RP's potential

South Korea’s new ambassador to Manila, Choi Joong-Kyung, is a positive thinker.

The Philippines, Choi told us during a recent visit to The STAR, has “a very big potential” to become one of the world’s Top 10 economies.

Other foreigners who have stayed for a certain period in this country often share that optimism, noting in particular that the Philippines has the human and natural resources for economic success.

Unfortunately, there are many other factors needed to achieve that success. Other countries have done their homework; we have not.

Korea entered the Top 10 within 30 years, Choi told us.

What have we done in the past 30 years? Back in the 1970s, as Choi recalled, his country sent agriculture experts to Los Banõs in Laguna to study how to produce high-yielding rice varieties at the International Rice Research Institute (IRRI).

“We learned from your country,” Choi said.

IRRI scientists are still doing ground-breaking research, but Philippine rice production has been left behind by its neighbors.

The Koreans who went to IRRI returned to their country and produced a hybrid variety they called “unification rice.” They saw their yield increase from one to three crops per year as President Park Chung-hee launched their version of the Green Revolution.

Park, an autocrat, also put his country on the road to export-led economic growth and rapid industrialization, laying the foundations for Korea’s rise to one of the world’s Top 10 economies.

This was in the 1970s, when the Philippines was also placed under authoritarian rule and Green Revolution, among other things, was launched.

Autocratic rule worked for the economic development of neighboring countries including Singapore and Malaysia. Singapore now tops most other countries in economic and human development indicators as well as in surveys on transparency and good governance.

We, on the other hand, got the wrong despot and autocratic rule didn’t work for us. Not too many things work for us.

But probably because of their job description, diplomats have a more optimistic outlook on a host country’s development prospects.

“You will ride the roller coaster up and up,” Ambassador Choi told us.

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Foreigners in fact have had a rosy outlook on the Philippines’ development prospects since more than four decades ago, when a World Bank study predicted that the country had the best potential for an impressive economic takeoff in Asia.

The Asian Development Bank set up its headquarters in Manila partly because the country was seen as a regional leader in development. That was way back in December 1966, when the ADB headquarters opened its doors for business, only a year after groundbreaking ceremonies led by the country’s president at the time, Diosdado Macapagal.

Four decades later, with Macapagal’s daughter at the nation’s helm, where does the country stand in terms of development?

Still developing, left behind as our neighbors notably Japan, South Korea, Singapore, Hong Kong and Taiwan sprinted ahead to become economic tigers. We were left behind again in the race to recover from the Asian financial contagion in 1997.

Our foreign debt has ballooned to dizzying trillions and we are still dependent on foreign aid, including dole-outs from those Asian countries that used to send their citizens to the Philippines to learn everything from us, from agriculture to English proficiency and public administration.

The biggest savior of our economy is the ever-growing army of Filipinos working overseas who remit billions in foreign exchange earnings every year. Ironically, they are leaving en masse for lack of better opportunities in their own country. But this national tragedy has kept the economy afloat in the worst of times.

Those remittances are expected to drop in this year of recession and unemployment. Fortunately, prudent banking policies have saved the country from the worst of the global crisis.

There are currently 46,000 Filipinos in South Korea, with most of them employed as factory workers, technicians, engineers and entertainers.

South Korea is currently the Philippines’ largest source of visitors, with nearly 612,000 arriving in 2008.

This year the two countries are celebrating 60 years of diplomatic relations – the end of one full cycle in the lunar calendar and the start of a new one, which Ambassador Choi believes will mean even better bilateral ties.

Choi, a former executive director of the World Bank, sees economic potentials for the Philippines particularly in the fields of agriculture, clean energy and tourism.

But he noted that high power costs – double the rates in Korea, he said – as well as constitutional restrictions on foreign business activities discouraged foreign direct investments.

He acknowledged Filipino concerns about corruption but said the problem would go away, though slowly, as the economy grows and financially empowered and better educated citizens develop a lower tolerance for corruption.

There are two types of corruption, he said: one focuses on accumulating wealth while the other arises because of the need for survival.

We told him that we have too much of the first kind at the highest levels of government, and it trickles down to the grassroots, where corruption proceeds serve the purposes of both survival and wealth accumulation.

And unlike the Koreans, our anti-corruption brooms have a limited sweep. The Koreans convicted and sent to prison two of their former presidents and several top industrialists for corruption and other criminal offenses. We never convicted our homegrown despot or his heirs. We convicted one former president for plunder but did not have the guts to send him behind bars even for one minute.

Can we become one of the world’s Top 10 economies in another 30 years?

Choi prefers to be encouraging: “Once the crisis or the winter is over, spring definitely comes.”