Korea and the Philippines. Bow.
Both were under the Japanese.
Both were under the Americans.
Both were “born” after World War II. South Korea was among Asia’s weakest economies. The Philippines was “next to Japan” – by virtue of the American infrastructure and developments.
Both had dictators – Park Chung Hee and Ferdinand Marcos were Ronald Reagan’s S.OB.s against communism.
In 1986, the Philippines had EDSA. In 1987, South Korea had its first democratic elections in 30 years.
In 1987, The Philippines crafted a new constitution which did not allow foreigners to own real estate.
South Korea on the other hand, allowed foreigners to own land – and this was further liberalized in 1998.
Note that, both had low import tariffs.
By 1996, Korea had achieved OECD status. In contrast, the Philippines remains a “developing economy that up to today is still “planning to become a first world country by 2020.
Half a century after being “born”, Korea is a member of OECD. Philippines is still dreaming to achieve OECD status by 2020. Korea got there more than 10 years ago.
As of 2010, South Korea is now one of the top five automobile makers in the world, and now has the capacity to design and build its own nuclear power plants.
And the Philippines is negotiating with Korea to buy a scrapped nuclear power plant initially developed for North Korea.
Today, while Filipinos have to put up with PLDT’s shitty and expensive service – and your other choice is an equally crappy Globe or Bayantel Smart service – couldn’t tell the difference between Globe/Smart/Bayantel – they have the same owners???
Guess what… CNN recently came up with this article –
Why Internet connections are fastest in South Korea
By John D. Sutter, CNN
March 31, 2010 10:09 a.m. EDT
Editor’s Note: Which 17 countries have faster Internet connections than the United States? See our Internet speed map.
(CNN) — People in the United States basically invented the Internet. So U.S. connections must be the fastest and cheapest in the world, right?
Not so much.
Broadband Internet speeds in the United States are only about one-fourth as fast as those in South Korea, the world leader, according to the Internet monitoring firm Akamai.
And, as if to add insult to injury, U.S. Internet connections are more expensive than those in South Korea, too.
The slower connection here in the U.S. costs about $45.50 per month on average, according to the Organization for Economic Cooperation and Development. In South Korea, the much-faster hook-up costs $17 per month less. An average broadband bill there runs about $28.50.
So why is U.S. Internet so much slower and pricier than broadband connections in South Korea? The question is timely, as the U.S. government pushes forward with a “broadband plan” that aims to speed up connections, reduce costs and increase access to the Internet, especially in rural areas.
The comparison between South Korea and the United States is not perfectly instructive, especially since “we probably won’t ever be South Korea,” said Robert Faris, research director at Harvard University’s Berkman Center for Internet & Society.
“The whole political and social climate is so different, the geography is different, the history is so different,” he said. “It’s all pretty different.”
With those caveats in mind, here are the five potential reasons U.S. Internet speeds are slower and more expensive than those in South Korea. This list was gleaned from interviews with broadband experts and from policy papers:
Countries with fast, cheap Internet connections tend to have more competition.
In the U.S., competition among companies that provide broadband connections is relatively slim. Most people choose between a cable company and a telephone company when they sign up for Internet service.
In other countries, including South Korea, the choices are more varied.
While there isn’t good data on how many broadband carriers the average consumer has access to, “I think we can infer that South Korea has more [competition in broadband] than the United States,” Faris said. “In fact, most countries have more than the United States.”
Some academics, including Yochai Benkler, co-director of the Berkman Center, have criticized the U.S. government’s broadband plan as not doing enough to create the kind of competition that is present in other countries.
In a New York Times editorial, Benkler says competition will reduce costs for broadband consumers.
“Without a major policy shift to increase competition, broadband service in the United States will continue to lag far behind the rest of the developed world,” he writes.
Culture and politics
There are stark cultural differences between hyper-connected Korea, where more than 94 percent of people have high-speed connections, according to the OECD, and the United States, where only about 65 percent of people are plugged into broadband, according to an FCC survey.
The South Korean government has encouraged its citizens to get computers and to hook up to high-speed Internet connections by subsidizing the price of connections for low-income and traditionally unconnected people.
One program, for example, hooked up housewives with broadband and taught them how to make use of the Web in their everyday lives.
Parents in Korea, who tend to place high value on education, see such connections as necessities for their children’s educations, said Rob Atkinson, president of the Information Technology & Innovation Foundation.
These cultural differences mean Korea has a more insatiable demand for fast Internet connections, he said. That demand, in turn, encourages telecommunications companies to provide those connections.
Faris, of the Berkman Center, said no one society has a stronger appetite for Internet connectivity than another. Korea’s government simply has whetted that appetite, and provided the incentives to make high-speed connections accessible to a large segment of society.
Political culture has more to do with it, he said.
“The United States is a more litigious culture than others, and the power of the FCC [Federal Communications Commission] to regulate is not as strong here as it is in other countries,” which means its less likely that the U.S. will pass policies to promote the growth of ultra-fast broadband.
Open versus closed networks
There is vigorous debate in the telecommunications world about the role “open networks” have in creating fast, cheap Internet connections.
The idea behind an “open” system is essentially that, for a fee, broadband providers must share the cables that carry Internet signals into people’s homes.
Companies that build those lines typically oppose this sharing. A number of governments, including South Korea and Japan and several European countries, have experimented with or embraced infrastructure-sharing as a way to get new companies to compete in the broadband market.
The U.S. does not require broadband providers to share their lines, and some experts cite Korea’s relative openness as one reason the Internet there is so much faster and cheaper than it is here.
The most important thing is that countries create a way for companies to enter the broadband market without having to pay for huge amounts of infrastructure, said Faris.
South Korea, with more than 1,200 people per square mile, is a lot denser than the United States, where 88 people live in the same amount of space, and where rural areas and suburbs are large.
The result for broadband? It costs less to set up Internet infrastructure in a tightly populated place filled with high-rise-apartments, such as South Korea, than it does in the United States, where rural homes can be great distances apart.
In both countries, copper wires tend to carry broadband signals from fiber optic cables and into the home. Data can travel fast on copper wire, but it slows down the farther it goes.
In South Korea, that’s usually just from the base of an apartment building to a particular unit. In the U.S., copper wire may have to link a home with a fiber optic cable that’s a mile away.
Korea had a plan … a decade ago
In the 1990s, South Korea set a priority that it would be a highly connected country with a high degree of Internet literacy.
“They made this a priority 10 years ago and they’ve really executed on it,” said Atkinson, from ITIF, the Internet policy think tank.
The country is still four to five years ahead of the U.S. when it comes to broadband policy, even as the United States tries to catch up, said Taylor Reynolds, an economist at OECD.
“Korea has long been a leader in broadband and in very fast broadband,” he said. “And, in fact, the technology that Korea has used for probably the past four to five years is VDSL, and that’s a technology that’s now being put in by AT&T” in the United States.
Meanwhile, Korea is abandoning that technology in favor of the next big thing, Reynolds said. That likely involves bringing super-fast fiber optic cables straight into homes. And, according a recent report by the Berkman Center, that could make South Korean Internet 10 times faster than it is now.
Faris said Korea’s clear-cut plan helped lead to its faster broadband speeds.
“A big difference is that Korea made a decisive move to expand Internet in the country,” he said. “They said we want to be very good at connecting to the Internet. A lot of government money was thrown at it …
“The U.S. has taken a fairly hands-off approach to the sector. They’ve left it to the private sector. There’s been some money put into it, but not that much, on a per capita basis. We just haven’t taken it that seriously.”
Who said this thing about infant industries needing protection?
I would think that South Korea needs “protection” from the US after all it was poorer than the Philippines at the outset – looks like all it needed was …. competition.
Here’s some more, while Korea’s SMEs are in photovoltaic systems and nanotech – cottage industry pa rin tayo…. cute ano?
Excuses, Excuses, and More Excuses
Korea was highly protectionist of its own economic environment. So was the Philippines – still is.
Korea had a government which supported its own government-controlled corporations, not sell them to the private sector. The Philippines had to sell off its corporations because they were inefficient – Pinoys weren’t paying taxes, and excpected public services – then wala ng revenue pinagnakaawan pa – they were a frakking shame. If the Philippine GOCC was run as efficient as the Korean GOCC then it would be a waste.
Korea had high-tarrifs on imports which could directly compete with its own local industries. Philippineas had high tariffs on imports which could directly compete with its own local industries, TOO.
Korea invested heavily in education, which paid off. Tough luck, Filipinos don’t vote for politicans who support legislation of that nature – mga ignorante kasi.
Korea then opened up its economy when it was ready on the world stage. That’s crap. How can you just “open up” when their constitution, allowed foreign ownership of land, even BEFORE they “opened up”.
The Philippine government sold every government-controlled corporation to the private sector. Now you complain of high water and electricity prices. But LIMITED it to FILIPINO corporations – FOREIGN corporations could have provided a better deal – we will never know, because we kept them out.
The Philippines was highly lax and liberal in foreign trade. Not really,for example, importation of galvanized iron – the most common material used as roofing by the poorer sectors.
Galvanizers complain of tariff
distortion, unfair competition
BY IRMA ISIP
Steel galvanizers said government’s plan to lift the import duty on steel raw materials due to supply problems of the local manufacturer would also correct the distortion prevailing in the market.
Senior Trade Undersecretary Thomas G. Aquino at the weekend said the technical level inter-agency committee on related matters will tackle a petition of downstream steel players to remove the 7-percent tariff protection for hot rolled coils (HRC) and cold rolled coils (CRC) following the inability of Global Steel Philippines Inc. to supply its customers due to labor problems, power interruption and non-payment of real property tax.
The Philippines opened up its markets too early – Is a myth. Korea opened up, and it developed. It did not develop first then opened the market. Markets are created every day – one market is up one day, down the other – either open up and get on the gravy train – or miss out, simple as that.
The Philippines had too much foreign debt which of course just went into the pockets of corrupt politicians. If I believe that foreign debt brouhahaha, the US will be so poor right now – it owes TRILLIONS OF DOLLARS. 🙂
The Philippines never invested much in long-term solutions and left its budding engineering graduates to rot high and dry. Well, Filipino voters chose to vote for politicans who wre myopic, you get the government you deserve. Foreign companies could have provided for solutions and employment for budding engineering graduates instead of being wasted in Filipino corporations that treat people like dirt.
In short, you guys are suggesting we make the same mistakes again. Definition of insanity: Doing the same thing over and over again and expecting different results. Sorry, economic liberalization is not the answer contrary to factual events – Actually, the instanity is yours, half a decade of protectionism – same tired policy that has factual results – kulelat ang Pilipinas, angat ang Korea. That’s what insanity does to you – you never notice that YOU already are in a protectionist environment and are showing the results of such environment. Low tariff rates without open FDI policy = kulelat. Low tariff rates WITH open FDI policy = angat.
Apparently, the Philippines… and Filipinos remain… clueless and would rather remain protected as infants forever.
Infants forever? – that’s so effin retarded.
Solution? Tanungin mo sarili mo how can you remove the protectionism? Ano pa nga ba eh di change the constitution, di ba? How?
Eh di based sa procedures ng constitution.
And if you want to go faster, vote for a candidate who supports removing the protectionist clauses in the constitution and allows foreigners to own land on which they will put their business office and residence – GO GORDON.
To the protectionists and the Noynoyistas and Villaristas.. this one’s for you –
Let the new Filipinos’ voices ring throughout the land.. to the beat of APL
Thank goodness APL landed overseas, if he were in the Philippines – di papansinin yan dahil hindi tisoy, he wouldn’t even be discovered.
I still think the Jeepney needs an upgrade, like the Land Rover or do we need the Koreans to do it for us? 😉