Thomas Fuchs
EVERY so often someone asks me: “What’s your favorite country, other than your own?”
I’ve always had the same answer: Taiwan. “Taiwan? Why Taiwan?” people ask.
Very simple: Because Taiwan is a barren rock in a typhoon-laden sea with
no natural resources to live off of — it even has to import sand and
gravel from China for construction — yet it has the fourth-largest
financial reserves in the world. Because rather than digging in the
ground and mining whatever comes up, Taiwan has mined its 23 million
people, their talent, energy and intelligence — men and women. I always
tell my friends in Taiwan: “You’re the luckiest people in the world. How
did you get so lucky? You have no oil,
no iron ore, no forests, no diamonds, no gold, just a few small
deposits of coal and natural gas — and because of that you developed the
habits and culture of honing your people’s skills, which turns out to
be the most valuable and only truly renewable resource in the world
today. How did you get so lucky?”
That, at least, was my gut instinct. But now we have proof.
A team from the Organization for Economic Cooperation and Development,
or O.E.C.D., has just come out with a fascinating little study mapping
the correlation between performance on the Program for International
Student Assessment, or PISA, exam — which every two years tests math,
science and reading comprehension skills of 15-year-olds in 65 countries
— and the total earnings on natural resources as a percentage of G.D.P.
for each participating country. In short, how well do your high school
kids do on math compared with how much oil you pump or how many diamonds
you dig?
The results indicated that there was a “a significant negative
relationship between the money countries extract from national resources
and the knowledge and skills of their high school population,” said
Andreas Schleicher, who oversees the PISA exams for the O.E.C.D. “This
is a global pattern that holds across 65 countries that took part in the
latest PISA assessment.” Oil and PISA don’t mix. (See the data map at: http://www.oecd.org/dataoecd/43/9/49881940.pdf.)
As the Bible notes, added Schleicher, “Moses arduously led the Jews for
40 years through the desert — just to bring them to the only country in
the Middle East that had no oil. But Moses may have gotten it right,
after all. Today, Israel has one of the most innovative economies, and
its population enjoys a standard of living most of the oil-rich
countries in the region are not able to offer.”
So hold the oil, and pass the books. According to Schleicher, in the
latest PISA results, students in Singapore, Finland, South Korea, Hong
Kong and Japan stand out as having high PISA scores and few natural
resources, while Qatar and Kazakhstan stand out as having the highest
oil rents and the lowest PISA scores. (Saudi Arabia, Kuwait, Oman,
Algeria, Bahrain, Iran and Syria stood out the same way in a similar
2007 Trends in International Mathematics and Science Study, or Timss,
test, while, interestingly, students from Lebanon, Jordan and Turkey —
also Middle East states with few natural resources — scored better.)
Also lagging in recent PISA scores, though, were students in many of the
resource-rich countries of Latin America, like Brazil, Mexico and
Argentina. Africa was not tested. Canada, Australia and Norway, also
countries with high levels of natural resources, still score well on
PISA, in large part, argues Schleicher, because all three countries have
established deliberate policies of saving and investing these resource
rents, and not just consuming them.
Add it all up and the numbers say that if you really want to know how a
country is going to do in the 21st century, don’t count its oil reserves
or gold mines, count its highly effective teachers, involved parents
and committed students. “Today’s learning outcomes at school,” says
Schleicher, “are a powerful predictor for the wealth and social outcomes
that countries will reap in the long run.”
Economists have long known about “Dutch disease,” which happens when a
country becomes so dependent on exporting natural resources that its
currency soars in value and, as a result, its domestic manufacturing
gets crushed as cheap imports flood in and exports become too expensive.
What the PISA team is revealing is a related disease: societies that
get addicted to their natural resources seem to develop parents and
young people who lose some of the instincts, habits and incentives for
doing homework and honing skills.
By, contrast, says Schleicher, “in countries with little in the way of
natural resources — Finland, Singapore or Japan — education has strong
outcomes and a high status, at least in part because the public at large
has understood that the country must live by its knowledge and skills
and that these depend on the quality of education. ... Every parent and
child in these countries knows that skills will decide the life chances
of the child and nothing else is going to rescue them, so they build a
whole culture and education system around it.”
Or as my Indian-American friend K. R. Sridhar, the founder of the
Silicon Valley fuel-cell company Bloom Energy, likes to say, “When you
don’t have resources, you become resourceful.”
That’s why the foreign countries with the most companies listed on the
Nasdaq are Israel, China/Hong Kong, Taiwan, India, South Korea and
Singapore — none of which can live off natural resources.
But there is an important message for the industrialized world in this
study, too. In these difficult economic times, it is tempting to
buttress our own standards of living today by incurring even greater
financial liabilities for the future. To be sure, there is a role for
stimulus in a prolonged recession, but “the only sustainable way is to
grow our way out by giving more people the knowledge and skills to
compete, collaborate and connect in a way that drives our countries
forward,” argues Schleicher.
In sum, says Schleicher, “knowledge and skills have become the global
currency of 21st-century economies, but there is no central bank that
prints this currency. Everyone has to decide on their own how much they
will print.” Sure, it’s great to have oil, gas and diamonds; they can
buy jobs. But they’ll weaken your society in the long run unless they’re
used to build schools and a culture of lifelong learning. “The thing
that will keep you moving forward,” says Schleicher, is always “what you
bring to the table yourself.”
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