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.

The poverty situation in the Philippines may be seen as a microcosm of what is happening among the developing and the least developed countries around the world. Statistics show that in the last 10 years of the 20th century, the actual number of people living in poverty increased by at least several hundred millions at the same time that total world income actually increased by an average of 2.5 percent annually.

In stark terms, therefore, the poor have become poorer and the rich have become richer. A famous comparison recently made is that the western European nations continue to subsidize their cows at us$2.50 per head -- which is more than 2.5 times what 1.2 billion people live on at less than one u.s. dollar a day. Figures released by the UNDP in its human development report ( HDR) in 2002 draw a similar picture of increasing poverty for a vast number of people in the face of economic growth for a few.

The plain truth is that a great majority of humankind is being deprived of their rights to human security, bereft of the benefits of education, primary health services, decent housing, basic education, and gainful livelihood• poverty is inextricably bound together with the other key issues of the environment, peace and development, and globalization.

In the competition for greater material wealth, most people have accepted some dictums without question, not realizing that what is medicine for one may be poison for another. To an unprepared society, a liberalized policy may lead to a long-term net loss not only in incomes, but also in social costs. Liberalization has been a bitter pill backward countries had to swallow -- only to discover, with tragic effects, that is not the cure they were looking for. "Have-not" countries continue to be faced with problems in the implementation of their obligations under the WTO agreement.

Because of liberalization in the industrial, services and agricultural sectors, many developing countries face dislocation of local industries, products and services as these are generally small- or medium-sized and, therefore, are unable to compete with larger multinationals or foreign companies that are able to market cheaper imports due to economies of scale.

Developed countries and the special interests within them have campaigned for the globalization agenda over the years. They have pushed for open markets for their industrial goods in poor countries but have, just the same, maintained their own protectionist systems, especially on agricultural products• from the point of view of the have-nots, the current levels of protectionism in developed countries are scandalous.

For instance, OECD member-countries reportedly spend over us$350 billion every year to protect their agriculture sectors -- or almost us$ one billion each day -- far more than the total us$50 billion devoted to development assistance to poor countries. In their mistaken belief that "one-size fits all" and their unrelenting focus on economic growth and financial stability, multilateral institutions and donor countries have imposed conditionality that are beyond the capability of poor countries to handle.

On the other hand, in their desire to accelerate domestic sufficiency and economic growth, many developing countries have embraced liberalization -- unsuspecting of its pitfalls and certain rules of the game definitely not to their favor. Their insufficient institutional capacities have been compounded by abusive or incompetent governance, a sheer lack of resources, or a combination of all these.

Human security and international terrorism

The inequity and the unfairness of it all have led to civil wars, insurgency, ethnic cleansing, violent crimes, strong-man regimes, international terrorism -- a virtual explosion of threats to human security -- whose dimensions may have been neglected or overlooked in the quest for globalization, and whose inescapable result is increasing poverty.

At the beginning of the 20th century, people seemed to believe that the growth of economic interdependence, technological progress and social connectivity would bring about future decades of peace and security. Tragically, the 20th century turned out to be one of the bloodiest centuries in human experience.

UNDP's human development report for 1993 (hdr-1993) states that "human security reflects a condition that recognizes the centrality of basic human rights, human capabilities, human development and their links to world peace and stability." Human security means protecting people from critical and pervasive threats and situations. It involves creating political, social, environmental, economic, cultural and public safety systems that together give people the building blocks for survival, livelihood and dignity in their hopes for a better quality of life.

The twin goals of " peace and development" probably describe best mankind's immediate as well as long-term aspirations. On the other hand, a new dimension of development -- which is human security -- has emerged, as advocated by Sadako Ogata, former UN High Commissioner for Refugees, and Amartya Sen, Nobel Prize awardee for development economics.

According to them, human security is concerned with safeguarding and expanding people's vital freedoms. It partakes both of protecting people from critical and pervasive threats and of empowering people to take charge of their own lives. Protection refers to the norms, policies and institutions essential to shield people and requires governments to exercise "top-down" vigilance, especially in insuring the rule of law, democratic governance and public safety.

The "democratization of technology" is equipping the terrorist with a frighteningly sophisticated and powerful array of skills and weapons unimaginable a decade ago. The "democratization of technology" has been diffusing power away from governments, and enabling fanatic individuals and conspirational groups to play powerful roles in world politics -- including that of inflicting massive destruction -- a capability once reserved to government and their armed forces.

To globalization and other forces transforming national societies, we must now add the power of terrorism. Terrorism has privatized even war -- as we can see from Osama bin Laden's jihad against the whole of western Christendom. It no longer takes another super-power to pose a grave threat even to the American giant. The specter of asymmetric warfare, of which terrorism is its most visible aspect, will be with us for the next several years.

We Filipinos have long been acquainted with terrorism. Our citizenry, in fact, have been among its first victims in the post-cold war era. Islamist extremists have struck in many places in Mindanao and other parts of the Philippines. Local insurgents and separatists apparently have linked up with an extremist movement active in all the Muslim communities of southeast Asia -- which has a grandiose program to unite parts of Indonesia, Malaysia and the Philippines into one Islamic state. Islamic terrorists regard themselves as fighting to establish a global community of believers that -- as in the days of Arab glory, more than a thousand years ago -- would be governed by the Koran and ruled by a "successor" to the prophet Mohammed, or caliph, who would possess both temporal and spiritual powers. But this myth of a return to Islamic purity is as propagandistic and as illusory as Hitler’s dream of a thousand-year Reich or Stalin’s vision of a classless society.

Islamic fundamentalism, however, may finally exhaust itself, since it lacks the intellectual resources capable of giving the Muslim peoples the civilizational vigor they need to compete on equal terms with the modern and secular west. To avert the "clash of civilizations" that some thinkers see as impending, world leaders are promoting a "dialogue of civilizations" being encouraged by the united nations and promoted by the ecumenism of Pope John Paul II.

Obviously, a "dialogue of civilizations" will be drawn-out and complicated. But i think it is tremendously important as a parallel mechanism to conventional diplomacy at a time when religious, cultural, and civilizational affiliations have all became potential and even active sources of global tension and conflict.

Globalization and culture

The globalization of culture is also fanning the flames of discontent and anti-American resentment across the world. Globalization is associated with the spread of the less savory aspects of western pop culture -- commercialism, consumerism, hedonism -- a catalog of isms and drug abuse are perceived in many quarters of the developing world as an assault on their traditional customs and values, particularly among Muslim communities, including in the Philippines.

There are deep cultural reasons for anti-American sentiments that are rising in some parts of the globe. Obviously, for much of the third world, America has come to personify all the western powers that created empires during the period of colonization -- whose influence on their developing societies has been so strong and so disruptive over these last 500 years.

Anti-Americanism is also being driven by the fear that the world is being "Americanized." cultural globalization has hit some poor countries harder than economic globalization has done. In such countries, American customs and values -- which are the dominant strains in the intrusive internationalist culture -- are fast spreading, especially among young people, through the mass media and the internet.

Traditionalist peoples see these alien values and customs as threatening the conservative culture and lifestyles they want to preserve, and this perception is stimulating a reactive kind of anti-foreignism, which is awakening a religious revival throughout the Muslim world. In other places -- as china and India -- anti-Americanism stimulates rising middle-class nationalism.

And -- let's face it -- anti-Americanism is also being facilitated by what the New Yorker magazine calls a "national appetite for global swaggering." cultural fears raised by McDonald’s ubiquitous outlets, pop music and CNN dominating the air waves, plus recycled Hollywood movies -- which are the global icons advertising America’s presence -- do exaggerate America’s global influence. Indeed, the unrelenting dominance of the western media and commercialism has widened, instead of reduced, the gaps between the rich and the poor.

Let me now say a few words about other needed reforms in the free market system.

As a founding member of the policy advisory commission of the world intellectual property organization ( WIPO-PAC), i have strongly advocated that the rich and developed nations help reduce and eventually neutralize global terrorism by sharing their intellectual property consisting of inventions, innovations, creations and research and development ( R&D) products with the poor countries whose backward conditions provide the breeding grounds for extremism, fanaticism, criminal violence, and suicidal behavior.

At the third meeting of the WIPO-PAC in Geneva last October 11, 2001, i reiterated the importance of caring, sharing and daring among nations in pushing forward the frontiers of universal peace and development. Caring and sharing are probably easy enough to do -- but daring to forego profits and royalties, daring to give more to the environment than take from it, and daring to sacrifice for the common good may be more difficult to do.

For instance, those discoveries and technologies which would be beneficial to the improvement of health, prolongation of life, facilitation of education, enhancement of the environment, and reduction of poverty should be transferred expeditiously and affordably to the "have-not" peoples -- even as WIPO recognizes the need to protect and reward the innovations and inventions of creative people and institutions (which largely come from the affluent countries).

In my view, bridging the deepening gaps in family income, health, security, environmental conditions, social mobility, job opportunities, and material comforts among people around the world would significantly remove the root causes of insurgency, separatism, civil war, and armed conflict, to include the hopelessness that breeds suicide-bombers.

Summing up

Notwithstanding the hard lessons of the recent past, i believe the course most countries, including the Philippines, have taken in joining the WTO was the right one. Globalization is here to stay, but there is much we can do to manage and refashion it into something that better serves humanity. The interplay of the actors in globalization must be orchestrated so that all will aim not only for economic growth and financial stability but also for people empowerment in terms of equal access to opportunity, social justice and human security in its widest sense.

Governments must face up to their responsibility to function with transparency and efficiency, and strive for governance that combines economic development, environmental protection and human security. Developing countries must reassess their liberalization policies and endeavor to strike a balance among the roles of the state and the market, and the needs of the poor. Mainstreaming trade into the wider development agenda of reducing poverty should be a central consideration.

In this regard, the Doha round can truly become a "development round" if there is greater coherence and convergence of policies among international economic institutions -- such as the WTO, World Bank, IMF, and the WIPO -- so that trade is mainstreamed in the development agenda and, therefore, capacity-building can be focused, targeted and achieved. It is also essential to review special and differential treatment being espoused by the affluent nations beyond just the time-phasing of commitments• capacity-building and sufficient flexibility to pursue domestic development goals are equally essential.

Today, the challenge before our countries is for them to grasp the opportunities globalization presents -- while working together to minimize our shared vulnerabilities to its risks. Ultimately, the countries best able to take full advantage of globalization will be those that cultivate open societies, free economies and democratic governance.

In the world of the future, every state will need increasingly to work within the framework of a global market, to attain the kinder world to which mankind aspires. To that end, the response mechanisms of the free market will probably be better-suited than the formally legalistic and treaty-bound decisions of governments.

Functionally distinct components of each nation-state should link up more and more with their foreign counterparts -- forming a dense web of sectoral networks that will eventually make up a veritable trans-governmental order. Likewise, the GO-NGO partnership between government agencies and non-government organizations and civil society would most likely deepen and broaden for the overall equitable distribution of benefits.

In the Asia-pacific region, globalization opens up tremendous possibilities for genuine integration and political/security cooperation -- as the forces of modernization compel even once-isolated states (like China, North Korea, Vietnam, Myanmar and Laos) to conform more closely to international norms and practices in civil liberties and human rights.

Like the open market alongside it, true democracy could become the most compelling quality of the new age -- as powerless people claim their right to take their place in the more bountiful table of the new global society. The empowerment of ordinary people should, therefore, be our highest priority and common vision. The structural reforms that states must undertake -- to keep their economies competitive and reduce poverty -- will unavoidably result in more effective democratic institutions.

Indeed, it is our unity as a community of nations that cares, shares and dares for each other that would bring us within easier reach of mankind's noblest goals. Civil society -- the family, the community, the NGOs, the media, the churches, etc. -- have vital roles in assisting the state in its task to improve the conditions of each citizen and society itself.

In sum, the international community must redouble its efforts to reshape the dimensions of globalization in order to make them more equitable and beneficial for all. They must be reconfigured towards a bias not only for reducing poverty but also for the enhancement of human security. Further inaction, indifference and/or complacency are not an option. Otherwise, it may indeed be too late for humanity.

Thank and mabuhay -- best wishes!