Speech

of

His Excellency Fidel V. Ramos

President of the Philippines

At the 30th Annual Meeting of the Philippine Economic Society

[

Released on December 14, 1992

]


Economic directions

for the 1990s

I WAS pleasantly surprised to receive your invitation. I hadn’t known there was room for fellowship among contemplatives of the “dismal science.”

I shall

not

attempt to instruct you: On the contrary, I hope things work the other way around.

Actually, the President’s life is simple enough. I really have only two problems: The political ones are insoluble; and the economic ones are incomprehensible.


A country brimming over with economists

Seriously, I find it ironic that we—who so pride ourselves on our individual competence—should find ourselves so far down the economic ladder. Of us Filipinos, any wise guy could reasonably ask: “If you’re so smart, why aren’t you rich?”

Everyone knows this country brims over with economic brains: This hall is filled with them, and the overflow populates the World Bank and the International Monetary Fund.

If a logician were to generalize from our example, he might be led to conclude that a country’s progress is inversely proportional to the quality and number of its economists.

I note, too, that this Society was organized in 1961—during our second foreign-exchange crisis. But how many other similar crises have we had since then? Either you haven’t been doing your job as you should—or people in authority haven’t been listening to you.

Perhaps the reason is that economists themselves disagree congenially. Perhaps George Bernard Shaw was correct when he observed, “If all economists were laid end to end, they would not reach a conclusion.”

But Keynes was absolutely right. Many of us slavishly follow economic theory that is actually long dead and buried.

Look at how ideological stereotypes from the Cold War still dominate our economic debate in politics and in the press. We still have serious people seriously arguing for Stalinist-style “nationalist industrialization”; while their opponents still speak up for “trickle-down.”

We still hear foreign investment being branded as “neocolonial”—together with institutions like the IMF and the World Bank; and proposals to open the economy to competition denounced as a betrayal of “Filipino First” policies.

Yet the recent history of economic theory has really been the downfall of one orthodoxy after another. The only theoretical certainty is that no economic doctrine can be engraved in stone—if only because each country is unique in its character and historical experience.


A new concept of national security

In the wake of Communism’s collapse, competition in the world is shifting from the military and the political to business and trade. Economic strength has become the new measure of national power. And national security must now be founded ultimately on our country’s economic strength, its political unity and its social cohesion.

Most everywhere in the world, private enterprise has also become acknowledged as the more efficient engine of economic growth. And following the example of the most successful national economies, many countries—including President-elect Clinton’s United States—are bringing together national business, the labor unions and Government to work cooperatively against foreign competition—in the manner made famous by Japan Incorporated.

In a much more modest way, we ourselves are getting Government, business, and labor to work together—to bolster our country’s competitive position in the region and in the world.

If Government was the monkey on the back of business, now it must create the economic climate in which individual enterprise can thrive.


Authoritarianism or democracy?

Any discussion of Government’s role in development in a poor country must begin by venturing an answer to the question of which is more efficient for economic development—authoritarianism or democracy? Discipline or freedom?

To answer this question, every country, every people must draw on its own historical experience.

In our country, any master plan for development must take into account the political choice Filipinos have made again and again—most recently at EDSA six years ago, when they stood up against a strongman’s tanks to reclaim their liberty.

For any economic planning in this country, political democracy is a “given.” A critical mass of popular opinion has formed, which makes one-man rule impossible.

Instead of the discipline of command, the Philippine President must invoke the discipline of civic responsibility.

But democracy to me does not mean Government’s passively following wherever the electoral majority inclines. Democracy to me is not just horse-trading—and certainly not the endless search for the least common denominator among partisan interests.

Democracy to me means Government’s leading public opinion toward the direction that it considers the country should take. That kind of democracy is what my Government aspires to.


Our policy reforms in the large

To start off our economic reforms, we have begun dismantling the superstructure of regulation and control which has made whom you know—and not what you know—the secret of business success in this country.

We are putting a stop, once and for all, to political entrepreneurship—which merely transfers wealth, instead of creating it. And we are cutting off monopolies and cartels—in manufacturing, in the financial system, in the service industries and wherever else they may be found.

We’re also selling off the last big-ticket items left over from the era of crony capitalism. I have given our managers a deadline of November 1993—and if they think they can get around that, then they have another think coining.

Our tariff structure we are moving rapidly to the minimum levels prescribed by the ASEAN Free Trade Area—to which we are unequivocally committed.

Agriculture and industry I regard not as mutually exclusive but as complementary. There can be no de-emphasizing agriculture—if only because so many of our people continue to derive their meager livelihoods from it.

As in Japan, Taiwan, South Korea and China, Philippine agriculture must become the foundation of Philippine industrialization. Public policy must encourage it to modernize and diversify—to be able to absorb more workhands, raise nutrition levels, reduce income disparities and raise demand for the products of industry. And in this effort land reform seriously conceived and seriously carried out must have the highest priority.

Opening the economy will obviously be difficult in the short term. But in this world there is no gain without any pain. What is more, we really have no choice. Unless we change its basic structure, our economy will never achieve self-sustaining growth.


Communitarian capitalism

To achieve this growth, we are more than willing to unleash the energy of self-interest. But we shall also insist that Philippine capitalism keep a regard for the social whole. Though wealth should be privately owned, its owner should make a public use of it.

We recognize the legitimacy of unions and other worker associations—and we shall support them in their efforts to protect their rights and to cushion their memberships against the hardships of economic life.

We Filipinos have always accepted that people with more are obliged to help people with less—in the name of compassion and in recognition of a human community. This traditional moral code we shall make a principle of public policy. There are many reasons that compel us to attempt this—self-interest included—because the few who

have

can never be secure in their possessions for as long as they live in the midst of so many who

have not

.

Until now we have relied on “trickle-down” mechanisms—from large Government projects and national businesses—to ease mass poverty. But development has not trickled down, because there are few channels through which growth can flow downward.

The only way to wipe out Philippine poverty is to attack it directly. All the agencies of Government must take on a pro-poor bias. Economic policy in the large must become sensitive to the well-being of the majority among us who are without the means to lead decent and useful lives.

To a great degree, the poorest Philippine regions are poor because they have had less access than the richer regions to basic Government services. This historical neglect we are redressing with “positive discrimination.”

We shall be allocating to the poorest provinces, cities and towns more than their usual share of elementary schools, hospitals and health clinics, farm-to-market roads, irrigation systems and other basic infrastructure.

Government shall also be setting itself not merely theoretical but measurable standards for gauging its success in easing poverty year after year.

Indonesia—over the 20 years from 1970 to 1990—was able to reduce its poverty level from 60 percent to less than 20 percent. Against that achievement by our closest neighbor, we shall dare to measure our own effort.


People empowerment

Through what we call people empowerment, we shall awaken local communities and ordinary Filipinos to the full possibilities of modern life. Part of this work must be to carry out a realistic population policy. Serious imbalances in our economy and our environment have been aggravated substantially by our country’s rapid population growth.

Another urgent task must be to compel comfortable Filipinos to fulfill their civic responsibilities.

I have always thought it ironic that Filipinos of means—who are the quickest to complain about the quality of our social services—should also be the most adept at shortchanging Government on their taxes.

Civic responsibility has always been the price of freedom. I recall Keynes also saying that, in the long run, we are all dead. But, in truth, part of us lives on long after we are gone—because human society is a partnership of the connected generations of changing persons that include not only those who are living but those who are dead and those yet to be born.

And we cannot continue—as we Filipinos have done in the past—to pass the buck for our country’s mass poverty, its social inequality, its environmental degradation, to some future generation. There is no one here but us: And we are responsible for one another.

What can you do? As intellectuals and citizens, give us individually and collectively the benefit of your intellect and your experience. Take part in the debate on economic policy. Keep the economic officials honest: Keep them on their toes.

Write, speak out. Go public with your own opinion. You will find this President willing to listen. You will find this President grateful for wisdom and good sense, wherever they may be found.


Source

:

Presidential Museum and Library