A. Enhancing economic security through development diplomacy The extent and complexity of economic cooperation and competition in the next millenium demanded more than domestic reforms. Therefore, economic linkages are also a key to progress. Given such awareness, President Ramos complemented whatever local initiatives with economic diplomacy, otherwise termed as Development Diplomacy. This effort only emphasized the priority placed by his administration on the importance of economic development and the kind of strategic initiatives ventured upon. 1. Domestic reforms
Lagging behind in a region of rapidly growing economies, President Ramos recognized that for the Philippines to catch up with its neighbors domestic policies must be reformed. For instance, protectionism failed to help local industries develop. In response, the Ramos government pursued decentralization, deregulation, and liberalization programs. Decentralization, which devolved power from the national government to local government unit, was basically a political process. But its ultimate objective was to give provinces and municipalities greater command over
GINA RIVAS PATTUGALAN
a wide range of socio-economic policies environmental regulation, infrastructure development, investment attraction, and revenue generation. Meanwhile, both deregulation and liberalization aimed at leveling the playing field for both local and foreign investors. 2. Economic diplomacy
To President Ramos, the wars of the coming decades will be more economic than political. The world therefore will depend more on economic linkages rather than on arms buildup. This also meant that domestic economic reforms are insufficient to achieve economic viability. To this end, his government complemented whatever local initiatives with economic diplomacy, otherwise termed as Development Diplomacy. Specifically, economic diplomacy was aimed at enabling the country to access new markets and to draw foreign investors and tourists alike to the country. Economic diplomacy was conducted in two ways. The country-team approach, whereby state visits, trade missions, trade shows, business meetings, and related activities were facilitated, resulted in investor confidence and expansion of local enterprises access to foreign markets. Concretely, these led to numerous bilateral economic agreements and investments into the country. In total, the country-team economic diplomacy of the Ramos administration has led to the signing of 13 bilateral trade agreements, 20 investment protection and promotion agreements, nine taxation agreements, 11 services agreements, and a host of other bilateral economic pacts.3 It has brought in US$ 22.4 billion in foreign investments. Most investments into the country came from
Likewise, economic diplomacy resulted in the increase of official development assistance (ODA) to the country, although this cannot be considered a measure of economic progress. For example, the Philippines became the largest Japanese ODA recipient on per capita basis. Other than Japan, the European Union, the US, Asian Development Bank and the World Bank became major sources of grants and concessional loans. The major accomplishments of the Ramos government in economic diplomacy, however, were seen in the country’s representations in global, regional, and sub-regional economic initiatives and arrangements that placed the Philippines on the economic map of the region. The Philippine multilateral participation can be classified into three levels: extra-regional, regional, and sub regional. At the extra-regional level, the Philippines sought active participation in the General Agreement on Tariffs and Trade (GATT) round, which ended in 1994, and the WTO. The aim of the Philippines in joining the WTO is to access more markets for its products and facilitate its trade and investments with the rest of the world in the context of a liberal...