The Upside (the Positive Things)
Two decades ago, Philippines was ahead of Korea. While we were not ahead, Korea was hovering on a financial crisis. But now it is quite different. The GDP per capita in Korea is roughly $20,000; the Philippines has only l/5 of Koreas. (Philippines GDP is roughtly l/3 of Thailand and Malaysia)
Korea is on its way to achieving $l trillion in trade; its golf players are the best in the world, especially the women, the K pop group is accepted even in Europe, its telenovelas are a hit in the Philippines and elsewhere. Its electronic products are mistaken to be Japanese brands. Its number l in shipbuilding, in LCD, and number 2 in semiconductors. (There was a story about the Chairman of Samsung being laughed at by Japanese electronics executive when he thought loudly that Samsung would build a semiconductor factory."Why you can not even make refrigerators or TV?" But the Samsung chief curtly replied that its not yet the end of the world?" Call that courage bragadoccio)It is simply phenomenal and short of being a miracle.
And now, Korean Airlines will be among the first airline to buy Airbus 380.
How did Korea do it?
l. Strong leadership and governance.
The government chief selected the best bureaucrats to put Korea on the right track. Little interference.
The government determined the key strategic industries to be in and supported them. We can guess: electronics, shipbuilding, etc.
The government encouraged businessmen to go to the world for their market; domestic consumption is small. (Encouraging international busiinessman right on day one.)
2. Investment in education
Its a very competitive educational climate out there. Parents invest so much time and effort to get to the best colleges. Only graduation from best colleges and universities guarantee great jobs later on.
Most of teaching staff of universities graduated from schools abroad. The universities have strong business, sciences and technology, international business, and exchange program components.
3. Strong survival instincts and love of the country by Koreans
The country;s climate and geography are harsh; they have into several wars. Life in Korea is hard and has very little natural resources to speak of. That is why, anywhere in the world where conditions are worse (or better); they will survive and flourish. They patronize their own products: buy Korean is deeply embedded in their hearts (maybe not true for modern generation of young Koreans) Korean stores abroad survive because the Korean community support them.
During Korean financial crisis, citizens offered their personal jewelry to stave of the crisis.
There was even a group of Koreans who worked in Europe and when they returned, bought a scrapped facory to bring back to Korea with their own money. How many other citizens of other countries will do that? It is always expected that the government will take care of their needs.
4. Strong Entrepreneurial Mentality by Korean
I met a Korean the other night. He has been in the Philippines only for three years and has done the following:
l. Franchised three Korean noodles restaurant: one in QC two in Angeles city.
2. Is in into printing business, and import of printing machine.
3. Will be engaged soon in cosmetic business
The dark clouds ahead
l. Ageing population coupled with declining birth rate.
Birth rate is almost l%. Many Koreans do not get married.
2. Lower savings rate
The young Koreans are on buying spree.
3. Too much dependence on export market and Samsung
The impending financial bombshell at Europe (Greece and :Portugal) NZ and USA (God forbids) make the Korean economy very vulnerable to worldwide slowdown. They do not have another Samsung or Hyundai.
BRIGHT SIDE FOR THE PHILIPPINES
l. There is higher savings rate.
2. The remittance from abroad by OFW is still strong despite slowdown.
3. FDI is small, but domestic investment rose 3o+%. Many Filipinos are making a strong bid/bet on the Philppine economy.
4. The Philippine currency is gaining strrength, although still behind other Asian neighbors.
5. Strong service sector, construction and real estate is booming. Strong presence in BP: Philippines is No. 2 in BPO worldwide (next to India) and Number l in call center. Even Indian call centers are relocaing in the Philippines.
PHILIPPINE IS GETTING THERE
Some tweaking/adjustment is in order:
l. Stronger governance.
2. Investment in infrastructure e.g. beutifying the city, repairing our roads, building parks, and other attraction.
3. Managing the population growth.
4. More promotion of entrepreneurship and international business menality
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