited the daughter and son-in-law (still working from home.) And the in-laws themselves, who are snowbirds, dividing their time between Connecticut and Florida – and back to Tampa before returning to New York.

It was a celebration; the wife survived skin cancer (in the tongue) after three surgeries and thirty radiation sessions between March and July 2021. She’s a sturdy woman; she beat cancer too ten years ago.

And other trips came too: We traveled to Bulgaria in April, to be there until July – to be on the ground again, assisting my Eastern European friends with their business. And took a 10-day tour of Israel in May – the fourth attempt was a charm. Twice, armed conflicts derailed our plans, and the last one, covid, stood in the way.

Philippine prognosis.

Events taking place aren’t solely personal. They have geopolitical implications – think of the Asian crisis and then the global recession in 2008 – and what they mean for the Philippines.

Consider what my Eastern European friends requested from me upon arrival: “Please address the management team and talk about managing in times of crisis.”

They remember that I pursued restructuring projects at my old MNC-company. And one, in particular, they won’t forget is a country manager saying, “My wife asked me to ask you if you are firing me.”

“I am here to assist you, and your team answer three things: Where are you; where do you want to be; how do you get there.”

These Eastern European friends were giving me an earful. And one question I asked is: Why is the Ukraine business growing despite the Russian invasion?

Consider: Year-to-date, sales in Ukraine are up 19%, although the expectations are they would only increase 7% from the prior year despite the price increases – owing to inflation, i.e., raw and packing materials and “logistics costs” and wages are also rising, beyond gas and energy.

Ukraine is their third-biggest market in Central and Eastern Europe. Following their successes in the region, they began to develop Western Europe. For example, Germany, year-to-date, is up 92% and should be 60% over the prior year. Compared to Ukraine, that is not surprising because the German business is still a fourth of the Ukrainian one even when Germany’s population and GDP per person are more significant, twice and over four times, respectively.

So, what crises are these friends raising? Moreover, they requested me to launch the “Sustainability” initiative of the company.

Those familiar with the blog may recall that nineteen years ago, this Eastern European enterprise was an MSME with sales of less than $10 million and had not made money in eight years. When I challenged them to gear up to be a one-hundred-million-dollar company, they could not comprehend it, save my friend who owns the company – who kept his sight glued to the future. They had to match and be competitive with the median size of a Fortune 500 consumer goods company.

Unsurprisingly, they blew past the hundred million mark years ago.

Philippine prognosis.

The blog came to life just before the PNoy administration took office. And Arangkada had just launched – “to double GDP growth in three years and target US$7.5 billion in annual FDI and US$100 billion in exports” – and thought the new administration as receptive.

And the blog felt that Arangkada could represent the “paradigm shift” that we could only talk about before. But the JFC, at the end of the Aquino administration, didn’t hide its frustration. It was same old, same old. And with the Duterte administration also over and with BBM at the helm, how optimistic can we be?

We have our work cut out for us until we recognize and internalize the imperatives of (a) a “growth mindset” and (b) the 3 Cs of a hardy mindset: commitment, challenge, and control.

Translation: How long have we been stepping forward with unsolicited advice to the government and our economic managers? These recommendations haven’t gained traction all these decades, whether strategic or tactical.

Why?

They are a product of a “fixed mindset” versus “growth mindset” or “fast” versus “conscious” thinking. That is to borrow from the more recent bodies of knowledge, aka neuroscience.

“Neuroscience examines the structure and function of the human brain and nervous system. Neuroscientists use cellular and molecular biology, anatomy and physiology, human behavior and cognition, and other disciplines to map the brain at a mechanistic level.

“Humans have an estimated hundred billion neurons, or brain cells, each with about a thousand connections to other cells. One of the great challenges of modern neuroscience is to map out all the networks of cell-to-cell communication—the brain circuits that process all thoughts, feelings, and behaviors. Emerging bit by bit, the resulting picture is known as “the connectome.” The ability of the brain to elaborate new connections and neuronal circuits—neuroplasticity—underlies all learning.

“Just as computers are hard-wired with electrical connections, the brain is hard-wired with neural connections. These connections link its various lobes and connect sensory input and motor output with the brain’s message centers, allowing information to come in and push outback.

“Neuroplasticity is the brain’s capacity to continue growing and evolving in response to life experiences. Plasticity is the capacity to be reshaped or altered; neuroplasticity, then, is the ability of the brain to adapt or change over time by creating new neurons and building new networks.

“Historically, scientists believed that the brain stopped growing after childhood. But current research shows that the brain can continue developing and changing throughout the lifespan, refining its architecture or shifting functions to different brain regions.

“Neuroplasticity says that it is possible to change dysfunctional thinking and behavior patterns and develop new mindsets, memories, skills, and abilities.

“It encompasses how nerve cells adapt to circumstances—to respond to stimulation by generating new tendrils of connection to other nerve cells, called synapses, and to respond to deprivation and excess stress by weakening “connections.”

“Neuroplasticity underlies the capacity for learning and memory, enabling mental and behavioral flexibility. Research has firmly established that the brain is a dynamic organ and can change its design throughout life, responding to experience by reorganizing connections – via so-called “wiring” and “rewiring.” Scientists sometimes refer to the process of neuroplasticity as structural remodeling of the brain.

“The brain changes most rapidly in childhood, but it’s now clear that the brain continues to develop throughout life. These changes in middle age highlight the role of neuroplasticity in learning across the lifespan.

“Neurogenesis refers to the creation of new brain cells. Scientists long believed that the brain was not capable of producing new neurons. Still, modern research has revealed that certain regions of the brain, particularly the hippocampus, are capable of generating new cells throughout adult life.” [Neuroscience | Psychology Today]

Should we pause and ponder?

Should our social scientists figure out how we can mitigate our instincts given newer sciences?

Consider how the blog constantly plays out these instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

“Your view of yourself can determine everything. If you believe that your qualities are unchangeable — the fixed mindset — you will want to prove yourself correct over and over rather than learning from your mistakes.

“If you have only a certain amount of intelligence, a particular personality, and a specific moral character, you’d better prove that you have a healthy dose of them. It simply wouldn’t do to look or feel deficient in these most basic characteristics.

“There’s another mindset in which these traits are not simply a hand you’re dealt and have to live with, always trying to convince yourself and others that you have a royal flush when you’re secretly worried it’s a pair of tens. In this mindset, the hand you possess is just the starting point for development. This growth mindset believes that your basic qualities are things you can cultivate through your efforts.” [Carol Dweck: A Summary of The Two Mindsets (fs.blog)]

Over the blog’s life, the postings have raised all these barriers to nation-building.

Are our prayers our only hope?

It could be a sheer coincidence: On the 9th of May, the day we Filipinos elected BBM, my wife and I visited the Basilica of the Annunciation and Mount of Beatitudes.

“The Basilica of the Annunciation is a Catholic church in Nazareth, in northern Israel. Catholic tradition holds it to be the site of the house of the Virgin Mary and where the angel Gabriel appeared to her and announced that she would conceive and bear the Son of God, Jesus – an event known as the Annunciation.

“The church was established at the site where the Annunciation took place according to one tradition. Another tradition, based on the apocryphal Protoevangelium of James, holds that this event commenced while Mary was drawing water from a local spring in Nazareth. And the Greek Orthodox Church of the Annunciation was erected at that alternate site.

“The Mount of Beatitudes is a hill in northern Israel, in the Korazim Plateau. And the belief is that it is where Jesus delivered the Sermon on the Mount.

“The traditional location for the Mount of Beatitudes is on the northwestern shore of the Sea of Galilee, between Capernaum and the archeological site of Gennesaret (Ginosar), on the southern slopes of the Korazim Plateau. Its negative altitude (around twenty-five meters below sea level, two hundred meters above the Sea of Galilee) makes it one of the lowest summits in the world.” [Wikipedia]

Are our prayers our only hope?

Can we develop a growth mindset?

What about the 3 Cs of a sturdy mindset?

“Commitment. To be involved with others and experience a sense of purpose and meaning; how ordinary people can do extraordinary things.

“Challenge. To appreciate that change rather than stability is the norm; new or demanding situations are learning opportunities; the importance of “thinking outside the box.”

“Control. Focus on situations where we have influence, not where we have little control; you have control only over yourself; you must be the one to change. Develop a problem-solving attitude; why are you unable to succeed in your efforts?” [Robert Brooks of Harvard University (faculty of Harvard Medical School; he has served as Director of the Department of Psychology at McLean Hospital]

Consider what my Eastern European friends requested from me upon arrival: “Please address the management team and talk about managing in times of crisis.”

McKinsey, the consultancy, submits that “volatility” can best describe the world today owing to the Russian attack on Ukraine.

No wonder these friends asked me to talk about managing in times of crisis. They are still ahead of the curve yet recognize that “change rather than stability” is the norm.

On the other hand, given the Filipino instincts – if we are not better off today versus the days of Aquino and Duterte – how optimistic can we be?

Should we toss our blinders finally?

Philippine prognosis

Why did the blog stop post after the 8th of April 2022? Events, personal and otherwise, were taking place.

The Philippine presidential election would be a month away, the 9th of May. And there’s the news report from Reuters, “Russia launched a large-scale invasion of Ukraine on the 24th of February.”

On a personal note, in March, the wife and I took our first plane travel – since covid, outside road trips – and flew to Florida. (The last one was to return to New York after our annual visit to the Philippines at the end of February 2019, when covid had reared its ugly head.)

We spent two weeks driving from Tampa to Sarasota to Naples to Boca Grande – visited the daughter and son-in-law (still working from home.) And the in-laws themselves, who are snowbirds, dividing their time between Connecticut and Florida – and back to Tampa before returning to New York.

It was a celebration; the wife survived skin cancer (in the tongue) after three surgeries and thirty radiation sessions between March and July 2021. She’s a sturdy woman; she beat cancer too ten years ago.

And other trips came too: We traveled to Bulgaria in April, to be there until July – to be on the ground again, assisting my Eastern European friends with their business. And took a 10-day tour of Israel in May – the fourth attempt was a charm. Twice, armed conflicts derailed our plans, and the last one, covid, stood in the way.

Philippine prognosis.

Events taking place aren’t solely personal. They have geopolitical implications – think of the Asian crisis and then the global recession in 2008 – and what they mean for the Philippines.

Consider what my Eastern European friends requested from me upon arrival: “Please address the management team and talk about managing in times of crisis.”

They remember that I pursued restructuring projects at my old MNC-company. And one, in particular, they won’t forget is a country manager saying, “My wife asked me to ask you if you are firing me.”

“I am here to assist you, and your team answer three things: Where are you; where do you want to be; how do you get there.”

These Eastern European friends were giving me an earful. And one question I asked is: Why is the Ukraine business growing despite the Russian invasion?

Consider: Year-to-date, sales in Ukraine are up 19%, although the expectations are they would only increase 7% from the prior year despite the prices increases – owing to inflation, i.e., raw and packing materials and “logistics costs” and wages are also rising, beyond gas and energy.

Ukraine is their third-biggest market in Central and Eastern Europe. Following their successes in the region, they began to develop Western Europe. For example, Germany, year-to-date, is up 92% and should be 60% over the prior year. Compared to Ukraine, that is not surprising because the German business is still a fourth of the Ukrainian one even when Germany’s population and GDP per person are more significant, twice and over four times, respectively.

So, what crises are these friends raising? Moreover, they requested me to launch the “Sustainability” initiative of the company.

Those familiar with the blog may recall that nineteen years ago, this Eastern European enterprise was an MSME with sales of less than $10 million and had not made money in eight years. When I challenged them to gear up to be a one-hundred-million-dollar company, they could not comprehend it, save my friend who owns the company – who kept his sight glued to the future. They had to match and be competitive with the median size of a Fortune 500 consumer goods company.

Unsurprisingly, they blew past the hundred million mark years ago.

Philippine prognosis.

The blog came to life just before the PNoy administration took office. And Arangkada had just launched – “to double GDP growth in three years and target US$7.5 billion in annual FDI and US$100 billion in exports” – and thought the new administration as receptive.

And the blog felt that Arangkada could represent the “paradigm shift” that we could only talk about before. But the JFC, at the end of the Aquino administration, didn’t hide its frustration. It was same old, same old. And with the Duterte administration also over and with BBM at the helm, how optimistic can we be?

We have our work cut out for us until we recognize and internalize the imperatives of (a) a “growth mindset” and (b) the 3 Cs of a hardy mindset: commitment, challenge, and control.

Translation: How long have we been stepping forward with unsolicited advice to the government and our economic managers? These recommendations haven’t gained traction all these decades, whether strategic or tactical.

Why?

They are a product of a “fixed mindset” versus “growth mindset” or “fast” versus “conscious” thinking. That is to borrow from the more recent bodies of knowledge, aka neuroscience.

“Neuroscience examines the structure and function of the human brain and nervous system. Neuroscientists use cellular and molecular biology, anatomy and physiology, human behavior and cognition, and other disciplines to map the brain at a mechanistic level.

“Humans have an estimated hundred billion neurons, or brain cells, each with about a thousand connections to other cells. One of the great challenges of modern neuroscience is to map out all the networks of cell-to-cell communication—the brain circuits that process all thoughts, feelings, and behaviors. Emerging bit by bit, the resulting picture is known as “the connectome.” The ability of the brain to elaborate new connections and neuronal circuits—neuroplasticity—underlies all learning.

“Just as computers are hard-wired with electrical connections, the brain is hard-wired with neural connections. These connections link its various lobes and connect sensory input and motor output with the brain’s message centers, allowing information to come in and push outback.

“Neuroplasticity is the brain’s capacity to continue growing and evolving in response to life experiences. Plasticity is the capacity to be reshaped or altered; neuroplasticity, then, is the ability of the brain to adapt or change over time by creating new neurons and building new networks.

“Historically, scientists believed that the brain stopped growing after childhood. But current research shows that the brain can continue developing and changing throughout the lifespan, refining its architecture or shifting functions to different brain regions.

“Neuroplasticity says that it is possible to change dysfunctional thinking and behavior patterns and develop new mindsets, memories, skills, and abilities.

“It encompasses how nerve cells adapt to circumstances—to respond to stimulation by generating new tendrils of connection to other nerve cells, called synapses, and to respond to deprivation and excess stress by weakening “connections.”

“Neuroplasticity underlies the capacity for learning and memory, enabling mental and behavioral flexibility. Research has firmly established that the brain is a dynamic organ and can change its design throughout life, responding to experience by reorganizing connections – via so-called “wiring” and “rewiring.” Scientists sometimes refer to the process of neuroplasticity as structural remodeling of the brain.

“The brain changes most rapidly in childhood, but it’s now clear that the brain continues to develop throughout life. These changes in middle age highlight the role of neuroplasticity in learning across the lifespan.

“Neurogenesis refers to the creation of new brain cells. Scientists long believed that the brain was not capable of producing new neurons. Still, modern research has revealed that certain regions of the brain, particularly the hippocampus, are capable of generating new cells throughout adult life.” [Neuroscience | Psychology Today]

Should we pause and ponder?

Should our social scientists figure out how we can mitigate our instincts given newer sciences?

Consider how the blog constantly plays out these instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

“Your view of yourself can determine everything. If you believe that your qualities are unchangeable — the fixed mindset — you will want to prove yourself correct over and over rather than learning from your mistakes.

“If you have only a certain amount of intelligence, a particular personality, and a specific moral character, you’d better prove that you have a healthy dose of them. It simply wouldn’t do to look or feel deficient in these most basic characteristics.

“There’s another mindset in which these traits are not simply a hand you’re dealt and have to live with, always trying to convince yourself and others that you have a royal flush when you’re secretly worried it’s a pair of tens. In this mindset, the hand you possess is just the starting point for development. This growth mindset believes that your basic qualities are things you can cultivate through your efforts.” [Carol Dweck: A Summary of The Two Mindsets (fs.blog)]

Over the blog’s life, the postings have raised all these barriers to nation-building.

Are our prayers our only hope?

It could be a sheer coincidence: On the 9th of May, the day we Filipinos elected BBM, my wife and I visited the Basilica of the Annunciation and Mount of Beatitudes.

“The Basilica of the Annunciation is a Catholic church in Nazareth, in northern Israel. Catholic tradition holds it to be the site of the house of the Virgin Mary and where the angel Gabriel appeared to her and announced that she would conceive and bear the Son of God, Jesus – an event known as the Annunciation.

“The church was established at the site where the Annunciation took place according to one tradition. Another tradition, based on the apocryphal Protoevangelium of James, holds that this event commenced while Mary was drawing water from a local spring in Nazareth. And the Greek Orthodox Church of the Annunciation was erected at that alternate site.

“The Mount of Beatitudes is a hill in northern Israel, in the Korazim Plateau. And the belief is that it is where Jesus delivered the Sermon on the Mount.

“The traditional location for the Mount of Beatitudes is on the northwestern shore of the Sea of Galilee, between Capernaum and the archeological site of Gennesaret (Ginosar), on the southern slopes of the Korazim Plateau. Its negative altitude (around twenty-five meters below sea level, two hundred meters above the Sea of Galilee) makes it one of the lowest summits in the world.” [Wikipedia]

Are our prayers our only hope?

Can we develop a growth mindset?

What about the 3 Cs of a sturdy mindset?

“Commitment. To be involved with others and experience a sense of purpose and meaning; how ordinary people can do extraordinary things.

“Challenge. To appreciate that change rather than stability is the norm; new or demanding situations are learning opportunities; the importance of “thinking outside the box.”

“Control. Focus on situations where we have influence, not where we have little control; you have control only over yourself; you must be the one to change. Develop a problem-solving attitude; why are you unable to succeed in your efforts?” [Robert Brooks of Harvard University (faculty of Harvard Medical School; he has served as Director of the Department of Psychology at McLean Hospital]

Consider what my Eastern European friends requested from me upon arrival: “Please address the management team and talk about managing in times of crisis.”

McKinsey, the consultancy, submits that “volatility” can best describe the world today owing to the Russian attack on Ukraine.

No wonder my Eastern European asked me to talk about managing in times of crisis. They are still ahead of the curve yet recognize that “change rather than stability” is the norm.

On the other hand, given the Filipino instincts – if we are not better off today versus the days of Aquino and Duterte – how optimistic can we be?

Should we toss our blinders finally?