How can we compete?

My son who is working for a British multinational bank in Singapore made the observation to me the other weekend that the regional financial sector seems bullish on Indonesia. He had been going to Jakarta as part of his regional responsibilities over the past few months and he can see why people in the know are now thinking Indonesia will be the next regional powerhouse.

It was easy for me to dismiss the optimism to Indonesia being a resource rich country with a big population. But my son pointed out what inspires confidence is the prevailing perception that Indonesia has the right kind of leadership. President Susilo Bambang Yudhoyono or SBY is reputed to have made inroads in the fight for good governance.

Corruption had been a serious malady that had kept Indonesia from really flying. I doubt they had been able to eradicate corruption to the point of being like Singapore. But they had been able to shrug off their old image that may have even been worse than ours on the corruption angle. As the international advertising campaign for Indonesia sums it up: Indonesia… take a look at us now!

So I asked my son how we are regarded and the best answer he could muster is that we don’t have the buzz Indonesia enjoys. I wanted to ask him how we measure up to Vietnam but I didn’t gather the nerve. Knowing that he had also been flying in and out of Hanoi quite a bit lately, I was afraid he would say Vietnam is more important to his bank than our country.

I want to feel more upbeat because we have a new president who is credible and has said enough things to justify our hopes that he will fight corruption. But I do not see the fire in his belly that a newly elected President should have about his program of government. He still acts as if he is an “accidental president.” And with his decision on Rico Puno in the light of Puno’s published boast that P-Noy can’t touch him, P-Noy is also now an impotent or puppet president.

Amando Doronila, my old journalism professor at UP, called this regime a “lazy presidency.” P-Noy should address this unwanted image of being too laidback for comfort. Doronila has good reason to say that P-Noy’s “ad hoc presidency” seems to “loathe hard and sustained planning aimed at delivering results rather than platitudes that are easy to mouth.”’

The big story with P-Noy’s presidency so far is bloating the conditional cash transfer program, a good social amelioration approach, but at the expense of other urgent concerns. Is this the way to go? I can appreciate that CCT is not a dole out but an investment on the poorest of our children so that they can have a brighter future. But does DSWD have the capacity to implement a much expanded program this quickly?

Our problem is we have so much catching up to do. We cannot focus on just one major concern at the expense of others. This is why it is important for our government to have a good plan in mind on how we will go about this business of development. Since P-Noy seems to have no idea where he is leading us, maybe the China model can give him ideas.

Fareed Zacaria had an interesting recent column in Time. He traced China’s steps to where it is now in the world economy:

“For much of the past three decades, China focused its efforts on building up its physical infrastructure. It didn’t need to invest in its people; the country was aiming to produce mainly low-wage, low-margin goods… But the factories needed to be modern, the roads world-class, the ports vast and the airports efficient. All these were built with a speed and on a scale never before seen in human history.

“Now China wants to get into higher-quality goods and services. That means the next phase of its economic development, clearly identified by government officials, requires it to invest in human capital with the same determination it used to build highways. Since 1998, Beijing has undertaken a massive expansion of education, nearly tripling the share of GDP devoted to it.

“In the decade since, the number of colleges in China has doubled and the number of students quintupled, going from one million in 1997 to 5.5 million in 2007. China has identified its nine top universities and singled them out as its version of the Ivy League…

“What does this unprecedented investment in education mean for China — and for the US? Nobel Prize–winning economist Robert Fogel of the University of Chicago has estimated the economic impact of well-trained workers. In the US, a high school-educated worker is 1.8 times as productive, and a college graduate three times as productive, as someone with a ninth-grade education.

“China is massively expanding its supply of high school and college graduates. And though China is still lagging far behind India in the services sector, as its students learn better English and train in technology — both of which are happening — Chinese firms will enter this vast market as well.

“Fogel believes that the increase in high-skilled workers will substantially boost the country’s annual growth rate for a generation, taking its GDP to an eye-popping $123 trillion by 2040. (Yes, by his estimates, in 2040 China would be the largest economy in the world by far).”

We can no longer depend on the initial China model of cheap labor and the ILO warned us not to depend on worker remittances too. If we want to be regionally competitive, we have to do something spectacular in education, with special emphasis on science and math. I know the DepEd people will point to the K-12 program but that is too simplistic.

We have to go down to basics and the most basic is at the classroom: the quality of the teachers. We don’t have enough teachers and a large number of the teachers we have can use better training. I am for the K-12 program but it just seems to me that we have to address the basic problem of teachers first or the additional two years will be wasted too.

The real China challenge, Zakaria pointed out is not being produced by Beijing’s currency manipulation or hidden subsidies but by strategic investment in infrastructure and its people and of course, hard work. We cannot even rest on our laurels, if our so called English proficiency can be considered such. Even there, during my last trip to China, I was told that the Chinese are now teaching their children English at the pre-Kindergarten level. That’s what we are up against if we want to be competitive in our region.

There is no time to lose. P-Noy and his kabarkadas must disprove Doronila’s assertion about “this lazy presidency.”

In sum, a simple program for P-Noy should consist of good overall governance with a strong anti-corruption bent that must deliver immediate discernible results and not just talk. And for the long term, a good investment on education with a massive teacher training program at its core is what we need. Governance and education — the homework we must do to even start being considered competitive in our fast growing region. –Boo Chanco (The Philippine Star)