Former Philippines President Ramos on APEC progress and new challenges

We share common enemies now and the economies of APEC are vulnerable, especially the Philippines, to these modern day threats.

Fidel V. Ramos, President of the Philippines from 1992-1998, championed market reforms and the opening of trade and investment which has sparked rapid growth and development across the archipelago of 100 million people. He also played a key role in shaping APEC’s agenda, including at the first APEC Economic Leaders’ Meeting on Blake Island in 1993 and as host of the meeting three years later in Subic. 

On the occasion of APEC’s 25th anniversary in 2014 and as the Philippines prepares to host member economies next year, Ramos described the role of cooperation within the region in facilitating economic progress and new challenges to growth and prosperity.  

APEC Bulletin: What is your view on the growth and development of the Philippines economy since it helped found APEC in 1989 and the impact engagement with other member economies has had in advancing this process? 

Ramos: The Philippines opened up starting in 1986, but we couldn’t do all the things we wanted to do to reform our socio-political economy and therefore, our entry into APEC was a very good time to begin reforming and transforming.  

For instance, we increased our connectivity and foreign relations all over the world. Number two, we provided the telecommunications, the power supply, the transportation—both air, sea and land—as well as the people-to-people networks that were necessary for our economy. 

Let me also say that APEC has provided a very strong and liberalizing effect on our economy especially in regard to respecting market forces in our domestic economy and in our regional economy in the Asia Pacific. 

APEC Bulletin: What do you see as the biggest challenges to further progress in the Asia-Pacific? Where should the Philippines and other APEC economies channel their attention moving forward? 

Ramos: As you and I know, and all of the APEC member economies know, including those outside APEC, mankind in the 21st century is no longer faced with grave threats from other economies nearby or far away within the region or outside the Asia-Pacific region. 

We share common enemies now and the economies of APEC are vulnerable, especially the Philippines, to these modern day threats. These are climate change because of global warming and this is due to the abuse by people around the world of the environment through extravagant consumption and wasteful management.

Secondly, there’s also the massive incidents of poverty around the world and this has required people’s defenses against deprivation and, hopefully, people’s benefits in terms of decent housing, good basic education for kids and, of course, healthcare and longevity for earth’s people.  

APEC Bulletin: Bridging socio-economic disparities in a region that is so big and diverse is clearly a challenge. What are your thoughts on the tracking and benchmarking of progress? 

Ramos: How do the people in Mexico or Chile or Peru live in comparison with the way we live here in the Philippines? This, of course, is a function that is being performed right now by the United Nations and every year, they put out the UN Human Development Index which is a measurement of the quality of life of our peoples around the world.  

I think the APEC Secretariat, guided by the APEC leaders, should now make a comparative analysis of how we are all situated in terms of the quality of life like governance, personal security, habitat, per capita income, healthcare and longevity, basic education, job opportunities etc. Therein lies the solution to help narrow the gaps that are inequitable. 

I hope that will happen within the next generation because I have a feeling that our APEC leaders also think the same way. Nobody wants war. Nobody wants poverty. Nobody wants hunger. Nobody wants disease. 

APEC Bulletin: The Philippines is meanwhile rebuilding from Typhoon Haiyan. What lessons does this tragedy offer economies, particularly those in the Asia-Pacific which are already natural disaster prone and now having to deal with the increasingly severe effects of climate change?  

Ramos: The more developed economies, not necessarily in APEC but I’m talking about the Netherlands for instance, have already developed a system to protect their lowlands from strong ocean surges. 

Now, we experience this in the Philippines because we are an archipelago of 7,107 islands—it’s hard enough but I can imagine how much more dangerous the situation is for tiny but independent Pacific island nations out there. They are not APEC members but they are within our area of responsibility. I’m talking about Fiji and Samoa, etc. 

Let us help them and, by doing so, we help ourselves through this new natural disaster calamity phenomena by leading in the development of the systems here in our region and transferring this technology to the smaller, poorer economies. 

Then, there’s the matter of protecting marine biodiversity. Again, APEC economies are vulnerable. We fish in the oceans but many of our practices are already destructive of marine biodiversity. We must adopt common best practices. 

APEC Bulletin: When thinking about economic security, the Philippines was of course among the economies impacted by the Asian Financial Crisis but was able to rebound fairly quickly. What is your take on the post-crisis environment today and where economies should go from here? 

Ramos: The world is not yet fully recovered from the recession of 2008 which started in the US and very quickly spread to Europe and also to Asia to a certain degree but it is the US and Europe that suffered the most from the economic recession that started in 2008. 

Now I think the APEC economies, 21 of us, both developed and developing, both advanced and emerging, must start thinking of putting up a cooperative reserve fund to protect us from economic recession of whatever kind. 

In ASEAN, we already have such an economic safety net in terms of the Chiang Mai Initiative which you are familiar with because many of us that are part of APEC are also part of ASEAN. This has to do with each member economy in APEC contributing to a little reserve fund—currency to be at the disposal of the leaders for use in intervening, or call it protecting endangered APEC economies, when these things reoccur. 

APEC Bulletin: Trade growth continues to lag compared to pre-global financial crisis levels. This was a priority for you and your fellow Leaders who committed APEC economies to work towards free and open trade and investment in the region by 2020.

Ramos: As you know, APEC came from earlier beginnings where there were too many restrictions on trade and investment liberalization and, of course, facilitation. 

For instance, the Uruguay Round—a long, long time ago, the US was bound by this. Eventually NAFTA came in and that involved the US, Canada and Mexico. I used to say in the US and here in Asia and also in Europe: AFTA NAFTA there will be AFTA in our region and everything will be better. 

This is the way we use to promote APEC starting with the older organizations down below. We have built up according to that vision and are growing up all the time.

APEC Bulletin: What is your view on the new crop of emerging regional agreements in APEC region and the possibility of an APEC-wide Free Trade Area of the Asia Pacific which is being advanced now by member economies? 

Ramos: APEC would be the biggest target for a free trade area because if you’re looking at the progression or the build-up we have ASEAN again, Plus-one with China, Plus-two Japan, Plus-three South Korea, Plus-four India, Plus-five Australia, Plus-six New Zealand. We’re almost there. 

Now in the case of the Latin America and the Southeast Asian economies we have a very potentially viable organization called FEALAC [Forum for East Asia Latin American Cooperation]. 

There’s so many building blocks that we should work on or revive if they’re inactive so that in the end, you’ll have beyond just a cooperation forum or a non-binding association are really integrated union of economies that are interested in protecting and enhancing the survival of mankind.

APEC Bulletin: The negotiation of freer trade and greater economic integration at an institutional level is one thing but getting public buy-in is another, isn’t it?

Ramos: It is the economic benefit that people are really looking. It’s not so much the political connection or the defense alliance. In the end, it’s three meals a day, it’s a better home, it’s insurance for the kids so that they can finish college and the ability to travel, learn about other people after retirement. So, you must have that little nest egg. I think this is the ambition of every family regardless of nationality around the world and here again, APEC is in the lead.

APEC Bulletin: What are your expectations as the Philippines prepares to host APEC again in 2015? 

Ramos: Any hosting by any economy of the APEC series of meetings that will culminate with the summit of the APEC Leaders is a grand opportunity for showcasing the host economy, its people, and its future capabilities. China is hosting the 2014 APEC and, as members, we should be more familiar with not only China’s assets but also their problems.  

Maybe we can learn from each other how to deal with our common problems of poverty and hunger because not everybody is getting the right number of calories everyday as well as urbanization—that’s a big problem for all of our economies. But I think China is providing a good model of housing, livelihood and transportation access because urbanization must not be too rapid or intense.

APEC Bulletin:  What accomplishments would you like to see from China, the Philippines and other APEC economies in 2014, and beyond, and how could this contribute to economic progress in the region and globally? 

Ramos: As we have always said in the Philippines and also in APEC, there must be a democratic distribution of wealth and benefits. It’s okay to have plenty of wealth, but it’s not okay to have so many poor people. The solution is to obviously redistribute the wealth. 

In the Philippines, we have a very candid model for portraying this idea and we say, we must grow the economy so that there is fire from the bottom and there is fire from the top just like the way we cook the very delicious Filipino rice cake called ‘bibingka.’ Fire from the bottom is the effort of the poor people at the grassroots—that includes industry, energy and even talent. 

Fire from the top means the leadership must provide connections with the global market, transfer of technology and then distribute the assets so that these also go down, not trickle down, but really go down to the grassroots so that they can expand. And I think all economies have to do this.