“Sana Di SONA”

 

 

The 1987 Philippine Constitution does not say the President must deliver a State of the Nation Address (popularly shortened nowadays as SONA) at the opening of the regular session of Congress. It only states that “The President shall address the Congress at the opening of its regular session.”

 

For whatever the noble purpose behind this constitutional mandate to address Congress when it opens for business, it seems lost in the hype and build-up by the media and naturally by the President’s own men (or women) who want him to shine and sparkle. As it turns out, the SONA becomes an annual event for pomp and ceremony, just like the state of the union address of the US President or the Speech from the Throne in the case of the British Parliament or any of the commonwealth nations which continue to consider the Queen of England as their head of state.

Benigno Aquino III SONA composite courtesy of the Philippine Daily Inquirer.
Notice the receding hariline. Click link to read full text of President Aquino's 2013 SONA,
 http://www.abs-cbnnews.com/focus/07/22/13/english-version-president-aquinos-sona-2013-full-text

To me, the only sensible paragraph in President Benigno Aquino III’s long and drawn-out SONA is when he said: “Tomorrow, we are submitting to Congress our proposed 2.268 trillion-peso National Budget for 2014. I am confident of your support and advocacy for the allocation of funds which was arrived at after careful consideration. This budget is not only a continuation of our reforms, but it will also accelerate our momentum towards long-lasting inclusive progress.”

 

Of course, this should not be taken literally. The Constitution gives the president thirty days from opening of Congress to submit a budget of expenditures and revenues which shall be the basis of the general appropriations bill to be passed by Congress.

 

Thus, the SONA has become nothing but beautiful music to the President’s ears and his captured audience, thin in substance but long in aspiration and hope. In fact, there is more sense in listening to SONA’s critics for they make you appreciate the honest truth that is missing in the President’s speech. One could only continue hoping to hear the truth instead of the SONA.

 

President Aquino’s latest SONA is purely aspirational, a call to continue the change the President has said he has begun in transforming our society. A familiar refrain we hear every time a new President speaks before Congress: “this nation can be great again,” or “we can dream again,” etcetera.

 

For Noynoy Aquino to declare he is proud to be a Filipino is expected of a nation’s leader. He cannot say otherwise or else reap the ire of the people. But to say “How wonderful it is to be a Filipino in these times” is equivalent to self-denial, to whitewashing the truth with a layer of lies. That’s why it’s better to listen to SONA’s critics, you hear the real story of the nation, not the one advertised, straight from the horse’s mouth.

 

“How wonderful it is to be a Filipino in these times” sounds like the country’s tourism slogan, “It’s more fun in the Philippines.”

 

Let us take apart the President’s SONA by focusing rather on the bigger issues he has tried to sell to Congress and to the people at large.

 

The President spoke of a strategy of maximizing opportunities for all, especially for those most in need, which he calls, “inclusive growth,” that surprisingly sounded upbeat to some although in reality is actually a mere sound bite, more like “daang matuwid.”

 

Financial institutions such as the World Bank and development-focused United Nations organizations, including the Asian Development Bank, have defined “inclusive growth” to be “broad based growth, shared growth, and pro-poor growth”. By this definition, inclusive growth implies an equitable allocation of resources that benefits every sector of society. It also requires the creation of an environment of equality in opportunity in all dimensions of livelihood, a platform for people who are poor to access a good standard of living. Defined simply, inclusive growth means improved living standards for all, including the poor and those vulnerable to poverty. In short, it must be socially inclusive and not only for the benefit of a privileged few such as the oligarchic elite.

 

The underlying premise of inclusive growth is that societies based on equality tend to perform better in development. For example, countries with more equal income distribution are likely to achieve higher rates of poverty reduction than very unequal countries.

 

In his SONA, President Aquino said that “widespread opportunity is the key to comprehensive and sustained progress,” not equal opportunity (repeat: not equal) which is the cornerstone of inclusive growth. He explained the exclusive nature of his concept of inclusive growth by saying that “the only ones who will be left behind are those who chose not to venture onwards with us, simply because they did not seize the opportunity.”

 

Clearly, Aquino’s concept of inclusive growth applies only to people who join the government’s bandwagon, those who have access to opportunity and these are the people who will benefit from his government policies and programs. Under such circumstances where opportunities may be deemed widespread but not fully accessible to all, those who are poor and vulnerable in society will never be included to benefit from the President’s policy of inclusive growth.

 

Those who are poor are well known for their militant opposition to government lip-service initiatives, such as poverty alleviation programs like the conditional cash transfer program, more popularly known as Pantawid Pamilyang Pilipino Program (4Ps). Because the poor have lost their trust in President Aquino, they would never link up and be beholden to this program.

SONA protesters clash with police as President Benigno Aquino III delivers his
speech before the Batasang Pambansa.  Elmer Labog, secretary general of Kilusang
Mayo Uno (KMU), says: "Aquino's grandioise claims of economic growth based
on cherry-picked economic indicators fail to hide the economic indicators that matter
to ordinary Filipinos. Landlessness is growing; unemployment is rising; wages are
being depressed; prices are soaring; and social services are decaying as they become
more scarce."

Aquino boasted in his SONA that there are now almost 4 million households that benefited from the program compared to 700,000 household beneficiaries when he came to office in 2010. But he forgot to mention that based on a poverty incidence of 27.9% or 26.8 million poor Filipinos and a projected population of 96.2 million in 2012, there would be an increase in the number of poor Filipinos to 3 to 4 million. This increase would wipe out the gains under Aquino’s 4Ps, implying that poor people are multiplying faster than the number of beneficiaries the government can enlist in the program.

 

Despite the government’s poverty alleviation program, poverty in the Philippines has remained unchanged. Not because the poor did not seize their opportunity under the Aquino administration, but because economic and income inequalities continue to persist and inclusive growth remains elusive. Even as the current administration keeps correcting and revising the official daily poverty threshold, the resulting low official poverty threshold would still show that there are currently between 38 to 68 million poor Filipino households, the worst scale of poverty in the country's history.

 

We can go through the litany of so-called achievements enumerated by President Aquino in his SONA one by one, and each one falls flat. Do not be mesmerized by his elocution, his ability to speak to the level of the masses, and being at home speaking in English and Pilipino. Obviously, the President has become a quick study and has now mastered the art of communication. At the end of the SONA, what remains important is the message, not the medium. The SONA is not an Oscar awards event and we don’t need commentaries on what the President wore or how he combed his thinning hair, the ternos worn by female members of Congress, and whether one needs a make-over.

 

Instead of SONA, our country deserves to be told the truth, not a bunch of lies or made-up statistics used to embellish the speech. Instead of pageantry and celebration, the President and Congress must buckle down to work. A simple laundry list of priority items to pursue is more than enough. Instead of wasting almost two hours of rambling before Congress,  President Aquino should have told members of Congress what important legislation needs to be enacted now or sooner so he can continue the job of serving his real bosses. That, he could accomplish in less than half an hour.

 

Some groups critical of the Aquino administration described the first three years as “ampaw” rule, like “hollow bread with a lot of air in the middle.” According to the Center for People Empowerment in Governance (Cenpeg), a think-tank based in the University of the Philippines, three years of Aquino governance only entrenched the oligarchic elite in the country. In other words, only the elite gained from three years of Aquino leadership yet the President, never worrying if his nose stretches, calls it inclusive growth.

 

Other militant groups listed at least 10 lies President Aquino claimed in his SONA but which will not be printed in newspapers controlled by the President and his friends, ranging from the lie of “rapid economic growth” to the lie that the ongoing armed civil unrest has been quelled.

 

Cenpeg has further rebuked President Aquino’s overhyped mantra of “Kayo ang boss ko” (the masses are my boss) as a hypocritical and meaningless slogan. This time the President talks about inclusive growth, another fancy concept, but does he really mean it? Or is it another “daang matuwid” gone crooked?

 

Sana na lang, instead of SONA.

The darker side of innovation

 

 

I’ve read recently that the Philippines has been ranked 90th in the 2013 Global Innovation Index (GDI) published by Cornell University, INSEAD business school, and the World Intellectual Property Organization (WIPO). Compared with other countries, the study said that innovation in the Philippines is only at par with Uganda and Botswana.

 

With a rating of 31.2, the Philippines is way below the top-ranked countries which have an average rating of 60.5. Surprisingly, the Philippines did not fare well among Asian countries, with lowly Mongolia even passing the Philippines with a higher rating of 35.8 and was number 72 among all countries.

 

Innovation. Photo courtesy of Dubey Classes of Innovation.



What does this latest GDI say about the Philippines? A new strain of AIDS has definitely hit us – Acute Innovation Deficiency Syndrome.

 

It’s not that we’re lacking in innovation or creativity as a people, but it’s somehow misplaced on matters that do not lift us a society, whether in business, politics or other endeavours. We have, as Nick Joaquin rightfully pointed out, a heritage of smallness.

 

One of the 84 indicators used by GDI in measuring innovation is the quality of higher education available in a country. The University of the Philippines used to be among the top-ranked universities in the whole of Asia, maybe between 1900 and 1950 or later. Now, UP is nowhere to be found among the top 100 of the inaugural Times Higher Education Asia University Rankings for 2013, although it ranked 67th among the top 100 Asian universities in the QS University Rankings for Asia, 2013.

 

A consolation of sorts to all diehard UP students and alumni is the news that three students from the University of the Philippines Diliman (UPD) were crowned this year's Asian debate champions after beating the National University of Singapore (NUS) in the final round of one of Asia's biggest debate tournaments. Ah, debating, we’re good at this. Just look at our own Congress where there are plenty of debaters of different stripes who walk all over the place. Here they can debate to death whether to eliminate the pork barrel system of allotting government money to members of Congress that traditionally are earmarked for improvements in their bailiwicks but sometimes surreptitiously end in their pockets. We call it “pork barrel” while the US Congress calls it “earmarks.”

 

Another consolation of a kind, this time to diehard Marcos fanatics, is the renaming of the UP College of Business Administration to Cesar EA Virata School of Business. Those who are young not to remember, Cesar Virata was the prime minister and finance minister during the Marcos martial law regime. Even UP bureaucrats have short memories of the oppressive Marcos dictatorship that it would honour one of the dictator’s devoted underlings.

 

We’re not lacking in innovation, for sure.

 

But all this talk about innovation and creativity could be overrated. In his book Capitalism, Socialism and Democracy, the Austrian-American economist, Joseph Schumpeter, developed a theory of economic innovation and business cycle based on the early works of Karl Marx which he called creative destruction. Schumpeter adapted his theory of innovation derived from Marxist economic theory, where it refers to the linked processes of the accumulation and annihilation of wealth under capitalism.

 

According to Schumpeter, the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system. Marx implied in his early works, notably in the 1848 Communist Manifesto, that capitalism not only destroys and reconfigures previous economic regimes, but it also continuously devalues existing wealth through events such as war, dereliction or regular and periodic economic crises which are necessary for the creation of new wealth. In the Manifesto, Marx and Engels described the crisis tendencies of capitalism in terms of “the enforced destruction of a mass of productive forces.”

 

While Marx admired capitalism’s creativity, he strongly emphasized its self-destructiveness. On the other hand, as Schumpeter praised and glorified capitalism’s endless creativity, he treated its destructiveness as simply a matter that relates to the normal costs of doing business.

 

The spirit of creativity and the concept of creative destruction could also explain how the human imagination ceaselessly continues to destroy things only to create new ones. For example, the scarcity of wood as fuel forced the discovery and invention of substitutes, such as the use of coal for heating, or the invention of coke for the production of iron.

 

Schumpeter envisaged the “innovative entry of entrepreneurs as the disruptive force that sustained economic growth, even as it destroyed the value of established companies and laborers that enjoyed some degree of monopoly power derived from previous technological, organizational, regulatory, and economic paradigms.”

 

A modern example of how this creative destruction works is the story of Polaroid. Polaroid instant cameras have disappeared almost completely with the spread of digital photography.

 

As early as 1949, Schumpeter foretold the “railroadization” of the Middle West in America through the Illinois Central. While Illinois Central meant good business, it also spelled the demise of the old agriculture of the West.

 

Many companies that once revolutionized and dominated new industries have seen their profits fall as rival companies launched improved designs or cut manufacturing costs. Xerox in copiers is a good example. The cassette tape replaced the 8-track, only to be replaced in turn by the compact disc, which was undercut by MP3 players, which will in turn eventually be replaced by newer technologies. Companies which made money out of technology which becomes obsolete do not necessarily adapt well to the business environment created by the new technologies.

 

The power of the internet has acted as a catalyst for creative destruction. It has allowed businesses to compete in markets outside of their geographic location, reach more consumers, create efficiencies and cut costs in manual processes as well as pioneer new techniques for doing business.

Newsroom of the Future, courtesy of Pablo Maria Ramirez Banares.

Huffington Post and Zero Hedge have been creatively destroying the domain of the traditional newspaper. Many newspapers and magazines, such as the Christian Science Monitor, the Seattle Post-Intelligencer, and Newsweek, have stopped publishing their paper edition and gone online. Traditional alumni networks that typically charge members to network online are in danger of being wiped out by free professional networking sites like LinkedIn and Viadeo.

 

There is no limit to the human imagination. All because we put so much value on innovation and creativity. Anything goes, the sky is the limit.

 

This is true in our attitude to our environment and our resources. As Thomas Homer-Dixon wrote in The Ingenuity Gap, “the beliefs in the unlimited substitutability of resources, in the primacy of economic institutions and policies, and in the exceptionalism of human beings and their modern markets often combine to produce what I can call unbridled hubris.”

 

The steadfast belief in the market as the core of every economic activity drives the impulse for innovation. It also creates a sour distaste for government, that government and all its regulatory powers are the antithesis of the free market. We want innovation that is free from all forms of infringement and encroachment by the State. Little do we realize that new growth or progress, as Homer Dixon argues, is fueled not by just “ideas that reconfigure the rock, soil, wood, water and air around us into miraculous things that serve our needs” – but it is a consequence also of “social factors like the political struggles that shape market institutions and policies.”

 

The innovation powerhouse called modern science indeed plays a huge part in the story of human prosperity. The perils that innovation brings, which we simply ignore as the costs of doing business, may also be the engine to destroy those things we have created so we can keep our innovative spirit running. Innovation may be largely responsible for our extraordinary flexibility in overcoming resource scarcities and other technical challenges, but there are certain social consequences that can cause economic distress, such as layoffs and massive unemployment due to obsolescence of working skills, economic imbalance and disparity between countries as a result of globalization, and other hardships that could push the free market into periodic paroxysms of crises which we have experienced from the recent Wall Street meltdown.

 

Marshall Berman devoted a whole chapter on “Innovative Self-Destruction” in his book, All That is Solid Melts into Air: The Experience of Modernity, where he described the profound and cultural consequences of the processes at work within modernity.

 

Berman wrote: “The truth of the matter, as Marx sees, is that everything that bourgeois society builds is built to be torn down. All that is solid -- are made to be broken tomorrow, smashed or shredded or pulverized or dissolved, so they can be recycled or replaced next week, and the whole process can go on again and again, hopefully forever, in ever more profitable forms.”