Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
Upon Acceptance of Honorary Doctorate from Georgetown University on the Second Distinguished Speaker Lectures on Southeast Asia

Delivered in Georgetown University, Washington D.C., April 8, 1998]

The transpacific future

IT WOULD PROBABLY SURPRISE you if I said that if it were not for the Philippines, it is very likely the United States would not be quite the country it is today.

Indeed, among the countries in Southeast Asia, the Philippines has the longest and closest associations with the United States. No other country has run the whole course from conflict, through colonialism and dependency, and finally to equality and sovereign partnership with the United States as has the Philippines.

One hundred years ago, in May 1898, Commodore George Dewey sank the Spanish fleet in Manila Bay, winning the initial victory in a string of triumphs in the “splendid little war” as one contemporary pundit described America’s fight with Spain.

While the original quarrel may have been with Spain, it was the Philippines that American troops occupied as the first and only outpost in American’s formal colonial empire in East Asia, or, as it used to be called, the Far East.

Of course, “benevolent assimilation” proclamations to the contrary, the Filipinos took exception to this arrangement. In the first place, they had not been consulted about the transfer of their real estate. In the second place, they had already declared themselves independent of Spain, and the centennial of that declaration of freedom we are celebrating this year.

The ensuing Filipino-American War was neither splendid nor little. Much was lost, especially by the Filipinos, who fought with the bitter tenacity and patriotism of all people who defend their native soil.

That war which American history books erroneously label the Philippine Insurrection, was also hard on the American conscience. If you look through the writings of that period, you will see how America debated with itself on the rights and wrongs of colonial conquest. It is to the credit of the United States that there were many Americans in high positions as well as common folk who opposed such brutal annexation.

The Philippine-U.S. relationship in the past

It is also to the credit of this country that its colonial policy had sufficient humanity and common sense to eventually win over the whole-hearted cooperation of the Filipino people whose leaders came to realize after four years of bloody fighting that national independence could be pursued in peace and friendship with the Americans.

This may be an old story today, but it is how the United States began to have a presence in East Asia, a presence that has survived to this very moment, despite the rivalries of other powers, the cataclysm of world war, the triumph of decolonization and the conflicts of the Cold War.

That presence has been maintained to protect the vital interests of the United States—interests that have grown and changed as East Asia itself has grown and changed. Today, these require that the United States not simply to be engaged with East Asia, but to be a full contributing partner and big player in the transpacific future.

Once the bitterness of their initial conflict had subsided, the Filipinos avidly accepted all that America had to offer. Hundreds of thousands of Filipinos went to work and study in the United States and thousands of Americans came to live, build and teach in the Philippines.

This friendly exchange opened our minds to one another. It shaped two generations of Filipino-American interaction. It facilitated mutual understanding to such an extent that the average American can today get along easier with Filipinos than perhaps with any other East Asian people. In short, we can, and often do, speak the same words and understand each other’s body language.

Self-rule under American guidance

During the period of U.S. colonial rule, American political, legal and social forms and norms were imported wholesale. Though the Filipino had been exposed earlier to European liberal democracy, it was the American variant that took strong root, which is why we have a presidential and not a parliamentary system of government.

It was the experience of autonomous self-rule under American guidance that made the Filipinos such staunch allies of the United States. Indeed, Filipinos were among the few subject East Asians who gallantly fought alongside their colonial sovereign during World War II, and then carried on through protracted guerrilla warfare after the fall of Bataan and Corregidor in defense of democracy.

It helped that, in 1935, the Philippines had already been promised independence from the United States after a 10-year transition period as a commonwealth. Filipinos were not about to risk losing their independence for a second time in exchange for the Japanese option of a “Greater East Asia Co-Prosperity Sphere.”

Subsequently, during the long struggle of the Cold War, the Philippines again played its role as part of the free world in the Korea and Indochina conflicts.

These were the years of what were once called the special relations” of the Philippines and the United States. Nowadays, the phrase may sound quaint, but I, for one, will always remember its deeper meaning as a unique bond forged between two peoples.

In the eighties, our “special relations” ran into trouble.

Because of the Cold War, American priorities in the Philippines came to be fixed more than ever on the military bases at Subic and Clark, which constituted a major pillar of America’s forward deployment strategy of those days. But they were also perceived as an increasingly burdensome encroachment on Philippine sovereignty by a growing number of Filipinos.

As the years went by, and as Washington seemed to support a dictatorship in the Philippines only for the sake of preserving access to these bases, many Filipinos began to question the value of a relationship which in their minds had become dominated by the military nexus.

Culture of dependence

Although I, myself, as Secretary of National Defense from 1988 to 1991, had supported a short-term extension of the military bases agreement, it now seems fair to say, in hindsight, that while the bases contributed to East Asian stability and the containment of communism, they also engendered and reinforced a culture of dependence by the Philippines on the United States that was not healthy.

In the end, Washington forsook the 14-year-old dictatorship in the Philippines, arid supported the consolidation of Philippine democracy that was restored by the bloodless People Power Revolution of 1986. By then, however, too much time had passed. In September 1991 the attempt to renew the bases agreement failed to get approval in the Philippine Senate, and the rest is history.

In hindsight, again, we can say now that the nonrenewal of these bases had the salutary effect of establishing healthier relations between our two countries. It was also timely, because the Cold War had ended, and East Asia had entered a new era where all relationships had to be reevaluated and reengineered.

Asian miracle or Asian meltdown?

In the light of today’s headlines about the East Asian financial crisis, it may be difficult to even remember that there was an Asian economic miracle before the threatened economic meltdown began.

Let us remember that most East Asian nations moved into the second half of the 20th century either as colonial dependencies or as economically backward states, often seething with internal political instability.

The sixties and seventies were grim. Gunnar Myrdal’s book Asian Drama, which came out at that time, spoke of intractable Asian poverty. America’s strategists warned of falling Asian dominoes. Southeast Asia, in particular, was called the “Cockpit of the Great Powers,” and its nations seemed impotent in the face of the most cynical external manipulation. The weakness of the region at that time was an appalling humiliation for its peoples.

The dominoes did not fall, however. Instead, they became economic dynamos. In less than a generation, East Asia gained spectacular increases in income, significant improvements in living conditions, and solid gains in technological and industrial development.

So let us set the record straight. East Asia has lifted more people out of absolute poverty resulting either from the devastation of war or from the oppression of colonizers or from both, in a shorter period of time than any other region in the last half-century. There were many mistakes made and accumulated over time that triggered the financial crisis in East Asia. But there were also many decisions correctly taken and reform policies properly implemented. If this were not the case, then East Asia could easily have become another war-ridden backwater.

The nations of the region have played the game of “catch-up” with the industrialized West with skill and pluck. They have covered a phenomenal stretch of ground. If some have faltered in this last mile, I assure you that they have lost neither the guts, the muscle nor the willpower to pick themselves up and get back into the race.

It is equally important to remember that although it was the East Asians who did the hard work, their work would not have produced such admirable results without the United States. In many ways, the Asian miracle is America’s godchild.

The Philippine experience

The United States provided the security umbrella that underpinned regional stability at a time when threats to that stability were very real. The U.S. market absorbed mountains of Asian imports, in effect guaranteeing the success of the region’s strategy of export-led growth. Americans can take pride in what the U.S. has done in East Asia, and they should therefore support the region’s own effort to preserve the gains their country helped to make possible. The return of democracy with the administration of President Corazon Aquino was cause for rejoicing in my country and for democracy advocates everywhere but it did not alone guarantee a stable future, much less sustainable development.

President Aquino had to stand against seven coup attempts. Under her leadership, it fell to me, first as Armed Forces Chief of Staff, and later as Secretary of National Defense, to lead our armed services, with the support of the people, to defend our newly won freedoms.

Structural reforms

When I came to the Presidency in June 1992, the Philippines was already plunged in the darkness of a power shortage. The Philippines’ participation in East Asia’s rise was late. The political upheavals after 1986 scared off the investment money that flowed into our neighboring economies.

Yet, within six years, we managed to turn the corner.

Structural reform has strengthened our competitiveness. Deregulation, privatization and decentralization have unleashed our economy’s productive powers and the energies of our 71 million people. Incomes have risen, jobs have grown in number and quality, and opportunities for the ordinary citizen have increased. From being seen as the “Sick Man of Asia,” the Philippines is now the newest tiger on the block.

Despite the tough end of 1997, marked by the fall in the peso and in the Philippine stock market, real economic growth was still at 5.8%, well ahead of most of our neighbors. This was largely because we had adopted and implemented sweeping reforms long before the financial shockwaves hit us.

At a time when others in the region are seeking International Monetary Fund (IMF) assistance, the Philippines exited on March 27th from its 35 years of IMF tutelage covering 22 successive programs.

I am confident that the fundamentals will prove the durability of the Philippine economic growth with accompanying social equity.

As The Economist survey of Southeast Asia on March 7 puts it: “Over the next few years [the Philippines] could well enjoy the best performance of any Southeast Asian economy.”

Our greatest source of pride is that we achieved all this without sacrificing any part of our democratic freedoms. The Philippine model of democracy with development is working—and working well. Those who say they support democracy and the free-market system can now point to the Philippines as an example of political and economic development making simultaneous progress for the good of the people under the trying conditions of the Asian economic crisis.

Reform is the order of the day

But now is not the time for self-praise, neither for odious comparisons.

No one in the region is under the illusion that it’s still business as usual.

Economic reform is the order of the day in East Asia. The region’s finance and banking sectors, in particular, need to be upgraded and modernized according to international standards.

After the dramatic growth of nearly two decades, the region must now take stock, consolidate, prepare for renewed competition, and do the policy reforms needed to attain the next level of development. As always painful adjustment will be necessary and if adjustment is postponed the pain will only become greater. Global cooperation, more than ever before, is called for under the new regime of economic interdependence.

At the same time, reform has to be humane if it is to win lasting support from the people. Safety nets are essential, as are improvements in social development and in education to reinforce the ability of our young people to manage and lead national transformation.

In doing so, they will pursue policies compatible with our specific historical experiences, social norms, cultural values and a shared vision for the future. Contrary to what some may say, Asian values are not antithetical to the concept of the free markets, or transparency, or accountability, or deregulation, or privatization. Nor does East Asia have a monopoly of thrift and diligence.

What is certain is that Asians will continue to attach great importance to those factors of proven value, namely, the family, the community and social cohesion.

The age of interdependence

The drive for reform in East Asia is not a zero-sum game. It must be seen as part of the bigger picture of deepening transpacific interdependence, a quality of interdependence that calls for win-win solutions in an atmosphere of both competition and cooperation.

Thirty-five years ago, on the fourth of July 1962, John F. Kennedy chose Philadelphia, the cradle of American independence, to issue a Declaration of Interdependence with the countries that were creating Europe’s Common Market.

Speaking today, at this great center of U.S. education, in the American capital city, I invite the United States and Asian leaders to join with my country in defining the elements of transpacific interdependence.

Our interdependence is premised, in the first place, on comprehensiveness. Economic, political development and security cooperation have all become legitimate and essential areas for joint endeavor.

Our interdependence must address the Asia-Pacific region’s kaleidoscopic diversity. It must be nurtured and encouraged, so that its force will impart a genuine sense of community to the socialist and capitalist economies, the Pacific island states and continental nations and the peoples of many faiths, races, languages and customs that make up our region.

Cooperation in ASEAN

Interdependence must therefore be as inclusive as possible. The divisions of the past are now meaningless Old enemies of the Cold War now sit together to define the regional agenda for East Asia. There is no longer any reason to lock out any one.

The nations of Southeast Asia started down this road more than thirty years ago with our regional community, the Association of Southeast Asian Nations, or ASEAN for short.

Cooperation in ASEAN began with modest endeavors in the social, cultural and technical fields among its five original members. Today, ASEAN encompasses nine countries of Southeast Asia, including some former Cold War rivals. When the tenth nation, Cambodia, is finally able to join, hopefully before the end of the year, this will complete the vision of “Southeast Asian Ten” as a nascent regional community.

ASEAN has also established dialogue partnerships with ten external powers that have vital interests in Southeast Asia—Australia, Canada, China, the European Union, India, Japan, Korea, New Zealand, Russia and the United States.

Engaging so many of these powers, separately and together, in order to promote regional dialogue and cooperation is a diplomatic triumph for ASEAN and a vindication of its role as a stabilizing factor in the Asia-Pacific.

Beyond ASEAN, there is the Asia-Pacific Economic Cooperation, or APEC, forum.

APEC is a major mechanism through which we hope to translate our deepening regional interdependence into collective action to expand regional free trade and investment and to intensify regional economic and technical cooperation.

Economic success and political change

The policies of reform will eventually call for the politics of change.

Political practices still vary greatly in a region governed for so long by authoritarian means. The countries of the region are thus moving toward greater citizen participation in consultation and decision-making in different ways. But one aspect has been central to East Asia’s progress, and that is the regionwide emergence of market-oriented economics.

Yet, in the long run, change is inevitable.

The middle classes are growing in number and purchasing power in East Asia. Liberal and free-market thinking is replacing the old closed-shop mentality. Nationalism now has a wider vista and is no longer suspicious of foreign trade and investment. The global media are shining their hard bright light throughout the region, broadening the scope of individual action while constraining the exercise of arbitrary power.

A feeling is in the air that it’s no longer wise just to tinker with the economy arbitrarily.

Many are coming around to the view that a second generation of reforms is necessary—this time focused on good governance and not simply on prudent macroeconomic management.

In this process of evolution, it is important to respect the diverse national methods of political change being undertaken by our Asian partners. This is part of building the bonds of regional community. We Filipinos are confident this process will lead to the expansion of freedom in Asia. We will be working steadfastly toward that end.

The most dramatic illustration is China, whose economy has surged since Deng Xiaoping introduced market economics nearly twenty years ago. Nonetheless, China still has some way to go to arrive at a milder form of central government control. But let us understand the key point: the evolution toward participative politics will continue, with fits and starts to be sure, but in an increasingly beneficent direction—unless we cut off contact with China. That must not happen.

Defining Japan’s future course

Japan is defining its future course after leading the way to economic modernization in East Asia. We congratulate Prime Minister Ryutaro Hashimoto for his decision to support important internal reforms that would shift political power from the bureaucracy to elected officials. It is hoped these changes will enhance Japan’s capacity to absorb more imports from and increase investments in East Asia.

In Korea, acute economic problems are being gradually brought to heel, and the new President Kim Dae Jung, has the credibility and toughness to lead his people at this difficult juncture to preserve the democracy and development they have already attained.

In Indonesia, our giant neighbor, much is expected out of courageous reform. This is a trying time for the Indonesian people, and it is only right that the international community should band together to alleviate their plight. Yet, I have no doubt that with their famed patience and resilience our Indonesian friends, too, will pull through.

One area where regional consultation has moved ahead is regional security cooperation.

East Asia has a number of potential trouble spots.

The most serious is the Korean Peninsula, where the challenge of economic reform in the South runs parallel to the uncertainties caused by famine and holdout Stalinism in the North. American leadership helped bring about the two most important peace initiatives for Korea—the Four-Party Talks and the Korean Peninsula Energy Development Organization. These two initiatives must be kept on track.

Tension on the Taiwan Straits, dramatically heightened by the Chinese missile exercises of 1996, will remain a major concern. Talks between the two sides need to be sustained.

Regional security

The most complicated potential trouble spot is the South China Sea. The littoral states there, including the Philippines and China, have conflicting territorial claims on that sea, which is also vital to Japan, Korea, Russia, the United States and other maritime powers that use its sea-lanes. In addition, marine resources of the South China Sea, particularly fisheries and offshore oil and gas, are at stake.

Fortunately, the problems of the South China Sea have been contained through both bilateral and multilateral dialogue The Philippines, for example, has concluded codes of conduct with China and Vietnam to avoid conflict where their South China Sea claims overlap.

Again, ASEAN made an important contribution by spearheading the formation of the ASEAN Regional Forum, or ARF. ARF is a unique body, being the only regional forum where all the key players can meet, face to face, for open discussions, which add significantly to mutual trust and confidence building in a region which was the site of hot and cold conflict only a short while ago.

The road ahead

The Philippines and the United States are on the threshold of the second century of their relations. In this postbases phase of their bilateral relationship, Filipinos and Americans are freer to experiment in their approach to future cooperation. The fundamentals of that cooperation, moreover, are becoming clear.

First the Philippines and the United States have a primordial interest to see stronger growth returning to East Asia as soon as possible.

More than half of Philippine trade and investment is linked to Asia. For the United States, the region absorbs some 30 percent of its exports. America’s transpacific trade is now larger than its trade across the Atlantic. Total cumulative American investment in East Asia is about $100 billion.

The recovery of East Asian countries is critical for our own well-being. Toward this end, we will support a continuing positive role for the IMF, even as we seek reforms to make the IMF more responsive to new global economic realities.

Second, from a longer-term viewpoint, the economic future of the Philippines and the United States is becoming more intertwined than ever before with the region.

East Asia still has the young populations, the growing consumer markets, the productive capacity and the demand for development funding that must eventually bring global capital and commerce back to the region. The future, therefore, requires that we move ahead to anticipate and manage problems that might unsettle the regional economy again. For this purpose, the greatest possible use should be made of the APEC process.

Most pressing at this stage is the need to ensure that the major economies–especially the United States, Japan and the other G-7 countries—continue absorbing the imports from the region’s developing nations and continue encouraging the flow of investment capital into the region.

What we do not need is a protectionist backlash.

Aiming for a Pax Pacifica

Third, in the security arena, the Philippines and the United States remain allies, bound by a mutual defense treaty. We recently signed a new Philippines-United States Visiting Forces Agreement, which should bolster our traditional defense cooperation. The Philippines and, in fact, the rest of the region, fully support a continuing U.S. security presence in East Asia. This means that though we no longer allow bases, we must nonetheless facilitate an active, forward strategy for the United States.

Fourth and finally, alongside our bilateral defense arrangements, we must also shape the post-Cold War security environment of the region with the full participation of all the region’s countries, including China. The Philippines heartily welcomes the recent improvement of Sino-American relations. We laud President Clinton for his leadership in engaging China, and, indeed, in being the architect of America’s new East Asia policy.

In closing, let me observe that what we should aim for in the future is not a Pax Americana, but a Pax Pacifica, where regional peace, stability, progress, prosperity and modernization are viewed properly as community responsibilities and not as the chance outcome of a balance of power.