A Nation’s Blueprint to True Prosperity: Antidote to Financial

Meltdowns – by Augusto Steve Legasto, Jr. 1

Survey Results

The latest SWS survey revealed the greatest hunger of Filipino voters is for integrity, honesty and
character among their leaders. Unfortunately the same survey also revealed dissatisfaction with the
“motherhood” promises and platitudes being mouthed by all the presidential candidates > fighting
corruption, alleviating poverty, creating jobs, raising the quality and reach of education, restoring the
Philippines to its former exemplary status .... There is hunger for a clearly defined set of action plans and
programs for fulfilling these promises. What is needed is a clear blueprint that will lead to a reversal of
the increasingly deteriorating life conditions of Filipinos.

1
Steve Legasto is among the earliest researcher and writer in governance economics starting with his doctoral
dissertation at Columbia University (NY) followed by numerous articles in professional academic journals and two
books since 1972. His 2009 “Blueprint” book is his third. He was among the first Filipino leaders who, beginning in
1970, mobilized US-based Filipinos and American friends in the fight for the preservation and then the restoration
of democratic institutions in the Philippines. He eventually became the first Secretary-General of the Ninoy Aquino
Movement (NAM) formed immediately after the assassination of Ninoy in 1983 under the leadership of Sen.
Heherson Alvarez, a close associate of the martyr during his last days.

Legasto got his Ph.D. and M.Phil in Management Science from Columbia Univ, an M.A. in Administrative Science
from Yale Univ. And Certificates of Training from Massachusetts Institute of Technology and Wharton School of
Business of Univ. Of Pennsylvania. He retired from his teaching career at City Univ. Of NY and Rutgers Univ., the
State Univ. Of New Jersey. He is currently an IT consultant.
2010 comes at a very unique juncture in Philippine history. The depth and breadth of corruption,
disorder, self-serving mode of governance, poverty and hunger, ill-preparedness in the face of
calamities, loss of global competitiveness, budget deficits, incompetence (primarily in the public sector),
decline in the quality of health care and education, brain drain, food insecurity and human rights
violation have reached such unprecendented levels in the entire history of this nation. Most noteworthy
is the serendipitous unfolding of a series of extra-natural events that can best be attributed to “divine
providence” – Cory Aquino’s death, the Filipino people’s acute hunger for true good governance and for
a government of, by and for the people, the global financial meltdown, the global food crisis, the series
of typhoon-related calamities, the Maguindanao massacre, the awarding of the Nobel prize for
economics to “governance economists”.

This article is based on a governance economics book for the Philippines that this author just published
this year. Jr. This book2 with the same title as this article’s was commissioned in early 2008 by a partner
of CBCP in CBCP World Corp., Transpacific Broadband Group International, in 2008, prior to the global
financial meltdown. In it, I present a new development paradigm which first emerged out of my doctoral
thesis effort between 1972 and 1974. It is now called the “ANT Paradigm”.

“Prosperity with Dignity” for the Filipino People

The “ANT Paradigm” has been designed for countries like the Philippines to replace the largely
discredited traditional industrialization-centric development paradigm proffered for so many decades by

2
The book is now available at all the major bookstores nationwide.
“developed” nations, their multilateral agencies (mainly, the World Bank, UN, IMF, ADB, et al.) and their
own funding institutions (e.g., USAid, AusAid, JBIC, JICA, et al.). The root cause of the global financial
meltdown is the short-sightedness of this “western” development paradigm. The new development
paradigm blazes a new path to “true prosperity”, or “prosperity with dignity” for the Filipino people. In
lieu of the traditional materialistic view on prosperity, we need to pursue “prosperity with dignity” in
our country where:

• The measure of personal worth is based more on the value of a person‟s contribution to the welfare of
others than on how much wealth he has. A concerted effort led by mature and credible faith-based
communities shall be needed to bring about the requisite scriptures-based values transformation. The key
guiding principle lies in the truth that the Creator of man and the universe has an original blueprint for
mankind and human society. This is recorded in the scriptures.

• Excess incremental wealth is invested in wealth building investments that benefit the poorest. Wealth
building investments are made through social business enterprise (SBE) vehicles.

For example, for every dollar (or peso) spent on luxurious expenses a dollar (or peso) is
invested in a sustainable project with social upliftment impact similar to the joint venture company
established in Bangladesh between Danone Foods of France, the world‟s foremost yogurt maker,
and Yunus‟ Grameen Bank named „Grameen Danone Foods‟. Locals from the community, Bogra,
where its factory was established played a major role in the success of the venture, most especially
their womenfolk. This 2007 project has come to be recognized as the first successful multinational
“social business enterprise”. The project succeeded in creating new jobs, producing affordable
foods for the poor while at the same time alleviating a severe malnutrition problem in the
community.

In countries like the Philippines, there are many opportunities for SBE ventures like this
one – e.g., biofuel production, economic-scaled agricultural and aquacultural production for food
security and for export of such products as rice, corn, mango, high-value vegetables, grouper, jack,
cream dory.

• Governance is executed via a “bottom-up”, rather than a “top-down”, process where the lowliest citizen has
a real say in community and national planning and building. This scenario can only be achieved through
strategic deployment of Internet access and laptops/netbooks through a “Internet Access per Family
Program” (IAFPro) nationwide. The plan is to prioritize deployment to high school students, then college and
elementary students. A sustainable financing scheme can be made feasible by leveraging the use of trading
and other e-Commerce networks to generate new revenue streams for the parents who can use the
computers between school hours with the aid of these students.

The democratizing impact of the Internet demonstrated during the recent Obama
presidential campaign in the US can be tapped to the benefit of the less fortunate. The Internet can
be harnessed to close the digital divide between the “haves” and the “have-nots”, rather than be
allowed to exacerbate it.

• The societal goal is not primarily to maximize economic growth or GDP per capita. History has shown that
this has only served to worsen the gap between rich and poor. Neither is the primary goal to alleviate
poverty. The primary goal must be cognizant of the full nature of man as a creature made up of body, mind
and spirit. The book presents a quality-of-life index or well-being index that reflects every basic need that
God has imbued each and every human being with. The primary goal is to optimize a society‟s “quality of
life” or sense of well-being.

The “ANT” paradigm’s focus on “prosperity with dignity” reflects the true basic wants and needs of the
Filipino people who happen to be among the most “spiritual” people in the world.
Embracing “Governance Economics”

The recent awarding of the 2009 Nobel Prize for Economics to two “governance economists”, Elinor
Ostrom and Oliver Williamson underscores the timeliness and value of our “prosperity with dignity”
(PWD) blueprint.

Governance Economics (GE) is the science of allocating scarce resources, coordinating and controlling
activity in societies through the use of institutions, structures of authority and collaboration. GE studies
how humans can better manage common resources such as water systems, forests, fisheries, oil fields,
metal and mineral deposits, or grazing lands -- and even themselves -- by being active participants in
decision-making and management of resources. In study after study, it was found that the key to
success has been the involvement of local people who are affected and have a vested interest in the
local enterprises. Governance economics has shown how these common resources can be managed
successfully by the people who use them, rather than by governments or private companies. Traditional
governance has long ignored what citizens can do and the importance of real involvement of the people
involved — versus just having somebody in Malacanang or in Washington make a rule.

The PWD blueprint stresses how local people should be mobilized through the formation of social
business enterprises (SBEs) into income-generating production within their communities with the aid of
information and communication technology. Partnerships among the locals, professionals, seasoned
businessmen, academicians, faith-based institutional leaders, the youth of civil society and financiers
need to be forged under the guidance of proposed regional management and development coordinating
councils (MDCCs) all over the country.

Per the PWD blueprint, these enterprises need to be operated at “economies of scale”. Because such
enterprises will require huge amounts of funding, the sourcing will rely more on foreign sovereign funds
like Saudi Arabia’s which do not carry the same stringent conditions that multilateral funds impose on
beneficiary countries. I am highly critical of multilateral funding activities in countries like the Philippines
because they tend to favour the pockets of consultants more than those of the target beneficiaries and
even the local consultants.

Under the ANT Paradigm priority is given to the grassroots and then upward to the middle classes. The
PWD blueprint states that the Development Strategy:

1. Must Rely Heavily on the Power of Information and Communication Technology > our state-of-
the-art development strategy and action plan recognizes the crucial role of ICT as the only
means available to ever bridging the ever-widening gap between the “haves” and the “have-
nots” within nations and among nations.
2. Must Empower Local Economies while Strengthening Presidential Management ‘Command-and-
Control’ Capabilities > Through full implementation of the Local Government Code of 1991, R.A.
7160, LGUs shall enjoy genuine and meaningful local autonomy to enable them to attain their
fullest development as self-reliant communities and make them more effective partners in the
 attainment of national goals. This decentralization cannot be safely done without a web-based
Integrated Financial and Management Information Support (IFMIS) system. Happily, this IFMIS
system has already been assembled by the Transpacific Broadband Group International
Consortium and is ready for roll out either through Land Bank of the Philippines or DBP, or both.
3. Mobilize ‘Management and Development Coordinating Councils’ (MDCCs) nationwide from the
congressional district level up to the national. These MDCCs are to provide the organizational
and logistical support the president will need. The detailed formulation of ‘actionable’
development plans must be done from the bottom up but the development template and
measures of indicators must be standardized by the MDCC.
An MDCC is at minimum comprised of highly qualified representatives from the
government, faith-based institutions, academia, professional societies or sector of practitioners
(e.g., lawyers, accountants, marketing or other such specialists), civil society youth, corporate
executives and entrepreneurs and NGOs.
4. Fast track economic development and jobs generation through large scale social business
enterprises3 (SBEs). The next president cannot engineer real growth in the countryside through
the traditional reliance on private sector investment initiatives, microfinance, or corporate social
responsibility initiatives. These generate neither the magnitude, breadth nor depth of positive
socio-economic impact needed to bring about true lasting prosperity in the communities and
the nation.
5. Establish a new set of socio-economic indicators > for measuring improvements, or lack thereof,
in the quality of life in each community and in the nation as a whole. The quality of life
indicators to be used to measure the impact of government programs and investments is an
enhanced version of the Millennium Development Goals (MDG) model of the United Nations
which I first developed in my doctoral thesis.
6. Overhaul and Professionalize the Government Bureaucracy > getting new legislation passed to
streamline and professionalize the government by stipulating new strict and enhanced
guidelines and standards for hiring and maintaining personnel and choosing executives and
better compensation packages than the private sector’s.
7. Overhaul the Tax Information and Collection System and Lowering Individual and Corporate Tax
Rates > lower tax rates can be used to dramatically boost revenue collection efforts such that
total annual tax revenues can be raised higher than ever.

These are some of the initial concrete programs under the PWD blueprint:

 Education & Risk-free Pre-Need Plan > partnering with private-sector educational institutions;
Internet-powered e-Education;
 Health Care & Risk-free Pre-Need and Insurance Plan
 Food Security > Filipino-led large-scale food supply projects with foreign funding & foreign
market targets for surplus production,
 Countryside and Urban Poor Sector Development > initial focus on indigenous peoples’
communities (which comprise 14 million nationwide), responsible mining, outsourcing of
affordable fertilizer from new sources through interfaith initiatives

3
Simply put, SBEs are business enterprises place both profit and positive social/community impact on equal
footing.
 Energy > energy security through interfaith initiatives, oil exploration, biofuel initiatives & other
alternative energy systems with special focus on solar energy, including biomass, algae &
nuclear energy
 Infrastructure Development in the Neediest Areas > potable water supply, irrigation projects,
modern economy-scaled fixed & mobile processing & packaging plants, sewage & water
treatment projects, world-class tourism development projects,
 E-Commerce > web-based financial & management information support systems, web-based
and ATM-based payment, payroll and remittance systems
 Decent & Secure Shelter > responsible urban planning; partnering with NGOs (e.g., Gawad
Kalinga & Habitat for Humanity)
 OFW Support Systems > remittance cash cards with powerful savings & fulfilment components,
 Medical & Retirement Village Tourism Initiatives
 Interfaith-based Cooperation for Peace & Security especially in Mindanao