In language, inflection denotes the tone, modulation or pitch used in spoken words. In mathematics, as in business, inflection is something else entirely. Generally combined with the word point, inflection denotes a significant change in direction.
It is a word much in my mind this week, the first week of the last quarter of the year, the beginning of the month of filing of candidacy for the Philippine 2016 national elections, a week for thinking about change. More importantly, it is a week for thinking about goals and paths. After all, choosing the leader for the nation is essentially about influencing the path the nation will take for the six years after election.
Of interest to those of us thinking about the national leadership, this week the World Economic Forum released its most recent Global Competitiveness Report. This year’s report covers 140 economies and the Philippines ranks 47th, an improvement from 52nd of 144 economies from the previous year. An earlier report, the World Bank’s Ease of Doing Business report provided much less sunny news, showing the Philippines ranking 96 of 189 companies, a drop of 9 ranks from 2014.
For this current administration, possibly the most relevant indicator is the one that directly addresses the heart of its administrative platform, “daang matuwid” (literally the straight path), Transparency International’s index of perceived corruption. In the 2014 report, the Philippines ranked 85th of 175 territories, a rise from 94th (of 177) in 2013, and a significant improvement from the 2012 ranking of 105th (of 176).
What this rise in ranking masks is how far away we truly are from achieving the “daang matuwid.” TI’s corruption index measures level of perceived corruption in the public sector on a scale from 0 (highly corrupt) to 100 (very clean). The Philippine 2014 score is 38. By contrast, Denmark, top in the list, scores 92. Singapore, 7th in the list, scores 84. Our close neighbor, Malaysia, ranked 50th in the list, scores 52.
While rankings are useful and allow us to identify countries worth emulating, what is truly important is understanding the goal and what it takes to achieve the goal. In 2012, when the new scores using 0 to 100, from the old method of using a 0 to 10 score, were released, TI Philippines president Rosalinda TIrona echoed this sentiment when she said: “We must go beyond this ranking and think of what we can do.”
Near the beginning of this administration’s term, I had the opportunity to speak with a few leaders in government and in that meeting, our group pointed out that taking a few important indicators would help the government in laying out a path for the future. Metrics, after all, are a critical means for creating the visibility required to develop priorities. There was general agreement with this notion and with the identification of the global competitiveness index and the ease of doing business index as excellent starting points for crafting a path for economic growth.
The global competitiveness index includes 12 pillars, organized into three sub-indexes: (a) basic requirements; (b) efficiency enhancers; and (c) innovation and sophistication.
How does the Philippines stack up on the GCI?
Overall, the Philippines ranks 47th, with a score of 4.4. However, we rank 47th and higher in only three pillars: macroeconomic environment (24th), market size (30th), and business sophistication (42nd). In the sub-indexes, we rank 47th (3.9) in innovation and sophistication, 51st (4.3) in efficiency enhancers, and 66th (4.6) in the basic requirements.
On a scale of 1 to 7, our highest scores are in two pillars of basic requirements: macroeconomic environment (5.7), and health and primary education (5.5). However, while we rank an excellent 24th on macroeconomic environment, our ranking in health and primary education is only 86th. Not surprisingly, our lowest score (3.4) as well as our lowest ranking (90th) is in infrastructure, the third pillar of basic requirements. Completing the picture in the basic requirements sub-index, our score in the institutions pillar is 3.8 (77th). The country scores below 4 in only two other pillars: technological readiness (3.9) and innovation (3.5). These are also, sadly, the two factors commonly identified as critical to creating inclusion and growth.
Visibility and consequence
This is sobering information. We have made great strides in only one important area: the macro-economic environment. This is clearly not enough. Weak institutions, failing infrastructure, and less than competitive education erode competitiveness. Interestingly, these are the areas of competitiveness where the often invisible hand of government can have the most impact. This information becomes even more concerning when taken with the decline in the country’s rankings in the ease of doing business report.
Now to the primary promise of this current administration, the question of corruption. In 2012, Tirona, then TI Philippines president, named a single step as critical in furthering the fight against corruption. It was, predictably, the single most important legislative step to achieving visibility in the public arena: the Freedom of Information bill, a bill which clearly did not receive priority by this government, a bill which to this day remains unpassed.
In one of the APEC meetings in Iloilo last week, we spoke about change, visibility and consequence. Change as a country, we agreed, required a system of accountability. Of course, the shaping of values and character is important. However, in the larger world of public service, the material temptations of money and power can be extremely beguiling. In the public arena of behavior, accountability is best forged through the certainty of appropriate consequences, good or bad. These consequences can only be meted out if the actions meriting them are entirely visible.
What all of this tells us is something we already know, but also something worth repeating. We need to pay attention to the basics. Infrastructure, strong institutions, basic human development (health, education), and transparency.
It is high time for change. Once every six years, we, the citizens, get a chance to create a point of inflection. Let us choose well.
Readers can email Maya at [email protected] Or visit her site at http://integrations.tumblr.com.