Rich country, poor country

Every time I go to Singapore to visit my son and his family, I can’t help but wonder how a small island about the size of Metro Manila but half its population and with no natural resources can be a First World economy. On the other hand, our resource-rich country still has half of its population living in poverty.

Some say it is because Lee Kuan Yew ruled as a dictator while we enjoyed our freewheeling American-style democracy. I don’t buy that because we had 20 years of Marcos rule, 14 of which under martial law which gave Marcos pretty much the same dictatorial powers of LKY. Yet, the opposite happened because absolute power only hastened the economic decline of the Philippines with presidential cronies abusing the preferential treatment that Marcos gave them.

Maybe it is more about the personal qualities of LKY, the Cambridge-trained lawyer who was meticulously honest and with so much love of country.

In our case, we had a succession of presidents, none of whom was as visionary and as honest as LKY. Or maybe our rambunctious democracy is also hobbled by the social inequities from colonial rule.

In a speech during the 18th Philippine Business Conference, LKY said, “I do not believe democracy necessarily leads to development. I believe what a country needs to develop is discipline more than democracy.”

LKY is only half right. Discipline by itself, described as authoritarian rule, is not enough, as our martial law experience tells us. Given the hindsight that my over 70 years of living in our country brings, maybe it simply is because we never elected true statesmen with love of country.

Our politicians, including all presidents except Ramon Magsaysay and probably Fidel Ramos, do not have enough love of country to focus on national interest and common good. Personal and family interests prevailed.

So, we are what we are today.

LKY said: “This was a pity because they had so many able people, educated in the Philippines and the United States. Their workers were English-speaking, at least in Manila. There was no reason why the Philippines should not have been one of the more successful of the ASEAN countries. In the 1950s and 1960s, it was the most developed, because America had been generous in rehabilitating the country after the war. Something was missing, a gel to hold society together.

“The people at the top, the elite mestizos, had the same detached attitude to the native peasants as the mestizos in their haciendas in Latin America had toward their peons. They were two different societies: Those at the top lived a life of extreme luxury and comfort while the peasants scraped a living, and in the Philippines it was a hard living.”

Daron Acemoglu, Simon Johnson and James Robinson, this year’s Nobel Prize winners for economics, focused on the relationship between societal institutions and national prosperity. Indeed, economics and politics are inextricably linked.

Why do some countries prosper and others falter? Is it a matter of geography and resources? Or is it the nature of governments and institutions?

Terrence Ho, associate professor in practice at the Lee Kuan Yew School of Public Policy (LKYSPP) wrote an article for Channel News Asia that dissected the factors behind Singapore’s success.

Ho credits the British colonial rule for giving Singapore a parliamentary democracy, rule of law and a functioning civil service. And later, “self-government and subsequent full independence saw inclusive development taken a step further, as the government prioritized social investment in education, housing and health care.”

The absence of natural resources enabled Singapore “to avoid the fate of resource-rich countries where resource extraction dominates the economy. This tends to benefit the few rather than the many, as profits accrue to oligarchs and their political patrons who control the oil or mineral deposits. All too often, resource revenues that could have been invested in education and social well-being are lost to corruption, tax evasion and fiscal inefficiency.”

Doesn’t that sound like us?

“By contrast, Singapore invested heavily in people as its only resource, with education among the largest components of the national budget…This set the foundation for sustained income growth built on human capital development.”

That is also Japan’s story. Japan became a developed country despite its lack of natural resources by: Investing in human resources, Importing the resources it needs for its industries, becoming efficient and using the latest technology.

Going back to Singapore, Ho points out that “home ownership was also central to Singapore’s social agenda. Singapore’s public housing program gives the majority of the population an asset that appreciates in tandem with economic growth, allowing citizens to share in national prosperity.”

BBM announced his administration would build six million houses in six years and that was cut to half to three million and there are no indications they will meet even the reduced target.

Singapore, Ho said, prioritizes inclusive growth.

“Over the past two decades, the government has introduced numerous programs and policies to strengthen social security and social inclusion. These include universal health care and long-term care insurance, permanent social transfers… and most recently, income support for the involuntarily unemployed.

“While some may interpret this as prioritizing social equity over economic growth, the reality is that future economic progress hinges on social cohesion and inclusivity. Otherwise, public support for economic openness and growth-oriented policies could easily give way to populist nativism…

“Human capital investment must continue to be prioritized as the ultimate driver of economic progress. It is all the more critical today, where AI and automation are able to replace human beings in a growing number of tasks.”

These are good lessons from Singapore. Unfortunately, our leaders are more focused on enriching themselves at our expense. Just look at all the self-serving pork fat in the new budget. That’s enough to make you cry for our country.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco