MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | FIDEL V. RAMOS
PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | FIDEL V. RAMOS
Regional Vitality in the 21st Century
April 6-10, 2001 — Tokyo, Japan
His Excellency Fidel V. Ramos
Introductory Let me begin by thanking the Pacific Basin Economic Council (PBEC) for this renewed opportunity to discuss with you the strategic issues facing the Asia-Pacific region in the first decades of the 21st century. This time, I represent our new president, Mrs. Gloria Macapagal-Arroyo - who asked me expressly to convey to everyone of you her warmest greetings. Scanning the regional environment, I note three strategic challenges that confront our political, economic and cultural leaders. The first challenge is economic - and I see that as mainly coping with globalization. The second is political - and that has to so with making democracy work in our transitional societies. In many countries, people are increasingly disillusioned with systems of governance and economic institutions they regard as corrupt, inefficient and ineffective. The third challenge is that of ensuring regional stability and cooperation. Our countries need peace and security if they are to deal successfully with their internal problems of economic growth, social justice and political freedom. In real life, these three challenges overlap. They are linked organically; and dealing successfully with one problem makes dealing with the others much easier. I. Coping with globalization Let me start with the problem of coping with the forces of globalization. "Globalization" is shorthand for the way trade, investment, industry and technology transfer are spreading around the world in a rapid and unpredictable pattern, transcending political frontiers and national cultures. Over this past generation, east Asia has been among the biggest beneficiaries of this open trading system. The so-called east Asian "economic miracle" was founded on export-led development strategies that tapped into rich western markets. But neither will we easily forget that our home region was first to experience the downside of globalization in the economic crisis that started in mid-1997. On balance, globalization can be more beneficial than disadvantageous to the developing country whose leadership is intelligent enough to blunt and minimize its brutal impact on vulnerable communities and workpeople. The east Asian crisis demonstrated forcefully to all our countries the dangers inherent in the lack of transparency in our financial systems - the absence of level playing fields in our economies - and the corruption of our politics. And the crisis is forcing our economies to become more efficient, more productive, more competitive - just as it is forcing national politics to become more transparent, more accountable and more democratic. From now on, effective states and efficient markets should be the role models of all our endeavors. The connection between the two is plain. Only in a state with clear and secure individual rights are there strong incentives for people to produce, invest, and engage in mutually advantageous economic interaction. And the rights of property and the security of contracts - on which markets are founded - only an effective state can guarantee. We also need the state to provide the requisite social protection for those groups in the national community whom globalization puts at risk. And we need effective states to deliver the social services - such as primary health care and basic education - that enable ordinary people to pursue the fullest possibilities of their lives by providing them the opportunities to improve themselves. Our end effort must be to make our countries competitive playeres in the economy of the 21st century. We must ensure our countries end up on the right side of the emerging digital divide. Our need to form regional blocs What are the smaller economies to do in a world where scale has become an increasingly dominant factor in business? Obviously, the smaller economies must find their niches; focus on their core competencies; and create scale for themselves by forming regional blocs. Throughout the world, regionalism continues. The bush administration apparently proposes to expand the north american free trade area (nafta) to south america in a grand "free trade areas of the americas." Meanwhile, the european union (e.u.) - where regionalism is most advanced - is adding a combined european armed forces to its political attributes. In southeast Asia, we already know, ASEAN is set to actualize its free-trade area (AFTA) by January 2002 for its founding members - Indonesia, Malaysia, Singapore, the Philippines, and Thailand. (Brunei, Cambodia, Laos, Myanmar, and Vietnam will have between 2006 and 2010 to follow suit.) And even while it is completing this first phase of afta, asean is also reaching out to the northeast Asian powers - China, Japan and Korea. The alternative to east Asian regional unity and integration is to become marginalized - in the face of the moves of Europe and North America to consolidate powerful trading and negotiating blocs. Only by combining into one closely-knit east Asian grouping can "ASEAN plus three" generate enough leverage to enforce reciprocity on their trading partners in nafta and in the e.u. Only by standing together can east Asia persuade the rich countries to dismantle the export subsidies they still give their farmers, and to allow freer market access to such labor-intensive exports as textiles and garments coming from the developing countries. Only by speaking with one voice in global councils can east Asia win more freedom of movement for contract workers, students, and migrants from the developing countries. An east Asian economic bloc can also speak authoritatively for all the poor countries on the question of intellectual property rights, as well as environmental, labor, and human rights issues in the World Trade Organization (WTO). Now let me turn to the challenge of making representative systems work in our transitional democracies. II. Making democracy work Over these past 15 years, South Korea, Taiwan, the Philippines, Thailand and Indonesia have all emerged from strongman rule. Unfortunately, replacing authoritarian regimes with representative systems has been the relatively easier part. Everywhere in the region, we are coming to realize that rule of the people does not necessarily mean good government. While democracy's trappings - elections, parliaments, a critical press, freedom of expression and religion, independent judiciaries, etc. - are easy to assemble, making them work properly for ordinary people requires a long learning process, for which leaders often have little patience. Populist politicians competing to win votes in an electoral campaign with extravagant promises can, once elected, so debauch the public treasury and corrupt the bureaucracy that the state becomes reduced to near bankruptcy, as had been the case in some countries, including the philippines during the short-lived term of former president estrada who was ousted last january 20th by a non-violent people power uprising. Then there is the even more basic problem of reconciling the libertarian democratic ideology with a culture where authority still rests on the personal power exercised by dominant personalities which prevents the transformation of many developing countries into full-fledged, mature democracies. Democracy develops best where it develops incrementally but steadily - by consistent reforms in the political and civic landscape instigated by economic change. In the western world, electorates were enfranchised gradually - their participation by gender, wealth and literacy. It took even Britain almost 150 years to develop a middle-class parliament. By contrast, the advent of democracy in the third world has been a telescoped revolution. In relative time, east Asian representative politics is still close to where britain was a century ago when "rotten" boroughs were bought and sold, and the duchess of devonshire exchanged kisses for votes. Middle-class revolts against mismanagement in government Where democratic institutions still are weak, democracy must depend in the character and competence of elected leaders. Yet the democratic vote does not always elect leaders who can respond competently to the urgencies of the moment. Electing good leaders is never easy - even for mature democracies, but electing good rulers is particularly difficult in poor countries, where mass electorates all to often choose their leaders on the baiss of their popularity and ability to buy votes. The election of movie actors and actresses, television personalities, and star-athletes to high office is part of our contemporary experience in the Philippines. In Thailand, rural constituencies organized by patronage machines still easily swamp the better-educated and therefore more independent bangkok electorate. No wonder then that, everywhere in our region, big-city people awakening to the possibilities of modernization are frustrated with democracy's inability to cut down corruption; produce good government and inspire public officials to excel. Let me make clear that I do not share this pessimism about democracy - which seems widespread in east Asia. Democracy does not lend itself to easy conversions. It always involves long-maturing internal processes within nations: in their economics, their politics and, in the end, the collective national spirit and state of mind. And nobody has a magin formula for turning authoritarian regimes into democracies overnight. In most of our countries, we have already built up the bare bones of democracy. We can change our rulers without too much violence and bloodshed. And procedural democracy of this kind can lead to genuine people-empowered democracy. Three bottom-line requirements My own bottom-line requirements for a truly functioning democracy are three; free elections, free media, and free markets. Free elections guarantee there is open competition for political power. And every successful election helps consolidate democracy. Free media help ensure people are able to choose their rulers wisely. And free markets - by nurturing civil society - stimulate popular demands for the rule of law and the protection of human rights. I think it is upon specifics like these - on the practical and even measurable concepts and institutions that underpin the working democracy - that influential groupings like you of p.b.e.c. should focus. And these concepts should include transparency, fairness and accountability of governance - a level playing field for enterprise - as well as public spirit and civic responsibility on the part of citizens. If we work together to promote these relatively simple concepts in our national societies, then our countries will have stability, and our people will have well-being. III. Security and stability in the Asia-Pacific Regional security I see as our third great challenge in the first decades of this new century. If our economies are to grow and democratic institutions are to take hold, we will need a stable regional environment. In southeast Asia, indonesia's internal problems could prevent it from acting as the linchpin of ASEAN security. Instability in that archipelago - which straddles the strategic sealanes between the indian ocean and the western Pacific - could become endemic if democracy produces only a succession of weak civilian governments in Jakarta. In northeast Asia, Japan's failure to emerge from its recession is prolonging east Asia's economic recovery. Fortunately, Pyongyang's efforts to repair its relationships with Seoul and Washington has mitigated the crisis set off by North Korea's efforts to develop nuclear-missile capability. While aid has been offered to North Korea's faltering economy, Pyongyang's missile threat has also pushed South Korea to insist on higher limits for the range of its missile systems in its negotiations with Washington. And Tokyo has agreed to an American proposal to set up a theater-missile-defense system to protect its forces deployed in northeast Asia. Ultimately, east Asia's future will depend on how Japan, the United States and China struture their relationships. These three powers have been the principal props of east Asia's balance of power since the end of the cold war. The triangular relationships still is the main issue In strategic terms, no stable counterweight to China's growing economic and military power is possible without the American presence. So that, ultimately, it is the U.S.-Japan alliance that underpins Asia-Pacific security. As a sdie-benefit, the alliance also provides China and east Asia assurance and comfort that Japan will remain a civilian - and not a political and military - power. Asean generally welcomes the forward deployment of U.S. ready-response forces as guarantees of America's commitment towards enduring Asia-Pacific security and stability. Taiwan is probably the only issue that can ignite a military conflict between Beijing and Washington. Re-unification is a key element in Chinese nation-building. Where, during the 1970s, they were allies against the Soviet Union, the United States and China now see themselves as potential adversaries. And U.S. military attention is shifting from its historical focus on Europe toward east Asia as the most likely arena of future military competition. Initially, the Americans themselves have deployed more attack submarines to Asian waters, to patrol the long-distance trade routes between Baghdad and Tokyo. At Pentagon war games, scenarios now deal increasingly with potential Asian conflicts. Recognizing their country's technological inferiority, Chinese planners emphasize strategic surprise. They apparently envision preemptive attacks - highly-accurate concentrations of firepower launched in great secrecy by highly-mobile forces - that would paralyze taiwan's counterstrike capability before american forces could react. Our primary concern should be how the island is reunited with the mainland - because any conlfict on Taiwan straits would be life-threatening to the whole region. I myself am optimistic that recent political changes in Taipei could speed up the necessary rapprochement between China and its estranged island. Secure in his credentials as a Taiwanese nationalist, president Chen Shui-bian can carry popular opinion with him in any reasonable arrangement with Beijing. Since early January, he has allowed residents of the nationalist offshore islands of Quemoy and Matsu to travel to the Fujian coast. If no crisis intervenes, this symbolic "mini-link" could lead to wider contacts. A political solution - probably years away - is likely to have a federalist framework similar to that Beijing has arranged with both Hong Kong and Macau. How will China exercise its regional pre-eminence? Meanwhile, China's entry into the World Trade Organization should work to deepen its economic liberalization. It will also result - unavoidably - in further loosening of the communist party's political control. Rapid growth these past 20 years has caught China's rulers in a classic dilemma. Any further deepening of economic reform is virtually impossible without some accompanying reform of the political structure - and politcal reforms have proved detrimental to Marxist-Lennist systems. Economic growth has also set off a sea-change in chinese strategic thinking. Today, China's avowed goal is to project power - beyond mainland east Asia, where its strategic authority is already widely accepted - initially into east Asia's maritime regions and ultimately into the world's oceans. Because China has been a land-power since the early 15th century, its build-up of sea - and air-power is liable to become Asia's key security issue over these next 10-15 years. Already other powers with maritime interests - like India, Japan, Indonesia, Vietnam, the Philippines, and even the city-state of Singapore - are beginning to react to what they see as a threat to their own sea lanes of communication. How China exercises its potential political and military power must concern all the countries of the Asia-Pacific - and none more so than we in southeast Asia, who lie in the direction of its historical expansion. This is why we all have a vested interest in the success of China's market experiment. We want the market system to complete the process of inducing the spontaneous democratization already going in village government; in the mass media; in the internet; and even in the national people's congress - because a pluralistic China will not spring any surprises on its neighbors. What east Asia can expect from a Bush presidency What can east aisa expect from the Bush presidency? We may expect it to counter Beijing's military threats to Taiwan more forcefully. But newly-institutionalized trade ties in the context of China's entry into the WTO should help keep relationships between beijing and washington on an even keel. The Bush administration is committed to deploying a national anti-missile defense system much bigger than the one proposed but postponed by President Clinton. But a potential controversy over this issue has been defused, at least for the time being, by technical problems. Unification of the Korean peninsula and the resumption of "normal state" status for Japan will make sustaining the U.S. military presence on a large scale difficult to justify for Washington policy makers, whether at home or in east Asia. Generally, the American forward military presence should decline, as tensions ease in northeast Asia, and as the technological revolution enables Washington to reduce it safely. Already Washington is emphasizing the political rather than the military function of its allicance structure. And, through APEC, it is assuring its charter membership in the future Asia-Pacific community. Toward an Asia-Pacific security community The idea of an Asia-Pacific security commuity is no longer a pie-in-the-sky. Even Chinese intellectuals now believe an Asia-Pacific security community is likely to emerge - because the states in the region share interests in a peaceful and stable security environment and benefit increasingly from growing economic interaction. Events in the world make clear there are no alternatives to economic integration and political solidarity. Our object should be to replace the balance of power (as the organizers of states relationships in east Asia and the Asia-Pacific) with the balance of mutual benefit. The institutional tools for achieving this ideal are already on the ground. The ASEAN region forum (ARF) for political and security discussions and the Asia-Pacific Economic Cooperation (APEC) grouping complement each other - tying together otherwise disparate states in network of common purpose. I see as the key to lasting peace in this new century the accommodation of the ambitions of the rising powers - China the foremost among them - for influence in regional affairs. Since we don't want another cold war in our part of the world, we must organize China's early and full involvement on an equitable and non-disruptive basis in the regional order. Finding a practical way of doing this will not be easy. Fortunately, we have the leisure to do so. None of the great powers faces an immediate threat; and rivalry among them has lost it ideological edge. Meanwhile, unifying forces are at work, growing economic interdependence may not guarantee peace and stability, but it does create an incentive for avoiding conflicts by raising their costs. Now that the world's center of gravity is shifting back to Asia-Pacific, its is perhaps time for our statesmen to start conceptualizing the components of a pax Pacifica. And this must be the stability - not of any single power's hegemony - but the peace of virtual equals - the product of security cooperation that comes - in the world of the prophet isaiah - from "sitting down and reasoning together." A final word about the Philippines Now that the Estrada era is over and President Gloria Macapagal-Arroyo is firmly in place as legally confirmed twice by the Philippine supreme court, economic fundamentals should begin to count once again. And they include the country's being ranked "number one" in the category of "knowledge jobs" - as indicated by the availability in the Philippines of qualified engineers; information technology workers, and competent senior managers, per the world-wdie survey of March 2000 by the U.S.-based (Connecticut) Meta Group. Politically, we Filipinos have emerged from our "calvary" more confident in our ability to govern ourselves. Our country has been cleansed by its recent constitutional ordeal and leadership crisis. I invite you to take a second look at Philippine prospects. To you all, I say: get on the ground floor of a restoration of economic growth in the Philippines - a strategic country at the gateway of east Asia which is certain to be the center of the economic action in this new century! Thank you and mabuhay (best wishes)! |
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