Australia and the Philippines - On the Threshold of a New Era

Speech by the Hon Alexander Downer, MP, Minister for Foreign Affairs, to the inaugural Philippine-Australia Dialogue, Manila, 11 October 1997.

Introduction

Co-chairs Estanislao and Webb, Secretary Siazon, distinguished leaders from Australia and the Philippines, ladies and gentlemen.

Australia and the Philippines stand on the threshold of a new era. Secretary Siazon and I have agreed that we need a new, more dynamic bilateral relationship that brings further real benefits to the people of both countries. The Philippines Australia Dialogue is a key vehicle to get us there.

The Philippines has always been a country that matters for Australia. It stands at the heart of the region of our principal strategic and economic interest. It has a vigorous democracy which contributes to a strong resonance between the thinking of Australians and Filipinos. We have begun more and more to enjoy a close working partnership on important regional issues. And we have also become more fully aware of the potential for further increased trade and investment between our two countries.

Australia's engagement with the Philippines is strong - and, to those who do not know the relationship, quite striking. It is striking for instance that Australia is the second largest provider of development assistance to the Philippines, behind only Japan. And it is striking that Australia is the Philippines' largest defence cooperation partner.

That is all good - but we in Australia are seeking consciously to make it better. We recall that President Ramos said in Australia in 1995 that we "tend to look past each other". There is now more eye contact between us than there was two years ago - but we are determined to keep our focus on the relationship and to take it forward. I personally have made a reinvigoration of the relationship a key focus of my work in 1997.

That is why today's Dialogue is so important. Through this Dialogue, which Secretary Siazon and I agreed on in our discussion last year, we seek to gain broader recognition of the relationship's importance and a strategy to help us achieve more together in the future. Never before has such a high-powered group of leaders, from all walks of life in both countries, had the opportunity to consider together ways for Australia and the Philippines to advance their mutual interests. Never before has the opportunity been given to those outside the inner circle of Government to make such a direct impact on bilateral ties. We look to you to provide a stimulus for new ideas to take the relationship into a new era.

I want to start the ball rolling by talking to you first about the recent White Paper on Australia's Foreign and Trade Policy and our commitment to the Asia Pacific region. Second, I want to address the potential for growth in the Philippine-Australia relationship.

PART ONE: The White Paper and Australia's Future in the Asia Pacific

Australia's first ever White Paper on Foreign and Trade Policy brings together everything that the Government has been doing in foreign and trade policy since March last year, and charts Australia's way ahead in our regional neighbourhood and the world as we move into the 21st century.

Australia has global interests which require a foreign and trade policy of broad scope. Nonetheless, a fundamental message of the White Paper is that Australia is committed to the Asia Pacific for the long haul, and that Australia's highest foreign policy priority is to make a lasting contribution to this region.

The White Paper stressed that East Asia and, in particular, South East Asia, is Australia's highest priority. It also stressed that Australia brings substantial economic, strategic and cultural assets to its regional engagement.

The region can also count on Australia being there when the chips are down. We have demonstrated that again in four telling ways over the last two months. Our one billion US dollar contribution to the IMF package for Thailand and our recent announcement of two million Australian dollars in assistance to combat Indonesia's forest fires are concrete evidence of that commitment. Similarly, we have played an important role in helping develop a regional consensus on the lead of the ASEAN Troika - of which Secretary Siazon is a member - in addressing the issue of Cambodia; and in helping to overcome the effects of drought in Irian Jaya and within the Philippines Australia is playing an important role to build a peace dividend for the people of Mindanao, and I will have more to say on this later.

In short, Australia has been deeply involved in helping to overcome crises which have posed respectively economic, environmental, strategic, and humanitarian challenges for the region.

The White Paper gives Australia's foreign and trade policy a much sharper and more results-oriented focus. In seeking those results, we have confirmed the importance of several key approaches.

First, we have placed renewed emphasis on building effective bilateral relationships. These are vital in themselves but they are also the building blocks of regional and multilateral efforts. The relationship with the Philippines presents an excellent case study of our focus on bilateral links. Here was a relationship that was ticking over well, and would have continued to, with minimal Government effort.

But we in Government - both in Australia and the Philippines - have agreed on the importance of doing better, and doing more. That effort is beginning to deliver results. Secretary Siazon and I announced a series of bilateral initiatives in July. We are here today at the inaugural Philippines Australia Dialogue. And I will have more advances in bilateral business to announce in the course of my visit. In fact, the Philippines relationship demonstrates not only the seriousness of the Government's commitment to bilateralism - but the genuine achievements that can follow from that additional effort.

Second, the White Paper recognises that the sustaining force behind the Asia Pacific's dynamism is economic liberalisation. For liberalisation is the key to a buoyant trade and investment environment which can produce new jobs and improved standards of living for citizens in every country of the region.

Third, the White Paper underlines the importance of building regional structures that promote the peaceful resolution of differences and which foster a sense of common interests and shared responsibility for the region's future.

Finally, and perhaps most importantly, the White Paper states clearly that we cannot pursue our national interests without having regard to the values of the Australian community, including its support for fundamental human rights. Central to these values is an unqualified commitment to racial equality, to the elimination of racial discrimination and to a non-discriminatory immigration policy. I am proud that Australia has a remarkable history of cultural diversity and in today's world is unsurpassed in its tolerance. That is a special feature of Australia, and that is the way it will continue to be.

The White Paper also identifies globalisation and the rise of East Asia as the two most profound trends in the international environment to which Australia's foreign and trade policies must adapt and respond over the next fifteen years.

Some commentators have been critical of the White Paper's judgement that economic growth in industrialising Asia will continue at relatively high levels over the next fifteen years. They point to the continuing currency and market adjustments in South-East Asia as evidence that the East Asian miracle has come to an end.

There is no doubt that these recent developments pose a very great challenge for ASEAN countries and that it will be vital to adhere to prudent economic policies if long-term growth is to be maximised. But, by looking at the fundamentals of the economies of the region - and where they are likely to head over a decade or more - we can identify what is really in Australia's and the region's long term interest.

These economies have fundamental strengths that give cause for optimism. They have strong fiscal positions, which will stand them in good stead in the current period. They have high domestic savings rates, which are critical to long term investment capacity. And their integration into the global economy has meant that they have productive investments and are producing goods and services that are in demand in the rest of the world. The message I give to those who doubt regional economies is look long term and do not forget the fundamentals.

I have personally been at pains in Australia to explain that, despite the current volatility, the long term prospects for South East Asian economies remain good. Our contribution to the Thai baht swap was an indication of our confidence in the region as well as our commitment. And I reiterate here that Australia retains confidence in the economic fundamentals of the region and in its future.

PART TWO: The Philippine-Australia Relationship

I would now like to turn to the very important bilateral issues which you will be discussing over the next two days. I would like to consider first, why the Philippines is important for Australia; second, where the relationship is at now; and finally, to ask you to contribute to where we go from here.

The Importance of the Philippines to Australia

To say that the Philippines has come a long way this decade is, of course, an understatement. At the end of the 1980s the Philippines was experiencing severe economic difficulties and faced armed insurgencies on a number of fronts. Over the period of President Ramos's leadership we have seen those problems substantially turned around.

On the internal security front, President Ramos has been able to address substantially the concerns of insurgency groups on the left wing, in the military and in Muslim Mindanao. As a consequence, the Philippines has enjoyed a period of political stability which has underpinned an equally impressive upturn in its economic fortunes.

In that context, I am pleased to announce today that Australia will be contributing two million dollars towards peace and development efforts in the southern Philippines island of Mindanao. In particular, the fund will be used to support emergency programs in post conflict areas and to help former MNLF soldiers pursue livelihoods away from conflict. It will be part of an expected one hundred million dollar contribution by Australia to development in Mindanao over the next few years. By contributing to such peace, we are also contributing to the economic health of the Philippines, and that is a task of which I am proud.

The Philippines now boasts several years of GNP growth of over five per cent per annum. This achievement has been built on substantial tariff reductions and liberalisation of a number of key sectors including the financial sector, shipping and telecommunications.

Moreover, President Ramos's administration has committed itself to reducing the general level of tariffs to five per cent by early next decade. I applaud that commitment as an important step towards the APEC goal of free trade and investment in the Asia-Pacific region.

It is clear that whoever succeeds President Ramos next year will have very big shoes to fill. We have confidence, however, that - regardless of who becomes the next president - with the Philippines' commitment to economic liberalisation and democratic principles, a bright future is assured.

The Philippines' success has also won it an enhanced international profile. And Philippines leaders are making the most of that greater role. Last year, the Philippines demonstrated considerable diplomatic skill in launching the implementation stage of APEC's road to trade liberalisation, known as the Manila Action Plan for APEC.

Secretary Siazon, a highly skilled diplomat himself, has demonstrated as chair of the ASEAN Standing Committee and of the ASEAN Regional Forum since July that the Philippines is now a regional player of considerable stature.

For all of these reasons, we regard our relationship with the Philippines as one of tremendous importance. The Philippines - at the heart of East Asia, with a now solid record of growth and stability, and with an enhanced profile within ASEAN and in the region - is a nation which matters more and more to Australia.

The Relationship at Present

The relationship is already on a very sound footing. Based on common regional concerns and a shared commitment to democracy, it is a relationship of like minds. And it is one which is gathering considerable momentum.

We both seek to strengthen the region's security through our membership of the ASEAN Regional Forum and by building up a series of interlinking security dialogues. And I am pleased to say that the inaugural regional security dialogue between our officials will take place here on 14 and 15 November.

We both share a commitment to enhancing regional economic liberalisation. I have already talked about the Philippines's contribution to APEC, which stands as one of the key achievements of the Ramos administration.

Our commercial relationship has been growing rapidly in recent times. Five years ago, two-way trade was 775 million Australian dollars. Last financial year it had almost doubled, reaching 1.5 billion dollars. We have no doubt that there is the potential for further growth.

Moreover, Australian firms are increasingly investing in the Philippines or contributing their expertise in some way. All of you on the Philippines side will know the Manila South Harbour container terminal, the Philippine National Railway Southern Luzon rail link, the Cebu smart traffic light system and the Mass Rail Transit system currently under construction in Manila. But did you know that all of these have benefited from Australian know-how at some stage?

Australia's commitment to the Philippines is also evident when you consider the extent of our defence and development cooperation. This year we have provided $A4.75 million under our bilateral Defence Cooperation Program. And our development assistance this year will reach around $A57 million.

There are also strong people-to-people links with 90,000 Australian residents hailing originally from the Philippines and tourist numbers to Australia now sharply rising. A number of prominent Filipinos have also studied or trained in Australia at some stage - Transportation and Communications Secretary Enrile and Agriculture Secretary Escudero are just two who spring to mind. We would certainly like to see many more Filipino students come to Australia.

It is clear that Australia and the Philippines enjoy a relationship which, in an undemonstrative way, has achieved a great deal across a broad range of fields. The challenge we face is to gain recognition of the strength of the relationship and its gathering momentum, and to broaden it even further.

Future Steps

Recently, we have begun to take steps to do just that.

Secretary Siazon's visit to Australia in August was a very successful one which brought the Philippines to the direct attention of many Australian businesspeople. My own visit here this week will build on those gains.

Today's inaugural Philippines Australia Dialogue is also a major step in the right direction - and I congratulate your chairmen, Dr Estanislao and Professor Webb and their teams from Griffith University and the University of Asia and the Pacific, for bringing together this excellent group in this fitting setting. Indeed today's gathering represents the most high-powered gathering of Filipino and Australian talent and expertise yet brought together.

Also, Australia has now commenced - as I foreshadowed in Kuala Lumpur earlier this year - a survey of our current investment in the Philippines. This will help highlight new areas of opportunity for Australian business as well as identifying any existing difficulties in our investment relationship.

I would also like to take the opportunity to announce today two further important initiatives.

The first we believe will significantly raise Australia's profile in the Philippines. Next year, 1998, is of course the Philippines' centenary of independence from Spanish colonial rule. As part of Australia's participation in that anniversary, we will be holding a ``festival of Australia'' in Manila in the latter half of the year. The ``festival of Australia'' will help make more widely known the extent of Australia's involvement in the Philippines and will showcase the best Australia has to offer in business, science and technology, education, culture and sport.

The second initiative will help raise the Philippines' profile still higher in Australian businesspeople's minds. The Department of Foreign Affairs and Trade's East Asia Analytical Unit has commenced work on a study of the Philippines' economic prospects. The Unit's work is highly regarded by Australian business and academia and we expect that this study will considerably increase investment interest in the Philippines.

Conclusion

Before we commence our discussion I would like to leave you with some thoughts about your role in creating the next phase of Philippines Australia relations.

We are now in your hands. Knowing that Governments do not have all the answers, we are asking for your intellectual contribution to the future of the bilateral relationship.

The task is yours. But may I offer three suggestions on how to take it forward.

First, be positive. Secretary Siazon and I have shown what can be done with extra effort to promote this relationship.

Second, be open with yourselves and with each other. Plain speaking is a way of life in both our countries. Use that shared advantage to generate an open and vigorous debate.

And, third, be bold. Deliver ideas that are worthy of the dynamic relationship that we are building.

The English language does not have a word that captures the 'best wishes and long life' message that I want to leave you with today. But, fortunately, in the Philippines, you are blessed with a word that hits the spot precisely. Mabuhay Philippines! Mabuhay Australia! And Mabuhay to this Dialogue!