Thursday, January 22, 2015

Modernization by design

“The Iwakura Mission was a Japanese diplomatic journey around the world, initiated in 1871 by the oligarchs of the Meiji period. Although it was not the only such ‘mission,’ it is the most well-known and possibly most important for the modernization of Japan after a long period of isolation from the West. It was first proposed by the influential Dutch missionary and engineer Guido Verbeck and was probably based on the model of the Grand Embassy of Peter I.” [Wikipedia]

“[T]he historical turning point that set the nation on the road to modernization was the Iwakura Mission. From December 1871 to September 1873, fifty-one Meiji government leaders traveled by ship and rail to fifteen different countries . . . When the group left home, Japan was essentially a closed country; the Japanese knew little about the outside world. But as the members of the mission visited other countries’ factories, mines, museums, parks, stock exchanges, railways, farms, and shipyards, their eyes were opened to ways Japan could remake itself, not only with new technologies, but also with new organizational strategies and ways of thinking . . .

“The trip created a shared awareness among the mission members of just how far behind Japan was from the advanced countries and a common perspective about how to introduce change. Rather than becoming discouraged by what they saw, the officials returned home energized, excited by future prospects for Japan and eager to send additional teams abroad to study in more detail.”[Deng Xiaoping and the transformation of China, Ezra F. Vogel; The Belknap Press of Harvard University Press, 2011, p. 217]

“Gu Mu . . . served as the Vice-Premier of the People's Republic of China between 1975 and 1982 . . . Between 1978 and 1988 Gu was a major part of the new reformist government under Deng Xiaoping, specializing in external relations and economic development. Gu, as Vice-Premier, led the PRC's first formal delegation to Western Europe following the Cultural Revolution. On the trip Gu visited France, Belgium, Denmark, Switzerland, and West Germany . . . As one of Deng Xiaoping's chief aides in charge of economic management, he played a major role in implementing Deng's economic reform policies and China's opening to the world. He was a key figure in the creation of Shenzhen, China's first Special Economic Zone.” [Wikipedia]

“Gu Mu recalled that on the eve of the trip, when Deng met with him to give his instructions, he said, ‘Have broad contacts, make detailed investigations, and carry on deep research into the issues . . . Look at how they manage their economic activities. We ought to study the successful experiences of capitalist countries and bring them back to China . . . China’s new willingness to work with capitalist countries . . . required not only rethinking specific industrial plans, but also revising rules and bureaucratic procedures to allow foreign firms to operate in China . . . In the more leisurely days of Meiji Japan, the Iwakura Mission had taken more than a decade to produce its twelve-volume ‘Opinions on Industry’ to guide industrial development. By contrast, after the Gu Mu trip, it took just several weeks for the delegation to complete its reports and for the Chinese economic leaders to organize appropriate units to discuss the implications of what they had learned . . .

“The forum was conducted in a series of twenty-three morning sessions spread over two months . . . In the afternoons the officials returned to their regular work units to report on the morning discussions and to prepare their units’ written responses to the issues raised. The forum allowed some sixty representatives of the key economic ministries and commissions to present the overall activities and plans of their units. This way, each unit could get a sense of what all the other units were thinking without becoming involved in arguments about precise allocations and production targets; such details would be discussed at later planning meetings . . . China could no longer remain a closed economy, that it must import foreign technologies, equipment, capital, and management experience in order to accelerate its development.” [Vogel, Op. Cit. pp, 221, 224, 225]

This blog has raised that in the case of PHL, we embraced the most convenient route to drive our economy, OFW remittances, and more recently, BPOs. If we’d look into the details of the Iwakura mission and the efforts of Gu Mu, we will realize that the economic miracles that happened in these countries were a product of a deliberate game plan. Which they crafted after an “aha moment” – when they recognized that they had to push their thinking and worldview into the modern age. They weren’t simply destined or fated. On the other hand, we risk misunderstanding the mantra of mercy and compassion when we have yet to make the unanimous choice to move the nation forward and exert the requisite efforts? “[T]he Church in the Philippines is called to acknowledge and combat the causes of the deeply rooted inequality and injustice which mar the face of Filipino society, plainly contradicting the teaching of Christ.” [Homily of Pope Francis in Manila Cathedral,, 16th Jan 2015]

In short, we have to overcome: (a) parochialism and truly learn from others; (b) our hierarchical system and structure that says only the elite has the right to learn about modernization; and (c) the assessment of the friars that we’re incapable of self-government – that our culture of impunity seems to bear out? And precisely why Rizal risked his life by preaching and echoing the Age of Enlightenment.

There is a parallel history in the US where the pioneers saw the natives as incapable of self-rule. In our case, the colonizers saw Juan de la Cruz as a thief. In the US, the pioneers pursued the efforts to modernize and consequently the natives became the minority. In the case of PHL, the Chinoys showed us how to drive the economy and, not surprisingly, they are today the Philippine economy.

Why did that not happen in Japan and China? They opened the country to foreign investment, modern technology and innovation and thus learned the imperatives of talent, product and market development – the critical elements that drive economic output. Yet we're finding a 21st century ally in socialism – that it is the answer to our backwardness?

For example, let’s look at Thomas Piketty’s (“the French economist that put inequality back on the map and is being hailed as the Karl Marx of the 21st century”) key concerns: ‘[I]f every country just tries to snap away investments from its neighbors through tax competition and optimization, then everybody loses. It’s a stupid game; it’s a negative-sum game that fosters financial opacity . . .  If a rising percentage of the public thinks that a disproportionate share of the benefits of globalization goes to the financial sector or large multinational companies, then there is a great danger that people like Marine Le Pen will be able to successfully drive the anti-globalization agenda and revitalize nationalism.” [Piketty: 'The Myth Of National Sovereignty Helps Big Corporations Screw Us Over', Max Tholl and Florian Guckelsberger, The European, 5th Jan 2015]

Piketty summarized his perspective as follows: “I firmly believe that globalization is a positive-sum game that serves all our interests. But we must find ways and develop institutions to ensure that everybody benefits from it . . . A truly global government is of course a utopian idea. But I tried to make it clear in the book that I believe in step-by-step progress. I don’t believe in all-or-nothing proposals.”

He wants to strengthen global institutions so that: (a) banks don’t play games with their own investments and financial products that are designed to benefit themselves – and would bring the world down to its knees, i.e., the Great Recession of 2008; and (b) governments don’t turn their countries into tax havens that will entice MNCs to seek tax “inversion” (perhaps a step beyond historical “avoidance” and closer to “evasion”) as a competitive advantage. That’s fair enough; but are we romanticizing something about which we need more insights?

For example, my Ukrainian friends demonstrated, despite the misfires in their pursuit of the free market, they would go to war against the Russians because they don't like the specter of the dark ages – under communist-socialist rule. But do we see socialism as the easy way out? Granted that Japan and China are old civilizations, still our neighbors who can’t make the same historical claims (with the exception of Taiwan) did not shirk the challenge of modernization. Surprise, surprise! They became Asian Tigers!

Is the pain from our backwardness then self-inflicted? And if so, the mantra of mercy and compassion must attack the root “cause” more than the “effect” that we see in the face of poverty. That's what problem-solving is about! Otherwise we run the risk of the rest of the region leaving us in the dust – frail, wobbly and feeble? 

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