Monday, November 24, 2014

A Salute to Economists

[Keynote Speech delivered during the University of the Philippines at Los Banos-College of Economics and Management (UPLB-CEM) 36th Foundation Day]

FIRST OF ALL, TO THE BIG BOSS UPSTAIRS, WE PRAISE YOU FOR THIS BEAUTIFUL DAY.

DEAN ISABELITA PABUAYON, THE FACULTY MEMBERS AND STAFF OF THE DIFFERENT DEPARTMENTS UNDER THE COLLEGE OF ECONOMICS AND MANAGEMENT, MY FORMER PROFESSORS, MENTORS AND TORMENTORS, MY BROTHERS AND SISTERS IN THE UPLB ECONOMICS SOCIETY, STUDENTS, GUESTS, LADIES, GENTLEMEN AND FELLOW LETTY’S BUKO-PIE LOVERS, A PLEASANT GOOD MORNING TO YOU ALL.

I AM DEEPLY HONORED TO BE MADE PART OF THIS YEAR’S ANNIVERSARY CELEBRATION OF THE INSTITUTION THAT MOLDED AND MADE ME INTO WHAT I AM TODAY. IT MAY SOUND TRITE BUT IT IS TRUE.

MY FATHER, THE LATE RODOLFO V. AZANZA, DOUBLE DOCTORATE, AND A FELLOW FOR SOME YEARS AT THE LONDON SCHOOL OF ECONOMICS, ASKED ME TO TAKE THE B.S. ECONOMICS COURSE HERE IN UPLB-CEM WAY BACK IN 1986. AND I STILL REMEMBER HIS WORDS. HE SAID, HELLO SON, VEN AQUI, POR FAVOR. YOU WILL GO TO U.P. LOS BANOS AND TAKE THE B.S. ECONOMICSDEGREE BECAUSE IT WILL MAKE YOU UNDERSTAND WHAT MAKES THE WORLD GO ROUND. YOU WILL KNOW HOW PEOPLE BUILD NATIONS, AND HOW NATIONS RELATE WITH ONE ANOTHER TO BUILD UP THE GLOBAL ECONOMY. AND WHEN YOU HAVE THAT UNDERSTANDING, YOU WILL BE ABLE TO APPRECIATE THE MINDSET OF EVERY BREADWINNER, EVERY BUSINESS OWNER, AND EVERY POLITICIAN, DECISION MAKER, EVEN THE PRESIDENT OF THIS COUNTRY.

I STOOD THERE SPEECHLESS INFRONT OF HIM UNABLE TO WRAP MY BRAIN AROUND WHAT HE JUST SAID, AFTER ALL, I WAS ONLY 15 YEARS OF AGE. SESNING MY HESITATION HE ADDED, AND YOU KNOW SON, WHEN YOU ALWAYS HAVE SOMETHING OF SUBSTANCE TO SAY ABOUT EVERYTHING THAT THE PRESIDENT OF THE PHILIPPINES SAYS OR DECIDES TO DO, YOU KNOW, THE GIRLS DIG IT, THEY FIND IT SEXY.

THERE I FOUND MY WORDS AND I SAID, OK DAD, YOU GOT ME AT HELLO.

I DON’T KNOW IF IT IS RIGHT TO SAY THIS. BUT I KIND OF BREEZED THROUGH MY BS ECONOMICS LIFE. AS THEY SAY, TIME FLIES SO FAST WHEN YOU ARE HAVING FUN. WHEN I GOT INTRODUCED TO THE CONCEPT OF DIMINISHING MARGINAL UTILITY, ME AND MY FRIENDS, WE TRIED IT ON SAN MIGUEL BEER, AND IT TOOK US ALL NIGHT TESTING AND TESTING AND TESTING. AROUND 5AM THE NEXT MORNING WE CONCLUDED THAT THE THEORY DOES HOLD WATER, OR BEER. BUT WE ALSO REALIZED AT THAT AGE THAT FOR SOME GOODS LIKE ALCOHOLIC BEVERAGES, THIS DIMINISHING MARGINAL UTILITY THING RESETS EVERY 48 HOURS. OH, THAT WONDERFUL PARABOLIC SHAPE THAT EXPLAINS SO MANY THINGS IN LIFE.

ANYWAY, FAST FORWARD. AFTER 4 YEARS, I GRADUATED AND STARTED EARNING MY KEEP. AND SOON I REALIZED THAT EVERYTHING THAT MY FATHER SAID WAS TRUE ABOUT THE IMPORTANCE OF HAVING THE ABILITY TO COMPREHEND WHAT GOES ON AROUND ME. THE ABILITY TO DO A QUICK BENEFIT-COST ANALYSIS MAKES US A NOTCH ABOVE THE REST IN EVERYTHING THAT WE DO.
WE DO NOT BUY THINGS ON IMPULSE, RIGHT? EXCEPT WHEN SOMEONE ELSE IS PAYING FOR IT. WE DO NOT WASTE OUR TIME ON SENSELESS THINGS LIKE PLAYING CLASH OF CLANS AND CANDY CRUSH ON OUR IPAD, RIGHT? EXCEPT WHEN WE NEED TO UNWIND. SINCE IT IS CHEAPER THAN TAKING ANTI-STRESS TABLETS.
WE ARE BARGAIN HUNTERS. WE DO NOT BUT THINGS UNLESS THEY ARE DISCOUNTED. WE WAIT FOR A WEEKEND SALE BEFORE WE BUY THAT NICE PAIR OF JEANS FROM UNIQLO OR THAT PRETTY CARDIGAN AT COTTON ON. WE LOVE CHRISTMAS BECAUSE OF THE TIANGGE. WE BUY FLOWERS FOR OUR GIRLFRIENDS OR WIVES ON FEBRUARY 15. AND CORRECT ME IF AM WRONG, BUT NOW WE ARE ALL EXCITED ABOUT BUYING IPHONE 5 BECAUSE THE IPHONE 6 HAS BEEN LAUNCHED.

THE PEOPLE AROUND US, THEY MUST THINK WE ARE A BUNCH OF CHEAP BASTARDS (EXCUSE MY FRENCH). BUT WE ARE NOT. WE ARE JUST RATIONAL. WE ARE THE FUTURE OF THIS COUNTRY; WE ARE THE FUTURE OF THE WORLD. WE INTRODUCED MULTI-TASKING TO THE HUMAN RACE. WHEN THINGS BECOME TOO COMPLICATED FOR THE POLITICIANS WE SIT BACK AND WRITE A FORMULA FOR A MULTIPLE REGRESSION ANALYSIS. AND WE TEST IT FOR HETEROSCEDASTICITY AND MULTICOLLINEARITY AND WHAT HAVE YOU. AND ALL THEY CAN DO IS BUT AGREE. AND IN SILENCE THEY THINK, THESE ECONOMISTS ARE THEY SPEAKING IN TONGUES, OR PERHAPS THEY SPEAK KLINGON.

IN TRUTH THEY WILL NEVER UNDERSTAND OUR LANGUAGE. THE LOOSE COINS WE DROP INTO OUR PIGGY BANKS WE REFER TO AS OUR MARGINAL PROPENSITY TO SAVE. AND AFTER PAYING FOR AN EXPENSIVE DINNER DATE AND A MOVIE PREMIER, WE REFER THE GOODNIGHT KISS FROM OUR GIRLFRIEND AS A CONSUMER SURPLUS. EVEN IN BEAUTY PAGEANTS THEIR FAVORITE JUDGES ARE ECONOMISTS. AFTER ALL, WE KNOW HOW TO READ CURVES. AND WE WORK A LOT WITH MODELS, RIGHT?

I CAN TELL YOU, WE ARE A DIFFERENT BREED. WE ARE ALMOST NOT HUMAN.

WE NOW LIVE IN A PERIOD OF UPHEAVAL. CHANGE NOW HAPPENS IN BIG JUMPS RATHER THAN IN MINUTE BITS. THE ASEAN INTEGRATION IS JUST AROUND THE CORNER, AND WE CAN EXPECT THAT IT WILL BRING A BIG CHANGE TO HOW GOODS WILL BE PRODUCED, HOW SERVICES WILL BE DELIVERED AND HOW VALUE WILL BE CREATED. AS ECONOMIC BOUNDARIES DISAPPEAR IN THE ASEAN REGION, PRODUCTS AND PEOPLE WILL BE GOING TO AND FRO, LIKE THE WAY IT IS FORETOLD IN THE BOOK OF REVELATION. AND THE MANTRA IS: EVOLVE OR DIE LIKE THE DINOSAURS. WE CAN EXPECT THAT THE PEOPLE OWNING BUSINESSES, AND EVEN THE PEOPLE RUNNING THE ASEAN ECONOMIES, WILL TURN THEIR HEADS TO WHERE WE SIT NOW, TO THE COLLEGE OF ECONOMICS AND MANAGEMENT OF EVERY SCHOOL AND UNIVERSITY ALL OVER THE REGION, AND THEY WILL ASK THE QUESTION: WHAT ARE WE GOING TO DO NOW?

EXPECT TO BE ASKED THE QUESTION, BECAUSE WHAT IS THE POINT OF ASKING BIOLOGISTS OR PHYSICISTS OR VETMEDS OR ENGINEERS ABOUT HOW TO RUN AN REGIONAL INTEGRATED ECONOMY; A REGION WITHOUT BARRIERS. OF COURSE THEY CAN ALWAYS ASK THE LAWYERS, BUT THEY KNOW THAT IF YOU ASK 2 LAWYERS YOU WILL GET 3 OPINIONS.

BUT I DARE SAY THAT INSITITUTIONS LIKE THE CEM WILL ALSO HAVE TO EVOLVE. IT HAS TO IDENTIFY AND RECOGNIZE THE CROSSROADS OF CHANGE, AND DEVELOP ITSELF AS A KNOWLEDGE CENTER FOR THESE CHANGES. FOR EXAMPLE, I THINK IT IS CURRENTLY IN THE RIGHT TRACK IN GIVING FOCUS AND ATTENTION TO ENERGY ECONOMICS AS A NEW AREA WHERE STUDENTS CAN SPECIALIZE. WE HAVE TO ASSURE THE ENERGY COMPANIES A STEADY SUPPLY OF ENERGY ANALYSTS, POWER TRADERS, AND FORWARD MARKETS PRODUCT DEVELOPERS WHO WILL COME TO THE WORKPLACE ALREADY EQUIPPED WITH THE RIGHT ANALYTICAL TOOLS AND MINDSETS, RATHER THAN HAVING TO TRAIN THEM STILL. WE NEED MORE KEY PEOPLE IN GOVERNMENT AND IN THE PRIVATE SECTOR WHO UNDERSTAND THAT ENERGY IS NOT JUST AN INPUT TO PRODUCTION. IN THE INTRODUCTION OF WHAT IS NOW CALLED THE NEXUS PERSPECTIVE, WE REALIZE THAT ENERGY SECURITY HAS TO BE BALANCED WITH FOOD SECURITY AND WATER AVAILABILITY. THE OBJECTIVE HAS TO GO BEYOND MAXIMIZING PRODUCTIVITY OF THE ENERGY, FOOD AND WATER SECTORS IN ISOLATION FROM EACH OTHER. THE NEW OBJECTIVE HAS TO BE SYSTEMS EFFICIENCY, IN ORDER FOR US TO DEVELOP TRUE AND HONEST RENEWABLE ENERGY PROJECTS THAT ARE FIT TO BE CALLED SUSTAINABLE.

ON BIO-ENTREPRENEURSHIP, THERE IS, IN THE FIELD OF BUSINESS MANAGEMENT, A CONCEPT ABOUT THE RED OCEAN AND THE BLUE OCEAN. THE RED OCEAN IS WHERE PEOPLE AND COMPANIES COMPETE FIERCELY TO THE POINT OF UNDERCUTTING EACH OTHER. AND THE WAY TO SURVIVE IN BUSINESS IS NOT TO COMPETE IN THE RED OCEAN, BUT TO FIND A NEW PART OF THE OCEAN WHERE IT IS STILL BLUE. FOR MANY BUSINESSES, THE RED OCEAN IS THE URBAN CENTER, AND THE BLUE OCEAN CAN BE THE RURAL AREAS, WHERE WE HAVE, WITH THE HELP OF THE ACADEME, A NEED TO RETOOL OUR FARMERS AND SHIFT TEHIR MINDSETS FROM THAT OF JUST BEING TILLERS OF THE SOIL AND PRODUCERS OF INPUTS TO PRODUCTION TO THAT OF A TRUE BLUE BUSINESSMEN.

ANOTHER AREA WHERE THE COLLEGE CAN ALSO FOCUS ON IS CORPORATE SOCIAL RESPONSIBILITY. THE COMPANIES I KNOW THAT ARE BASED IN EUROPE HAVE FULL-BLOWN CSR DEPARTMENTS IN THEIR ORGANIZATION S. WHAT USED TO BE DONE ONLY AS A SIDE NOTE TO MARKETING AND H.R. IS NOW BEING GIVEN REAL ATTENTION. MY FORMER EMPLOYER HAD THE CSR HEAD AS NUMBER THREE IN THE WHOLE ORGANIZATION. THEY HAVE THE CEO, THEN THE CFO AND THIRDLY, THE CSR EXECUTIVE VICE PRESIDENT. WHAT USED TO BE CALLED COMMUNITY OUTREACH AND DEVELOPMENT PROGRAMS ARE NOW BEING REFERRED TO AS COMMUNITY INVESTMENTS. THERE IS A BUSINESS CASE TO CSR.

AS OUR VERY OWN COLLEGE OF ECONOMICS AND MANAGEMENT CONTINUES WITH ITS ROLE AS AN ECONOMIC CHANGE KNOWLEDGE CENTER AND PRODUCER OF FUTURE ECONOMISTS AND MANAGERS THAT THIS COUNTRY NEEDS, WE WHO HAVE THE PRIVILEGE TO BE PRODUCTS OF THIS INSTITUTION WOULD AND SHOULD NOT BE AFRAID TO PROSPER IN THE FIELD WE HAVE CHOSEN TO CONQUER. TODAY WE MIGHT BE UNDERPAID OR UNDERHEIGHT, BUT WE DO NOT NEED MUCH TO SUCCEED, REALLY. WE HAVE A RATIONAL MIND, AND THAT IS ALL THAT WE REALLY NEED.

WHEN THE WORLD GOES CRAZY, WE THE ECONOMISTS WILL HAVE THE ABILITY TO PROVIDE THE MUCH NEEDED DIRECTION. BECAUSE WE HAVE THE ABILITY TO HOLD SOME THINGS CONSTANT. WE ONLY HAVE TO SAY CETERIS PARIBUS AND THE COMPLICATED BECOMES SIMPLE. IT IS ALMOST MAGICAL.

I SAY THESE THINGS BASED ON PERSONAL EXPERIENCE. AFTER 44 YEARS OF LIVING IN THIS WORLD, I CAN PUT ON THE HAT OF A PLANNER, A MANAGER, AN ADVISER, A DIRECTOR, A DECISION MAKER, AND A CEO. BUT THROUGHOUT ALL THESE ROLES I WILL POSIT THAT I CAN ONLY BE EFFECTIVE IF I CAN BE RATIONAL. AND THAT IS WHY I SAID IN THE BEGINNING THAT THE COLLEGE OF ECONOMICS AND MANAGEMENT MOLDED AND MADE ME THE PERSON THAT I AM TODAY. I AM WHAT YOU MAY CALL AN INTERMITTENT ECONOMIST, BUT AN ECONOMIST NONETHELESS.

OUR WORLD WILL ALWAYS NEED PEOPLE WHO ARE EXPONENTS OF THE APPLICABILITY OF BASIC ECONOMIC PRINCIPLES IN ALL FACETS OF LIFE, FROM FAMILY TO BUSINESS TO GOVERNANCE AND EVEN WORLD DOMINATION. PEOPLE LIKE US WHO HAVE DEEP-SEATED UNDERSTANDING THAT THERE IS NO SUCH THING AS FREE LUNCH; THAT IT IS NOT THROUGH THE BENEVOLENCE OF THE BUTCHER OR THE BAKER THAT THERE IS MEAT OR BREAD IN THE MARKET; THAT THERE IS AN INVISIBLE HAND, WE WILL ALWAYS HAVE A JOB. SEEMINGLY UNEXPLAINABLE THINGS THAT BAFFLE OTHER PEOPLE, WE JUST EAT THEM FOR BREAKFAST. WE CAN EXPLAIN WHY THE SEATBELT LAW CAN ACTUALY KILL MORE PEOPLE, OR WHY DRUG DEALERS LIVE WITH THEIR MOTHERS, WHY IT IS BETTER TO COURT THE SECOND LESS PRETTY GIRL, WHY THE AMERICANS WERE DESTINED TO LOSE THE VIETNAM WAR AND WHY THE CARBON CREDITS MARKET WAS BOUND TO FALL. WHILE OTHERS WOULD BLOW A GASKET TRYING TO DISCERN THESE QUESTIONS, THE ANSWERS JUST COME TO US NATURALLY; AS NATURAL AS KC CONCEPCION’S SKIN COMPLEXION.

ANYWAY, TIME IS FLEETING, LET ME END BY SAYING THAT Y= C + I + G + X – M IS THE FIRST AND NOBLEST OF ALL EQUATIONS. BECAUSE IF YOU UNDERSTAND THAT, YOU ALSO THEREFORE UNDERSTAND HOW PEOPLE BUILD NATIONS, AND HOW NATIONS INTERACT TO BUILD A GLOBAL ECONOMY.

AND BETCHA BY GOLLY WOW, THE GIRLS DO FIND THAT SEXY.

THANK YOU EVERYONE, AND MORE IMPORTANTLY, THANKS TO THE GREAT ARCHITECT OF THE UNIVERSE UPSTAIRS, WHO ENABLE US TO BE WHAT WE ASPIRE TO BE.

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