AT a working lunch a few days ago with one of our local business leaders, this gentleman said something that was both a little shocking and revealing. In the interest of his privacy, I will not mention his name but you would recognize him and his companies. Like many of his generation, while pursuing his own businesses, he also gave his time and effort for government service.
He has been successful at what he does but, at the same time, is “conservative” and calculating with the decisions that he makes. At the age—like some of us—when legacy is becoming much more important than rewards, he still has great ambition for his business interests.
In a casual conversation with Bill Gates, he recalled that Gates said it was never his intention to become wealthy as he was only interested in technology but that he became “the richest” because of the stock market. That is my kind of guy. US President Donald J. Trump also once said to him that “For a man to retire is to expire” which is certainly more Filipino/Asian than American.
Later in our conversation, he said something that was entirely surprising and thought provoking. I am slightly paraphrasing. “Philippine business does not have the balls to take risks. Unlike other Asians, we do not go all in and take big chances and make bold moves.” He is absolutely accurate.
But thinking about it, it is more than simply risk-taking. It is all about enjoying our comfort zone. And that is one of the primary reasons that economic progress is depressingly slow.
When you look at the situation, you can see examples everywhere you turn. Our urban transportation system is not much changed in the past 50 years. The jeepney as a main vehicle and method for commuting? Seriously?
We have a judicial system that would be effective if the population was 20 million and gadgets like computers had never been invented. Yet, we never hear of anyone in the legal profession calling for bold and substantial changes that would prevent both criminal and civil cases taking decades to resolve instead of months.
We have laws and regulations on the books that have been obsolete since the 20th century. Still we need more time, more hearings, and much more study—and maybe another election or two—before changes come. The Real Estate Investment Trust was passed by Congress in 2009. Maybe by this time next year, a REIT will finally be available for investors.
Australia passed its REIT law in 1971. The
Malaysian stock exchange currently trades 18 REITs. REITs were introduced in
Brazil in 1993. Thailand listed its first REIT in 2013. Japan, Hong Kong,
Singapore, Taiwan, Korea even Bulgaria and Mexico has this important
investment vehicle.
We see this phenomenon in business, economics, politics, foreign policy and about every topic for public discussion. It is usually “You’re moving too fast” rather than any complaints about moving too slow. The limits on foreign company ownership need revisions. Almost everyone agrees with that although the specifics are difficult. But the discussion has not progressed in 20 years.
The economy needs more healthy business competition. But we are stuck between the absurd “Government should own everything” and the equally ridiculous “Let these industries self-regulate.”
It takes “cojones” to step outside the comfort zone and move forward. Doing that can be frightening, difficult, and require hard thinking and harder work. But complaining about the status quo is not enough. Perhaps, the problem is that some people would like things not to change and prefer the “good old days.”
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
