Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
At the opening of the National Development Summit (Pole-Vaulting Conference) organized by the National Economic and Development Authority
[Delivered at the Philippine International Convention Center, Manila, June 8, 1997]
Faster, stronger, higher
THE INITIAL VISION of “Philippines 2000” was plain and simple. It was to raise this country to the threshold of newly-industrializing-economy status by the end of the 20th century.
We have crossed that threshold.
- We have invigorated the economy by opening it to the winds of global competition. Our trade with the world has grown by 114.0 percent over the past five years. Foreign investments—totaling P490.2 billion—have turned our economy into a choice destination.
- We have brought both city and countryside into the web of growth. Through devolution, decentralization, deregulation and democratization of benefits, we have empowered local communities to make the political and economic decisions that affect their daily lives.
- We have made some headway in lifting up the common life, in raising the Filipino’s sense of self-worth. Average per capita income has increased from $830 in 1992 to $1,250 in 1996.
- We have also brought down the poverty incidence rate. According to the family income and expenditure surveys conducted every three years, poverty incidence declined from 40 percent in 1991 to 35 percent in 1994. Given the strong growth in 1995 up to the first quarter of 1997, we have every reason to believe that the proportion of our families caught in poverty will go down to 30 percent by the end of this year.
- We have hit our annual targets for raising the GNP growth rate and income per head. And we have accomplished both our economic turnaround and social reforms as a working democracy.
Robust political institutions
Our democratic political institutions—restored by the People Power Revolution at EDSA in February 1986—are as strong as ever. We have held four successive, generally peaceful national and local elections over these past four years. Peace agreements have been forged with former military rebels and the Moro National Liberation Front, while negotiations continue steadily with the National Democratic Front and the Moro Islamic Liberation Front.
When we hold national and local elections next year, there is no question that the world will witness the orderly transfer of power from this Administration to a new one.
On the eve of a new century, and a new millennium, we who lead this country—as elected officials; business, labor and civic leaders; civil servants; corporate managers; professionals; academics and intellectuals; or heads of non-Government and people’s organizations—we have three basic tasks.
First, we must sustain the forward drive of our Philippines 2000 reforms so that we can overcome the poverty of Filipino families and expand the circle of progress.
Second, we must catch up with our “tiger” neighbors in East Asia—and then at least keep pace with them.
And third, we must ensure our economy’s competitiveness in the global market—by making it an efficient creator of wealth.
Why we need to pole-vault
While we can take satisfaction in what we’ve done these past five years, the challenge of development is still before us, not behind us.
Competition in the global economy is now so intense that we must work hard just to stay where we are. The number of our people entering the labor market grows by a million every year—so we need three million new jobs in the balance of this century. And technology is changing so fast that we must reengineer our economic activities and educational programs for us to catch up and then keep in step.
In the light of this challenge last January 2, in my year-end report for 1996, I spelled out the compelling strategy we must pursue: “We should be satisfied no longer with leapfrogging, for others are leapfrogging, too. Rather, our arm should be to pole-vault into the 21st century.”
This strategy must define our long-term goal. We must not just alleviate poverty, we must eradicate it. We must not be content with nearly industrializing, we must become fully industrialized.
We must strive for development in the spirit of the Olympic Games, Citius, Fortius, Altius—faster, stronger, higher.
Seeking a consensus on goals and programs
I envision the crucial linkages of “pole-vaulting” as working in this manner: The people will provide the strength, and the interlinking of officials and private-sector leaders from top to bottom will represent the pole with which we must vault over the challenges that we face.
The combined efforts of Government and the acknowledged leaders of civil society—who are in full force here—will provide the impetus and the means to enable our people as a whole to pole-vault toward the goals to which we aspire.
That is why I have called this National Development Summit of 1997—in order to consult with you and to get a consensus on the goals and programs that our nation must pursue in the early years of the new century.
To be truly consensual, the summit must incorporate every sector of national society—including the disadvantaged sector and the political opposition. While we should aim for maximum agreement, we must accommodate minority views and respect dissenting opinion.
This is why I am pleased to see represented here many of the minority parties in the legislature.
On my instruction, the Cabinet departments and their technical staffs have prepared a concept paper on pole-vaulting—in effect, a draft program—to guide and provide focus to our discussions in the next two days.
This pole-vaulting strategy is the Ramos Government’s legacy to future administrations. The tasks it sets for both Government and the private sector will take not just years but decades to actualize in their fullness.
The draft program has two major elements:
One, it identifies the economic and political reforms still undone—which must be achieved if we are to overcome the feudalism, protectionism and inward-looking nationalism of the past; and
Two, it sets the benchmarks over which we must vault—in the form of “must-do” programs that we should accomplish over a specific period.
Generally, the reforms would make the market system work more effectively; and enable individual Filipinos and the whole of our national society to become more efficient creators of wealth.
In a word, the pole-vaulting strategy we propose impels us to raise consistently our capabilities as a people. It challenges us to compete, not just against other countries, but against ourselves.
Sectors of society we must improve
The guidance paper also lists the sectors of the economy, of the administrative bureaucracy and of the political system that we must improve qualitatively.
In industry, we must press on with the reforms that have brought about profound changes in our industrial capabilities. There are now many downstream industries able to manufacture export products on a global scale, with a high employment generating capacity. Such downstream enterprises, many of them small and medium-sized, outweigh the total output and employment coming from a few multinationals and conglomerates that nag us for protection from competing imports.
Fight against inflation succeeding
Moreover, individuals and households are now benefiting as consumers of a wide array of quality and reasonably priced products. In addition, our fight against inflation is succeeding because of the competition that our liberalization policies have made possible. Monopolistic pricing, intended to victimize consumers, has largely been eliminated and must not be allowed to return.
In agriculture, we must make fuller and more efficient use of our land and waters and other resources—because, by the year 2035, our population will likely be double what it is now. We have the natural resources and we have the manpower—not only to meet domestic requirements but to export to the world. But what we have lacked so far is one concerted, determined and relentless push to bring Philippine agriculture into modernization. This our pole-vaulting strategy must now supply.
In finance, we must exploit the dynamism of market forces to promote production efficiency.
When I took office in June 1992, the Administration made balancing the public-sector fiscal account a top priority. With the consistent support of Congress, the Administration adopted a responsible deficit-cutting program, producing for the past three years a substantial budgetary surplus.
As a result, we are now seeing self-sustaining economic growth amid a decline in the inflation rate. The Government is no longer crowding out the private sector for scarce investment funds, thereby permitting a steady decline in interest rates.
We have learned and are implementing an important lesson from these activities—that it is possible to have growth without the Government resorting to deficit spending. The Government can open up market opportunities and get things done faster by relying on free enterprise as long as a liberalized, stable and predictable policy environment is put in place.
Investments in education the key
In education, and training, we must now move intensively to bring our people up to speed with the global economy. To create high-wage jobs in the future, human-capital investments are the key. The efficiency of workers must increase significantly. This will enable them to adapt to the rapid technological changes now taking place.
As our people accumulate additional skills from our investments in training and education, productivity will rise, allowing living standards to improve.
Budgetary allocations aimed at raising the quality of basic education have increased and must continue to increase. Opportunities for higher education must be expanded and access to it equalized through scholarships and “work-now-study also-pay later” plans.
At the same time, vocational and technical education and training programs of the Government must be strengthened and spread out. Budgetary requirements, however, loom larger and larger with every passing year. Quality education and training do not come cheap, and so we must invigorate public-private partnership in dual training and education.
Over the long haul, we can become a mature industrial economy only if we are able to ride the wave of technological changes taking place. Scientific research and technological progress raise productivity. They enable our enterprises to expand their outputs with the same level, or even less, of inputs in terms of time, labor, capital and materials.
We have to acquire this productive ability, but it means investing more in research and development (R&D), in science and technology (S&T) in both the Government and the business sector.
Right-sizing the bureaucracy
There is a danger of underinvestment in R&D and S&T because the benefits spill over to third parties for which benefits the investing agent is not properly compensated. The Government must, therefore, step in with some corrective measures. This we can do through the National Government budget.
While we can increase and steadily raise our spending for R&D and S&T, we must have a healthy revenue system in place, and we must continue to rationalize the size and scope of government. In this regard, enacting the remaining components of the Comprehensive Tax Reform Program and right-sizing the bureaucracy are crucial. A market-reliant economy requires a new kind of government—lean but effective in productivity and service-delivery.
Improvement of Government capacity and efficiency must extend across the board—in all branches and from top to bottom. The bureaucracy we must further professionalize; and we must begin to use Local Government units as strategic partners in development. The administration of justice we must make impartial, swift, thorough and unsparing.
We must make the political system more responsive to the challenges—and the opportunities—the new century will bring. We must reexamine the Constitution as thoroughly as the Japanese, the South Koreans, the British and others are reexamining theirs—to improve qualitatively the State’s capacity to promote the interests of the national community in this new age of global economic interdependence.
Finding our competitive niche in the world
Beyond these “must-do” reforms, this National Development Summit must identify the competitive niches in the global economy we must begin to develop—by overcoming our infirmities and building on our basic strengths.
What are these strengths?
Our distinct advantages lie in our open society; our archipelagic geography astride two great oceans of commerce; our strategic location at the heart of the world’s fastest-growing region; our first-rate managers and corporations; and our skilled and adaptable workpeople.
The draft pole-vaulting program contains a “wish list” of the things we want the Philippines to be—in the context of our economic, political and cultural relationships with the nations of East Asia and the Pacific.
Comprising this wish list are the following: to make our country a knowledge industry center in the Asia-Pacific; a food basket for East Asia; a maritime and shipping power; a commercial hub; an energy exporter; a regional financial center; a Southeast Asian shopper’s supermarket; an educational center for various disciplines; a medical center; and a center of culture and the arts.
This list is indeed ambitious, even visionary—but it is by no means limited to just that. But we can attain all these—if we work together more intensely with a shared vision and a common purpose.
A nation at peace with the world
Let us join hands to attain this vision—knowing we cannot be strong without steady toil and willing sacrifice; we cannot grow without teamwork and civic responsibility; we cannot be a national community without caring for one another.
From this summit, let us also send a message of solidarity, friendship and cooperation to our neighbors in East Asia. In our search for our niche in the world economy, we do not seek to exploit their weaknesses: we seek instead to reinforce our capabilities with their own strengths.
Thus our progress will not be at the expense of our neighbors or trading partners. The progress we aspire to is progress with others for our mutual benefit, just as the security we seek is security with, and not against, our neighbors in East Asia and the larger Asia-Pacific region.
Given our limits and constraints, our country may never become a power in military or political terms. But if we strive constantly to perfect our comparative advantages as a people, we can hope to exert greater influence in our region and in the world through our own effective performance in the family of nations.
The creativity of freedom
Since we Filipinos became a nation 99 years ago, we have strived to live in freedom, and to win for ourselves spiritual fulfillment and material prosperity. In a very real sense, our pole-vaulting strategy manifests our people’s historical striving toward those ideals.
Today our free and open society is a competitive advantage in itself that foreign investors and our neighbors acknowledge and even applaud—because freedom stimulates creativity in the individual and in the whole of society.
Wealth-creation is merely a byproduct of that creativity of freedom. Wealth-creation is merely the means to our long-term goals. Our final objective is a Philippines where people can share God’s blessings equitably, live together in freedom and dignity, and prosper as one nation at peace with the world.
In our ceaseless efforts to come closer and closer toward perfecting these defining elements of our national identity, we may offer an inspiration to other peoples in the development world.
That is the purpose – and the hope—that animates us as we begin this National Development Summit of 1997.