Hawai'i represents what the ADB is fighting for

The dawn of the new millennium brings both excitement and apprehension to our Aloha State.

Visitors such as Chicago residents Renee Fields (left), Kathy Harding and Terri Redden often take Hawai'i's beauty home with them in the form of photographs. Yet, as the ADB meeting suggests, Hawai'i can offer much more than packaged tourism and a momentary photo-op. Advertiser library photo • Feb. 13, 2001

We welcome the annual meeting of the Asian Development Bank. But just as we start to realize the decades-long dream of making Hawai'i the "Geneva of the Pacific," we are troubled by allegations that ADB programs exacerbate poverty and economic inequality and fail to lift up Asia's disenfranchised underclass.

For the Asian Development Bank, Hawai'i offers more than nice weather and a beautiful venue. We offer a successful model of political-economic development virtually unmatched anywhere in the Asia-Pacific region. Hawai'i has avoided the gross income inequalities associated with the Philippines, Indonesia and Thailand. It has been able to achieve its levels of economic growth without the limits on political expression associated with Korea, Singapore, China or Taiwan, and without the second-class citizenship imposed for almost a century on the Chinese people of Hong Kong.

Sustained growth, equitable income distribution, social mobility and racial equality, all without a legacy of political repression, are the fundamental ideals of the Asian Development Bank. However, these ideals have remained elusive throughout the region, except for in Hawai'i.

Hawai'i also has realized American ideals to a greater degree than most of the United States. At the dawn of the 21st century, we still read about race riots in Cincinnati and recent polls finding that one in four Americans hold "very negative attitudes" toward Americans of Chinese ancestry. While problems of poverty remain in Hawai'i, they are nowhere near the orders of magnitude of intractable inner-city poverty that plagues most major American cities. Only in Hawai'i is multi-ethnic representation pervasive throughout all levels of business, government, labor and academia.

The socio-economic ideals that Hawai'i has achieved over the past half century have resulted from democratic representation, not only in the political sense, but in the economic arena as well. Local capital accumulation, reinvestment and entrepreneurialism across racial and socio-economic lines have fostered the growth of local businesses, a vibrant middle class and key decision-makers coming from all sectors of our community. However, with increasing opportunities to invest, work and live outside of the state, we increasingly see the financial and human capital that was so critical in building the community we cherish leaving Hawai'i for higher short-term returns and compensation.

We watch with pride and hope as our sons and daughters of Hawai'i excel educationally and professionally in national and international arenas. But we worry how much longer it will be before they and their children no longer consider Hawai'i to be "home."

The uncertainties we face today are real, with no easy solutions. But we are not without hope. In searching for a coherent vision for our future, we can find hope and inspiration by reconnecting with our past.

If there is a lesson to be learned from the successful economic development models of Hawai'i and Asia, it is the importance of economic diversification, local capital accumulation and reinvestment.

Economists and portfolio managers emphasize theories of "efficient markets," the need to maximize portfolio returns in the short term and the "economic rationality" of investing our capital outside of Hawai'i. However, such portfolio and asset allocation models fail to reflect the broader economic impact that local reinvestment has on longer-term structural economic development. With their emphasis on the "free mobility of capital," traditional economic theories fail to consider the immobility of community, culture and climate — Hawai'i's most valuable assets.

Where would Hawai'i be today if we had strictly adhered to the principles of "comparative advantage," pouring all of our resources into pineapple and sugar cane without diversification into tourism and services? And where will Hawai'i be if we fail to further diversify our economy into high technology and higher value-added industries?

Hawai'i today does not lack investment capital. What we lack is the vision and commitment to invest and re-invest locally in our own future. The capital needs of Hawai'i's emerging growth companies are small relative to the local financial resources potentially available. In addition to financial capital, Hawai'i is rich in potential intellectual and human capital. For decades, hundreds of Hawai'i's children have excelled at top Mainland universities. The challenge facing Hawai'i's leaders is to develop and implement compelling vehicles and strategies to attract existing resources back home.

Structural transformation is never easy. However, Hawai'i's successful transformation from agriculture to tourism proves that it is possible. Moreover, the successes of Hawai'i's prior generations can serve as an inspiration to us today.

We have an obligation to perpetuate the often elusive but precious gifts of economic opportunity, social mobility and racial harmony that our parents and grandparents struggled so hard to pass on to us.

What is at stake is much more than provincial pride or sentimentality. What is at stake is proving to the world's skeptics that socioeconomic ideals have been, and can be achieved. We must work together, for there is much to gain.

If we fail, there is far too much for all of us to lose.

Jeffrey Au is managing director of PacifiCap Group; Joseph F. Blanco, technology development special adviser, Office of the Governor; Tareq Hoque, resident, SPIRENT Communications' ad-tech division; Randolph Moore, president/CEO, Kane'ohe Ranch; Anthony Rutledge, president/CEO, Unity House; and Lily Yao is a community and business leader.