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Feisty Philippines “Tiger Cub” Merits New Respect

Those economic quakes across the Pacific have had the perverse result of educating Americans to South East Asia’s significance as the most dynamic region of the developing world. According to the US-ASEAN Business Council, American exports to ASEAN could surpass trade with Japan in the next 20 years. Already ASEAN’s 450 million people constitute the world’s fourth largest trading market (after the European Union, the US and Japan).

Within ASEAN, the recent currency breakdowns may prevent several recognized economic “tigers” from achieving significant economic growth this year, but the Philippines still seems likely to post a healthy 5.5% increase. “Sometimes,” says President Fidel Ramos, “it is better to be a tiger cub than an old tiger.” That means: We start out smaller, but have less distance to fall and are more resilient.

There is a special message hidden in that remark; namely, that the Philippines’ rise represents a beckoning investment and marketing opportunity for the US, and especially the Pacific Northwest.

It would not have seemed so only a few years ago. In the early 90s, with the US closing military bases and the Philippines democracy still wobbly, a century-long special relationship between the US and its one-time protectorate appeared to be coming to an end. But, as last week’s Seattle visit by President Fidel Ramos emphasized, things are looking up–even in the midst of Asia’s currency turmoil. Seattle and Washington State, home to 60,000 persons of Filipino background, may have a particular interest in the future of the tropical archipelago because of our relative proximity, higher education ties and the lure of our technology.

Culturally, quips Ramos, “It is said that we (Filipinos) are the way we are because we spent 300 years in a Spanish convent and 50 years in Hollywood.” But among the legacies of that strange colonial history is a population that is comfortable in English, the defacto international language, and are used to operating under laws and structures modeled on those of the United States. As the old pattern of American paternalism and Filipino dependency has disappeared, the image of the Philippines as an independent, but Westernized partner can be discerned.

Ramos’ impressive, six year administration ends next May, and many observers (and perhaps Ramos himself) worry that a new government could revert to political pandering, cronyism and corruption. More likely is that Ramos’ privatization of unwieldy state enterprises and the streamlining of government processes and structures will continue. Such reforms as foreign exchange de-regulation and ending the telecommunications monopoly have helped earn the Philippines a prestigious PERC 97 Survey ranking on Asian investment risk that puts the country just behind Singapore, Hong Kong and Japan. Inflation has dropped from 18.7% to 5.7%. Exports are up 23% so far this year. And, as a stabilizing factor, the large number of Filipinos working abroad brings in about $7 billion in payments to families back home. Even if Ramos should fail in his efforts to liberalize trade, “graduate” his country from International Monetary Fund controls and undertake tax reform before he leaves office, it seems unlikely that a successor would try to reverse the nation’s course.

Over the long run, the Asia Development Bank, located in Manila, projects an average 6 percent growth rate in the ASEAN region, including the Philippines, that will require investments equaling $50 trillion between now and 2020. Some $10 trillion of that will be for infrastructure –roads, bridges, mass transit, transportation, plus waste-management facilities and other environmental processes. American finance and technology can help.

Management and professional skills–the burgeoning service sector of trade–also will be stimulated. Given the English language proficiency of many Filipinos–and the nation’s position as second among developing countries in exports of computer services (after India), the Philippines again stands out for its business appeal.

The country has the still further advantage of long-standing educational ties to the US. Ramos himself is a graduate of West Point and the University of Illinois, and thousands of other Filipinos have some connection to US higher education.

At last year’s APEC Summit in Manila, President Ramos helped create Edunet, a program to provide interactive higher educational services among the Pacific Rim countries. There are now 48 universities in 18 nations conducting Internet teaching and research on Edunet. And, though largely unnoticed here, this new system is headquartered at the University of Washington’s new APEC Study Center and is presided over by the internationally recognized UW professor, Donald C.Hellmann.

In Seattle last week, Ramos proposed a “Cyberspace Education Corps” made up of tens of thousands of volunteers, “donating time and talent to teach developing nations through the net–without ever having to leave their homes and offices.”

That good idea, the already operating Edunet, and several sizable commercial ventures from the Seattle-area that are going into the Philippines indicate what is possible: a new US and Northwest “special relationship” with an old ally and friend, the Philippines. Peace and prosperity in the 21st century will be built on just such partnerships.

Bruce Chapman

Cofounder and Chairman of the Board of Discovery Institute
Bruce Chapman has had a long career in American politics and public policy at the city, state, national, and international levels. Elected to the Seattle City Council and as Washington State's Secretary of State, he also served in several leadership posts in the Reagan administration, including ambassador. In 1991, he founded the public policy think tank Discovery Institute, where he currently serves as Chairman of the Board and director of the Chapman Center on Citizen Leadership.