Saturday, May 9, 2009

Corruption risks foreign aid? Who cares about foreign aid?

The World Bank has another encounter with corruption involving projects in the Philippines. And a UK business group very politely tried telling us how we could encourage more foreign investments.

Foreigners are treading dangerous waters everytime they try to offer us unsolicited advice; yet it is upon us to pick and choose which would bring us good given our decades of economic woes – we’ve already sunk one generation; we don’t want to see another one? This writer has been echoing the frustrations of more and more Filipinos while presenting a different if not a new perspective.

With two of our ex-presidents listed among the most corrupt heads of state, would mathematicians tell us that there is a high probability that we will have more high-level corruption in future?

Should we worry that corruption could jeopardize foreign aid to the Philippines? Not necessarily – given that corruption is universal. And who cares about foreign aid? If the U.S. Catholic Church despite its focus, dedication and massive financial resources has not succeeded in reducing poverty in the U.S., is there a high probability that foreign aid won’t achieve its ideals in the Philippines? (This writer has represented the USAID/IESC in Eastern Europe – where corruption seems ever present too; and supports charity efforts in a private capacity.)

The bottom line is: what others think and do for us does not matter; it is what we think and do for ourselves that matters. Yet we remain part of an interconnected world – no man is an island?

The University of Michigan Graduate School of Business is one of those that popularized the acronym COWs: citizens of the world. And they are people who “think global” and when they do meet they share “war stories” or experiences in different parts of the world.

COWs recognize that they have a different worldview. They are the opposite of the rednecks who may not have a passport and have not traveled beyond 50 miles from home. In the 1980 U.S. census, over 50 % of Americans were in this category. The number has shrunk but a big chunk still is homebound.

The U.S. IRS taxes residents based on global income, irrespective of the country where the income was generated. Rednecks could not care less but COWs do. And some of them are Republicans and would explain why they are against any more taxes. And to add insult to injury, the COWs read about corruption.

In Connecticut over the recent past a governor and a couple of mayors were imprisoned. And in New York a senior and well-respected Democratic congressman is under pressure to resign his congressional leadership position if not his seat because of alleged corruption. And the list goes on!

Yet Americans are fortunate – U.S. GDP is more than the combined GDPs of Japan, China and Germany, the three largest economies after the U.S. In other words, an errant son can afford to squander his parents’ fortune if they are incredibly wealthy but a poor farmer’s son cannot.

That is what should worry us about corruption in the Philippines – we cannot afford it!

And it is not just the current administration that should worry us – we have not seen the last of it; those that are yet to come should give us pause, i.e., how can we as a people deal with this flaw? Corruption is not an Arroyo problem per se; it is a Filipino problem? And we each need to own up to it – a rotten fish smells from the head down?

What about foreign aid? Should the question instead be: How do we build ourselves up? Foreign aid may tide us (especially the poorest of the poor) over like U.S. Catholic charity efforts tide the poor over. But only economic booms lifted them out of poverty. We cannot rely on foreign aid to lift us out of poverty. Only economic booms can. How do we leverage the global economy so that we become self-sufficient? China knows how, i.e., it can put ideology aside while Russia seems more preoccupied with ideology and the results speak for themselves.

A Singaporean scholar (Kishore Mahbubani, Dean of the School of public policy at the National University of Singapore and former Singaporean ambassador to the UN, and author) argues that:

“China (and most of Asia) has finally figured out the 7 pillars of Western wisdom, which enabled the West to succeed:
  • Free market economics: the Chinese are deeply committed to free market economics, one reason why China (while still an autocratic regime) was very keen to join the WTO is because they believe that by complying with those standards it will become the most competitive economy in the world (Russia doesn't want to join because they feel the WTO rules are an imposition on them; the Chinese believe they're a gift to them).
  • Science and technology: Europe became dominant for centuries because it surged ahead in its mastery of science and tech. But if you extrapolate from what you see on campuses and colleges today, by 2010 70-90% of all new PhDs in science and engineering will be held by Asians.
  • Meritocracy: why is Brazil a soccer superpower but economically a medium power? Because when it comes to soccer, they look everywhere, they search for the best players in cities as well as in slums; but when they look for economic talent, they only look to the upper or medium class. Asians have discovered that the millions of brains that were not used for centuries are now being used. In India, even the "untouchables" are being given education and are integrated into the economy, it's a silent revolution.
  • Pragmatism: it's an ancient Western practice. Asians have become the best copycat nations in the world. As Deng Xiaoping said: "it doesn't matter if a cat is white or black, if it catches mice". In most of Asia, the ideological debates are left behind.
  • Culture of peace: In the region where we saw the biggest war since WW2, the guns are now silent. Asians have not got to the "zero prospect of war" that Europe has achieved, but it's moving in the right direction.
  • Rule of law: the country that is producing the largest number of new laws in the world is China.
  • Education: the hunger for education in Asia is phenomenal. In many ways, the gold standard for education now is being set by Asian countries, starting with Singapore.”

We have our work cut out for us; do we need to dig deep into our soul and gather the courage to face up to the challenge? And conquer the world? The lesson of Eden comes to mind: Adam and Eve were assured that they would conquer the world despite their human nakedness.

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