Monday, April 11, 2005

Economic Revolution- on Almonte's market strategy

Economic revolution

Philstar’s Alex Magno recently quoted a think piece by former President Ramos’ former National Security Adviser, (Ret.) General Jose Almonte, on how the country is faring and what it needs to do. Almonte, among many stories of brilliant strategizing, is also known for preparing a few months before the 1998 presidential elections a think piece predicting a revolution of sorts within two years of an Erap presidency. Edsa Dos occurred in early 2001.

We all have our ideas on how to solve the national problems. It’s just that everyone seems frustrated at how our politicians are clowning around, how the peace and order situation is deteriorating, and how the economy is underperforming. What is intriguing about Almonte’s thesis is that instead of addressing the soft state (can not enforce its laws) of the country politically, he proposes that Filipinos must vastly improve the economic to spur political reform, i.e. law and order, management of grant and corruption, etc. This is the path being taken by China. As the Chinese economy expands, democratic stirrings are beginning.
I will suspend my misgivings on how the absence of distributional (power and resources) justice can be neglected in favor of economic growth and development and thereby lead to social justice and equity. Let us explore how Almonte's thesis can proceed. How do Pinoy expatriates, and we citizens who are excluded from the political process, contribute to the economic development of the nation? Granted that we are already doing so by presumably paying our taxes, setting up a business, following the law, sending back money to the Philippines etc.; what else can we do to accelerate the economic development of the country?

Filipinos, both back home and abroad, realize that our government officials are failing us and are simply incapable of turning the country around. We need to accept the fact that we have to do things on our own, as individuals, as a community, and as citizens. If not, future generations of Filipinos, including our children, will be handicapped by the mistakes of our generation. This piece is about doing “little” things with significant impacts.

First, think Filipino in all aspects. Whether abroad or back home, buy Filipino. Let’s try and make it both a national and international brand of quality. The past Christmas season was a good time to buy Filipino products as gifts and giveaways. Local handicrafts, art pieces, foodstuffs, drinks, etc make very attractive and memorable gifts. Significant multiplier effects are achieved buying corporate gifts from NGOs or charitable institutions (tribal groups, home for the aged, sick, orphans, refugees etc.). With a population of 80+ million and approaching 8M overseas, Filipinos have significant purchasing influence on the local economy.

As an expat abroad, use Filipino products as much as possible. Using a Barong Tagolog in a sea of suits, or smoking a Tabacalera cigar instead of the South American varieties are good conversation starters and promote local products. Your foreign friends or neighbors will always appreciate a bottle of Tanduay, Philippine coffee, or even lambanog that now come in well-packaged boxes. Promote health and one of the country’s best products by buying, giving, or distributing extra virgin coconut oil (EVCO).

A number of Filipino friends in the U.S. have adorned their homes with Filipino paintings, art pieces, and books. This is a very good way of not only promoting Filipino culture and history, but also supporting the artistic and literary communities back home.

Second, a stumbling block to national development is that concerned citizens and the conscious middle class are isolated from one another. EDSA 1 and 2 brought various groups together to depose despots and corrupt leaders. The dynamics that led to this people power must be harnessed for economic development. We need to network with as many groups all over the country and abroad to achieve this. The least we can do is to start and keep the discussion alive. The expat IT community has a very active e-group ( This must be replicated in the other professions and then all networked together some way.

A result of this networking maybe that expat Filipinos will be encouraged to invest (either by themselves or their organizations) in the Philippines, while those back home could work with expat Filipinos to export Filipino products. I am not talking big business here, but small businesses that could be grown. EVCO, Filipino handicrafts, Filipino literature, foodstuffs, drinks, etc are some of the small-businesses that come to mind. Health related products, for example, will be in demand in the U.S. as the population ages (70M+ retiring by 2010).

Third, the country needs to encourage small businesses all over the country, while at the same time ensure a local and stable supply of food. If we can make food prices affordable similar to Thailand, then it can free up funds to invest in other economic activities. A U.S.-based batchmate, has decided recently, to invest in an aquaculture project in the Philippines. Villages and subdivisions, for example, can organize and commit to buy a certain amount of organic vegetables weekly from a farming community in the province (transport and storage needs to be addressed). Tourist resorts should be encouraged to buy local as much as possible and so on.

Middle class citizens are members of various organizations, be it professional, civic, or community. Harness these organizations to do two things: a) generate livelihood activities for the poor in YOUR community; b) invest in education of the youth. The middle class (us) is educated and conscientious. Hence, the burden of simultaneously addressing the current economic malaise and investing in the future lies with us. The Gawad Kalinga ( project of the CFC is one of the best community development models I have seen, because of its holistic and integrated approach.

Another example is the non-governmental organization (NGO) Linis Ganda (Clean and Beautiful), which was organized in 1983. With 572 participating junk shops, 1,200 eco-aides, 2,500 bodega helpers and drivers of 132 trucks and jeeps, and 17 primary cooperatives, the NGO generated 182,051,000 kilos of recyclables from 450,000 households in year 2002, which were sold, earning it 231.6 million Philippine Pesos (PhP) or US$4.21 million (US$1=PhP55). This was an increased of PhP74.4 million increase from year 2001. Of the recyclables, 46% were paper and cartons. Total sales of recyclables have been estimated at PhP4 billion a year (US$73 million) and are clearly a significant contributor to the underground economy (DPWH SWMP, 1998).

Short of a violent revolution, how can the country develop with incompetent and corruptible government officials and politicians? Avoiding a bloody uprising by those oppressed and hungry necessitates that those of us that have a little more not only share our material blessings, but also our talents and time to provide opportunities to those that have less in life. Our officials and politicians have been deemed incapable. The country needs our help and Almonte suggests that an economic revolution of sorts from below may be a possible solution, if not a safety valve, for the impending violent catharsis the country is hurtling towards.

The point of this piece is to raise awareness and to start a discussion on how to improve the Filipino economy from the ground up. I have not proposed a complete menu of solutions and nothing raised here is new. That is for you, your friends and colleagues, family, community, batchmates, organization etc. to discuss, draw up, and initiate.

Let us turn the development model on its head and see what comes up.