Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
At a meeting with the Discovery Institute, APEC Study Center, Trade Development Alliance, Washington Council for International Trade, and World Affairs Council
[Delivered at the Bell Harbor Conference Center, Seattle, Washington, U.S.A., November 21, 1997]
A universe
of information
IN NOVEMBER 1993 I came to Seattle to take part in the historic first meeting of the APEC Economic Leaders on Blake Island. Today I have returned—to meet with Seattle’s business leaders, who are icons of the global information society.
I am delighted and honored to be asked to this conference organized by the Discovery Institute—a grouping which reflects Seattle’s pioneering spirit as a hub of the information age—together with the other sponsors: the APEC Study Center, the Trade Development Alliance, the Washington Council for International Trade, and the World Affairs Council.
If Seattle is indeed the wettest city in the continental U.S.A., it has also been abundantly showered with talent and creativity. Its people thrive on the cutting edge of the new technologies that define the spirit of our age.
It is good to be here at this time—in this dynamic American city that looks to the great ocean our two countries share.
Over this past quarter-century, economic reform and liberalization have let loose market forces, which in turn have liberated productive energies almost everywhere in the world.
Trade direct investment, and now capital flows, have expanded at compound rates. Spurred by the new communications and information technologies, they are moving more and more countries into a borderless global economy.
Nowhere have the benefits of the free market been more apparent, more profound, more sweeping than on the western rim of the Pacific.
Except for Japan, East Asia was an economic backwater 30 years ago. Today—through the hard work of its peoples and the democratic directions of its governments—the region sets the pace of growth and the standards of economic openness for all the world.
ASEAN as one big emerging market
One subregion of East Asia alone—the Southeast Asian states (including the Philippines) grouped in ASEAN—has become the world’s fourth-largest trading unit—after the European Union, the United States and Japan. ASEAN is unifying itself into one big emerging market of 450 million people—most of whom are steadily reaching middle-class status.
The U.S.-ASEAN Business Council estimates that American exports to ASEAN will overtake exports to Japan over the next 20 years.
And East Asia is emerging as an economic region in its own right. East Asian countries now trade more with one another than they do with the North American region.
East Asian countries have also become increasingly important sources of direct investment. In some Southeast Asian states, the major foreign investors come from ASEAN and other East Asian countries. East Asia’s share of total global output could well match those of the United States and the European Union in less than 20 years.
A powerhouse of the developing world
That projection might surprise you—considering the currency turbulence we in East Asia have recently experienced. Let me try and put it in context.
In all the developing world, East Asia is the most closely integrated into the global economy.
One aspect of this integration has been a large flow of capital into East Asia—from transnationals in the industrial countries taking advantage of its skilled workpeople and low labor costs. This surge of migratory capital has gushed like young wine into brittle old bottles.
East Asia’s financial sectors—even those of Japan—are still trying to cope with this new volatility of capital. And this currency turbulence is part of East Asia’s growing pains. It will pass—as the region’s macroeconomic fundamentals reassert themselves—and our capital markets begin to mature.
And the turbulence has had one beneficial side effect: it has strengthened East Asia’s new spirit of regionalism. It is heartwarming to see countries offering to help each other cope with the crisis. Even China chipped in a billion dollars to help bail out Thailand’s baht—together with Japan, Singapore, Malaysia and Indonesia.
As a “self-help,” quick-response program, we are also exploring—within APEC and with the International Monetary Fund—possible modes of a regional monetary facility to provide supplemental resources to national economies that may find themselves temporarily distressed.
In sum, the East Asian states are sharing the pain—for collective gains over the longer term.
Of course, the next year or two will be difficult for some of our economies. But it is East Asians who invented the idea that even crisis has its uses. And, as the traditional Chinese saying says, “deep worry inspires wisdom.”
Heeding the wake-up call from the world market
We of the Philippines expect the whole of East Asia to resume its growth mode once the turmoil subsides. In response to the wake-up call from the world market, financial reforms are being deepened all over the region. Currencies are being pitched at more competitive rates; financial discipline is being tightened.
East Asia has overcome far more serious challenges: this should be just a rough patch on our road to self-sustaining growth.
The fact is that globalization so far has benefited East Asia more than any other region. Its open economies, stable politics and orderly societies have attracted more trade and investment. And the currency turmoil has not blunted East Asia’s competitive edge—which lies in its high savings rate and its social commitment to shared growth.
East Asia’s working-age populations are young and growing. And governments continue to invest heavily in people—placing the highest priority on good basic education in science and technology. Over these next 20-30 years, East Asia’s drive for development can become the motive power for the entire global economy.
A great hunger for investment
Earlier this month, the Asian Development Bank projected that even if GDP growth in the whole of developing Asia averages only 6 percent until the year 2020—6 percent being below its recent historical average—its total demand for investment over this period would be $50 trillion at 1996 prices.
Of this sum, $10 trillion would be for physical infrastructure alone.
Asia has been urbanizing at the world’s fastest rate. New housing, new highways, new bridges, mass transit systems and better waste-management facilities are needed to make Asian cities more livable.
More investment money too must be found to generate electric power, pipe in safe water, build industrial estates, lay down transportation and communications systems—to ensure that Asian growth is not held back by the lack of infrastructure.
Protecting the environment will also need large investments as well as technical know-how. Thirteen of the 15 most polluted cities are Asian. And, over the last 50 years, Asia has stripped itself of half its forest cover. Almost everywhere, Asia’s environment is at risk—in the continent’s pell-mell rush to growth.
Asia must urgently bring on line environment-friendly processes that will be less wasteful of resources that remain—of clean air, clear water and fertile soil.
There are tremendous opportunities for America’s capital—your technology, your management expertise—in what Asia lacks and needs.
Why APEC is so important
For the moment, Asia’s most urgent need is to keep up the pace of trade and investment liberalization—and to enhance economic and technical cooperation so that the gains from globalization can remain broadly shared.
And this is where APEC comes in.
Not only is APEC a spur to free and fair trade and to open regionalism. It is also the first step toward an Asia-Pacific community—where our differences can be subsumed under the umbrella of our common interest in perpetuating regional growth and stability.
In APEC—as you know—we have agreed to dismantle regional tariff barriers by the year 2010 for its developed economies and by the year 2020 for the developing ones.
APEC members also played a key role in securing the first information technology agreement (I.T.A.) at the World Trade Organization—and are leading the studies to organize an “I.T.A-TWO.”
In their summit in the Philippines in November 1996, APEC leaders set down individual action plans to facilitate the liberalization of Asia-Pacific trade and investment.
They also concentrated on areas of prime concern to the developing APEC members—areas such as human resource development, small and medium enterprises, and economic and technical cooperation.
Running through the entire fabric of economic globalization is the pervasive impact of the new communications and computer technologies.
These technologies not only allow the instant deployment of capital. They also facilitate the dispersal of the components of production—to where they can be made cheapest and smartest.
In adapting to these new tools, corporations are moving away from hierarchical command-and-control pyramids toward tightened management structures that delegate decision-making and empower management and work teams.
Promise of a wireless Internet
The breaking-up of corporate monoliths to encourage innovation and creativity will be ever more important as competition intensifies. Workers and managers themselves may have to remake their careers several times; or they may have several careers in more than one place and at the same time.
Information technology itself is rapidly evolving. No one can yet predict the final design of the information infrastructure on which the global information society stands.
Until recently for example, telephone, broadcasting, cable, wireless communication, computer services, publishing and entertainment, were considered separate—only vaguely related—businesses. Today, technology is merging these industries into one huge market.
The Internet by itself has opened a universe of information. And already there is the promise of a wireless Internet—the Internet of the sky—which could free communication and information from their bonds to land-based lines.
Not just cheaper computers and communications systems are needed—to bring information technology within the reach of ordinary people in the developing countries. Our nations also need modem education systems if they are to join the global information society.
While the standardized, mass schooling of today is the educational analogue of mass manufacturing, it must constantly be reengineered and made responsive to market forces and technological changes.
Education in the information society
School systems of the information age must prepare students for a far-different world. A world where information is at everyone’s fingertips, where organization is highly decentralized and where individuals are more autonomous than they have ever been. Education will have the even more basic task of forming in the minds of preschool children the ethics of the global information society.
In an era when information can be everywhere—almost simultaneously—how will its provenance, ownership and legal nature be determined?
How will ideas like privacy, equity of access, suitability of content, the balance between the local and the global be adjudicated?
Will the information age homogenize world culture—as many fear—or will it, by multiplying choice, preserve cultural uniqueness, as others hope?
Education must also provide the means for expanding international cooperation to prepare all national societies for the information age.
We could even envision a cyberspace education corps—made up of tens of thousands of volunteers—donating time and talent to teach developing nations through the Net—without ever having to leave their homes and offices. And this need not arise from pure altruism. Business will reap handsome rewards from the steady worldwide increase in the number and quality of information technology workers and consumers.
Empowerment of the individual
The information age promises to be one of greater individual freedom. What is already clear is that the global information society cannot exist without empowering the individual.
Already the new technologies have had revolutionary consequences. In Eastern Europe, as we know, they have set off dramatic political change. Even the implosion of the former Soviet Union we may reasonably attribute to the incompatibility of its political structure with the needs of a high-technology economy.
Generally speaking, the new information technologies favor open societies over closed ones. They function best within those countries that allow the free movement of people, information and ideas. And their effects will tend to undermine authoritarian regimes and encourage the decentralization of political power within societies over time.
In the Philippines, we have created one of Asia’s most open societies—where freedom is vibrant and economic opportunity is widening.
Although we are only now beginning to catch up with East Asia’s “tiger economies,” Filipinos are already predisposed to the ethic of the information age.
By 2001 we should have 607,000 Internet users. Already our country is the second-largest exporter of computer services after India, among developing countries. And the quality of our I.T. professionals is recognized worldwide.
One unique feature that distinguishes us is our affinity with Americans because of our historical association this last century. From American models we have adapted our laws, business regulations, educational standards and corporate culture.
Tens of thousands of Filipinos have done postgraduate studies in American universities. Two million Filipinos and Filipino Americans live in this country—more than half of them on the West Coast, of whom some 60,000 live in Washington State.
All of these elements—plus our pioneering tradition—are fertile ground for partnerships and alliances in I.T. between Philippine and American businesses that want to be part of the action in East Asia.
Linchpin of regional security
The Asia-Pacific region has lately witnessed unprecedented improvements in the human condition.
With its young populations, its expanding markets and its surging export competitiveness, the Asia-Pacific has the world’s largest reservoir of new growth to fuel global development. The United States—as the Asia-Pacific’s biggest economy—is the linchpin of regional security, and its beacon of political liberty.
While the balance of military and economic power may shift, and foreign-policy priorities may diverge, we of the Philippines will continue to regard the United States as a friend, ally and partner—in the task of building the Asia-Pacific of the 21st century. And it is equally vital for the United States itself to remain continuously engaged in the Asia-Pacific.
Tokens of blood and treasure
The Asia-Pacific is where your most promising markets lie—where the most avid consumers of your technology live—and where your capital can find its best returns.
It is also there where America sacrificed its young men in three bloody wars, and in each of these, the Philippines fought alongside as your staunch ally.
By these tokens of blood and treasure, we Filipinos and you Americans are stakeholders in the same future. And that future will be decisively shaped by trade, technology and education—the three themes of this conference.
Finally—ladies and gentlemen: we live in a world of vast change—great challenge—and tremendous opportunity. But we do not live and work for ourselves alone. It is also for our successors that we strive. The generation now in grade school is the first to be brought up in the global information society. These young ones are the first in human history to receive the intellectual training and the scientific tools with which to grasp the concept of the world as one human community.
It is they who will discover new ways, new frontiers, new relationships, new meanings; and it is for them—these pioneers of humankind’s voyage to a brighter universal future—that we strive.