COMMENTS ON THE PHILIPPINES AND DEVELOPING NATIONS IN ASIA

Lorange Institute of Business Zurich, September 7, 2010

By W. SyCip

WHEN AMBASSADOR THERESA LAZARO INVITED ME TO COME TO ZURICH TO ADDRESS BUSINESSMEN AND BANKERS WHO MAY BE INTERESTED IN THE BUSINESS ENVIRONMENT OF THE PHILIPPINES AND EAST ASIA, I READILY AGREED.

FOR OVER 60 YEARS, MY WORK AND TRAVELLING HAVE EXPOSED ME TO BOTH WESTERN AND ASIAN CULTURE, EDUCATION, POLITICS, BUSINESS AND GOVERNMENT LEADERS. FOR THE PAST TEN YEARS, I HAVE AVERAGED 7 OR 8 TRIPS A YEAR TO THE U.S., 4 TO EUROPE AND ABOUT 10 TO 15 TRIPS IN ASIA.

MANY OF MY WESTERN FRIENDS MAY FIND AN ASIAN PERSPECTIVE HELPFUL IN UNDERSTANDING THE CHANGES TAKING PLACE IN ASIA AND MANY OTHER DEVELOPING NATIONS.

THE ECONOMIC SUCCESS OF THE U.S. AND EUROPE MAY CAUSE THEM TO BELIEVE THAT WHAT THEY HAVE DONE SHOULD NOW BE BLINDLY FOLLOWED BY ALL OTHER COUNTRIES EVEN THOUGH THEY ARE AT DIFFERENT STAGES OF ECONOMIC DEVELOPMENT AND HAVE DIFFERENT HISTORICAL AND CULTURAL BACKGROUNDS.

I THEREFORE HOPE TO GIVE YOU AN ASIAN PERSPECTIVE ON BOTH RELEVANT AND IRRELEVANT ISSUES. YOU WILL PROBABLY DISAGREE WITH MANY OF MY OBSERVATIONS, BUT I HOPE THAT MY COMMENTS MAY CONTRIBUTE TO SOME OF THE IDEAS YOU HAVE ON THE NEEDS OF EMERGING MARKETS.

AT PRESENT, ALMOST ALL CROSS BORDER NEWSPAPERS OR MAGAZINES IN ASIA ARE CONTROLLED IN LONDON OR NEW YORK AS ENGLISH IS THE SECOND LANGUAGE OF ALL THE COUNTRIES IN EAST ASIA. THESE PUBLICATIONS MAY NOT REFLECT THE THINKING OF THE ASIAN PUBLIC OR ITS LEADERS.

MY FRIENDS, BOTH IN THE WEST AND IN ASIA, KNOW THAT MY THOUGHTS ON POLITICAL SYSTEMS ARE QUITE DIFFERENT FROM THOSE WHO HAVE BEEN IMMERSED IN IDEAS AND VIEWPOINTS FROM THE WESTERN WORLD. WITH THE ECONOMIC SUCCESS OF EAST ASIA DURING THE LAST 20 TO 30 YEARS, I DO FIND THAT MANY OF THE WESTERN BUSINESS LEADERS WHO HAVE TRAVELLED EXTENSIVELY IN THIS REGION, TEND TO AGREE WITH MY OBSERVATIONS.

LET ME START BY SOME COMMENTS ABOUT THE PHILIPPINES. MANY SWISS COMPANIES AND CITIZENS HAVE CONTRIBUTED GREATLY TO OUR ECONOMY DURING THE PAST 70-80 YEARS. NESTLE HAS QUIETLY BECOME THE LARGEST FOOD COMPANY IN THE COUNTRY AND HAS HELPED THE FARMERS IMPROVE THEIR COFFEE PRODUCTION. FROM THEIR PHILIPPINE BASE THE ZUELLIGS HAVE EXPANDED THROUGHOUT ASIA. THE ZUELLIG FAMILY FOUNDATION IS IMPROVING RURAL HEALTH IN THE POOR PROVINCES OF THE PHILIPPINES. UNDER CONSTRUCTION NOW IS THEIR HEADQUARTERS BUILDING WHICH MAY BE THE MOST ADVANCED ENVIRONMENT FRIENDLY BUILDING IN ASIA. THE SCHMIDHEINY FAMILY HAS IMPROVED PRODUCTIVITY OF THE PHILIPPINE CEMENT INDUSTRY AND HAS BEEN ACTIVE IN CORPORATE SOCIAL RESPONSIBILITY PROJECTS IN THE COUNTRY. AND I AM GLAD TO SEE THE KELLERS HERE AS I WAS AT THE DINNER HERE WHEN ALMOST ALL OF ZURICH WERE PRESENT AT THE 70TH BIRTHDAY PARTY OF LUK KELLER.

MY ONLY SUGGESTION TO AMBASSADOR LAZARO WAS THAT THIS MEETING BE DELAYED AT LEAST 60 DAYS TO GIVE THE NEW PHILIPPINE GOVERNMENT TIME TO INDICATE WHAT THEIR POLICIES MAY BE AND WHO MAY BE THE PERSONS TO IMPLEMENT THESE POLICIES. WE WHO LIVE IN THE PHILIPPINES ARE HAPPY THAT PRESIDENT AQUINO HAS A LONG RECORD OF INTEGRITY AND WE FULLY SUPPORT HIS ANTI-CORRUPTION PROGRAMS.

THE PEOPLE THAT WILL BE OCCUPYING THE KEY POSITIONS IN THE GOVERNMENT SHOULD BE OF INTEREST TO ALL OF YOU. I AM GLAD THAT I CAN ASSURE YOU THAT THE CABINET MEMBERS, MANY FROM THE PRIVATE SECTOR, ARE PERSONS KNOWN FOR THEIR INTEGRITY AND COMPETENCE. THE SPEAKER OF THE HOUSE WAS AN HONEST AND SUCCESSFUL MAYOR OF THE LARGEST CITY IN THE COUNTRY. HE WORKS CLOSELY WITH PRESIDENT AQUINO AND HAS ENOUGH FOLLOWERS FROM THE DIFFERENT POLITICAL PARTIES TO GIVE HIM A COMFORTABLE MAJORITY IN THE HOUSE. ONE OF HIS BRIGHT ASSISTANTS IS NOW THE EXECUTIVE SECRETARY OF THE PRESIDENT.

THE SENATE HAS 24 VERY INDEPENDENT MEMBERS. THE INDICATIONS ARE THAT THEY WILL COOPERATE WITH THE NEW PRESIDENT PARTICULARLY ON MEASURES TO ACCELERATE ECONOMIC DEVELOPMENT AND ON LEGISLATION TO REDUCE CORRUPTION. THIS IS AN IMPORTANT ISSUE AS PRESIDENT AQUINO’S SUCCESSFUL ELECTION CAMPAIGN WAS BASED ON HIS PLEDGE TO GO AFTER THE CORRUPT LEADERS OF THE PREVIOUS ADMINISTRATION. THE TAX ENFORCEMENT AGENCIES HAVE ALREADY FILED CASES AGAINST PROMINENT PERSONS FOR TAX EVASION.

CONSIDERING OUR LEGAL SYSTEM AND THE AVAILABILITY OF HIGH PRICED LAWYERS TO DELAY AND DEFEND GUILTY PARTIES, IT MAY TAKE SOME TIME BEFORE WE SEE PEOPLE BEHIND BARS! YOUR BANKERS ARE AWARE OF THE DIFFICULTIES IN GETTING FUNDS OF CORRUPT POLITICAL LEADERS THAT ARE DEPOSITED IN TAX HAVEN BANKS IN EUROPE.

I AM OPTIMISTIC ABOUT THE PHILIPPINE ECONOMY UNDER THE NEW GOVERNMENT. PRESENT GROWTH RATES ARE BETWEEN 6% AND 7%. WHILE PEOPLE IN ASIA ARE INCREASINGLY FOCUSED ON DEVELOPMENTS IN CHINA, CAPITAL INFLOWS TO THE PHILIPPINES FROM EUROPE AND USA ARE IMPORTANT PARTICULARLY FOR THE OUTSOURCING INDUSTRIES LIKE BUSINESS PROCESSING AND CALL CENTERS. ACCENTURE, CHASE AND DEUTSCHE BANK, SHELL AND PROCTER & GAMBLE ARE JUST A FEW OF THE INTERNATIONAL NAMES IN THIS AREA.

WE EXPECT FURTHER GROWTH IN OUTSOURCING INDUSTRIES, MINING, TOURISM, INFRASTRUCTURE, WATER AND ENERGY PROJECTS. REMITTANCES OF OVERSEAS WORKERS AND SEAMEN ARE EXPECTED TO REACH $19 BILLION THIS YEAR.

SIXTY YEARS AGO, WE WERE TOLD BY AMERICAN AND EUROPEAN FRIENDS THAT THE PHILIPPINES WILL HAVE AN ECONOMY SECOND TO JAPAN. COMPARED TO OTHER EMERGING MARKETS IN ASIA, WESTERNERS THOUGHT WE HAD TWO MAJOR ASSETS: DEMOCRACY AND CHRISTIANITY. SAD TO SAY, THESE TWO ASSETS HAVE TURNED OUT TO BE OUR TWO LIABILITIES.

FOR A MORE BALANCED PERSPECTIVE OF OUR REGION, MAY I THEREFORE SUGGEST YOU CONSIDER THE FOLLOWING:

1. THE POLITICAL LEADERS OF THE WESTERN WORLD CONTINUOUSLY PREACH THAT “DEMOCRACY AND HUMAN RIGHTS” ARE WHAT IS NEEDED FOR POOR NATIONS TO ACHIEVE RESPECTABILITY AND ECONOMIC GROWTH. FREEDOM OF MEDIA, THEY SAY, IS AN ESSENTIAL PART OF DEMOCRACY.

MY CONCLUSIONS, BASED ON MY OBSERVATIONS OF THE PROGRESS OF EAST ASIA DURING THE PAST 50 YEARS, ARE QUITE DIFFERENT.

LET ME STATE CLEARLY THAT I AM FOR SUSTAINABLE DEMOCRACY BUT THIS CAN BE ACHIEVED ONLY WHEN THE MAJORITY OF ITS PEOPLE ARE NO LONGER POOR, ARE NOT HUNGRY AND ARE EDUCATED. DEMOCRACY COMES NATURALLY WHEN INCOME LEVELS RISE AND VOTES ARE NOT SOLD. A SUCCESSFUL DEMOCRACY REQUIRES AN INDEPENDENT JUDICIARY WITH WELL PAID JUDGES OF UNQUESTIONED INTEGRITY.

WHEN PEOPLE ARE POOR, UNEDUCATED AND HUNGRY, THEY SELL THEIR VOTES, DIRECTLY OR INDIRECTLY. THEN YOU HAVE A DEMOCRACY OF THE UPPER CLASS WHERE BASIC REFORMS AND LONG TERM PLANNING FOR INFRASTRUCTURE AND EDUCATION THAT WILL BENEFIT THE BOTTOM GROUP OF OUR SOCIETY ARE DELAYED.

MAYBE EVEN THE RICH WESTERN COUNTRIES SHOULD RECONSIDER THEIR PRESENT POLITICAL
INSTITUTIONS. IN 1787, AT ABOUT THE TIME THE ORIGINAL 13 STATES OF THE PRESENT U.S. ADOPTED THEIR NEW CONSTITUTION, ALEXANDER TYLER (A SCOTTISH HISTORY PROFESSOR AT THE UNIVERSITY OF EDINBOROUGH) HAD THIS TO SAY ABOUT “THE FALL OF THE ATHENIAN REPUBLIC” SOME 2,000 YEARS PRIOR.

“A DEMOCRACY IS ALWAYS TEMPORARY IN NATURE; IT SIMPLY CANNOT EXIST AS A PERMANENT FORM OF GOVERNMENT. A DEMOCRACY WILL CONTINUE TO EXIST UP UNTIL THE TIME THAT VOTERS DISCOVER THAT THEY CAN VOTE THEMSELVES GENEROUS GIFTS FROM THE PUBLIC TREASURY. FROM THAT MOMENT ON, THE MAJORITY ALWAYS VOTES FOR THE CANDIDATES WHO PROMISE THE MOST BENEFITS FROM THE PUBLIC TREASURY, WITH THE RESULT THAT EVERY DEMOCRACY WILL FINALLY COLLAPSE DUE TO LOOSE FISCAL POLICY.”

I LEAVE YOU TO JUDGE WHETHER THESE COMMENTS MADE 223 YEARS ARE APPLICABLE AT THE PRESENT TIME TO SOME OF THE COUNTRIES IN EUROPE! WHILE DEMOCRACY MAY NOT COLLAPSE IN EUROPE AND THE U.S., LOOSE FISCAL POLICY IN DEVELOPED COUNTRIES IS HANDICAPPING THEIR ABILITY TO COMPETE IN A GLOBAL WORLD!

NOT TOO LONG AGO, CLEMENT ATTLEE, THE PRIME MINISTER WHO WON AGAINST WINSTON CHURCHILL SAID, “DEMOCRACY MEANS GOVERNMENT BY DISCUSSION BUT IT IS EFFECTIVE IF YOU CAN STOP PEOPLE TALKING”. MAYBE THE ABUNDANCE OF TALKATIVE LAWYERS IN THE PHILIPPINES AND INDIA HAS BEEN THE DISADVANTAGE OF THESE TWO DEMOCRACIES AS COMPARED TO THE FASTER GROWTH LESS DEMOCRATIC COUNTRIES IN ASIA!

I AM ASSUMING THAT IN A DEVELOPING NATION THE PURPOSE OF GOVERNMENT IS TO REDUCE POVERTY AND IMPROVE EDUCATIONAL AND LIVING STANDARDS OF ALL ITS PEOPLE.

THE IDEAL AND PROVEN MODEL FOR RAPID ECONOMIC DEVELOPMENT IN EAST ASIA IS STRONG AND MAYBE AUTHORITARIAN POLITICAL LEADERSHIP, HOPEFULLY NOT TOO CORRUPT. HOWEVER, THERE MUST BE ECONOMIC FREEDOM SO THAT THE CITIZENS WILL BE MOTIVATED TO CREATE WEALTH. ECONOMIC FREEDOM ALSO REDUCES OPPORTUNITIES FOR CORRUPTION BY POLITICIANS.

IN EAST ASIA, NORTH KOREA AND MYANMAR, WITHOUT ECONOMIC FREEDOM, ARE FAILURES IN REDUCING POVERTY. THE OTHER COUNTRIES PROSPERED WITH STRONG, NOT TOO DEMOCRATIC, LEADERS BUT WITH ECONOMIC FREEDOM.

LIKE IN EVERY COUNTRY, THERE MAY BE SOME CRONIES BUT WITH ECONOMIC FREEDOM THEY MUST BE ABLE TO COMPETE WITH OTHER ENTREPRENEURS AND BUSINESS GROUPS. THIS HAS BEEN THE SUCCESSFUL MODEL OF TAIWAN, SOUTH KOREA, SINGAPORE, AND HONG KONG, THE WIDELY PRAISED 4 TIGERS.

CHINA, MALAYSIA AND THAILAND FOLLOWED THIS EAST ASIAN PATTERN. EVEN DURING THE AUTHORITARIAN CORRUPT SUHARTO PERIOD INDONESIA WAS ABLE TO SIGNIFICANTLY DROP POVERTY LEVELS.

AFTER SUHARTO WAS FORCED TO STEP DOWN, THE WEST PRAISED INDONESIA FOR ADOPTING A DEMOCRATIC CONSTITUTION. THIS PRODUCED A SUCCESSION OF WEAK LEADERS, AND MORE DEMOCRATIC CORRUPTION. WE ALL HOPE THAT THE NEW PRESIDENT, WITH A CLEAR MANDATE AND SOME TECHNOCRATS IN THE GOVERNMENT, MAY PROVIDE THE STRONG LEADERSHIP NECESSARY TO REDUCE POVERTY.

RECENT ARTICLES FROM THE UNITED NATIONS AND WORLD BANK WOULD INDICATE THAT DEMOCRACY, WESTERN STYLE, IS SUSTAINABLE ONLY IF ANNUAL PER CAPITA INCOME LEVELS ARE ABOVE $3,000 OR $4,000. THIS IS MUCH MORE THAN THE INCOME LEVELS OF SOUTH ASIA OR COUNTRIES LIKE THE PHILIPPINES, VIETNAM, INDONESIA, KAMPUCHEA OR LAOS.

FOR A POOR NATION, UNITY, DECISIVE POLITICAL LEADERSHIP, ECONOMIC FREEDOM AND LONG TERM PLANNING BY TECHNOCRATS WOULD BE DESIRABLE. TOO FREQUENT ELECTIONS AND CHANGES IN GOVERNMENT RESULTS IN ECONOMIC WASTE. POPULAR SHORT TERM BENEFITS ARE GIVEN TO THE PEOPLE TO GAIN VOTES AND DEVELOPMENT OF LONG TERM INFRASTRUCTURE PROJECTS WHICH WILL REALLY BENEFIT THE POOR ARE NOT UNDERTAKEN.

EXCEPT FOR SINGAPORE, SOME CORRUPTION HAS BEEN A PART OF EVERY GOVERNMENT IN EAST ASIA. IF CORRUPT FUNDS ARE MOSTLY KEPT IN THE COUNTRY THEY STILL CONTRIBUTE TO GROWTH – BUT NOT IF INVESTED IN LONDON, NEW YORK, OR ZURICH.

MY WESTERN FRIENDS WOULD STILL SAY THAT WITH ALL THE DEFECTS OF DEMOCRACY, THERE IS NO BETTER ALTERNATIVE. I MAY COUNTER BY SAYING THERE ARE ALTERNATIVES: SINGAPORE, FOR SMALL NATIONS, CHINA FOR LARGE NATIONS, AND MALAYSIA FOR MOSLEM NATIONS OR NATIONS WITH SIGNIFICANT MINORITIES. COMPARED TO WESTERN DEVELOPED DEMOCRACIES, ALL THESE COUNTRIES HAVE RESTRICTIONS ON MEDIA OR POLITICAL ORGANIZATIONS, BUT THEY HAVE RAPIDLY INCREASED THE LIVING STANDARDS OF ITS PEOPLE – PARTICULARLY THE BOTTOM GROUP.

THE 4 TIGERS OF ASIA, TAIWAN, SOUTH KOREA, HONG KONG AND SINGAPORE HAVE BEEN PRAISED FOR THEIR FAST GROWTH. TAIWAN WAS UNDER MARTIAL LAW AND SOUTH KOREA WAS UNDER A MILITARY DICTATORSHIP WHEN THEIR PER CAPITA INCOMES WERE AT PRESENT LEVELS OF CHINA. DEMOCRACY CAME NATURALLY ONLY AFTER INCOME LEVELS ROSE AND THEIR PEOPLE WERE EDUCATED AND WELL FED. HONG KONG, AS A BRITISH COLONY, HAD VERY LITTLE DEMOCRACY. IN ONE GENERATION SINGAPORE INCREASED ITS INCOME LEVEL TO U.S. AND SWISS STANDARDS – WITHOUT HAVING WESTERN DEMOCRACY!

I HAVE CHALLENGED MY WESTERN FRIENDS TO SPEND ONE WEEK OR ONE MONTH IN BOTH AUTHORITARIAN CHINA AND DEMOCRATIC INDIA AND JUDGE FOR THEMSELVES WHICH COUNTRY HAS DONE MORE FOR ITS PEOPLE. ALL ECONOMIC INDICATORS SUCH AS LITERACY RATES, CALORIE INTAKE, MORTALITY RATES, HEALTH CARE, EDUCATION, INFRASTRUCTURE, ETC. FROM THE WORLD BANK AND THE ASIAN DEVELOPMENT BANK, WOULD INDICATE THAT CHINA HAS MOVED FAR AHEAD OF INDIA. BOTH COUNTRIES ARE NOW FOCUSING THEIR ATTENTION ON THE RURAL POOR!

WITH THE AGE OF TV, THE CELL PHONE AND INTERNET, WE MAY ALL WANT TO CONSIDER WHETHER THE PRINCIPLE OF ONE MAN ONE VOTE IS THE BEST WAY OF ELECTING NATIONAL LEADERS. EVEN FOR DEVELOPED NATIONS WITH LARGE POPULATIONS, NAME RECOGNITION IS NEEDED TO WIN ELECTIONS – AND THIS PARTLY DEPENDS UPON HOW MUCH FUNDS YOU HAVE FOR T.V. ADVERTISING.

WHEN DENG XIAO PING ASKED JIMMY CARTER ABOUT DEMOCRACY FOR CHINA, JIMMY CARTER WISELY ADVISED HIM TO HAVE THIS ONLY AT THE VILLAGE LEVEL WHERE PEOPLE KNOW EACH OTHER WELL AND ACCOUNTABILITY IS EASY TO ESTABLISH.

THOSE OF YOU WHO HAVE VISITED THE VILLAGES IN CHINA WOULD HAVE SEEN LARGE BOARDS NOTING THE MONTHLY REVENUES AND EXPENSES OF THE VILLAGE. AS INCOME LEVEL RISES DEMOCRACY COMES NATURALLY.

I HAVE FURTHER DOUBTS ABOUT WHETHER ADVICE FROM DEVELOPED NATIONS CAN SOLVE POVERTY PROBLEMS IN POOR COUNTRIES. TWO COMPANIES, ADELA AND PICA, ORGANIZED BY MULTINATIONAL COMPANIES TO INVEST IN LATIN AMERICA AND ASIA, WERE BOTH FAILURES. A SENIOR EXECUTIVE OF EXXON MAY KNOW ALL ABOUT THE OIL INDUSTRY, BUT HE MAY BE TOTALLY IGNORANT ABOUT THE NEEDS OF A POOR DEVELOPING NATION.

2. WE ALL AGREE THAT THE WORLD ECONOMY IS MOVING RAPIDLY TOWARDS GLOBALIZATION OF BUSINESS, OF MEDIA AND OF ENTERTAINMENT. THE WORLDWIDE PRACTICE OF PROFESSIONS MAY BE COMING SOON. OUTSOURCING HAS CREATED MANY JOBS IN INDIA AND THE PHILIPPINES. AFTER ALL, IMPORTS OF GOODS ARE OUTSOURCING.

WITH GLOBALIZATION THE ACTIVITIES AND POLICIES OF LARGE MULTINATIONALS HAS IMMEDIATE EFFECT, NOT ONLY ON NEIGHBORS, BUT ON THE REST OF THE WORLD. SHOULD ECONOMIC LEGISLATION BE LEFT TO SLOW MOVING POORLY INFORMED POLITICAL BODIES OR TO TECHNOCRATS? AT LEAST A DISCIPLINED TWO PARTY PARLIAMENTARY SYSTEM IS MORE EFFECTIVE THAN THE PRESENT PHILIPPINE OR U.S. PRESIDENTIAL SYSTEM.

3. WE ARE TOLD THAT FREEDOM OF MEDIA IS A “MUST” FOR EVERY NATION. BUT IN POOR NATIONS MEDIA, WHEN NOT OWNED BY GOVERNMENT, IS CONTROLLED BY MAJOR BUSINESS GROUPS WHO HAVE THEIR OWN INTERESTS TO PROTECT.

HAS RESTRICTIONS ON MEDIA FREEDOM HARMED SINGAPORE? IN THE PHILIPPINES WE DO HAVE TWO EXCELLENT BUSINESS PAPERS, TWO VERY COMPETITIVE ENGLISH LANGUAGE DAILIES AND AN ADMIRABLE CENTER FOR INVESTIGATIVE JOURNALISM. INDIA ALSO HAS FREEDOM OF MEDIA, BUT MAYBE WE SHOULD ASK WHETHER THE FREEDOM OF MEDIA IN THESE TWO COUNTRIES HAVE REDUCED CORRUPTION, PREVENTED RIOTS OR IMPROVED PEACE AND ORDER WHICH ARE THE PRIORITIES OF POOR COUNTRIES.

4. WE IN ASIA MAY WONDER WHETHER THE LARGE FUNDS RAISED FOR ELECTIONS PRODUCES THE BEST LEGISLATORS. WEALTHY CONTRIBUTORS DO EXPECT SOME RETURNS EVEN IN DEVELOPED COUNTRIES. IN POOR COUNTRIES, MAJOR DONATIONS DO BUY POLITICIANS.

WHEN THE WORLD BANK ASKED ME ABOUT REDUCING CORRUPTION IN DEVELOPING NATIONS, I THOUGHT THAT THE BEST WAY IS TO CUT THE CAMPAIGN PERIOD BY HALF – THIS REDUCES THE AMOUNT OF FUNDS THAT HAVE TO BE RAISED.

AND HERE I RAISE A QUESTION AS TO HOW WESTERN LEADERS DECIDE ON WHO TO SUPPORT IN DEVELOPING NATIONS. AFTER A MEETING WITH MAO TSE TUNG, GENERAL MARSHALL REPORTED TO THE U.S. GOVERNMENT THAT HE WAS AN AGRARIAN REFORMER. YET THE U.S. SUPPORTED CHIANG KAI SHEK. WAS IT BECAUSE HIS WIFE WAS A WELLESLEY GRADUATE, A CHRISTIAN WHO SPOKE EXCELLENT ENGLISH AND HAD CONVERTED HER HUSBAND TO CHRISTIANITY? SHE ALSO HAD A BROTHER FROM HARVARD AND A BROTHER-IN-LAW FROM YALE, BOTH RAIDED THE TREASURY OF A POOR AND BANKRUPT CHINA AND MIGRATED TO PARK OR FIFTH AVENUE IN NEW YORK.

ON THE OTHER HAND MAO WAS JUST A PEASANT WHO DID NOT SPEAK ENGLISH. YET IN YUNNAN, LAST YEAR, I WAS TOLD THAT THE MINORITIES IN THE PROVINCE JOINED MAO’S ARMY IN THE CIVIL WAR AGAINST CHIANG BECAUSE IT WAS THE ONLY ARMY THAT DID NOT STEAL THEIR CHICKENS!

VALUES ARE OFTEN DIFFERENT IN RICH AND POOR COUNTRIES!

5. AT A MEETING IN ASPEN A FEW YEARS AGO, AN AMERICAN COMMENTED THAT IT WAS WRONG FOR THE CHINESE TO BUILD A RAILROAD TO TIBET AS IT WILL PROMOTE CHINESE INFLUENCE AND MIGRATION TO TIBET. HE THOUGHT THAT THE CHINESE SHOULD HAVE GOTTEN PERMISSION FROM THE PEOPLE OF TIBET. BUT DID THE UNITED STATES GET PERMISSION FROM THE AMERICAN INDIANS WHEN THE RAILROADS WERE BUILT TO THE PACIFIC COAST? AND DID THE BRITISH CONSIDER ABORIGINES RIGHTS WHEN PRISONERS WERE SETTLED IN AUSTRALIA?

6. IN JUDGING THE PROGRESS OF DEVELOPING NATIONS, MAY I SUGGEST THAT THE INDEX OF “HUMAN RIGHTS” PUBLISHED ANNUALLY BY THE U.S. BE REPLACED BY A “POVERTY INDEX”. IF THIS GOES DOWN, THE GOVERNMENT IS ALRIGHT; IF POVERTY INCREASES, THE GOVERNMENT MAY HAVE TO CHANGE LEADERS OR POLICIES.

7. BEHAVIOR STANDARDS ALSO CHANGE – IT WASN’T TOO LONG AGO WHEN BALINESE WERE TOLD BY WESTERNERS IT WAS INDECENT FOR THEM TO BE TOPLESS. AFTER THEY COVERED THEMSELVES, THE WESTERN TOURISTS ARE NOW TOPLESS IN BALI!

8. WHEN MY AMERICAN FRIENDS GO TO CUBA, THEY TALK ABOUT THE 20 OR 30 YEAR OLD CARS. VISITORS FROM DEVELOPING NATIONS WHO HAVE VISITED CUBA WONDER WHY CUBA HAS A HIGHER LITERACY RATE AND BETTER HEALTH CARE THAN OTHER LATIN DEVELOPING NATIONS.

9. I HAVE ALWAYS ADVISED MY AMERICAN FRIENDS THAT THEIR GREATEST STRENGTH IS NOT THEIR MILITARY, THEIR FINANCIAL INSTITUTIONS, THEIR LARGE ECONOMY OR THEIR EXCELLENT INFRASTRUCTURE.

THE GREATEST ADVANTAGE THAT THE U.S. HAS IS THAT IT IS THE LARGEST ENGLISH SPEAKING COUNTRY IN THE WORLD – AND ENGLISH IS EITHER THE FIRST OR SECOND LANGUAGE OF THE REST OF THE WORLD. THIS ENABLES THE U.S. TO CULTURALLY DOMINATE THE REST OF THE WORLD – WITHOUT HAVING TO DROP A BOMB OR FIRE A SINGLE MISSILE. UNFORTUNATELY, ALL THE FIRING OF GUNS IN THE EXPORTED FILMS DO NOT IMPROVE PEACE AND ORDER IN COMMUNITIES OF BOTH RICH AND POOR NATIONS. THERE IS THEREFORE INCREASING RESISTANCE TO THIS CULTURAL DOMINATION BUT RESTRICTIONS ON SHOWING OF SUCH FILMS IS OFTEN CALLED “CENSORSHIP”, A DIRTY WORD IN DEVELOPED COUNTRIES.

10. THE U.S. HAS THE BEST GRADUATE SCHOOLS IN THE WORLD. THE HIGH FACULTY SALARIES ARE ATTRACTING THE BRIGHTEST ASIANS AND EUROPEANS TO ITS CAMPUSES. THIS IS ONE OF THE GREATEST STRENGTHS OF THE US – ITS ABILITY TO ATTRACT THE BEST AND BRIGHTEST FROM ASIA WHO LATER CONTRIBUTE TO THE SUCCESS OF SILICON VALLEY.

I HAVE JUST CITED A FEW CASES WHERE ASIAN PERSPECTIVES MAY BE QUITE DIFFERENT FROM THE TRADITIONAL THINKING OF MY WESTERN FRIENDS.

IN CLOSING I WOULD LIKE TO SUGGEST THAT IN THE NEXT 50 YEARS ASIA, WITH TWO HUGE COUNTRIES, CHINA AND INDIA, MAY OFFER MORE OPPORTUNITIES FOR BUSINESS OR PROFESSIONALS THAN EUROPE, U.S. OR LATIN AMERICA. BUT DO NOT ASSUME THAT AMERICAN OR EUROPEAN WAYS AND IDEAS WILL DOMINATE ASIAN THINKING. CHINESE, INDIAN AND MALAY VIEWPOINTS WILL SURELY INFLUENCE WESTERN PERSPECTIVES. MY SUGGESTION TO MY WESTERN FRIENDS IS DO NOT TRY TO IMPOSE YOUR IDEAS ON NATIONS AT DIFFERENT STAGES OF ECONOMIC DEVELOPMENT. LET THEM DECIDE WHAT TO ADOPT AND WHEN TO ADOPT. THIS IS THE SUCCESS OF EAST ASIA. HELP POOR NATIONS ON BASIC EDUCATION AS THIS IS THE BEST WAY TO REDUCE POVERTY. THE REST WILL FOLLOW NATURALLY.

THE U.S. AND EUROPE WITH THEIR HUGE DOMESTIC MARKETS ARE ABLE TO SET ITS OWN RULES FOR INVESTORS FROM ABROAD. EVEN IF ONLY 25% OF CHINA’S AND INDIA’S POPULATION APPROACH “MIDDLE CLASS” INCOMES, THEY WILL HAVE A MARKET EQUAL TO THAT OF THE U.S. OR EUROPE – THEY CAN AND WILL BE SETTING NEW PATTERNS OF INVESTMENT. WHERE ELSE, EXCEPT IN CHINA, WILL YOU FIND VOLKSWAGEN AND GENERAL MOTORS IN BED WITH THE SAME PARTNER?

MY COMMENTS ARE QUITE CONTRARY TO WESTERN ADVICE FOR POOR DEVELOPING NATIONS SO I HOPE THIS OPENS OUR DISCUSSIONS FOR TODAY!