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Keynote Address - Asia Foreign Policy Update Luncheon - Fidel Valdez Ramos

The Hon. Fidel Valdez Ramos, Former President, Republic of the Philippines

Sydney, Australia
September 3, 2003

Eight years ago, the Philippines acceded to the world trade organization ( WTO). By that landmark act, we embraced the trade-related aspects of globalization. today, with the benefit of hindsight, i ask myself -- knowing what i know now -- would i have taken the Philippines to join the WTO just the same? My answer is -- yes -- definitely yes -- but now we must think back and determine what are globalization's hidden and, possibly, damaging dimensions in order that the world community can more responsibly respond to them in order to win a better future.

Politicians, economists, and security experts have dissected, debated and elaborated upon the nature, applications and effects of globalization. but regardless of their respective opinions and ideological inclinations, it appears that they agree on one thing: that in the context of the realities and relationships of the 21st century, globalization is extremely complex even as almost everyone accepted from the beginning the simple definition that globalization as being merely the elimination of barriers to free trade and the removal of restrictions to the movement of capital in order to promote deeper integration of national economies into the global system.

By that simpler definition, globalization could only pose benefits, not perils, for all. However, as practiced, globalization is far from being universally fair and beneficial. The key question, however, is: are these gains now enjoyed by a great number of suffering people in the world, or by only an elitist, uncaring minority?

Under a regime of increasingly open and liberal trade, the Philippines posted faster growth in terms of exports, averaging a 19.5% increase annually during the period 1994-1997 -- one of the fastest in our region despite the financial crisis of 1997-1998. Through its tariff reduction program, the country kept pace with the target to limit to zero to 5 percent tariffs for most of its tradable goods. Already, more than 85% of the country's total tariff lines are within this target range.

The Philippines adopted necessary safety nets for vulnerable sectors and measures to enhance its global competitiveness, increase and sustain agriculture productivity, improve infrastructure for speedy movement of goods and services, foster pollution management and sustainable development of natural resources, and accelerate science and technology efforts to support our programs towards globalization. All these, the Philippines did in the name of globalization and international competitiveness.

Poverty: the increasing gap

Although successive Philippine administrations, including mine, helped reduce poverty incidence from the high mark of 1985 at 41+% to 30% by 1998, the numbers today are still troubling. While the Philippine economy was considered the best performing in southeast Asia in 2002 -- except for Vietnam -- and the third best performing in all of east Asia, the country still has more than 5 million people out of work.

These figures notwithstanding, the Philippines' economic fundamentals remain sound, and the country enjoys predictable growth to ensure steady prices, low inflation, adequate liquidity, and funding for development initiatives. The Philippines is committed to good governance and to long-term structural reforms leading to continued strength in domestic demand, diversification of trade, and a hospitable environment for investment.