• Why did we fall behind?

    8

    I HAD a conversation with then President Kim Dae-jung at the Blue House (the Republic of Korea’s Malacanan Palace) following the presentation of my credentials to him as Philippine Ambassador on May 21, 1999.

    President Kim considered the Philippines as a very close ally and friend of South Korea, recalling with appreciation that our country sent troops to join the UN-led 16-nation alliance that defended democracy in the Korean Peninsula during the Korean War in the 1950s. At one juncture, the Korean leader mentioned that for a time the Philippines ranked second only to Japan with respect to economic development but wondered why it had fallen behind since then.

    The Japanese President of the Asian Development Bank (ADB) Tadao Chino echoed a similar viewpoint at the 37thannual meeting of the board of governors of the ADB in May 2004 in Jeju, South Korea. Chino compared the divergent fortunes of the Philippines and the Republic of Korea with the latter treading the road from rags to riches and the former traversing the opposite way.

    As envoy to Korea from May 1999 until my retirement from our foreign service in June 2003, I can well understand the views expressed by Messrs. Kim and Chino. During my four-year stay in Seoul, I found myself in awkward situations whenever Koreans made comparisons in a discreet way on the economic progress of Korea and the Philippines. One would say: “You were very much ahead of us then but I cannot understand what happened.” Another would wax nostalgic: “I studied at the University of the Philippines in the 1960s and have fond memories of my stay in your country but things have changed since then and I wonder why.”

    As much as possible I tried to be evasive, refraining from giving honest and straightforward answers. However, the opportunity to be frank presented itself when a Filipino provincial governor came to Korea with his wife and provincial board members to sign a sister-province agreement with his Korean counterpart. At the dinner that I hosted for them before their departure for Manila, the governor was effusive about the road network, infrastructure and other developments he saw in Korea.

    Subsequently, he asked me about the “secrets” of the Koreans. I replied succinctly: “The Koreans have discipline, work ethic, patriotism, nationalism, determination and perseverance.” The governor told his companions: “O, mga kasama, narinig ninyo si Ambassador. Magagawa ba ninyo ang sinabi niya?” (Hey guys, you heard what the Ambassador said. Can you do what he said?) The silence was deafening.

    As a retired diplomat, I am no longer encumbered by diplomatic constraints. When a Korean asked me in December 2003 why the Philippines failed to achieve economic progress like Korea, I said without hesitation that we have yet to produce a leader like Park Chung-hee and a businessman with the nationalistic fervor of Chung Ju-yung, the founder of Korea’s largest chaebol or conglomerate, Hyundai, and the largest shipyard in the world.

    When Gen. Park Chung-hee seized power in Seoul through a military coup in 1961, he made infrastructure-building the centerpiece of his vision of economic development. Once you have the infrastructure, everything else will follow, he said. He also created an Economic Planning Board to provide the central government a direction on how to steer the Korean economy up the road to progress and he made the Heavy and Chemical Industries Promotion plan as the key to developing six strategic industries.

    Park made the industrialization of his impoverished country the prevailing passion of his 18 years in power. He found economic “cronies” in people who had “can-do” entrepreneurial spirit and consuming love for their country, such as Chung Ju-yung whose company built the Gyeongbu Expressway (Seoul to Busan) and who successfully lobbied for Seoul’s hosting of the 1988 Summer Olympics. Chung and the other founders of Korean chaebols became Park Chung-hee’s “cronies” for development.

    Interestingly, the period in which Ferdinand Marcos and Park were in power overlapped 13 years. Park was ruler of South Korea from 1961 until his assassination by his own intelligence chief in 1979. Marcos took office on December 30, 1965 and was deposed by People Power in February 1986. Thus, the two authoritarian leaders were the masters of their respective countries’ fate, with Marcos wielding absolute power for 13 years (September 1972 to February 1986). Those 13 years could have been the transformative golden era of the Philippines, as the “Park Years” were for Korea. What the two rulers did for their country was a study in contrast.

    According to Wikipedia, in October 1972, Park Chung-hee dissolved the legislature and suspended the 1963 Constitution in a self-coup, drawing inspiration from Ferdinand Marcos who declared martial law in the Philippines on September 21, 1972. Ironically, Marcos, in turn, failed to emulate Park’s economic “Miracle on the Han River.” Park was reputed to be a modest man who did not enrich himself despite his 18 years in power. Park is the father of South Korea’s present impeached President Park Geun-hye. But that is another story.

    In 2014, when my wife Angie and I visited Korea 11 years after my retirement, I noticed that most of the English books in Seoul’s largest bookstore were about Park Chung-hee. The following year, Park topped the Korean Gallup poll on the greatest president in Korean history, getting approval ratings of 44 percent despite his authoritarian and repressive rule.

    Because of the development programs implemented by Park between 1961 and 1979, Korea was able to achieve remarkable economic growth in 30 years which, under ordinary circumstances, would have taken 100 years to do. He was able to raise per capita income from less than $100 annually when he gained power to more than $1,000 at the time of his assassination. Korea’s real GDP growth averaged 10 percent annually between 1962 and 1994.

    The leadership factor worked in tandem with the Korean people’s innate characteristics, including their entrepreneurial spirit. Korea’s educational system is now at par with Japan. It is also a blessing that this country has a homogeneous people, with a common language serving as a unifying factor. Devoid of natural resources, the Korean people had to struggle for survival in the face of harsh winters and a formidable geography; 70 percent of its territory is mountainous. Another important element that goaded the Koreans to strive for excellence was their earnest desire to equal or even surpass the achievements of the Japanese who occupied and humiliated them for 35 years—from 1910 to 1945.

    Seeing how our airline passengers and bus and MRT/LRT commuters suffer, I wish we could have a transportation system and network similar to Korea’s. I attended the inauguration in 2001 of the Incheon International Airport, which has been consistently voted or acclaimed as the best airport in the world. There is a train and buses servicing the huge airport. When I first visited Seoul in 1976, the subway system was under construction. Now it’s metro has been expanded and upgraded to make it on par with that of Tokyo. Unlike the bus stations scattered along EDSA, Seoul’s Express Bus Terminal serves as the hub of provincial bus lines and is connected to the metro lines. The terminal itself has been transformed into a shopping mall, restaurant row and even a family center. The JW Marriott Hotel, the Shinsegae Department Store and Seoul’s biggest underground shopping center are adjuncts to the terminal. There you have it, interconnectedness at its best.

    When I attended the 2002 Asian Games in Busan, I took the Saemaul train which took me five hours to reach Korea’s second biggest city. Last year, Angie and I took the Korea Express Train (KTX) to Busan and reached the place in 2½ hours. In early 2003, executives of France’s TGV (Train a Grande Vitesse), the builder of the KTX, invited me and some members of my Embassy staff for a ride on the finished portion of the high-speed railway. (One of the French engineers was married to a Filipina.) The construction of the KTX began in 1992 and the official launch was in April 2004.

    On our way, back to Seoul last year, a limousine took us via the Gyeongbu National Expressway which opened in 1970, a partnership project between Park Chung-hee and Chung Ju-yung’s Hyundai Group. We experienced how a well-thought-out transportation infrastructure facilitates the movement of people, goods and services—an essential element for national progress. The Republic of Korea is now the fourth largest economy in Asia and 11th largest in the world. Its GDP per capita income in 2013 was US$25,976.

    Of the seven countries where I was assigned, South Korea, Thailand and India overtook the Philippines in economic development in the 40-year span that I was in our foreign service. During my three-year (1973 to 1975) posting in Bangkok as a junior officer (Third Secretary), Thailand and the Philippines had almost the same size of population and degree of economic development. Now, our population has exceeded that of Thailand by some 30percent: Thailand – 68.7 million, Philippines – 102,250,133 (2016). Thailand is now classified as a newly industrialized country or upper middle income economy. Its GDP per capita income is US$15,319 as of 2015 while that of the Philippines is only $3,042 (nominal 2016). Two-thirds of Thai in GDP is accounted for by exports while two-thirds of the Philippine economy is consumer-driven. Thailand’s transportation network and physical infrastructure are far more numerous and superior to ours. Thailand expected to receive over 32 million tourists in 2016 while the Philippine target was a measly 6 million arrivals for the same year. In fact, Thailand overshadows the Philippines in all economic indexes. The gap has become so wide that a Philippine-based foreign economist said sometime ago that it would take the Philippines some 30 years to be where Thailand is today.

    I was Ambassador to India from 1994 to 1996. During my watch, the Indian economy was still sluggish despite the fact that it had decided to open itself to the globalizing economy in 1991. Upon gaining independence from Britain, Prime Minister Jawaharlal Nehru put India on the road to economic self-sufficiency to be achieved by central planning. From 1947 up to 1990, India was governed by a License Raj (rule), an elaborate system of licenses, regulations and accompanying red tape required for setting and running businesses.

    India’s economic transformation began at the start of the new millennium. With its thriving economy, India, a nuclear- weapon state, has grown further in international importance. It is now the sixth largest economy in the world with its economy growing at the annual rate of 8 to 9 percent. It is improving its road network and infrastructure. New Delhi now even has a Metro serving the capital and satellite cities. While there were only bazaars serving as shopping centers during my posting there, India now abounds in shopping malls. And India’s exports are creating their niches in American, European and Asian markets, including the Philippines.

    The burgeoning Indian automotive industry has invaded the Philippines. Tata Motors Philippines offers cars and commercial vehicles. Mahindra is the provider of patrol jeeps to the PNP. It has become an agricultural powerhouse and net exporter of food. It has globally known companies in steel, pharmaceutics, information and space technologies

    Despite its broadening economic ascendancy, India is still a country of “dehumanizing poverty” where a vast number of people (one-third of the population) do not enjoy a decent standard of living. But there is no doubt that the country is proceeding remarkably in the direction of poverty alleviation. It is a trend that would someday make India with its population of 1.2 billion a mega-market like China.

    A recent book included the Philippines among the emerging markets or economies. The Philippines registered
    a GDP growth rate of 7.1 percent in the third quarter of 2016 on account of higher investments and consumption. We outperformed others in the Asian region. But one swallow does not make a summer. We have been in a boom-and-bust cycle before. We are still struggling to extricate ourselves from the quagmire of a Third World status. It is a known fact that for a country to be in the take-off stage for economic success, it should first consistently register a sustainable growth rate of 7 to 8 percent over a number of years. According to economist Sixto K. Roxas, the Philippines registered a dismal real GDP growth rate of only 3.8 percent per annum from 1962 to 2003. Regrettably, the essential elements needed for sustained economic progress are still not with us.

    Our people are well aware of the many negative factors that militate against our economic goals. Right now, we are wallowing in a morass of political, economic and social ills. We crave for moral regeneration and
    economic redemption but lack the desire and resolve to light a candle in the midst of darkness.

    As General Luna in the hit movie said: “Mga kapatid, mayroon tayong mas malaking kaaway kaysa mga Amerikano. Ang ating sarili.” (We have an even bigger enemy than the Americans. Ourselves.)

    We should all take a hard look in the mirror to visualize where we are in contrast with other countries. By doing this, we could have a glimmer of what our national hero Jose Rizal called “nuestro perdido Eden” (our lost Eden).

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    8 Comments

    1. Very inspiring piece. However, despite having a new President with the political will to make drastic change and a genuine heart for the good of the country, there are still a few but noisy lots who has direct access to mainstream media and make their opposition and destabilization effort the norm. How sad indeed. Pagka ganito tayo (crabs), we could never be like South Korea.

    2. There is no need to compare South Korea to the Philippines under the administration of Marcos, as if he’s the root cause why we pale in comparison to the Koreans. Marcos is long dead and his administration gone for 30 years already.

      Presidents who succeeded Marcos had a lot of chance to prove themselves better than Marcos, and opponents of Marcos cannot blame him anymore and make him an scapegoat if our present economy fares less than our neighboring countries, and if our country had not progressed as expected after Marcos was deposed.

      Korea: The Koreans have discipline, work ethic, patriotism, nationalism, determination and perseverance.

      Marcos: Sa ikauunland ng bayan, disiplina ang kailangan.

      Korea: Gen. Park Chung-hee made infrastructure-building the centerpiece of his vision of economic dev’t.

      Marcos: Built the South Superhighway, North Luzon Expressway, etc. During the 1972-81 martial law period, tripled the country’s road network.

      Korea: Gen. Park Chung-hee made the Heavy and Chemical Industries Promotion plan as the key to developing six strategic industries.

      Marcos: In 1979 Marcos announced a plan for 11 major industrial projects, with the intention of shifting the focus of the nation’s industrial economy from consumer goods to basic heavy industry. Included in the plan were steel, petro-chemical, pulp and paper, a copper smelter, aluminum, phosphate fertilizer, diesel engines, gas and oil, a coconut industry, and the nuclear power program.

      Unfortunately, when Marcos was deposed, his successor discontinued his projects.

      During the term of Marcos, communist rebels and Marcos’ political opponents undermined his government and destabilized the Philippine economy by resorting to bombings, terrorism, etc.

    3. Strong Leadership is the answer. If the leader is strong, everybody follows. Nationalism comes from the leader. We might have a very strong leader, Duterte. If only he can be a statesman, we would be in our Golden Years. All past presidents were not able to exercise discipline. Filipinos to be discipline must be scared with the government.

    4. very truthful article. But per capital GDP of Thailand reflected in the write up is not nominal but PPP. If nominal, it should be USD 7k++ Philippine per capita In PPP (purchasing power parity) is around USD 8k + . Yes still half though of Thailand ‘s 15k+

    5. There is only one solution to the the problem of economic backwardness which is rooted in our lack of discipline, love of country, morality: outlaw the Roman Catholic Church which has kept the Filipinos imprisoned in a medieval mindset of friar worship, feudal-vassal relationship, class consciousness, hatred of the poor, pursuit of materialism as a means of salvation.

    6. What happened was that the yellows, by an accident along a stretch of EDSA in 1986, took power and reversed the course of our national development. Its that simple.