Re-Imagining Leadership in the Age of Disruption with Professor Richard H.K. Vietor
In today’s modern world, an economy’s development is being measured by countless indicators. Should a country’s development be based on its appearance? Do average citizens perceive a developed country as a nation of sky-high buildings and paved roads? Does political warfare hinder a country’s development? How can one even tell how developed a country really is?
Last August 7–8, 2017, the continuation of the conference, “Re-Imagining Leadership in the Age of Disruption”, this time with Professor Richard H.K. Vietor, took place at the Makati Shangri-La Hotel.
Professor Vietor is Baker Foundation Professor of Business Administration at the Harvard Business School. He teaches courses on the international political economy. Before coming to the Business School in 1978, Professor Vietor held faculty appointments at Virginia Polytechnic Institute and the University of Missouri at Columbia.
Professor Vietor’s research on business and government policy has been published in numerous journals and books. For his courses in business-government relations and environmental management, Professor Vietor has published more than one hundred and sixty case studies on energy policy, the regulation of natural gas, nuclear power and hazardous wastes; on strategy and deregulation in airlines, railroads, telecommunications, and financial services; and on the national development strategies of a dozen countries. He is a consultant to several corporations and to the Prime Minister of Malaysia.
Utilizing Harvard’s renowned case-study method, Professor Vietor discussed a total of six case studies (four of which he wrote himself) on various countries, namely: Singapore, China, Colombia, Saudi Arabia, the Philippines, and the United States of America.
Before proceeding, Professor Vietor shared how each country will be examined: context, institutions, framework for development and strategy, and understanding the country’s level of competitiveness on a global scale. He sees this approach as “looking into the beauty of numbers” — you’d be considered an A+ student if you went the extra mile to examine the empirical material of theories and exhibits.
Given the limited time, the conference was divided into two days. The first day’s discussions focused on Singapore, China, and Colombia, while the second day focused on Saudi Arabia, the Philippines, and the United States of America. The advantage in discussing these specific countries was that each differed in economic standing. These differences helped in understanding the factors that influenced their current standing today.
Also known as “The Lion City”, Singapore is located at the southern tip of West Malaysia. It is renowned for its growth and transformation into a country of world-class standards. Historically, 1965 was the year of new beginnings for Singapore. With the country’s separation from the Federation of Malaya, Lee Kuan Yew took the challenge of leading a small country, with hardly any resources.
During the conference, 50 years’ worth of Singapore’s strategies and actions were examined. During the first years of the country’s independence, it implemented tight monetary and fiscal policies. Aside from this, the Singaporean government invited multinational companies (MNC) to invest in their manufacturing sector, encouraged foreign direct investments (FDI), and subsequently, lowered trade barriers. Secondly, the country focused on infrastructure development, particularly housing, healthcare, education, and transportation. With all this in mind, institutions were established to focus on the fulfillment of this strategy. As a result, the country has a GDP worth USD 297 billion, has an efficient transportation system, and has one of the best-educated populations.
As glorious as it became, the country has its own challenges to face. Before the first session ended, the Professor left us to ponder on the current issues Singapore has yet to deal with: aging population, lack of job opportunities, and the restriction of foreigners from their labor force. What’s the next step for this small country of great strengths?
“The Red Dragon”, located in East Asia, is known as the restless nation fighting in a superpower showdown against the United States of America. With China, we evaluated present conditions and necessary actions they plan to take. With current President Xi Jinping in power, the country is recognized for manufacturing and export, high productivity, and growth in real wages from foreign investments and technology.
At present, China faces problems like severe income inequality, corruption, excess manufacturing capacity, environmental problems (pollution), demographic problems (as a result of the one child policy), and increasing financial debt.
What should President Xi Jinping do? As part of his strategy, he will look into the following actions: enticing foreign investments, particularly the western side of the world, to address the issue of income inequality; the roll out of an anti-corruption campaign; implementation and usage of renewable forms of energy; strengthening agricultural systems already present; improving education; and privatization of state-owned enterprises.
As good as the strategy sounds, will the president be able to prove that he can solve the nation’s problems? Will this large country be able to control the power it brings about?
Colombia, “The Gateway to South America”, is located in the northwest of South America, with territories in Central America. Discussing Colombia’s case right after two countries known to have developed economies has provided us with quite a sudden outlook change with regard to evaluating a nation’s efforts towards development.
The discussion began by looking into the country’s strategy by comparing former presidents Andres Pastrana Arango and Alvaro Uribe Velez strategies with current president Juan Manuel Santos’. Strategies associated with the two former presidents involved an export-led growth approach, lowered tariffs, and keeping an open outlook towards foreign direct investments (FDI). While with current president Santos, some key points involve free trade (FTA), privatization, and trade unions.
Another topic highlighted during the discussion was the presence of the Revolutionary Armed Forces of Colombia (FARC), which had caused conflict in the country for 52 years. How did this affect Colombia’s economy? This restless conflict led to either injury or death of over hundreds and thousands of innocent citizens, thus losing potential investment. Additionally, rural areas where most FARC members were situated were left underdeveloped.
President Santos played an important role in ending this battle with FARC by negotiating and developing a “secret” relationship in the hopes of achieving peace. President Santos once stated in October 2012, “I will keep seeking peace until the last minute of my term.”
The Kingdom of Saudi Arabia, “The Land of the Two Holy Mosques”, is located in Western Asia and is known for being the world’s largest exporter of petroleum products. The country relies heavily on the oil industry, which contributes to almost half of its GDP.
Professor Vietor opened the discussion of this case by asking a question — “Is the abundance of oil in Saudi Arabia a blessing or a curse?”
As a blessing, oil brought upon great economic development — access to basic utilities (water and electricity), subsidization in health care, education and training of constituents, and certain tax exemptions. Even so, the curse of the abundance of oil has afflicted the kingdom with what is known as the “Dutch Disease” (causal relationship between the increase in the economic development of a specific sector and a decline in other sectors). It also resulted in the country becoming overly dependent on the oil industry. Because of this, former King Abdullah advocated to push for modernization and development in the less-dependent approach.
This resulted to “Saudi Vision 2030”, which aims to reduce the nation’s dependence on oil by shifting the focus to other points of development such as training for human capital development, promotion of small and medium enterprises, development in sourcing renewable energy, and attracting FDI’s towards the tourism sector.
At present, Saudi’s new leader, King Salman, supports this approach, but is faced with the challenge of religious conservatives who do not approve of modernization as part of development.
However hopeful this plan sounds, other issues the nation needs to attend to would involve education (in line with complications with religious protests and beliefs), high youth unemployment, and finally, the execution of this vision.
“The Pearl of the Orient”, the country we call home, is located in Southeast Asia. In terms of numbers — Real GDP (highest in Asia), household and government consumption, inflation rate, and unemployment rate — our country’s values contradict each other, making the Philippines a somewhat confused country in terms of development.
Relatively positive economic indicators show that the country has so much more room to grow. During the discussion, the class looked into current President Rodrigo Duterte’s strategy, the 10 point Socio-economic Agenda. This strategy includes continuation and maintenance of macroeconomic policies; instituting progressive tax reform; increasing competitiveness and ease of doing business; accelerating annual infrastructure; promotion of rural and value chain development; ensuring security of land tenure (in order to encourage investment); investment in human capital development; promotion of science, technology, and creative arts (inclusive development); improvement of social protection programs; and implementation of responsible parenthood.
However detailed and promising his agenda may be, the reliability of this is vastly affected due to his war on drugs involving alleged extrajudicial killings. Furthermore, the country continues to struggle with both the prevalence of corruption in the government and the lack of major infrastructure, which need to be addressed immediately.
With such a long, promising list of programs endeavored by President Duterte, Professor Vietor could not help but push forward with the discussion by asking which four of the 10 points should be considered top priority? The top four were education, infrastructure, free trade/ ease of doing business, and peace and order.
With high hopes, will our country be able to make the most of the great potential it has?
United States of America
United States of America, “The Land of the Brave”, is known to be the largest economy and first-ruling superpower in the world. With strategies focusing on education, innovation, and research and development in the technology and science track, the country is not quite as it appears to be.
The U.S.A. has been known as the place where dreams come true because of job opportunities, advanced infrastructure, and booming business opportunities. On the contrary, the new administration under President Donald Trump is currently facing challenges and the truth can only be hidden for so long.
As discussed during the conference, the high cost of importation of goods and services has affected its current account. Additionally, there had been an increase in the country’s debt due to high consumption rates by both citizens and government. Will President Donald Trump be able to address these issues and retain the power the U.S.A. has? Will one wrong move lead to the downfall of this nation?
I have learned a lot from the two-day conference with Professor Richard Vietor. Through the case study discussions, I realized how each country differs from the other — each with its own history to tell, its own strengths and weaknesses, and endless challenges to face. And since each country is unique, it also has its own unique strategy for development. There’s no such thing as a cookie-cut plan for a country to prosper.
I could not explain how grateful I am for having been able to take part in the “Re-imagining Leadership in the Age of Disruption” conference. Not only was I able learn from Harvard Business School’s Professor Vietor and his detailed lectures and keynotes, I also had the opportunity to be among the country’s top leaders, who made the conference more intellectually stimulating with their presence and participation.
About the Author:
Kayleen Cheng graduated with honors from De La Salle University-Manila with a bachelor’s degree in Development Studies. Currently she is working as the club administrator of the Harvard Business School Club of the Philippines, where she coordinates among the alumni.