Unrealized potential

Unrealized potentialBack in 1966, the Asian Development Bank (ADB) pondered the site for its headquarters. Its choices: Tokyo, Tehran and Manila.

The Philippine capital won because the country was seen at the time as one of the world’s most promising economies.

ADB officials in Manila told this story the other day to their guest in their “Eminent Speakers” lecture series, Kishore Mahbubani, dean of the Singapore-based Lee Kuan Yew School of Public Policy and a retired top diplomat of the city-state.

Mahbubani, who remembers growing up in Singapore in a one-bedroom house with no flush toilet, told me that his country was not considered by the ADB because it was seen as a basket case.

How we can mess up our country in just four decades.

The ADB was not too far off the mark in its assessment. In 1960, the Philippines, with its gross domestic product five times greater than that of South Korea, was considered the second most promising Asian economy after Japan.

South Korea, Taiwan, and of course Singapore overtook us a long time ago. Today we are starting to lag behind Vietnam and may be overtaken even by Cambodia.

With the uncertainties posed by the ongoing global economic meltdown, wrong responses to the crisis could very quickly put us in a worse situation.

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Mahbubani continues to see great potential in the Philippines. He bases his optimism on the success of Filipinos overseas.

“The Philippines has one of the most successful diasporas in the world,” he told me yesterday. “There is an enormous amount of talent in the Philippines.”

How to harness that talent is the challenge facing the nation.

China’s great reformer, Deng Xiaoping, had recognized something similar in the Chinese diaspora, and had asked the right question: Why were Chinese people succeeding everywhere except in their own country?

Deng then gave his compatriots many of the right answers, setting out to create an environment that would make economic prosperity possible for the Chinese living in China.

Telling his compatriots that “to get rich is glorious,” he made his country embrace the free market. The resulting economic growth expanded the middle class, creating not just one of the biggest producers of goods but also one of the largest consumer markets in the world.

With its political system still officially communist, Chinese society is ideally egalitarian, where everyone enjoys equal opportunities for advancement through merit.

Deng is not popular in the human rights department; Beijing is still trying to exorcise the ghosts of Tiananmen.

But human rights do not play a key role in the factors that Mahbubani cites for the rise of what he calls the new Asian hemisphere. Neither does the type of political system, he says, pointing out that communist China and democratic India are achieving economic prosperity under different systems.

Good government and a merit-based society, he says, play a bigger role. He cites “seven pillars of Western wisdom” that Asian countries borrowed to achieve economic success: free-market economics, science and technology, meritocracy, the rule of law, education, pragmatism, and a culture of peace.

Reviewing those seven pillars, it is easy to see why our country is not rising with the rest of the Asian hemisphere.

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Mahbubani’s book, released earlier this year, on “the irresistible shift of global power to the East,” has so far received a cool reception in the West, with one publication describing it as “an anti-Western polemic.”

Mahbubani counters that there is a “tremendous amount of hubris and arrogance in the West,” and he wants to prick the “incestuous, self-congratulatory dialogue among Western minds.”

“You can’t use a toothpick to prod an elephant,” he said yesterday. “They have to move outside their zones of comfort.”

The seven pillars he cites are factors that Filipinos know the country has lacked for several decades, as the country steadily slipped behind its Asian neighbors in economic development.

Consider the per capita income of Filipinos working overseas, Mahbubani says, and you will have an idea of what the nation is capable of achieving if all those workers were given the right opportunities in their own land.

Asia is succeeding, he says, because it has a large pool of brainpower that is being harnessed at all levels, with countries such as China and India tapping talent all the way down to the lowest income groups.

The Philippines also has an enormous amount of brainpower but this largely goes untapped, Mahbubani observes, because the society “tends to focus on the upper classes.” In his book he cites the feudal political system that hinders the development of a meritocracy in this country.

I asked him how corruption can be eradicated and good governance promoted, and he replied with a story he heard about a street sweeper.

For a thorough cleanup, sweeping must start at the top. Even a street sweeper knows that, Mahbubani said.

But not Filipinos. This is just one of the many reasons why Asia’s second most promising economy in the 1960s is now turning into its basket case.

We can still achieve our full potential. But we must work double time if we want to catch up with our neighbors.