RP, South Korea: A study in contrast in antipoverty fight
RP, South Korea: A study in contrast in antipoverty fight
Martin Abbugao, Agence France-Presse, Jeju, South Korea
The riches-to-rags story of the Philippines in contrast to South Korea's march to first-world status underscores the importance of the right economic policies and their implementation, the Asian Development Bank (ADB) said on Monday.
When the Manila-headquartered bank was established in 1966, the Philippines was second only to Japan as Asia's richest nation, while South Korea was among the top borrowers.
Nearly four decades later, their fortunes are completely reversed -- the Philippines is one of Asia's poorest countries and South Korea is now a key contributor to the bank.
ADB president Tadao Chino said the two countries provided a study in contrasts in the bank's overarching goal to significantly reduce poverty by 2015.
The number of people living on less than a dollar a day in Asia has generally fallen, leading to a better quality of life and longer life expectancies, Chino said at a news conference at the close of the ADB's annual meeting in this South Korean resort island.
However, there are differences among countries and how they formulate and implement policies and multilateral aid.
"Not all the countries develop at the same rate and that depends upon the various given conditions (and) environment for development, and also the effectiveness of the policies and their implementation," he said.
Chino said the Philippines economy has improved and is projected to grow between 4.5 and 5.5 percent this year and next, compared to 4.5 percent in 2003.
"It is not bad but more can be expected," he said.
Chino said there were "complex factors" that inhibit the inflow of foreign investment as the country is burdened by a huge budget deficit, low levels of public spending and a lack of investment in infrastructure.
Financing the deficit keeps interest rates relatively high which in turn keep investors at bay, he said, adding that the Philippines' rapid population growth was also an impediment to growth.
"If there will be major political and economic reforms, then I think we can expect much higher growth rates ... It will improve the lives of the people.
"But that all depends upon the government and the people -- how do they make the effort for a better economy. The most important is to improve the environment for private sector activities."
Other analysts outside the ADB have cited rampant corruption as a deterrent to investment in the Philippines.
On the other hand, Chino held up South Korea as a model of poor countries which had received ADB aid and are repaying them now by becoming donors.
South Korea put out the red carpet for the more than 3,200 meeting delegates who held meetings at a posh, glass-walled international convention center that offers a sweeping view of the ocean here.
Seoul contributed US$113 million to the latest replenishment of the ADB's anti-poverty fund, which totaled $7 billion to be disbursed between 2005 and 2008.
"The Korean government has been contemplating ways to return the valued favors we received through the ADB to fellow member countries in need of assistance," South Korean Prime Minister Goh Kun said when he opened the meeting on Saturday.
He said South Korea will establish an "e-Asia fund" to help poor countries in the region improve their competence levels in information and communication technology.