The Pearl of the Orient
It is often said that the warmth of the Philippine welcome is legendary and as a first-time visitor to your wonderful islands I can happily confirm it.
The poet, Jose Rizal once vividly described your country as the “pearl in the sea of the Orient” , perhaps I may amend that statement to say your archipelago is more like a string of pearls cast across the South China Sea. I cannot hope to see all 7,107 of your islands but I can take away with me a flavour of your country.
My initial impressions of the Philippines are in many ways similar to those I experience whenever I visit the Asia Pacific region.
Everywhere there is colour and noise; there is a vitality and energy and bustle that is so characteristic of the region.
But here in the Philippines there is also something more. To the Western visitor the Philippines has a familiar atmosphere. For of all the nations of East and South East Asia, yours has had the most intricate relationship with the West.
From the moment Ferdinand Magellan first sighted Samar in March 1521, your history has been intimately intertwined, first with Spain, and then with the United States.
A Unique Legacy
That influence has given the Philippines a unique legacy; the only Christian country in Asia and one where English is widely understood. This dual inheritance is important in understanding your people's passion for liberty.
Many of the roots of modern democracy are based on Biblical values — belief in the uniqueness of the individual, the moral qualities of freedom, the rights and duties which we all share, these are the heart of our democratic principles.
We share a conviction in the sanctity of all human life, the worth of each and every person, and the fundamental importance of the family. The campaign for human rights may only have emerged in the last two centuries or so but its foundations stretch back to our Biblical heritage.
So it is natural that here, in the predominately Christian Philippines, there should be such a deeply held desire to see liberty prevail.
Equally, over the last five hundred years, it has been the English speaking peoples who have been at the forefront of extending democratic ideals around the world. And as, what is often described as, the world's third largest English-speaking nation, it comes as no surprise that you should play a major part in that too.
I am very much aware of the turbulent history of your islands in this century. Naturally, this will colour your views of the future.
It is an enduring lesson that those who have lived under any form of authoritarianism do not want any more of it. They know that democracy based on freedom under a rule of law and accountability to the people may not be a perfect form of government: there is no such thing. But it is the best yet invented.
One of today's great problems is caused by those who accept freedom but reject the responsibilities and respect for the rights of others that are an essential part of it. They do not hesitate to use violence for political or personal gain.
But in a functioning democracy in which freedom of speech, freedom of worship, and freedom of association are guaranteed, violence is totally unacceptable.
Our task must be to strengthen the rule of law in all its aspects so that people can go about their daily lives without fear. We should never concede more to those who threaten us with a gun, than we would to those who promote their views through the ballot box. For that would be death to democracy.
Lessons of this Century
If we are to make the best of the next century, we must first heed the lessons of this one.
1. Harnessing the advances of science has brought greater change in a faster time than we have ever known
We have witnessed the most remarkable events in science and technology. In 1900 what we now take for granted would have appeared fantasy in the eyes of our forefathers. There were no aeroplanes, televisions, plastics, computers, or antibiotics.
The atom was still the ultimate indivisible unit of matter.
The progress of medical science has raised the population of the world from under 2 billion at the beginning of the century to nearly 6 billion now, bringing both new challenges, and requiring careful use of resources.
We have seen the era of mechanisation give way to the era of automation. And just as mechanisation transformed the use of physical energy, so now automation is transforming the use of intellectual energy.
And the speed of change is forever quickening. Development which once took years can now be achieved in months. “Smart” machines transfer technology instantaneously from one country to another. Global communications mean that we can all have access to information from across the world and can travel across it too.
And that in turn means that it becomes more difficult for dictators to withhold the truth from their people.
2. The political upheavals
This century has also been shaped by two great political struggles. The first against Fascism and Nazi-ism, was defeated in war. But the second, against Communism, proved more enduring.
For the best part of the century, our nations have been forced to take part in a great ideological battle. A battle between communism and liberty.
We always knew that communism would fail because it produced neither dignity nor prosperity.
You only have to look at the nations which have been divided and lived under free and unfree systems to see which flourish more. West Germany or East Germany before reunification? South Korea or North Korea? Taiwan and Hong Kong or Communist China?
Just reciting the list proves the point.
But the crushing of human personality which Communism embodied has now left so many in the former communist countries unwilling and even unable to shoulder responsibility for their own lives.
The transition to liberty is never an easy one. It is particularly difficult when, as with the Soviet Union, there is no living tradition or recollection or freedom. For we know that the longer a country's experience under communism, the harder it is to recover from it.
The Russian's are struggling to achieve an enterprise economy. President Gorbachev started the process by giving personal and political freedoms but he did not know how to create economic freedom. After 73 years of communism the Russian people had little taste for enterprise and their only brief experience of it was snuffed out by Lenin in 1917.
China took a different approach.
Since 1978, Deng Xiaoping, although refusing to give personal and political liberty, has steadily encouraged a market or enterprise economy.
But perhaps the greatest difference between the Russians and the Chinese is that the Chinese are born traders and they have benefited from the investment of their diaspora in Taiwan, Hong Kong and Singapore.
3. Enterprise — the Vital Ingredient to Success
The failure of communism's great experiment has taught us that countries are not rich in proportion to their natural resources; if that were so then Russia would be the richest country in the world; she has everything, oil, gas, diamonds, platinum, gold, silver, the industrial metals, timber, and a rich soil.
Countries are rich whose governments have policies which encourage the essential creativity of man.
“Today the decisive factor is increasingly man himself, that is his knowledge, his capacity for … organisation and his ability to perceive the needs of others and to satisfy them” .
Capitalism is therefore not only about material things, it is about the human spirit and its creativity. In seeking to liberate people from poverty it is the business ethic in action which is the cutting edge of progress. Indeed the first social responsibility of a Government is to frame its laws in a way which maintains the wealth-creating capacity and reduces state intervention.
So it is the United States and Japan whose mighty economies demonstrate that success is greatest where the state takes only a comparatively small proportion of the nation's wealth in taxes.
And their example was followed by Hong Kong — which takes even less, leaving more to “fructify in the pockets of the people” , as Gladstone would have put it.
And we are all benefiting from growing trade. For trade has proved the most effective vehicle for spreading prosperity to small and large nations alike.
A small nation can still thrive as long as its businesses have access to the larger world market, where they can compete on equal terms with commercial and political giants.
You only have to look at the success of Hong Kong, Taiwan, and Singapore to know this to be true.
4. The Rise of Asia/Pacific
Recently lecturing in the United States, I called this the American Century. America's passion for liberty, her willingness to defend it the world over, her capacity for leadership, have put many countries in her debt.
And I pride myself that Britain has been her most faithful ally and friend in her great endeavour.
Now we see a new dynamism in the countries of the Asia&/Pacific. There is a tendency when using that title to think of all the countries in the region as the same — but they are far from being so.
They are diverse in size — ranging from China to Brunei.
They are economically varied — compare Japan to Cambodia.
They differ in political progress, in religion, in culture and in history.
But just as the scene shifts in a play, so the next Act in world history will be set more in Asia than in Europe, more in the Pacific than in the Atlantic, as the economic centre of gravity moves towards this region.
One look at the figures shows why the Asia/Pacific will play such a prominent role in the future.
First, the qualities of the people: a strong work ethic; a sense of social discipline; a belief in the family; a powerful commitment to education and to self improvement, to thrift and loyalty.
Second, it is not only the qualities of the people , it's the sheer numbers of the people who have those qualities and are in the most economically productive age group — twenty to forty — which is so significant. By the year 2000 there will be 76 million of these in the United States, 94 million in Europe, 37 million in Japan, but 570 million in East Asia.
They will constitute an unparalleled resource.
They will also constitute a vast market. Indeed, we can expect to see by the year 2020 a sharp increase in the proportion of the world's relatively well-off people, from around one billion to around three billion, in the Asia/Pacific region.
Third, by the end of this decade the volume of trade within the Asia/Pacific region is expected to exceed trade within Europe
The Philippines — Applying the Lessons
Here in the Philippines you are well aware of the importance of the two ingredients for success; democracy and free enterprise.
President Ramos has seized the initiative with his bold programme “Philippines 2000” which aims to take you over the threshold of being a Newly Industrialised Country.
Since 1992 the Government has introduced a series of reforms which are now bringing results.
Inflation is now in single digits, having been more than halved within the space of three years.
GNP has shown two years of growth above 5&percent; and the trend is upwards.
Foreign investment restrictions have almost all been scrapped, import barriers slashed, the Central Bank made independent and the banking industry as a whole opened up to overseas firms.
Privatisation has been the order of the day, with almost all the State's assets returned to private management, and what remains, such as the water system and the national power network soon to follow.
The results have been noticeable.
You have the world's second fastest growing emerging stock market; exports were up substantially and profits for your top 5,000 companies were up by 60&percent; last year. What a marvellous record.
I see some traces of Thatcherism in this programme!
You are also right to tear down the barriers to trade and investment with the outside world and to work with your partners in APEC and WTO to promote global free trade. And we all look forward to Filipino leadership of APEC next year and to the summit which you will host in Subic Bay.
The Economic Challenge to the West
The economic challenge posed by the Asia&/Pacific is for Europe and the United States to make themselves more competitive internationally. That means proceeding further and faster in the direction of reducing the burdens of government, controlling spending and balancing the budget, cutting taxation and reducing costs.
We now live in a genuinely global market in which capital, technology and skilled people move quickly across national boundaries in search of the most favourable economic and social climate.
So there is more reason than ever before for governments to pay the closest attention to the requirements of business.
Britain and the Asia/Pacific
Britain for one is ready to meet the challenge. We are the largest European investor in the region. We are the second biggest exporter of goods and the biggest exporter of invisibles.
Last year our exports to the ASEAN countries grew by a quarter, to over £5 billion, which makes them our eighth largest market.
Quite rightly, the British Government has in recent years given a much greater degree of importance to our diplomatic links with the region.
But I believe that Britain needs to consider further the implications of these Asia/Pacific opportunities for our wider foreign policy.
Britain must always think and act internationally.
Rather than rely on our “influence” within the confines of Europe I would have us fulfil our destiny as a nation with global interests and a special understanding of the world derived from our history.
The Common Market has given us, the European countries, welcome access to each others markets, but relying on Europe to provide either a security or economic framework will not satisfy our needs.
We should be more imaginative and more ambitious.
No such thing as a New World Order
Following the end of the Cold War, some people described our modern global political and security environment as a New World Order: my friends, there is no such thing. What we have today is a world ordered in a very different way where economic progress is increasingly followed by democracy.
That is the good news.
But the bad news is that we find ourselves in a more disorderly world now that the Cold War is over and events are no longer seen through the prism of East-West rivalry. There are dangers of nuclear proliferation as former Soviet weapons, materials and expertise find their way to unstable and aggressive regimes.
There are renewed national and ethnic tensions. The failure of the international community to uphold basic moral and legal principles in dealing with events in the former Yugoslavia has also set the worst possible precedent.
In this differently ordered world, the Asia-Pacific region enjoys by comparison enviable peace and stability. That has been the basis for its growth and prosperity.
But there have been more than enough conflicts in the past — in Korea, in Vietnam, in Cambodia — to underline the importance of every country maintaining strong and well-equipped forces to defend itself.
For Thatcher's law of politics is that the unexpected happens and we must always be prepared.
It would be quite wrong to be misled by the present favourable situation into imagining that there will be no future threats to peace in the region. The most dangerous threat comes from North Korea's nuclear ambitions.
It is very far from clear that these have been successfully checked. Indeed the agreement reached between the United States and North Korea is in reality a tacit acknowledgement of North Korea's nuclear status.
It is also a signal to other regimes with potential nuclear ambitions, say in Baghdad, Tehran or Tripoli, that breaking the Nuclear Non-Proliferation Treaty is a profitable activity; in other words it signals that crime pays.
One only has to think of our experiences with Iraq to realise that dictators can never be trusted. Only now, after five years of inspections and following the defection of one of the most senior members of the Iraqi regime, do we finally know how close Iraq was to having nuclear and biological weapons.
We know too that it continues to try to acquire them.
What confidence can we have that we know North Korea's true intentions? They could yet pose a risk to the security not only of the Korean peninsular but of the whole region.
A balance of power between Russia, China and Japan is evolving
But the crucial element in preserving security will be the emerging relationship between the three largest powers in the region — Russia, China and Japan — each of them very different countries with very different strengths and weaknesses.
Within Russia, although there are signs of economic progress, the political situation is confused and worrying. I believe that the communist system will never return but there are still plenty of communists about with new political labels.
Russia still has the weaponry and the reach to cause problems across half the globe — including the Pacific — if it is so minded.
The time has probably passed when outsiders could make much impact on Russia's internal economic and political evolution. I would have liked the West to have done more and sooner. I also believe that the West is now too keen to appease Russian demands, especially as regards expanding NATO membership to some of the countries of Central and Europe.
Generous-hearted firmness rather than weakness would have been a better policy.
For all her difficulties, Russia is still a powerful and potentially rich country. Like the United States, she is also a continental power, which faces both the European-Atlantic area and the Asia-Pacific. Although for the time being Russia has virtually abdicated an effective role in this region, we shall surely in due course witness a resurgence of Russian influence. With one-third of the world's economic activity now in the Asia-Pacific, and major Russian security interests at stake in her relations with China and Japan, she will inevitably be drawn to play a role.
But what is happening in China is probably the most important development at the end of this century and for the beginning of the next. She will want to have a bigger voice in the security of the region.
Already she has three million men under arms and a sizeable nuclear arsenal. And it has shown itself ready to use the implied threat of that military power in its action over the Spratly Islands —as you in the Philippines are only too painfully aware — and its exercises across the Straits of Taiwan.
Given the pace of China's economic growth, her military strength is bound to increase, even if the proportion of national wealth spent on defence does no more than keep pace with its economic growth.
In practice, China is going to be a much more formidable military power than it is today.
This is not necessarily a cause for alarm. The question is how that military power will be used. While China has always been vigilant about its borders and did occupy Tibet, she has not historically been an expansionist power with territorial designs on its neighbours.
In recent years, its various border conflicts have been muted and she has played a more constructive part in the United Nations Security Council. Even so, the other regional powers will need to be reassured that China's expanding forces and capabilities will not become a threat to them.
Your judgment will be affected — and rightly — by how far China's phenomenal economic development is matched by greater liberty, because democracies very rarely go to war with each other.
At present China has no legitimate political institutions and no rule of law. Yet can that great country really go through such far-reaching economic change without allowing greater political and personal liberty and without developing a rule of justice?
Sooner or later her people will surely demand a more open and representative form of government and broader political participation; and if it comes, that will be the best possible reassurance to China's neighbours.
We need to strike a balance in dealing with China between support for democracy and liberty and deepening China's economic links with the outside world. Those links represent the best guarantee of responsible Chinese behaviour towards its neighbours.
It is a policy, not of containment but of engagement.
The third player, Japan, is already an economic superpower. In recent years she has also been strengthening her defences. For reasons of history, Japan will probably remain reluctant to exercise military power in the region — provided always that her crucial security and defence links with the United States are preserved and do not fall victim to disagreements on trade and economic issues.
But of the regional players only Japan will have, for the foreseeable future, the size and technological sophistication in conventional forces and the economic might to balance China and ensure that no single country can achieve regional dominance.
… only the United States can guarantee peace
In Asia there are no multilateral defence institutions, no equivalent of NATO. Nor can you rely on the United Nations to hold the ring. Recently we have expected the UN to fulfil a role for which it is ill-suited and ill-equipped but as we have seen when it comes to action there is no substitute to the leadership of the nation state.
Stability will therefore depend both on a balance of power between the great countries, and most importantly on a continued American presence.
The principle of the balance of power — in which several weaker forces combine to counter-balance a stronger one — is often under-rated. In fact it makes for stability. But there also has to be one global power — a military power of last resort — to ensure that regional disputes to do not escalate to uncontainable levels. That power is and can only be the United States.
With the end of the Cold War, America is the only superpower. It is in all our interests to keep her committed to upholding international order, which means remaining a Pacific and indeed a European power.
That requires encouragement and support from America's allies and those who benefit from America's presence.
In recent years the Philippines has carefully developed a new relationship with the United States, while recognising America's continued importance to the security of the region.
It would have been a rash person who would have predicted at the end of the Vietnam War that America would still have substantial forces in Asia two decades later. But thank goodness America has had the stamina and resolve to stay, because its presence is the critical element in the Asian security equation —the more so because she provides a nuclear umbrella for Japan and South Korea.
While the countries of the region remain confident that America will not permit any one country to dominate militarily, they will feel secure. If on the other hand the United States were to withdraw, the balance would be upset and an arms race would inevitably follow.
So once again the world puts a big premium on America's wisdom and staying-power.
The counterpart is that America must not be excluded from the benefits of economic cooperation in the region.
The omens in fact look quite promising, with APEC assuming a larger role in the region's affairs. Indeed, the multilateral regional organisations such as APEC and ASEAN, will have a vital part in creating a sense of interdependence.
That will improve the sense of security of all the countries in the region. The key to their success is that their members are not being asked to surrender sovereignty, but rather to work together as independent countries to pursue their common interests.
Prosperity and Peace
It is on the basis of these two guiding principles — keeping the world's markets free and open, and keeping the United States as a willing and capable superpower to act as an ultimate guarantor of peace — that we can most effectively manage the changes and uncertainties which confront us.
In this way, we can ensure that the dynamic economies of the Asia-Pacific region do not appear to Westerners as a threat, but rather a challenge to improve performance and, indeed, as future markets for Western businesses.
We can also ensure that America is not seen in the Asia-Pacific region as an overbearing intruder, but rather a force for freedom and peace.
For it is towards these two goals, freedom and peace, that the countries in this region are now advancing. Who better to show them the way than the Philippines, where, in the Jose Palma's noble words:
“Ever within thy skies
And through thy clouds
And o'er thy hills and sea
Do we behold thy radiance,
Feel the throb
Of glorious liberty.”