Infrastructure and productivity

Much has been said about the acute shortage of infrastructure which discourages investors from our country. Our cities and towns are moving up the ladder of urbanization, with challenges being made more difficult by the increasing density of population that makes the situation truly impossible, such as the triple-whammy of water-power-food shortages.

But why is this crisis not considered as hopeless in other countries with equally dense population such as Japan, China and Singapore?

Some anthropologists say that in those countries, people show more respect or concern for others such that they can live well in crowded communities, by sharing sparse facilities with others. They drive their vehicles hewing strictly to traffic rules, and they live in domiciles with facilities shared with neighbors. They are conscious that the noise they create, the items that block pathways and the rubbish they generate may cause discomfort to others and, hence, they follow their preagreed regulations.

Such communities can live decently despite limited infrastructure, and their governments can spend their budgets on more important services for the people. Not too many “pasaway” there, but a lot with “malasakit”.

Knee-jerk reaction

The knee-jerk reaction to infrastructure deficiencies is to throw tons of money behind it. The guide of spending 5 percent of gross domestic product on infrastructure annually may not be appropriate or enough for the strategic needs of the economy. No high-profile projects please, such as Malaysia’s highest towers, Dubai’s palm beach from recovered land, UK’s disastrous Crystal Arcade project, etc.

The country’s Medium Term Development Plan as prepared by Neda defines the critical needs by regions and by economic sectors that must be addressed by infrastructures. These may be specific projects to certain sectors, or more general horizontal measures. The desired outcomes must be the creation of more quality jobs, narrowing the income gap and sharpening competitiveness to sustain inclusive growth.

Without this strategic approach to infrastructure planning, the desired outcomes from the projects may come too late or too expensive for our needs, which will threaten our competitiveness.

Take the case of roads and bridges. There is no question that we need to improve the situation. However, we need to ascertain the carrying capacity of existing roads and how different the reality is before planning for more expansions, skyways and expressways. For instance, at a speed of 60 km per hour, one lane has a throughput capacity of 50 vehicles per minute. Or a three-lane highway will have a capacity of 150 vehicles per minute. Of course, this ideal situation is seldom achieved because public vehicles use the outer lane as their passengers’ discharge/loading stations; certain private vehicles change lanes or hog two lanes, which can bring the effective lane capacity to one lane. The solutions to the above problems will probably be immensely simpler and cheaper than expanding roadways. We are now talking about productivity here which is a measure of creativity and execution.

Last week, we attended the Philippine Quality Award Forum where the winners shared some of their best practices which yielded performance excellence. I immediately realized that we were in the company of some of our most creative people which gives us the upper hand in any regional marketing effort.

Productivity is key

Productivity is indeed key, and leadership of the organization is enough to bring out the best in our human resources, our most precious asset. They are the ones that can make productivity rise without waiting for high capital budgets for infrastructures.

Take the perennial problem of flood control. Almost all our efforts are concerned with the design and construction of the hardware: dikes, gates, pumps, channels, etc., to achieve fast flow of water to catchment basins and eventually to rivers and the sea. Nobody seems to consider the human dimension. Remember that the main cause of submerging the once-prosperous towns of Malabon, Navotas and Obando was the filling up of the Dagat-Dagatan catch basin for the vanity housing project for the poor of Gov. Imelda Romualdez which she presented to the UN body.

Flooding

Despite the protestations of the professional engineers including this writer at that time (Bulletin Today, September 29, 1984) due to the flooding problems that will result, the governor of Metro Manila had her way.

Today, Dagat-Dagatan is mostly occupied by warehouses and commercial establishments —no housing for the poor.

In Holland, a country below sea level, they have elevated flood water management to an art. In addition to sophisticated equipment that they have de veloped from experience, they also developed an organization of independent water control boards. These are local government bodies responsible for maintaining the system. The “dyke meisters” are highly respected persons in the communities, who are chosen from among those who benefit the most from the dikes’ protection.

Maybe we should learn from the Dutch on how this system works to maintain their channels garbage-free, to keep the facilities in top conditions.  I am sure  the Dutch Embassy together with some of their expats will be pleased to help out via the European Chamber of Commerce of the Philippines, the Management Association of the Philippines and the National Competitiveness Council.

In the business where resources are finite, capital budget preparation is an important process for the board and management to ensure that desired outcomes are achieved. No one can throw tons of money behind a project since there is no government body that will act as guarantor. The shareholders will certainly not stand for it.