Waiting for graduation
SKETCHES - Ana Marie Pamintuan (The Philippine Star) - August 15, 2014 - 12:00am

In November 1965, in the final weeks of Diosdado Macapagal as president, representatives from several Asian countries plus Iran gathered in Manila to choose the headquarters of a bank that would focus on Asian development.

Nominated as sites were Bangkok, Colombo, Kabul, Kuala Lumpur, Manila Singapore, Tehran and Tokyo. Colombo and Kabul withdrew before the vote, which was eight for Tokyo, four for Tehran and three for Manila. The other proposed sites each got one vote.

A second voting at past noon on Dec. 1 narrowed down the choices to three, with Tokyo getting eight votes, Manila six, and Tehran four.

The Manila government apparently rolled out the red carpet for the delegates and lobbied fiercely for the honor. Hours later, in the final vote, Tehran was out. With one abstention, Manila edged out Tokyo by a nose, 9-8, and was picked as the headquarters of the Asian Development Bank (ADB).

Those who participated in the selection of the site were representatives from Afghanistan, Cambodia, Ceylon, India, Indonesia, Japan, Laos, Malaysia, Nepal, Pakistan, the Philippines, Singapore, South Korea, South Vietnam, Taiwan, Thailand and Western Samoa.

Several of these economies have since “graduated” from ADB lending programs, notably South Korea, Taiwan and Singapore.

On the other hand, the Philippines today is the fifth largest borrower of the ADB after India, China, Pakistan and Indonesia. China and India, however, are next only to Japan and the United States as the biggest contributors to the ADB, whose capital as of end-2013 stood at $162.8 billion.

As recalled by the current president of the ADB – a Japanese like all the others before him – the Philippines at the time of the bank’s founding was one of Asia’s top economies, second only to Japan in terms of development. Until the 1950s, the ADB’s Takehiko Nakao pointed out, per capita GDP in the Philippines was higher than in South Korea.

Today our per capita GDP – $2,790 as of last year – is behind Thailand’s $5,674 and Indonesia’s $3,510, and a long way from Korea’s enviable $24,329 and Japan’s $38,491.

What did the others do right?

*   *   *

Nakao is careful not to sound preachy or get himself or the ADB involved in Philippine political issues. Over a two-hour interview yesterday at the ADB headquarters, he reminded me that Japan before World War II had been one of Asia’s strongest economies, and did not qualify for the category of a poor, developing nation even when it was struggling to recover from the war.

But he did offer insights into the success of ADB “graduates” such as South Korea, whose recovery from its bloody civil war 60 years ago has been remarkable.

“They had a very clear view of what kind of country they wanted to build,” Nakao observed.

The Koreans invested heavily in infrastructure, reached out to their former colonizer Japan, and pursued a clear shift from an agricultural to industrial economy. It helped that the country had a highly educated civil service, and Koreans had a “shared vision” of where they wanted to go, Nakao told me.

He did not discuss his own country’s rapid post-war development, but we know that Japan followed a similar growth path and its people also had a shared vision, with war defeat further uniting a cohesive society.

Nakao did not say it, but a shared vision is what has been lacking in the Philippines. Instead each Filipino seems to be pursuing his vision of what he wants mainly for himself, his family, and in the case of politicians, the party. All interests are narrow and personal.

The late Manila Archbishop Jaime Cardinal Sin often lamented that it’s every man for himself in this country – always kanya-kanya – and he kept bewailing this long after he played a principal role in the dramatic ouster of dictator Ferdinand Marcos.

Perhaps ordinary Pinoys developed the kanya-kanya attitude as part of self-preservation and with role models in mind, since the myopic selfishness is most evident in the tiny fraction of the population with a stranglehold on the nation’s power and wealth.

*   *   *

I must stress that the ADB president is bullish about Philippine development prospects, especially with the reforms initiated under the Aquino administration.

“Many people now believe the choice of Manila (as the home for ADB) was excellent,” Nakao told me.

The country, he explained, has a wealth of talented assets, the cost of living is lower than in Tokyo, and it’s better for a bank like the ADB to be based in a developing country.

Nakao was Japan’s vice minister of finance for international affairs before becoming the lone nominee to replace Haruhiko Kuroda as ADB chief. Kuroda resigned in March 2013 to become the governor of the Bank of Japan.

Since assuming his post in April last year, Nakao has visited 16 developing member states of the ADB outside the Philippines.

From those visits he drew up an eight-point development agenda to ensure “robust, inclusive and sustainable growth” in the Asia-Pacific.

His “Going Back to Basics” agenda calls for policies to promote macroeconomic stability, investments in infrastructure and human capital, open trade and investment regimes, sound governance, inclusive growth, security and political stability, and a “well-articulated development strategy.”

The Philippines has achieved progress in certain points such as macroeconomic stability and good governance, he said, but there are many other challenges.

“It is, in a sense, behind other countries,” he said. “Maybe the Philippines can do more.”

Nakao has been meeting in recent weeks with Philippine government officials to see how the ADB can ramp up support for these efforts. Last Tuesday he was in Davao to inspect ADB-assisted projects particularly in agriculture and the mining areas.

“The Philippines should cultivate its own potential,” Nakao told me. “I hope the Philippines will be growing faster than the other countries to recover its status again.”

The ADB chief is not the first development official to express that hope. We haven’t dashed such hopes, but we’ve been mighty slow in turning hope into reality.

 

ADB ASIAN DEVELOPMENT BANK DEVELOPMENT JAPAN MANILA NAKAO PHILIPPINES SOUTH KOREA TEHRAN
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