 |
“Reaching
the Information Gateways:
An Unfinished
Task” Address given by Mr. Anand Panyarachun
at
the 65th General Conference of
International Federation of
Library Associations
and Institutions (IFLA)
Bangkok, August
24, 1999 Ladies and Gentlemen, The
invitation extended to me by Khunying Maenmas Chavalit, President of the National
Organizing Committee responsible for this Conference, presented me with a challenging
task. I must admit that the thought of addressing an audience of library and information
experts from all over the world was indeed daunting, since I am merely a user
of the final product, with limited knowledge of the theoretical and technical
processing of information. Nevertheless, I am a staunch advocate of the reading
habit, of self-acquiring of knowledge, and of life-long learning. Therefore, I
take this opportunity to share with you my concepts on libraries, and my views
on the roles of information and communication in the future. To perform effectively
in the business world, the “demand and supply” theory is an essential guideline.
Likewise, in the world of information and communication, the expectations and
needs of consumers have to be taken into account in charting the path of information
development. Looking back into the past,
humankind has evolved its communication mode from the primeval body language to
the ancient oral tradition, to the book culture, and now to the domain of information
technology. One of the most significant events of the 20th century
was no doubt the invention of the computer. A decade or so ago, we claimed to
be on the threshold of a new world - a global village where time and distance
had taken on new concepts. Consequently, we cannot discuss the new role of libraries
without examining the effect and implications of the advancement of information
technology. We are all aware that communication
techniques refer not only to tools and procedures, but also to knowledge, content
and symbols required for reading, renewing or transmitting information. When all
these technologies are harnessed in support of information collection, storage,
retrieval and dissemination, they can have a significant potential to enhance
life-long learning, in terms of quality and quantity. They posses the potential
to have an impact on poverty eradication, sustainable development, and in bringing
about social equity. The number of books
and written materials coming out of the press and other media continues to increase
day by day, which inevitably means that readers have to be more selective and
discerning. Likewise, libraries all over the world, large or small, public or
private, must find alternative ways of coping with the information deluge, while
keeping in constant view the demands of the clientele. To serve as a change agent,
libraries have to change their role constantly from being a mere depository of
books to being not only a reservoir of knowledge, which is essential for an individual
to make informed judgement and for sharpening a human mind, but also a facilitator
of the proficiencies to select the required information out of the deluge. When
one considers ways to support the development of libraries, the most obvious concern
is the physical infrastructure. The problems related to space, acquisition of
books and hardware items, design of hardware and software, repair and maintenance,
replacement of outdated machines, lack of power supply, etc., continue to plague
all types of libraries. Furthermore, the
current trends seem to suggest that books will increasingly be replaced by computer
elements processed by various types of software. The effect of globalization is
quite strong when it comes to the use of software programmes developed extra-nationally.
The development of indigeneous software is a demanding task, requiring time, skill
and funding, but it is a task that must be seriously considered, in order to safeguard
against intrusive foreign cultures, particularly when they affect the young minds,
and more so, national cultural identity. After all, technology in use is not simply
machines and hardware, but also a collection of transferred attitudes, values,
social norms and beliefs. Cultural pollution has already become a phenomenon of
serious concern in many countries. Let
us consider the Internet as a concrete example. When we mention Internet, we think
of the vast quantity of information available in an instant from all corners of
the globe. It is perhaps the largest knowledge and information base in the world
today. Internet is certainly a jungle of wonders, from which we can acquire information
at our own discretion. On the other hand, Internet is also a jungle of hazards,
where there is no control on pornography, propaganda, advertisement, violence
and crime. A recent example was the case of students learning from the Internet
how to make bombs, which killed a number of adults and teenagers at their own
school in the U.S.A. Then there have been cases of misuse of the Internet to get
information from children for illegal purposes. I was glad to read from a newspaper
recently that in the U.S.A. the Children’s Online Privacy Protection Act will
become law in the year 2000. This will forbid advertisers to receive personal
information from children less than 13 years old without offline parental permission.
Controls on the Internet are possible, but, as has been shown in countries that
have applied these controls, the balance between control and freedom to obtain
information is a very sensitive one. Apart
from the question of hardware and software essential for user-friendly library
services, the psychosocial component has to be taken into account. If a library
is to be completely computerized, then efforts must be made to promote the willingness
of children and adults to go into information technology with confidence and enthusiasm.
This calls for intensive education and training, both for producers and users
of information. Otherwise what is the use of having sophisticated technologies
which people are hesitant to use, either because they are too complicated to handle,
or the products do not meet the requirements of the users? There is a recognized
need to instruct users how to cope with tools for searching for information. In
some countries, this is still a transitional period when both the old and new
skills are competing for limited instructional opportunities. While
on this subject, let me digress a little and mention that, with the globalization
and advancement of information technology, I believe that our educational direction
and effort should be geared towards equipping our children with the essential
tools for survival in the future world. Among these tools are computer literacy
and languages. Since English is currently the most common computer language, proficiency
in English must be stressed. However, sophisticated
the machines and electronic processing methods are they will become valuable only
when they are put to good use by the human component of the information set-up.
Hence librarians must play a dynamic and catalytic role. They must be sensitive
to the needs of their specific groups of clientele, be they the public, the institution
or organization staff, the teaching cadre and students in colleges and schools.
This calls for full involvement of librarians in the planning and operational
aspects of the set-up, so that the work of librarians not only reflects the immediate
needs of the users, but also a forecast of what is to come. For example, when
a school curriculum is to be refocused on, let us say, environment, teachers and
students should be able to gather information ahead of time on the subject, which
means that the librarian must start acquiring materials and software on environment
prior to the actual implementation of the curriculum. Unfortunately I have heard
complaints from librarians that they are sometimes isolated from the decision-making
process of institutions, as if they can function in any direction they like, and
not as information support to on-going or future undertakings. That will not do.
Librarians must take part in conferences and seminars where plans and programmes
are initially discussed and developed. How can any decision be made without a
proper information base? At the same time, every effort and provision should be
made to encourage librarians to undergo regular training and attend refresher
courses to update their knowledge and skills to keep up with the latest accesses
to information. Surely the caretakers of the various information gateways must
be kept alert and ready to usher in those who pass through the threshold of the
information sphere. I am sure all of us
here still recall vividly our school and college days when libraries were essential
and indispensable study rooms where we spent long hours searching and digesting
information. Without libraries, we would not have been exposed to scientific knowledge,
artistic work and philosophical thoughts, and the visions and wisdom’s of great
minds. People of my generation had library books as tools for learning, but my
grandchildren’s generation is more fortunate to have a variety of electronic tools
to access information. While appreciating
the good fortune that enabled me to recognize the full value of libraries, I often
ask myself the question: How many others are not so fortunate? Let me take Thai
children as examples. Although nowadays a much larger number of students make
good use of libraries, thanks to the government and private-sector efforts to
set up libraries both in the urban and rural areas, often I noticed that the books
and materials remained almost too neatly arranged on shelves, with very few being
used. Worse still, some schools are still lacking space and funds for setting
up book corners, let alone proper libraries. When it comes to information technology,
the disparities between elite schools and poor schools are quite vast and increasing.
The trend appears to marginalize the latter more and more, which in fact means
marginalizing the poor evenmore. This must
surely disturb us, as we strive for social justice and equity, and as we advocate
participatory democracy across the nation. The more this disparity increases,
the more knowledge becomes monopolized by the minority “non-poor”,
and the capacity of the poor for wholesome participatory decision-making is correspondingly
denuded. The picture is even more dismal
when we consider the Asia and Pacific region as a whole, where the population
is almost 3.3 billion, or 54.5 percent of the world’s total population 1/. In
terms of geography, culture, population density and income distribution, it is
a region of sharp contrasts, a home to over two-thirds of the world’s poor, with
620 million illiterates, or 70 percent of the world’s total illiterates 2/. With
such socio-economic, cultural and educational deficiencies, any effort to improve
the quality of the people must be encouraged, and this certainly includes the
active role of libraries in opening up the knowledge horizon, especially amongst
the young. Concern must also be expressed,
as within countries, of the dangers of marginalizing whole nations as the information
technology gap widens among them. Every
time I hear people in urban areas talk about the Internet, E-mail and faxes, I
cannot help but think of a large number of those who do not have access even to
conventional telephone services. Governments in least developed and developing
countries are still dependent on outside resources to improve their information
and communication technologies. Even within a country, these technologies may
widen the gap between the haves and the have-nots. Hence the question of access
and equity cannot be ignored. It is an established fact that those equipped with
information technologies exert more economic, cultural and political power over
those without, since knowledge is power, and those with better knowledge are likely
to survive in this highly competitive world. A
wealth of information is available via various modes of information and data processing.
To-day information technologies greatly facilitate libraries to ensure that the
content of information meets the real needs of the consumers in terms of timeliness,
relevance and utility. Those making use of libraries have recognized that behind
the information gateways lie multiple paths to knowledge, wisdom and enlightenment.
Some of us have passed through some of these gateways, while several others are
unfortunately struggling to reach them, due to both internal and external circumstances
and limitations. There must be an honest sensitivity of all concerned, particularly
policy makers. To the need of the unreached, otherwise the
continued marginalization will widen the gap and seriously affect national development
efforts, and a nation’s place in the international arena. The
main theme of this Conference mentions an “enlightened” world. Although
the concept of “enlightenment” may seem rather Utopian, it is worth
striving towards it. To me an enlightened society must first and foremost be a
learning society, where people are eager to become wiser through the search for
proper knowledge. This is by no means an easy task. Several gateways towards knowledge
sources are available, among them libraries. Still, it is the will of human beings
that spurs them on to reach those gateways. Perhaps the very first step would
be to develop a critical reading and listening culture, to encourage the young
to ask questions and get correct answers, to think for themselves and apply what
they have learnt to improve the quality of life. Some pockets of society may be
more “enlightened” than others. It is the unreached that should
be the focus for development actions, and the target of library service planning. Several
tasks remain to be done, and must be done quickly to narrow the chasm between
the influx of information and the transmittal and spreading of information. All
actions should focus on equal access to information, which is the right of a citizen.
Libraries must make it their mission to reach the currently unreached population,
thus contributing towards the development of an egalitarian society. Most important
of all, the ultimate goal of libraries is to turn data and information into knowledge,
and to ensure that such knowledge serves as a source of wisdom; for without wisdom
there is no enlightenment. Only then can we expect the 21st century
to usher in an era of an “enlightened” world. The word “enlightenment”
to me, as a Buddhist, brings with it a vision of a world of Metta, Karuna, Mudita,
Upekkha, which mean loving kindness, compassion, sympathetic joy and equanimity.
Let us all unite our efforts to make this world a peaceful world. 1/
UNESCO Statistical Yearbook, 1997 (Year 2000 projection) 2/
UNESCO Compendium of Statistics on Illiteracy, 1995 (Year
2000 projection)
Speech
Archives in English Section
7 : Environment
|
|
- Environmental
Security and Natural Resource Conflicts: New Vulnerability and New Vigilance
July 14, 2003
HTML | 
PDF - The
Role of Environment Protection in National Development Environmental Protection
and Rural Development in Thailand
November 3, 1999
HTML
| PDF
- Role
of NGOS in Changing Societies
November 16, 1998
HTML
| PDF
- The
Three E’s: Electricity, Energy and Environment
November 2, 1998
HTML
| PDF - Environmental
Priorities in Southeast Asia
January 10, 1996
HTML
| PDF
- Sustainable
Development: The Southern View
May 22,1995
HTML
| PDF
- Merging
Business and Environment - Three Steps to Leadership
December 7
- 8, 1994
HTML
| PDF
- Challenges
Ahead
October 17, 1994
HTML
| PDF
- Partnership
for Change and Progress
April 21, 1994
HTML
| PDF
PROSPECTS
FOR STRENGTHENING FOOD SECURITY
THROUGH
INTERNATIONAL TRADE Speech by Mr. Anand Panyarachun
on
the Occasion of the FAO’s Celebration of its Fiftieth Birthday
given
at the FAO Regional Office on October 16, 1995 Your
Royal Highness, distinguished guests, ladies and gentlemen: Fifty
years ago, the Food and Agricultural Organization was founded to alleviate poverty
and hunger by promoting agricultural development, improved nutrition and the pursuit
of food security – “food security” being defined to mean the access of all people
at all times to the food they need for an active and healthy life. It is time
therefore that we take a long term look at how successful Asians have been in
achieving these laudable objectives. Many
of us will recall the threat of famine that hung over Asia in the unsettled aftermath
of the Second World War. Soon after that fear was removed, there arose a new fear
that Asia’s food production capacity would not be able to meet the accelerated
growth of population. It is amusing now to hear that there was concern in the
early 1950s that Japan might not be able to feed her population. For those who
had to live through that period, the outcome for Asia was still highly uncertain,
as the region was hit by food crises of differing degrees of severity, first in
the mid-1960s, and then again in 1972-74. Since then, the food situation in Asia
has become far more secure, and the problem of food supply seems to have occupied
less of political leaders’ time than it did only two decades ago. Nevertheless,
the food crises of the 1960s and the 1970s seem to have generated a mind-set which
is no longer relevant to the needs of Asia today. The
searing experience of the 1960s and the 1970s seems to have etched on the minds
of many political leaders in Asia, that the international markets for food cannot
be relied on. Looked at objectively, who can blame them? To take a few examples:
- the US has never been allowed to forget that in 1973,
it imposed a ban on soybean exports.
- similarly, Thailand also banned rice exports in 1972.
- the US government was believed to have held up aid shipments to wring political
concessions from India.
Even
at the best of times, the international markets for food are greatly distorted
by the actions of the major players, mainly, but not exclusively, the OECD countries. Consequently,
the great food crisis of 1972-74 was followed by a much greater emphasis on self-sufficiency
among Asian policy-makers. It was also followed by an upsurge in food production
throughout Asia. It would be nice to report that the slogan of food self-sufficiency
caused the increased food production. However, sloganeering does not make plants
grow. In the end what made the difference was the widespread adoption by farmers
of new genetically improved varieties of rice and wheat – a phenomenon that has
acquired the popular title of the Green Revolution. No doubt, the slogan of self-sufficiency
helped to the extent that it set up a clear target, as well as pushing governments
to undertake many activities in favor of farmers, for example, to invest heavily
in irrigation. But without the varieties from the experiment stations, the investments
would not have borne much fruit. By the
1980s there was agricultural surplus everywhere. Asian countries had their Green
Revolution. China had that plus a drastic reform of their agriculture.
The OECD countries also weighed in. Prices having been high in the 1970s, their
farmers refused to see them fall. Now in all OECD countries, agricultural prices
are completely innocent of market forces and determined entirely by politics.
When prices rose in the 1970s, and threatened to fall, their governments obliged
the farmers by paying them much higher prices than what the markets could absorb. Thus
it came about that the great food crisis of the 1970s was followed by the great
farm crisis of the 1980s. The farm crisis in turn led to hugely increased spending
in OECD countries on farm support. Hence we arrived at a paradoxical situation,
that countries that suffer from problems of over nutrition are also throwing the
largest amount of public subsidies at food production creating a worldwide surplus,
while hundreds of millions of malnourished people are unable to obtain a share
of that surplus. Various mechanisms to rebalance the situation, most notably food
aid, prove inadequate to the task. Commercial international trade also could not
alleviate the situation, as what the malnourished poor suffered from was inadequate
purchasing power. The subsidies to agriculture
in the OECD countries continued to grow, until they faced a real budget crunch.
This crunch was ultimately responsible for the introduction of agriculture into
the Uruguay Round. It came to be realized, certainly among the food exporting
countries, that the state of anarchy that characterized international agricultural
trade could not continue. Hence the long and arduous negotiations during the Round.
It is a matter of some disappointment that the Round has as yet achieved little
in the way of true liberalization, although I sincerely hope that over time, agricultural
trade would be subject to less arbitrary interventions, particularly on the part
of OECD countries. While the Round was
going on, in Asia (and indeed in other developing regions as well), many countries
were beginning to liberalize unilaterally their economies in all sectors except
agriculture. For many of these countries this resulted in a rapid export-driven
industrialization. Agriculture and the rural sector in general have become increasingly
marginalized. Because of these developments, the mind-set acquired from the food
crisis of an earlier era is no longer relevant. In that era, the objective was
clear and simple: a bigger pile of grains – almost regardless of costs. Now the
problem is far more complex. The spreading
industrialization in Asia still requires a healthy agriculture alongside industry.
But it will have to be a different kind of agriculture. The simple rule of maximising
the pile of grains is no longer sufficient. As young people leave agriculture,
rural areas tend to become increasingly depressed. Faced
with this new sort of farm crisis, it is tempting for industrializing Asia to
close off its agriculture from the rest of the world. Without access to cheap
food from abroad, and as people leave the farms, the lower supply would automatically
increase food prices. The high food prices would then allow the remaining farmers
to have higher incomes through higher prices, alleviating what would otherwise
be a depressed agriculture. This is the path that Japan and Korea had chosen to
follow. These are successful economies, and who can argue with success? But, ladies
and gentlemen, I submit that this is the wrong path for the rest of us to follow. It
is a wrong path because it would freeze our agriculture to a pattern which would
be increasingly irrelevant. Japan and Korea have made great strides in moving
into technologically more and more advanced areas in industry, and conquering
world markets. At the same time, its farmers are paid to go on producing rice
(and they are paid generously), while its people are eating less and less of the
stuff. Can the rest of us afford this luxury?
Can we not do better? Mythology seems to cloud all discussions of food and agriculture.
To do better, we have to start by clearing our minds of some of these myths. The
first myth is that agriculture is static and technologically backward. This is
simply false. Throughout this century, the application of genetics has borne fruit,
and will continue to do so. It is precisely because of this dynamism that food
prices have increased less than the prices of manufactured goods over the last
hundred years. Of course, these scientific and technological advances do not fall
like manna from heaven, but have to be striven for – they have to be invested
in, both by the national government and by international agencies. In this context,
FAO should be congratulated for its assistance in this respect, both directly
and through the Consultative Group on international Agricultural Research (CGIAR). Falling
food prices, although of great benefit to mankind generally, not least to the
urban poor, place increasing burden on agriculture everywhere. The burden is for
every farmer to increase its productivity to keep ahead of the falling prices.
And that productivity increase can only be obtained by putting more scientific
resources into research. Past history has shown, and current science is indicating
that further strides can be made in increasing farmers’ productivity. But
scientific resources are not exactly abundant. A poor, or even middle-income Asian
country cannot afford to spread its efforts on every commodity, and certainly
not in areas where it is unlikely to have comparative advantage or ever to acquire
it. We have to learn how to invest our effort wisely and with discrimination.
An agricultural economy which is divorced from the world markets is unlikely to
be able to invest its scientific resources wisely. An
open food economy is sometimes held to be antithetical to food security. I now
turn to this central issue of food security. Food
security can be considered at different levels. One can talk about world food
security, or national food security, or food security at the household level.
From a policy perspective, it is natural to center the discussion at the national
level. National food security is
sometimes conflated with national security, with its military, life-and-death
connotations. Since few can question action taken in the name of national security,
it can be used to justify any measure. In particular, it is often claimed that
national security can be ensured by food self-sufficiency – and this is the second
of the myths that cloud discussions of food issues. If anything serious is to
be read into this argument, it means that a country should prevent any disruption
in its food supplies. Supplies from imports are deemed to be more vulnerable,
particularly during a war, as international transport lifelines are the easiest
to sever. Imports are thus naturally thought to be a less secure source of food
than domestic supplies. Consequently, an agricultural work force has to be set
aside to keep on producing food, even if it is not very productive in that line
of work. Consider another alternative to
prevent supply disruption in times of emergency. Suppose the country stores grains
and other food items to be used during emergencies. To reach the objective of
national security in this manner is surely much less costly than keeping people
unproductively occupied in agriculture, particularly when people so retained are
mostly grandfathers and grandmothers. FAO
has given a nice definition of food security – “the access of all people at all
times to the food they need for an active and healthy life.” The phrase “at
all times” requires that there be certain stability in supply conditions.
If that is so, then it seems to me that access of consumers to international markets
(when and if necessary) would enhance food security more effectively than a closed
supply system. But the definition also
says “access of all people.” We should pay special attention therefore,
to the access of poor people, since they may not have the wherewithal to buy adequate
quantities of food. We have seen that a bigger pile of grains by itself does not
assure that the poor can buy food. Ultimately the poor will have to have better
incomes to be able to buy the food. In other words poverty will have to be eliminated
for food security to be attained. Now Asian
poverty is still primarily rural poverty. The fate of the rural poor is therefore,
tied up with the health of the agricultural sector. A closed-in, protected agriculture
is unlikely to be a healthy agriculture. If high prices are the objective of such
protection, then they will benefit only those lucky enough to have access to farm
lands, and will not trickle down to those who are landless or have small plots
of land, surely the most vulnerable group. Those who wish to enter the ranks of
the landed will find that land prices are usually prohibitive under protection.
Furthermore, the high domestic price of food that a closed-in system often produces
is certainly not going to help those poor who have to purchase it. A
healthy agriculture, I submit, does not depend on high prices. It depends on efficiency.
Efficiency cannot be gained by protection. What protection does is to freeze agriculture
into becoming a museum piece. Small farmers
and landless laborers depend as much on an efficient agriculture to give them
employment and improve their lives. The choice of what crops to grow, what technology
to use, will take better account of their availability to provide their most important
resource: their labor and their skills. And if their lives are sufficiently improved
for them to aspire to own more land, they will find the land prices to be less
prohibitive. Therefore, to have a healthy
agriculture, and with it wealthier farmers, a country needs to open up its farm
economy to international trade. This will allow the farmers to specialize in those
crops which best suit its resource constraints. To take a concrete example, normally
most cereal grains (except rice) can be grown with relatively little labor and
a great deal of machinery, as they are in the great grasslands of the “new” countries
such as the US, Canada, Australia and Argentina. Asia on the other hand is blessed
with a large population and work force, and relatively little land. With such
resource structure, to insist on growing one’s own food to feed one’s own population
is good neither for the urban poor who are forced to eat expensive grains, nor
for the rural poor when the rural economy could be growing something else which
yield higher value in the market place. A
more market-oriented policy may make farmers move away from grains, as
in China, and they will do so only because it is profitable to them and to the
rest of the economy. It may also make them move towards grains, as the
example of Vietnam has shown. When Vietnam’s economy was opened up, it went back
to the comparative advantage it has always had in rice production, to expand rice
exports – this after twenty years of regular imports. Large exports since 1989
have not only increased rural incomes but allowed it to buy capital goods from
the rest of the world to develop and diversify its economy. I
conclude, therefore, that for a viable and sustainable food security policy
to emerge, therefore, a more open agricultural policy is necessary. But a government,
having implemented this policy, should not sit back and pursue a completely laissez-faire
policy toward agriculture. Agriculture has traditionally depended a great deal
on public investments, particularly in Asia, where governments have poured in
vast resources into irrigation. Of equal importance is investment in agricultural
research, even though the sums involved are considerably smaller. Now, public
investments in agricultural research are more necessary than ever, and have to
be redirected to the new economic structures that Asia faces. I have no doubt
that there are in Asian rural areas considerable productive potential that is
suppressed by the misguided policies of today. The misguided policies have to
be removed, but the productive potential has to be actively enhanced also. The
international community can in the meantime also continue to push for further
doses of reforms to clear up the tangle that has bedevilled international agricultural
trade. The US, EU and Japan have obtained great “benefits” from the Uruguay Round
in that they are allowed to continue to waste more money on an over-priced agriculture.
These rights should not give us in the rest of Asia the excuse to waste our own
money too, for we can afford to do so less than they. We need therefore to advocate
in the GATT and in APEC, among other fora, that the rich countries should be saved
from their own follies. Poor people do
not need government handouts, whether those handouts take the form of cash or
in the forms of distorted prices for things that they produce or consume. They
need to be productive citizens. For many in Asia, agriculture is still their main
business. The current system in world agriculture does not allow them to participate
fully in it and make the full contribution that they can. And it is only when
they have reached their full productive potential can they attain a long-lasting
food security.
Speech
Archives in English Section
8 : Agriculture
|
|
Speech by H.E. Mr.
Anand Panyarachun
for the International Conference
“Global
Public Health Perspective:
Where Do We Go from Here?” Siam
International Hotel, Bangkok
November 16-18, 1998 A
quest for a new world order:
A place for women and children Honoured
Guests, Ladies and Gentlemen, I am pleased
and honoured to have the opportunity to address a conference that celebrates the
50th anniversary of two institutions, the world Health Organization
and Mahidol University, both committed since their origin to the ideals of scientific
advancement and equal opportunities for every human being to secure the fruits
of technological progress. The most difficult
period of history to understand for us is always the present in which we live.
It is, therefore, a tricky undertaking to guess the features of a new order that
human kind is forging, consciously or not consciously. For sure, the suddenness
and scale of changes in the last twenty years suggest that we are living through
a sequence of revolutions. Probably the
unprecedented development in communication technology is the main common determinant
behind tremendous recent changes that ranges from the end of Apartheid to the
narrowing of ideological divides, from the collapse of many dictatorships to the
end of state economic monopolies and from the boom to the recent fall of Asian
economies. Here we will not examine detailed
aspects of each of these changes with their explanations. The theme assigned to
me has a clear assumption: to be worthy of its times and capable of meeting
the challenges of the future, any new world order has to be propitious for children
and women to develop their full potential. I accept this assumption when I
discuss here the quest for a distinct place for women and children in a new world
order. I strongly and sincerely believe that this requirement, although especially
important for the third poorest part of the world, has a strategic importance
for the whole planet. The quest for a place
for women and children in a new world order requires a conjunction of wills, hearts,
minds and hands. To support this quest with consistent actions we have to refer
not only to our values and ethical principles, but also to some lessons learned
from the collective experience. Most key
elements that we want to see in the new order are already explicit in the Charter
of the United Nations and in the national constitutions that during the past century
have guided dozens of countries around the world. Moreover, some new sound elements
have been widely accepted and endorsed, particularly in the last two decades,
in a series of international conferences on development, population, environment,
women and children among others. I would like to propose here six ethical principles
and lessons learned that constitute, in my view, “imperatives” for a new
world order that favour women and children. These are: With
the highest priority – a first call for children. Essential needs of all children
should be given high priority in the allocation of resources, in bad times as
well as in good times, at the national, international as well as at family levels. Second,
a new order should oppose the apartheid of gender as vigorously as the apartheid
of race. To discriminate girls in the educational opportunities is an unacceptable
mistake. Employment rights, social security rights, property rights and even civil
and political liberties should not depend on one, unfortunate little chromosome. Third,
if the issues of malnutrition, preventable disease, widespread illiteracy and
poverty are not confronted as a new world order evolves, it will be so much more
difficult to reduce the rate of population growth and make the transition to a
form of development that is environmentally sustainable. Fourthly,
the growing consensus around the importance of market economy policies should
be accompanied by a corresponding consensus on the responsibility of governments
to ensure and promote basic investments in people. Firth,
the international action on debt, aid and trade should create an environment in
which economic reforms in developing countries can succeed in allowing ordinary
people to earn a decent living. Last but
not least, is democracy in a broad sense of the world, political freedom, decentralization,
transparency in government action, and participation of women in politics? These
are not just desirable and suitable for certain countries: in the Four Corners
of the world these have proven to be clear paths to economic and social development. Too
many times in history have experienced economists failed to predict economic trends,
no matter how much was invested in preparing those predictions and how many mathematical
calculations were used. But here, I am not afraid to say that the imperatives
above, if put in practice, will serve to strengthen social and economic development,
not just in the long run, but also in the short and medium term as well. These
paths are not without their pitfalls and every country must proceed at their own
pace. Government endorsement and general awareness on child rights and non-discrimination
against women have grown tremendously in most parts of the world. However, in
places like South Asia and Africa, millions of children die of preventable diseases,
and hundreds of millions of women still suffer gross discrimination. AIDs and
economic stagnation are threatening remarkable achievements in women and child
health that were obtained in the last few decades. Global military expenditures
are on a downward trend, but today there are more civil wars going on than two
decades ago. Awareness on environment protection has grown substantially, and
sustainable development proposals prevail in the discourse, but, in practice,
the risk of major ecological crisis is growing a bit every day. Still,
we feel that these causes are far from being hopeless. The principles I have just
outlined are based on solid arguments and extensive experience. The special vulnerability
of children is well known: in their first three years both survival and future
development are constantly at risk. Every child, boy and girl, if well educated,
will be able to give his or her unique and valuable contribution to humanity,
including in the economic sphere. Contrary to a somewhat current opinion, improvements
in child survival have never accentuated population growth: families that are
more knowledgeable in the care of children and confident in their survival are
more motivated to avoid unwanted pregnancies. In
a desirable new order, it may be appropriate in most cases to reduce the involvement
of the government in the production and delivery of certain services. But women
and children will still need a competent public sector to promote prevention and
care, and provide accessible quality schools and other institutions dedicated
to education. Many of our countries stagger under the burden of external debt.
Yet we continue to deny that the bulk of these debts have to be paid by the masses
– the most humble labourers and their families. This will definitely not produce
lasting growth, and furthermore, will not prevent the repetition of similar situations
in the future. Democracy and decentralization have a special reason to be regarded
as crucial factors to produce a new order: they are much more compatible with
the unstoppable growth of free communication than other ways to run a government. The
rationale of the six imperatives that I proposed appears clear from the considerations
above. Let us look now at ways each country can ensure that these six imperatives
will influence the lives of real people. A new international order will, of course,
be made of a sum of facts that happen in individual countries. We
have to see the Convention of the Rights of the Child (CRC) and the Convention
on the Elimination of all forms of Discrimination against Women (CEDAW) as key
instruments. These particular conventions not only produced declarations, but
were also followed by official treaties with mechanisms for international monitoring.
The process of reporting on the national compliance to the international bodies
may be, in itself, a powerful tool for change if the discussion on the articles
of these conventions is popularized. This is beginning to happen in various countries,
including Thailand, and we hope that this practice will extend until it is the
norm, rather than the exception. In many
countries, free elected governments ratified these conventions. It is then democracy
that will support the enforcement of regulations that emanates from them, while
the dissemination of information by the many new formal and informal networks
will in turn support democracy in this process. Still,
we must be aware that international treaties, national laws and regulations and
international monitoring of indicators are not sufficient to guarantee these rights.
Even wide, intensive and popular discussions on the compliance with these treaties
will not be sufficient. We need comprehensive government plans that are adequately
funded within the limits of national budgets. Also, these plans have to be carefully
administered and monitored. Participation
of key non-government stakeholders in the preparation and implementation of the
plans will contribute to better define the objectives, to find out the most appropriate
ways to achieve these objectives and to monitor, evaluate and readjust strategies.
Diversity of perspectives has to be valued as an asset and no more as a problem.
Each country might find out its own way to get meaningful and effective participation:
some have created effective commissions for women’s affairs, some have proposed
integrated special committees and task forces for children, or even a special
Ministry for children. Some others, instead, did a serious job in putting the
specific concerns with women and children needs and rights into the routine work
of a variety of institutions. I see that
some major objectives, such as AIDS prevention and care, or ending of trafficking
of women and children, also deserve specific national or even regional plans,
endorsed at the highest political level. Special challenges for these objective
oriented plans being: - to
break down the barriers among sectors;
- to harmonize
the contribution of government, private sector and NGOs; and
- to specify objectives and strategies for the short, medium and long term
We
regard these challenges above, together, as an additional imperative that arises
from decades of experience in working for and with women and children. They remind
us, for example, that physical, mental and emotional health, development, education
and special protection have to be addressed simultaneously, in a balanced fashion;
that independent women’s organizations have a lot to contribute to the effectiveness
of programmes for AIDS control, for a safe motherhood, for sanitation or for poverty
alleviation; that children have to be prepared for the future in a fast changing
world, but their future is also decided today, because today an avoidable disease
might impair forever this future. Now different
actors have their roles to play, and different responsibilities in providing a
place for women and children in the new world order, I would like to look at two
of them, namely the governments and the scientific community. A
pivotal role of the governments is to provide universal and equal opportunities
at least for survival, and to promote early childhood development and elementary
education. Besides this typical mandate in the sphere of well-known basic services,
children and women need to have access, systematically, to channels and services
that deal with abuse and other gross violations of rights. All this is valid for
all countries and, especially in the poorest, requires careful prioritization
among different alternatives. Changing
the balance of existing expenditures in favor of the poor majority is necessary
in many cases. Some countries have succeeded in this, but not without huge difficulties.
It is not easy, for example, to shift the priority from national airlines to domestic
bus routes. Where democracy is strong it may be easier, but in general this is
more like to happen if overall resources are expanding rather than contracting.
This brings the discourse to economic development, to access to international
aid and, of course, to the adjustments that, in periods of crisis, are supposed
to restore development. An interesting
approach is that, even in a market economy context, targets for development plans
should be first expressed in terms of basic human needs, and only subsequently
translated into physical targets for production and consumption. Too
much international aid goes to unconnected projects rather than in support of
a set of policies and strategies agreed upon in recipient line ministries, coordinated
with plan and finance, and approved at the political level. As a consequence,
too often requests and responses to aid tend to favor expensive and even unsustainable
capital-intensive efforts likely to benefit the higher income brackets in society. Although
the aim of adjustment programmes is to help restore financial stability to accelerate
growth, these should always include strategies to alleviate the negative effects
on the income of the poorest. Employment and, particularly, programmes in education,
health and natural resource protection should be protected. We
insist, in other words, in a better targeting on the part of the recipients as
well as on the part of the donors. A recent initiative, called “20/20” pursues
this objective. This was launched in 1992 by UNICEF and UNDP, and proposes that
at least 20% of the national government expenditure has to go to health, education,
water supply and sanitation, while at the same time at least 20% of external aid
also has to go for these same areas. So far no developing country and no donor
have complied with this target. As for
the scientific community, represented in this room with many exponents in the
area of public health, certainly has a role to play to ensure a place for women
and children in a new world order. Representing 80% of the World population, developing
countries account for 90% of the world’s burden of illness and disability. Yet,
excluding research on AIDS, only 5% of the global expenditures on health research
is devoted to the health problems of developing countries. In
the area of basic research, in order to explain the mechanisms of diseases and
for technology development, we see the need to increase allocation to respond,
for example, to the unanswered questions related to respiratory infections and
malaria, with high impact on poor children all over the world. Such researches
are better carried out through international collaboration and exchange, and should
involve institutions in both the developing and industrialized nations. Even
more emphasis should be given to support with additional resources, the better
understanding of the most suitable ways to ensure the successful application of
existing knowledge, as well as the efforts to improve surveillance of behaviors
and diseases. This type of study, to be strengthened in developing countries,
includes epidemiological field studies, health communication surveys, studies
on drug suppliers and demand, health services financing and information systems
in support of management. This knowledge will enable planners and managers to
better establish priorities and design programmes that might channel limited resources
to benefit more people. Similar considerations
have to be made on the research on education and on selected social issues, especially
related to women and children, such as violence and other behavior-related fields.
In developing countries, an increase in the support for good quality studies on
service supply and demand. Management, communication and cultural aspects involved
in these fields would have a great return for women and children. In
conclusion, I would like to declare my optimism for a new order, or, more simply,
for the new times ahead. Like the Universal
Declaration of Human Rights that emerged in 1948, the Convention on the Elimination
of all forms of Discrimination against Women (CEDAW) from 1981, and the Convention
on the Rights of the Child (CRC) from 1992, were conceived to last for centuries,
such is the strength of the principles that sustain the articles of these documents. This
strength suggests that their survival, with growing enforcement, for one millennium
or more is not pure Utopia. We can look at these human rights as proposals and
aspirations. We needed thousand of years of suffering, struggle and, of course,
improvement in communications among nations and people to reach a consensus on
this comprehensive spectrum of proposals. Many of these aspirations are rooted
in most traditional cultures. We don’t need to contradict the principles of any
religion or culture to affirm the validity of the CRC and the CEDAW. These
treaties are typical products of a new era, where no nation and no village live
any more in absolute isolation. Although knowledge of the treaties still eludes
perhaps half of mankind today, they are nevertheless known and valued by millions
of individuals all over the planet. We
feel that these millions of people may make a difference, by helping to accelerate
the compliance with established rights, also by disseminating the new ideas to
others. Many organizations too, much more than ever, are exercising their creativity
to preserve and uphold women’s and children’s rights. They form a critical mass
that share the mission of upholding these rights. Their members and leaders are
professionals or volunteers who operate in the public sector as well as in NGOs.
Diverse in culture and backgrounds, they are involved in delivering services at
the grass-roots level as well as in discussing solutions with some degree of abstraction.
Their power is growing, allied to the well-known rapid improvement in communications. Peter
Senge, a known thinker of modern management, said that the organizations that
will prosper will be those capable of recognizing the value of the “many leaders”
within them. The same applies to the world as a whole. The hope of a worthy
order, with a place for women and children, resides in the strength of the “many
leaders” that will put their hearts, brains and hands at work for
this ideal.
Speech
Archives in English Section
9: Public Health
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Keynote Address by
Mr. Anand Panyarachun
“The Role of Environment Protection
in National Development
Environmental
Protection and
Rural Development in Thailand
JW Marriott Hotel, Bangkok
November
3, 1999 Tonight, by the time that we go to sleep, the earth
will have changed. It will be a little warmer, the rains a little more acidic,
the area of forest reduced, a few more species pushed closer to extinction and
less fish swimming in the seas. In short, the fabric that supports life on this
planet will be a little more threadbare and we will have an additional 250,000
people to feed. The title of this Roundtable
“Environmental Protection and rural Development in Thailand” is hence
not just of national concern, but great international significance, focussing
on one of the greatest challenges facing society as we draw to the end of the
millennium. Canada and Thailand, although
ostensible very different, have some critical aspects in common with regard to
the main theme of this Roundtable. Both
countries are major repositories of biodiversity with globally significant species
and populations of wildlife. Charismatic “flagship” species, such as the tiger
and elephant in Thailand and polar and grizzly bear in Canada, give both countries
a high profile on the international biodiversity stage. Second,
both countries have established protected area systems, such as national parks,
that play a major role in biodiversity protection. This is in contrast to much
of Europe, for example, where parks are mainly of recreational significance. Third,
the protected area systems in both countries are of high public concern and often
featured in the news. Both countries are currently expanding the size of the protected
area systems, and giving increasing attention to management for biodiversity.
However, both countries also have significant tourism industries, and the national
parks attract a lot of visitors. A major challenge therefore for both countries
is how to manage the national parks to protect biodiversity but also allow for
appropriate use. Fourth, both countries
have significant populations of ethnic minorities, including indigenous peoples,
who still have close tie to the land and must be included as active participants
in land-use decision-making. Canada, for example, has developed several different
models for including participation by native peoples into decision-making in national
parks. Thailand is also seeking greater input from hill-tribe peoples on certain
issues relating to natural resource management decision-making. Fifth,
both countries are committed to greater public participation in resource management
and developing appropriate means to include them. The New Constitution in Thailand
is quite specific in this regard. Sixth,
both countries recognise the importance of implementing sustainable approaches
to rural development throughout the landscape. Vast areas of Canada are rural,
with people dependent upon resource development. In Thailand, a large proportion
of the population is engaged in agricultural activities. Environmental protection
must take these important rural populations into account. It
is perhaps due to these similarities, most of which contrast markedly to the European
context, that Thailand and Canada have established joint programs at many different
levels including government sponsored aid projects, academic exchanges, student
training and research projects to explore some of the challenges being faced in
the field of environmental management. Need
for Environmental Protection Every
day brings greater scientific confirmation of the role that humanity is playing
in changing global environmental systems. Now, however, it is not only scientists
who are aware but also the general public, as the news is full of stories regarding
the latest cyclone, flood and drought that not only seem, but actually are, occurring
much more frequently and with greater intensity than in the past. In
the U.S., scientists have found that precipitation has increased by more than
10% this century, and a greater proportion is coming in storms. Insurance payments
for Canadian weather disasters have been doubling every five to ten years, and
payouts reached $1.5 billion last year. There are now suggestions by the insurance
industry, who are taking global climatic change very seriously, that the Canadian
government establish a national disaster reduction fund of between $100 to $150
million. The insurance industry has also established its own research institute
looking into weather-related issues, with over $9 million in funding. The
bottom line here is that climatic change is very expensive to fix. With
these changes has come the realisation of the values that natural systems provide
for society that we often don’t take into account. They create our atmosphere,
so that we can breath, influence the weather and regulate the hydrological cycle
for our agriculture, and provide many raw materials from bamboo shoots and hardwood
timbers to medicines to support our livelihoods and well-being. The
total value of these services is difficult to measure. One team of scientists
form Cornell University calculated total values as over $2.9 trillion per year,
or 4 times the total value of the British economy. A more recent estimate from
the University of Maryland put the value as 10 times greater than the earlier
estimate and larger than the total global economy. What
is obvious from this is that although we can measure the distance between the
earth and the moon down to the nearest half centimetre, but we are only just starting
to approximate the value of the biosphere that keeps us all alive. It
is only as we pass the 6 billion mark for global population on our way towards
the end of this millennium that we are becoming aware of the value of these ecosystem
services, and the need to make sure that they are protected as a fundamental contribution
to sustainable development for this and future generations. Protected area systems
occupy a small percentage of our landscapes, but in these small areas we protect
ecosystem values from the market values that predominate on the majority of the
landscape. Not developing these areas is a fundamental plank for sustainable development
in the landscape as a whole. Need for
Enhanced Knowledge The so-called “Green
Revolution” has enabled food production to keep up with burgeoning populations
for the last forty years, until very recently. Besides hybridisation of crop plants,
a major tool in the Green Revolution was the addition of fertilisers. Without
fertilisers, starvation would be a reality in many more parts of the global than
it is now. However, there were costs to
these innovations that we didn’t realise at the time. Nitrogen fertilisers, for
example, denitrify back into gaseous state as nitrous oxides. Nitrous oxides are
a main agent involved in the catalytic destruction of the ozone layer in the atmosphere.
Destruction of the ozone later lets in more ultra-violet radiation from the sun,
which in turn reduces crop growth, which reduces agricultural productivity. The
point of the foregoing is to emphasis that the impacts that we are having on global
systems are not only very large scale, bot that they are also very complicated.
In order to work towards sustainable development it is necessary to have greater
scientific understanding of how environmental systems work and how to implement
optimal management activities. Such understanding calls for the investment of
considerable societal resources in education and capacity building. We can no
longer blunder along under the auspices of a benign and all accommodating environment.
The environment is no longer able to absorb the costs of our mistakes without
major retribution. Global climatic change, declining biodiversity, fisheries collapse,
pollution are all telling us this. In the
future we will have much less room for mistakes, much less environmental elasticity.
We will need our best brains, to be well trained and well-equipped in order to
advise society on the right moves to stay on the tightrope on which we now find
ourselves. Universities must play key role in meeting this challenge and our graduates
and faculty must rank amongst the best in the region, if not the world. Need
for Better Implementation It is not
enough to merely know the right road down which we need to move, we must also
have the right vehicles in which to travel. This task, the implementation of programmes
that best serve societal needs over the long run is a fundamental role of government
agencies. The new knowledge and the new road require dynamic agencies constantly
reacting to the challenges of the future and not mired in the old ways of doing
things. We need to try new programmes,
listen to new voices, accept and plan for uncertainly. We need, in short, to invest
in agency renewal that will look at different ways of doing things. This is not
to suggest that all is static within government offices, but rather to suggest
that the scale and pace of change will need to be far greater than anything that
has ever been considered before. Do
not Forget the People For too long
society has been split into two groups, the “planners” and the “planed
for”. The planners were usually government agencies charged with delivering
state services throughout the country. The “planned for”, were the
rest. Unfortunately there was often little contact between these two groups that,
in theory at least, were closely related. The planners forgot who they were ultimately
planning for; the “planned for” were never told what was being planned for them. Inevitably
conflicts started to arise between these two groups and between other groups in
society regarding delivery of many state programs. Demonstrations, and even mass
unrest became common over many government projects, dam building, pipelines, national
park establishment, power stations and many others. Part of this conflict arises
from a misunderstanding of the need for the development. Conflict also arises
from disagreement about how the costs and benefits of the projects are calculated
and fundamental differences in opinion about such issues as the rights of the
state versus the rights of individuals and visions of the future for Thailand. These
kinds of concerns can no longer be swept under the rug. They must be brought out
and discussed freely in public sessions. The new constitution makes it quite clear
that increased public involvement in decision-making is a right for all Thai people.
The challenge now is to find appropriate ways of re-weaving the people back into
the fabric of societal decision-making. A
New Kind of Development Thailand experienced
world-leading economic growth rates through the 1980’s and into the 90s. Then
came the financial crash. Although this has been a very difficult period of transition
for many, the experience has not all been
negative. It has turned attention, prompted by the wise words of His Majesty,
towards a more self-reliant kind of development that focuses on values rather
than economics. This is exactly the kind of development that the world needs going
into the second millennium. So out of the crisis has risen opportunity, and that
opportunity is for Thailand to refocus its development goals with a greater understanding
of the need for environmental values and protection to go hand in hand with social
values towards a more fulfilling future. Conclusion In
conclusion, the tittle of my talk was the role of environmental protection in
national development. It should be clear that I think that environmental protection
is a prerequisite for national development in the future. We should not look at
protected areas as being locked away, wasted to human use. Instead we should see
them as an investment in our children and in the future. Over
the next 50 years it is likely that global populations may double again. Even
with the stable and predictable Earth of the past, the difficulties with providing
livelihoods for this number of people would be chilling. However, on the new,
unpredictable Earth with increasing uncertainty regarding weather patterns, floods,
droughts and cyclones, it is going to be a very challenging world for our children
to inherit. Two things we can bequeath
them are, first, to implement policies to minimise the human-caused changes to
the environmental fabric of the planet, and second, to protect small areas of
our landscape as national parks and other protected areas that will help absorb
these changes and restore ecosystem processes in the future. This
much we owe to our children, and our children’s children.
“Role
of NGOS in Changing Societies” by Mr. Anand Panyarachun
World
Vision International
Asia-Pacific Regional Directors’ Conference
Regional
Forum
November 16, 1998 Members of the World
Vision International Board of Directors President of World
Vision Vice-President, Asia-Pacific Region Distinguished
Participants Ladies and Gentlemen It
gives me great pleasure to join you at this important Conference. I have accepted
the invitation to speak to you tonight out of admiration for the useful developmental
work of World Vision, not only in Thailand but in other countries of the world. My
presentation on the “Role of NGOs in Changing Societies” will address
three issues, namely: - the changing
macroeconomics situation in Thailand;
- its impact
on Thai society; and
- the role of NGOs within
that context.
Changing
Macroeconomic Situation All of you
are aware that Thailand has the dubious distinction of being the country that
jump-started the present economic crisis in East Asia. The
economic crisis has demonstrated that, even though liberalization typically encourages
competition and efficient use of resources, it can generate excessive spending
or bubbling of the economy leading to economic and social instability We
can trace the root of our difficulties back to 1985, when after the Plaza Accord,
the Japanese Yen appreciated greatly. This motivated Japanese enterprises to shift
their production overseas. Much of this shifting was to Southeast Asia, where
low wages helped maintain a competitive edge. Those streams of investment sparked
the “Asian Miracle.” Economic growth in
Southeast Asia at that time accelerated to over 10 percent annually. Such a remarkable
pace of growth misled both the private and the public sectors into undertaking
excessive investments. Spending sprees were fueled by borrowing from both local
and foreign sources. In the early 1990s,
Thailand started to liberalize not only her capital account but also her financial
institutions. Private corporations, therefore, had more credit access. The exchange
rate stability induced them to tap low interest funds from abroad to finance their
projects. Because of easy credit, the private sector often overlooked project
feasibility. There was much investment in non-performing sectors. In
the meantime, domestic financial institutions were pressured by growing competition
to the extent that their credit extension was executed in a reckless manner. Consequently,
the country’s external debts, particularly short-term capital, surged to a precarious
level, as did the current accounts deficit as well as inflation. Simultaneously,
local banks and finance companies encountered more problem loans. Their asset
quality fell to such a distressing level that the central bank was compelled to
provide them with enormous rescue credit lines, which worsened the country’s macroeconomic
position. These imbalances considerably
undermined confidence of both lenders and borrowers about the stability of the
Baht, resulting in floods of capital outflows, which were exacerbated by speculative
transactions. Such capital flight was frightening enough for the central bank
to abolish the basket pegged exchange rate policy and float the Baht. As
you know, after floatation, the value of the Thai Baht depreciated considerably.
To mitigate the crisis, the Thai government sought assistance from the International
Monetary Fund. The rescue package stipulated many economic conditions, including
establishment of high interest rates, limited budgetary expenditures, and stricter
banking rules. Impact on Thai Society What
has been the impact of the economic crisis in Thailand? Firstly,
the substantial Baht depreciation together with the IMF conditions resulted in
the contraction of consumption and investment spending in Thailand. We
are also experiencing record unemployment. The economic downturn brought about
cuts in production and reduction in the demand for labor or employment. The number
of unemployed more than doubled from 2.1 percent of the labour force in 1997 to
4.6 percent in 1998. The number of private corporations that ceased operations
rose by 134 percent, from 4,067 cases in 1997 to 9,543 in the first nine months
of 1998. There has been a soaring rise
in the price of consumer products, particularly for basic commodities. Inflation
has risen from 4.4 percent in 1997 to 10.2 percent in May this year. Hence,
the impact of the crisis, in terms of jobs and basic commodities, has been felt
hardest by the poor and other disadvantaged groups in Thai society. As
families strive to make ends meet, children become an inevitable casualty of the
crisis. Job losses among parents and the drastic reduction in disposable family
income has meant that many children have had to drop out of schools. Surveys
by the National Education Commission conducted this year indicate that out of
a total of about 793,000 dropouts, some 254,000 or 32 percent were as a direct
result of the crisis. These include children in primary and secondary schools,
in both general and vocational education. Experience
has shown that crisis-induced stress may aggravate the already growing problem
of domestic violence and abuse in the family. Cases of suicides are reported in
the press every day. Children and youth in and out-of school are driven to substance
abuse. The World Bank, recently, forecasted
that the number of people living in poverty in Thailand would rise from 9 million
to 13 million. That would constitute 23 percent of the total population by the
year 2000. Nevertheless, despite necessary
cuts in spending, compelled by the IMF restructuring policies, the Government
has made a commitment to maintaining social expenditures, particularly in the
areas of health and education. With the assistance of international financial
institutions, such as the World Bank and Japan’s Overseas Economic Cooperation
Fund, measures are being adopted to cushion the social impact of the crisis on
the most vulnerable groups, including children. Through
the government’s US$462.2 million Social Investment Plan, funded by the World
Bank (US$300 million) and Japan’s OECF (US$123.3 million), Thailand’s social safety
net has been strengthened through the creation of employment, provision of training
and easing of access to health and education. The SIP plan is meant largely for
government and state enterprise projects, as well as for self-initiated, community-based
projects and the decentralization of development activities. For the latter two
purposes, the Social Investment Fund (SIF) of US#132.57 million and the Regional
Urban Development Fund (RUDF) of US$41.57 million will be set up respectively.
So far 1.4 billion Baht loan has been approved by the World Bank under the Social
Investment Plan to provide training for laid-off workers, women and child workers,
disadvantaged women and the disabled. The US$500 million loan from ADB for the
social sector programme focuses on support for laid-off workers and unemployed
and the maintenance of certain subsides for the poor, for labour market improvement,
and for health and education programmes. The
Centre for Assistance to Laid-Off Workers has been established by the government
under the existing network of the Ministry of Labour and Social Welfare to register
laid-off workers and provide one-stop service in the forms of training referral,
counseling and placement support. Interventions by the government have created
jobs for 125,864 unemployed and laid-off workers in the rural areas, found new
jobs in the industrial sector for 254,894 laid-off workers, and helped 40,290
Thai workers to find employment abroad. It
is my belief that the current crisis provides us with an opportunity not only
to reassess our economic policies, but also our social agenda. And this requires
a reexamination of the role of government and civil society in providing social
entitlements to the people, particularly the disadvantaged sectors. Role
of the NGOs There can be no denial
that the primary responsibility for maintaining basic social entitlements for
the people rests with Government. However, experience in Asia points to the growing
role of civil society, namely NGOs, in the planning and delivery of social services
to disadvantaged groups. It has been said
by some that NGOs have a comparative advantage to Governments in implementing
social programmes for the people. If that is true, what are some of these perceived
advantages? - The first may be
that NGOs recognize the need for participatory planning of programmes for the
poor, something which still tends to elude Governments. The involvement of the
intended target group in the actual design of a programme is considered crucial
for its success. Through their grassroots contacts, NGOs have direct access to
the people and are in position to involve them in planning processes.
- The second advantage is that, through their well-established involvement with
disadvantaged groups and marginalized communities, NGOs have earned a certain
degree of credibility and trust among their constituencies. In working
with the poor, trust is an essential element for the success of programmes.
- Responsiveness and speed are also the hallmarks of NGO operations. Compared
to Government, which is bogged down by cumbersome bureaucracy, NGOs are more flexible
in their operations. They can respond more quickly to address various situations.
Government administration tends to be mostly top-down, whereby the real needs
of the people are often overlooked. It is usually the opposite for NGOs. They
can more easily grasp the reality and the urgency of the problems faced by the
people. They can act quickly to respond to their immediate needs.
- NGOs have a reputation for being more innovative than government in their
mode of operations. There is more room for creativity and experimentation. Non-conventional
approaches can be tried and tested. NGOs have proven that they are particularly
well-suited to the implementation of programmes geared to community participation
or requiring collective decision-making by client groups.
I
have provided you with some examples of the reasons for the success of NGOs in
the field of social development. While their achievements have been laudable,
we must look ahead and map out the challenges that lie ahead for NGOs as we enter
the twenty-first century. I believe that
the true test of success for NGOs in Thailand will be their ability to influence
Government and changes in development policies. Hence, I would urge you to focus
more action in the following areas:
- Promote constructive dialogue with Governments on issues of interest to your
constituencies. Share your knowledge and experiences with them. You are well placed
to stimulate and revitalize thinking and practices, which could best serve the
people.
- Provide
Government with examples of best practices in planning and delivery of
social programmes. In this way, the micro-level experiences of NGOs can be brought
to a macro-level, thereby ensuring greater impact of programmes at the national
level.
- Monitor the
actions of Government to ensure accountability and transparency. You have a “watch
dog” role in ensuring that the principles of good governance are respected by
the ruling party.
- Raise
public awareness of the legitimate rights of the people and mobilize constructive
community action to demand change for the betterment of society;
- Network among yourselves. Gain a bigger voice at the national
level through consolidation.
- Focus attention also on your internal operations, including your personnel.
The success of your operations depends on the quality of the human resources of
your organizations. NGOs workers are the ones who come into direct contact with
your constituencies. They are the ones who are delivering the services to the
people. Hence, it is crucial that they be well motivated and possess the necessary
skills to effectively carry out their work.
What
I have just outlined are areas that I feel NGOs should emphasize to make a stronger
impact in Thai society. With the growing
social problems and human sufferings arising from the economic crisis, your role
in promoting social development assumes even greater importance. NGOs,
such as World Vision, have already contributed immensely to assisting disadvantaged
social groups. In relation to your programmes for these special groups, particularly
children, I would urge you to work towards strengthening the family as well as
communities, as they serve as the basic institutions in our society for ensuring
child welfare. The goal of your programmes
should be to provide an enabling environment for families to function effectively
as caregivers for their members, as well as for communities to become sufficiently
strong to provide social safety nets. Your programmes should promote community
participation from the beginning, and, subsequently aim to promote self-reliance.
In doing so, you will ensure sustainability. I
am confident that World Vision will be able to accomplish these goals and reach
out even more to those who are in need of its services.
Keynote
Address By Mr. Anand Panyarachun
Chairman,
Council of Trustees, Thailand Environment Institute
Former Prime Minister
of Thailand
The Three E’s: Electricity, Energy and Environment
At
the Twelfth Conference on the Electric Power Supply Industry
(CEPSI)
Dusit
Resort Hotel, Pattaya
November 2, 1998 Distinguished
Guests, Participants, Ladies and Gentlemen It
gives me great pleasure to address today what is certainly the most impressive
group of global electricity supply leaders ever assembled in Thailand. And I hope
that your presence here reflects a strong interest in Thailand. Although the current
economic outlook is not as bright as it once was, we are working hard to restructure
our economy, restore our faith and rebuild a business climate which will once
again be conducive to growth in the near future. Today,
I shall share with you my views and vision on the reconciliation of electricity,
energy and the environment in the 21st century. Before I continue with
my speech, I would like to take this moment to congratulate the host organization,
the Electricity Generating Authority of Thailand, better known as “EGAT”, for
their tremendous effort and hard work in producing the exceptional turnout for
this meeting. Somehow, I do not feel at all a stranger in this place, even though
I cannot really proclaim to be an electrician or an environmentalist. However,
during the past decade I have been associated with several organizations both
in the public and private sectors that significantly influence the power industry.
Besides the Prime Minister, my affiliation with two distinguished organizations,
the Thailand Development Research Institute and the Thailand Environment Institute,
has significantly amplified my interest in the development of sustainable energy.
As businessmen, several of our investments are in industries which use electricity
as a major resource component, and also in the electricity supply industry, itself,
a power producer. Therefore, what I am going to present today will be the emerging
key issues as I see them and the need to enhance the balance among a handful of
concerns that all begin with the letter “E”, Electricity, Energy, Economy,
Efficiency, Equity and the Environment. Electricity:
An important Fuel for Economic Development and Quality of Life Faced
with the fragility of today’s regional or perhaps even global economic situation,
current energy security problems and conversation challenges become even more
critical. Electricity has played a central role in fueling the country’s social
and economic development during the last two decades. During the period from 1984
to 1996, power generation capacity increased by an average of 9.5 per cent per
annum from 5,848MW in 1984 to 19,142MW in 1996. Thailand’s economy has grown very
rapidly and has developed International competitiveness based on an abundance
of natural resources, inexpensive labor and a strong local market. Electricity
was a key ingredient for assisting the country achieve this economic growth and
prosperity. Electrification also enhanced the quality of life. Through electrification,
living standards have risen and more social comforts have appeared. Figures from
the Provincial Electricity Authority indicate that, presently, as much as 98 per
cent of 64,457 villages in Thailand have access to electricity from the national
grid. With electricity, people have transformed their lives through increased
domestic comforts, industrial competitiveness, job creation and revenues. Even
so, electricity consumption per capita in Thailand remains far less than in industrialized
societies. Energy production and consumption,
in fact, poses many threats to human health and environmental resources. Thailand’s
energy related environmental problems are not confined to power facilities which
burn fossil fuels. The legacy of environmental impacts resulting from conventional
electricity technologies of thermal power plants and hydropower, although not
devastating, still await an environmental clean-up and proper management. Competing
energy sources have their own strengths and weaknesses in terms of environmental
and society consequences. No single option ensures total environmental protection.
Obtaining massive hydropower required large amounts of land which more often then
not was in conflict with land utilization for other purposes, such as agriculture
and forest conservation. The displacement of local populations has also been a
major, critical issue associated with the creation of large dams and reservoirs.
However, from the point of view of sustainable resources, hydropower remains one
of the best options. Energy generation by means of thermal power generates wide
ranging environmental impacts that are of global, regional, and local concern.
The emission of greenhouse gases is creating global consequences leading to climate
change and ozone depletion. More regional and local effects are seen in acid rain
which damages agricultural flora and fauna, and in air pollution. Other dire effects
include land and water contaminated by process wastes. Electricity:
Essential Goods in a New Era of Borderless Power Markets Energy
plays an important role in achieving economic goals or development within a wide
range of energy and economic strategies in each country in the region. Some countries
promote their economy by importing energy, while others accelerate economic growth
by exporting energy. Trade of energy resources in the region is one of the key
factors which is beneficial for all the countries involved. However, some conflicts
do arise which need to be addressed in this borderless power market. Following
the deregulation of the power sector in 1992, plans to privatize state-owned power
utilities has been proceeding and is ongoing. To promote private participation
and competition in electricity generation in Thailand, three forms of private
participation are emerging. EGAT established subsidiary companies, allowing both
small power producers (SPPs) and independent power producers (IPPs) to participate
in supplying electricity. National energy policy also encourages power investment
and electricity imports from the neighboring countries of Lao PDR, Myanmar and
Malaysia. Several agreements have been established with these countries and a
number of power projects are in different stages of preparation. Over
a 25 year period, starting from 1998, Thailand will buy almost 95 per cent of
the electricity generated by power facilities in Lao PDR. In fact, a memorandum
of understanding has been established between Thailand and the Lao PDR by which
Thailand will purchase power from and make huge power investments in Lao PDR.
Negotiations are currently in the early stages between Thailand and power authorities
in Southern China and in Myanmar, where several existing and potential hydropower
resources are expected to generate energy for export to Thailand. These new players
and new sources of electricity also generate new concerns and issues regarding
the rights of local people in relation to natural resources and the environment
which are being utilized to support the production of electricity for export to
other areas, other countries and other users. Experience
shows that significant structural and ecological consequences are often borne
by the local people. Their environment bears a disproportionate share of pollution
and destruction. The 900MW Nam Thuen II hydropower project in Lao PDR was delayed
for over two years due to environmental issues. Environmentalists and resistance
groups voiced their concerns to the World Bank and the Thai government, calling
for a reconsideration of the plan to purchase power from this project. The Nam
Thuen II dam will flood 450 square kilometers of pristine forest, uprooting and
displacing various local tribes from their home in the Nakai Plateau. Early
this year, the Thai government requested my assistance to chair the National Committee
attempting to settle the conflict and dispute over the Yandana Gas Pipeline Project
from Myanmar to western Thailand. This project was controversial for environmental
and political reasons. The primary cause of the vocal resistance to the gas pipeline
project was human rights issues in Myanmar and partial placement of the gas pipeline
through a reserved forest in western Thailand. Security was another issue. In
the context of trans-boundary import and export of electricity and energy resources
such as natural gas, the issue is no longer national but has become an International
affair. Arguments had been put forth that the country which creates the electricity
demand should share the responsibility to ensure the proper power development
in the source country, and that environmental safety and social justice should
be high priorities. Through this involvement,
I found that predicting environmental impact was no longer the biggest constraint
to project implementation. Nor was the design of buffers to protect and heal the
environment. Rather, failure to analyze strategic alternatives has been found
to be, by far, the most significant constraint in gaining public acceptance. Project
justification is not clearly perceived by the local stakeholders. No forceful
explanation about why the pipeline right-of-way could not have been rerouted to
avoid all conservation natural resources was presented. The project proponent
failed to adequately assure the public and the resistance groups that the most
environmentally and socially friendly options had been selected. The
Yandana Gas Pipeline episode is a good example of the need for a comprehensive
energy sector plan that includes alternative energy policies, plans and strategies
or project types, taking into account their costs and benefits, particularly the
environmental and social impacts. Analysis of pertinent alternatives will prevent
high impact projects from getting on the priority list. After projects are ranked,
based on the lowest environmental cost, project specific assessments can be performed.
By employing this strategic planning on a sector wide level, the public consultation
process at the stage of project specific assessment becomes more manageable with
minimal conflict. If stakeholders have participated in the selection of environmental
criteria and procedures, short-listed projects, based on the agreed upon criteria,
are likely to be widely accepted by civil society. Electricity
Recession: Time to Reassess Energy and Economic Strategies Today,
we gather here in the midst of a regional economic disaster. The Thai energy sector
is suffering from falling demand and a market surplus. Costs are rising due to
the burden of currency depreciation and unproductive generating capacity. To survive
this crisis, the power industry will need to increase internal efficiency through
material saving, maintenance and personnel management. I can assure you that an
increase in the price of electricity is not the solution. Rather, costs should
be reduced and business strategy refocused. At the end of the 1998 fiscal year,
electricity demand was down 0.5 per cent from the previous year. Peak power demand
slipped by 2.3 per cent to 14,180MW. If the situation continues and there is no
further delay in IPP projects, EGAT will reduce the capacity of its power plants
by at least 4,800MW in the year 2001. Having suspended purchases of power from
neighboring countries, shelved some of its own projects, and delayed commercial
operations for most of the IPP and SPP power projects, EGAT anticipates that in
2001, the Authority’s energy reserves will be at a high level of 60.66 per cent
of total capacity. Conventional approaches
to energy have focused mainly on increasing energy supply to meet energy demand,
but it is now becoming clear that a new approach is needed in order to meet social,
economic and environmental objectives. We can turn this economic recession into
an opportunity to improve efficiency and increase the profitability of existing
power facilities. We can optimize resource utilization, reduce waste and adopt
more advanced electric technologies favorable to the environment. The economic
crisis aside, long term savings, monetarily and environmentally, could be very
real. Much can also be done with extending the life of existing power plants for
five years or longer. More efficient, less damaging use of resources can be achieved
through initiatives such as the implementation of the Environmental Management
System ISO14000. The use of economic instruments, clean technology and pollution
control measures still holds great promise. We can pursue a sustainable energy
development approach and be optimistic that the economy will regain its momentum
in the not too distant future. We will be ready to provide the energy necessary
for the recovery process, and we will respond to economic and social aspirations
with efficiency and sustainability. The
concept of sustainable development is well known and is now shaping World business
and the global economy. The principles of sustainable development promise to be
major issues for economic and social policies as we enter the 21st
century. What does sustainable development means for energy? I am certain that
most of you in the power industry have great interest in the principle of sustainable
energy. Without referring to one specific technology or another, I would like
to urge you to continue and even intensify your efforts toward a more energy-efficient
future. The power plants of the next century
should be green, a color representing the concept of sustainable energy production
and consumption. An environmentally, efficient supply of electricity should incorporate
these efforts; 1) maximizing energy efficiency and minimizing losses in the production
and transmission of electricity to users; 2) minimizing environmental impacts
associated with energy production by using cleaner fuels and applying appropriate
management and equipment control; 3) maximizing or possibly replacing the use
of fossil fuels with non-fossil and renewable energy resources when technically
feasible and economically justifiable. Demand
side management (DSM) must be incorporated into supply options in long term power
development plans. In this context, recognition and commendation are in order
for Thailand’s DSM efforts, which are regarded as one of eight success stories
among 100 projects supported by the Global Environment Facility (GEF). Thailand
was the winner of the ASEAN AWARD. Thai DSM efforts officially began in 1993.
The measure has been implemented in all energy sectors; residential, commercial
and industrial, using various measures and technologies suitable to the region
and culture. Environmentally Friendly
Energy Options for the 21st Century The
electricity industry is at the cross- roads of energy options. We are faced with
pressing priorities such as power sector restructuring, energy security and scarce
resources, limitations of capital investments and diminishing environmental quality.
In arriving at decisions, there must be a real balance, a trade off between energy
supply and use, economy and the environment, and social goals. We will survive
unfavourable past economic and environmental experiences, and we will not give
up our quest for sustainable energy development. You
will agree with me that in order to achieve energy security, it is not appropraite
either to exclude altogether any specific energy resources, or to rely excessively
on one or the other. However, renewable sources such as hydropower, solar, wind,
geothermal and biomass should be used as much as possible through energy technology
development and cost reductions. With appropriate policies and new technology,
we can anticipate positive global environmental benefits as high as 10 to 20 per
cent for fossil fuel replacement. Renewable technologies are beginning to prove
on a significant scale, the distinct advantages that make them attractive and
cost effective. At any rate, conventional
electricity generation from fossil fuels is expected to continue to supply the
bulk of the electricity demand for many years to come. Linked with this, global
climate change, is the premier global environmental challenge of the 21st
century. The Kyoto Protocol requirement is unprecedented in the scope of responsibility
placed upon both developed and developing countries. It has been recognized as
the most complex and important International environmental convention ever signed,
both for its global industrial implications and for International relations. Energy
policy and options for the next century are now becoming a global matter. To
realize a sustainable society, it is necessary to use all available energy resources
effectively and in a proper manner to derive full advantages and to counterbalance
disadvantages. First choice resources would be clean, renewable energy such as
hydropower, solar, geothermal, wind power and the transformation of industrial
and agricultural waste into fuel. Discontinuing the use of fossil-based fuels
such as coal, lignite, oil and natural gas for the production of electricity is
simply not feasible as fossil fuels still offer economical advantages. However,
the sustainable development strategy focuses on increasing the efficiency of combustion
technologies and investments in pollution reduction equipment in all cases where
there is significant potential for progress. Another
option is nuclear energy, the world’s third largest source of electricity generation
after hydropower and coal. Use of nuclear power could have major environmental
benefits. Nuclear plants are very compact and have modest land requirements. They
do not normally emit carbon dioxide, greenhouse gases, or any other pollutants
into the atmosphere. The supply of nuclear fuel is abundant. However, concerns
have been expressed about nuclear safety, stemming largely from the accidents
at Three Mile Island in 1979 and Chernobyl in 1986. We may, therefore, have to
prepare for a critical situation arising in a few decades ahead. We will be forced
by the dangers of global warming to drastically reduce the use of fossil fuels
and we will have no alternatives in sight. In such circumstances, nuclear fission
could be the only alternative for partial alleviation of the situation. This goal,
however, cannot be achieved by isolated individual efforts and would require the
concerted efforts of the International community. Action to improve the acceptance
of nuclear power by the general public or by local communities is essential. The
public’s perception of the environmental consequences in this matter is crucial.
But the present negative view is subject to change only through proven safety
technology and public education. Nuclear power is perceived as extremely dangerous.
However, global climate change which is now threatening the survival of mankind
is actually being caused largely by burning fossil fuels. Conclusion There
is no doubt that we have reached the point where energy and the environment are
inseparable. All future plans and actions must recognize and integrate this reality.
By learning from previous success stories and mistakes, and by having the courage
to sincerely forge a more sustainable path, the relationship between energy and
the environment will become more compatible. I
believe that electric utilities will continue to have a significant role and responsibility
in defining this new relationship as we enter the 21st century through
the reconciliation of short and long term needs of economic growth and efficiency,
environmental quality and social well-being. Progress will inevitably include
strategies for eco-efficiency, efficiency in both supply and demand, and fossil
fuel efficiency for limiting greenhouse gas emissions. Renewable technologies
such as hydroelectricity, use of biomass and geothermal power are likely to expand
rapidly. Their costs will continue to decline with technological progress and
mass production. Furthermore, the door to nuclear energy must be kept open. However,
unless the problem of nuclear waste treatment is completely solved, we must recognize
that concern will supersede any progress for maximizing the environmental benefits
of this alternative. Throughout the decision-making
process, we must not forget that any initiative in the public realm will involve
interest from many diverse stakeholders. We must have the courage to acknowledge
these voices through the incorporation of a sincere participatory approach to
resolving potential conflict. We must educate, communicate and demonstrate leadership
in this regard. Above all, we must strive
towards a more sustainable future.
Keynote Address
Environmental
Priorities in Southeast Asia
By Anand Panyarachun
International
Conference on
Environmental Priorities in Southeast Asian Nations
Shangri-La
Hotel, Bangkok
January 10, 1996 Mr. Chairman,
Distinguished Guests, Ladies and Gentlemen, It
is a great pleasure for me to address this distinguished gathering. At the outset,
I would like to acknowledge the role of the American Bar Association and the Ministry
of Science, Technology and Environment of Thailand, in the organisation of this
timely conference. The theme of this conference
demands not only our own attention, but also that of the world at large. The scale
and pace of economic growth in Southeast Asia are beginning to affect the balance
of major global environmental issues. This influence can only increase in the
future as development expands and spreads across the entire region. The
leaders of the ASEAN member countries, meeting in Bangkok last December, shared
the common vision of a Southeast Asian community by the year 2000. Cooperation
on this scale would be a powerful force for sustainable development in the region,
and it would also vastly increase the international influence of Southeast Asia.
It is therefore of the utmost importance that we establish our priorities for
environmental protection now, before, it becomes too late for us to take effective
action. With respect to major global issues,
one can think immediately of biodiversity - the variation within and between living
organisms and ecosystems. The importance of this region’s biological resources
cannot be denied. The inhabitants of Southeast Asia fall into a diversity of racial,
religious, social and political systems, yet they are all heavily dependent on
direct harvesting from nature. Most of
the Southeast Asian nations are also important storehouses for non-economic biological
resources. Although society may not derive any direct economic benefit from such
resources, they are essential components of ecosystems and vital for proper ecosystem
functioning. Here in Thailand we are blessed
with a wide range of tropical evergreen and monsoon habitats, with a rich large
mammal fauna, and valuable marine areas. The statistics are impressive: Thailand
harbours about six per cent of all known vascular plants, seven per cent of all
known terrestrial vertebrates, and almost ten per cent of all fish. Our neighbours,
for example, Indonesia, Malaysia, Vietnam and Myanmar, have equally rich biodiversity
resources. These countries are all characterised by a diversity of geographical
regions and habitats, with correspondingly high levels of species richness and
endemism. The biological endowments of the region have not been bestowed lightly,
however. We fully recognise that with them comes the burden of responsibility
for sustainable developing and conserving their potential. Our aim should be,
in the words of the World Commission on Environment and Development, “to meet
the needs of the present, without compromising the ability of future generations
to meet their own needs.” This admirable
expression of intent serves as the guiding spirit for our endeavours. Yet it offers
us no rules, or guidelines, for accomplishing our objectives. Indeed, it presents
us with potentially conflicting aims, the reconciliation of which will no doubt
involve much political soul-searching, and perhaps many compromises. To
illustrate my point, I would like to turn to another global environmental concern;
that of climate change. In November of
last year, the Inter-governmental Panel on Climate Change (IPCC) released its
Second Assessment Report on the status of global climate change and the influence
of human activities. The Report provided conclusive proof those human activities,
and industrial activities in particular, are contributing to the increases in
global temperatures that have been observed over the past century. In
the absence of effective mitigation policies, the continued acceleration of “the
greenhouse effect” is expected to result in further temperature increases, as
well as fluctuations in the intensity and distribution of rainfall, and rises
in sea level. The consequences for our society could be potentially catastrophic.
The IPCC’s Report foresaw losses of biological and land resources, with adverse
consequences for health and food security in some of the most vulnerable regions
of the world. These effects would combine
to threaten and undermine sustainable economic and human development. As
subscribers to the precautionary principle, the nations of Southeast Asia and
the rest of the world have placed their faith in the United Nations Framework
Convention on Climate Change (UNFCCC) as a forum for tackling global environmental
change. In the three and a half years since the Convention was signed, we have
progressed from debate to negotiation and, in the wake of the first Conference
of the Parties last year, to partial agreement and action. But
are we doing enough? Can we claim to be taking the necessary steps to halt the
continued deterioration of the Earth’s climatic system? Regrettably,
I am not sure that we can. My doubts are based on the way in which the international
community has assigned its priorities. I have argued before that the nations of
Southeast Asia must avoid reiterating the development patterns of the industrialised
West, both to prevent intense local pollution, and to avoid becoming producers
of global pollution on a scale in direct proportion to their human numbers. Yet,
given the justifiable importance we have placed on economic development, it is
inevitable that our present levels of resource consumption will increase. The
challenge for us, therefore, is to moderate the rate of this increase. The challenge
for the industrialised nations, on the other hand, is to reduce consumption and
pollution to offset inescapable increases in developing regions. Our common goal
should be to create a new, equitable balance in the global economy; one which
will prevent catastropic disruptions of our climatic and biotic systems, while
at the same time allowing sustainable economic and human development to continue. Yet
there appear to be significant differences between this aim and the priorities
of both industrialised and developing countries as seen today. The ultimate objective
of the Climate Change Convention is the “stabilisation of greenhouse gas
concentrations…at a level that would prevent dangerous…interference with the climate
system”. While this aim currently involves no legally binding commitments,
the action that has been taken so far is not fully in the spirit of the Convention.
Industralised countries are only nominally committed to reducing emissions of
greenhouse gases to 1990-levels, while other Parties to the Convention have simply
to produce an inventory of greenhouse gas sinks and sources. Clearly
more action is needed on climate change, and needed soon if we are to achieve
a global balance within a realistic time-frame. One potential avenue opened at
the first Climate Convention Conference in Berlin last year was international
cooperation to reduce emissions, otherwise known as “Joint implementation”.
Joint implementation provides cost-effective opportunities for reducing
or sequestering greenhouse gas emissions across international boundaries. Most
importantly, joint implementation could promote technology and information transfers
between countries, and therein lies its real promise. By
promoting the redistribution of technologies designed to reduce our dependence
on natural resources, joint implementation could improve our chances of preventing
more serious environmental damage. Moreover, the transfer of modern technologies
to developing countries, provided those technologies were suited to local conditions,
could promote sustainable economic development. Clearly
technological cooperation, whether under the Climate Convention, the Biodiversity
Convention, or any other international agreement, is an important priority. Under
such a regime, the new global balance of which I spoke earlier becomes a more
realistic and attainable goal. Indeed, our progress towards environmentally-sustainable
regimes of cooperation has already been considerably furthered by the development
of ISO 14000 environmental management standards. I
would like to discuss ISO 14000 in greater depth because to me it represents an
important priority in both global and national terms. The
emerging set of ISO 14000 standards is one of the most comprehensive environmental
quality management initiatives ever undertaken. Once adopted, this standard is
expected to become the benchmark of environmental quality for all future international
trade. Achievement of this goal will involve implementation of environmental management
systems (EMS), environmental audits, environmental performance evaluations, product
life-cycle assessments, and product labeling. The
ISO 14000 series of standards emerged primarily as a result of two major events:
the Uruguay round of the GATT negotiations which began in 1986 and the Rio Conference
on Environment and Development held in 1992. The GATT talks addressed the need
to avoid or remove non-tariff barriers to trade, while the Rio ‘Earth Summit’
established an international commitment to protection of the global environment. With
careful implementation, the ISO standards should prove capable of uniting both
trade and environmental concerns. If the international community can succeed,
as I believe it must, in avoiding non-tariff trade barriers, while honouring its
environmental commitments, the ISO standards will represent a new position of
consensus for business and the environmental community. With the potential to
promote world trade, whilst at the same time encouraging and assisting industries
and other organizations to be more environmentally responsible, the standards
should allow economic development, but not at the expense of a degraded environment. In
the work of the ISO, we have an important link between common global priorities
and our own regional and national priorities. The private sector in Southeast
Asia is rapidly becoming a major environmental influence through its financial
resources and its export drive. Through education and promotion of the ISO 14000
standards, as well as the earlier ISO 9000 series, the environmental community
is beginning to build partnerships with the private sector. These partnerships
are proving invaluable in the process of tapping the potential of the private
sector as a force for environmental improvement. Here
in Thailand, the Thailand Environment Institute (TEI) is investigating ways of
garnering private sector support for a national environmental foundation or trust.
Already working closely with members of the Thailand Business Council for Sustainable
Development (TBCSD) on the ISO 14000 series, TEI is now studying the role that
a national fund could play in leading the private sector down the path of sustainability
by using its capital to create ventures that both realise a profit and use resources
in a responsible way. Mobilising additional
resources in this fashion represents a crucial priority if we are to finance not
only the immediate costs of environmental protection, but also the recurring costs.
Furthermore, the partnerships that are formed in this way draw a wider range of
players into the environmental arena, and meaningful participation is enhanced.
The success of a national fund will be in direct proportion to the number of constituencies
it addresses. With representation from the private sector, government, non-governmental
organisations and people’s groups, a collective effort to improve national environmental
quality would have a strong chance of succeeding. I
have touched on the issue of public participation, and would like to develop this
further with respect to our urban environments. It is undeniable that one of the
least desirable side-effects of rapid economic development in Southeast Asia has
been the emergence of vast, largely unplanned, urban conurbations. The haphazard
nature of urban development in cities such as Bangkok, Manila or Jakarta is contributing
to worsening traffic chaos, air and water pollution, and a general reduction in
the quality of life. Coupled with these
negative trends is a rapidly growing sense of frustration amongst the urban population,
who feel that they have little control over their environment, and must suffer
without recompense the adverse effects of rapid economic growth and development. Environmental
management in the urban areas of Southeast Asia has almost always been the responsibility
of governments, both central and local. In 1992, my administration undertook a
wide-ranging revision of environmental legislation intended to lead towards sustainable
development in Thailand. The National Environmental Quality Act, as the centrepiece
of this legislation is known, now provides us with the tools of environmental
management, and the power needed to wield them effectively. For
urban dwellers, the benefits of these changes have already become apparent. For
example, unleaded gasoline was first imported into the domestic market in 1992.
Rapid acceptance of the new fuel led to competition between local refineries to
produce unleaded formulae. At the beginning of this year, the spread of unleaded
fuel culminated in a complete phase-out of all leaded gasoline. As a result of
these developments, the level of airborne lead pollution has dropped dramatically
in Bangkok. However, as urbanisation has
increased, and environmental problems multiplied, safeguarding the environment
has become an almost overwhelming task. Here in Thailand, privatisation and sub-contracting
have recently been initiated by several government agencies in an effort to alleviate
the burden. However, another potential option is to encourage individual communities
to protect and manage their own immediate environments. There
is a growing awareness of environmental issues amongst the people of Southeast
Asia, and urban dwellers in particular. The responsibility for this can be attributed
largely to the mass media, who time and time again have demonstrated their commitment
to environmental values. It seems that almost every environmental crusade can
trace its origins to an article in the newspapers, or story on television. Now
surely is the time to give the people of Southeast Asia some say in the future
of their environment, and to recognise the role of the media as a force for education
and enlightenment. By empowering local populations we can accomplish several things.
Firstly, the ability of local people to manage their environment will be enhanced.
Secondly, a sense of community can be instilled in often-disparate urban groupings.
Thirdly, an on-going dialogue can be created between government authorities and
local communities, which will help to strengthen trust and cooperation. Finally,
and perhaps most importantly, truly sustainable development can be achieved because
it is based on consensus, and has the legitimacy that only consensus can confer. Up
to now, I have been considering priorities for the development and protection
of our natural environment and its resources. I cannot help thinking, however,
that we risk neglecting one of the most important elements of the human experience;
namely, our culture. I firmly believe that
when we talk of environmental priorities we should include our cultural environment
and particularly the material remnants of our history which do so much to convey
and foster national identity. Southeast Asia is a region of great antiquity, and
the treasures of the past such as Ayutthaya and Sukothai here in Thailand, Angkor
Wat in Cambodia, and Borobudur in Indonesia, still have the power to enrich our
lives tremendously. It is regrettable;
however, that the levels of attention, interest and even funding are far lower
for cultural protection then they are for other developmental issues. Development
and conservation plans for our natural and cultural heritage progress in different
directions and are no longer mutually sustaining or even inter-related. In
recognition of the relationship between society, nature and culture, the Thailand
Business Council for Sustainable Development (TBCSD) has been sponsoring the preservation
and development of the island city of Ayutthaya, one of Thailand’s most important
historic sites. Founded in the mid-14th
century, Ayutthaya was for over 400 years the capital of a flourishing and prosperous
kingdom situated in the Chao Phraya River basin. In recognition of its historical
significance, Ayutthaya was designated a UNESCO World Heritage Site in 1991. Restoration
work under a master plan prepared by the Fine Arts Department of the Ministry
of Education began last year. The TBCSD
has been active in promoting the implementation of the Ayuttaya master plan, which
seeks to meld environmental, cultural and social considerations into a cohesive
whole. We recognise that success will depend on all groups in the government,
private sector, academia, non-governmental organisations, as well as the local
community, lending their support to the initiative. To this end, an on-going process
of consensus-building and open dialogue has been initiated. I
hope I have demonstrated that the assignment of environmental priorities must
start from a full understanding of those elements, which comprise our environment.
To all, consideration of the natural environment must be added that of our social
and cultural environments. Once we have taken this holistic approach, we will
be in a stronger position to identify those factors, such as public participation,
which cross over boundaries and are therefore of the greatest importance. The
nations of Southeast Asia are perhaps best placed to realise this approach towards
environmental protection. We are now at the stage where the benefits of economic
growth can allow us to conserve and sustainable development our still abundant
natural resources. National governments are introducing environmental legislation
based not on command and control measures, but on market-based instruments. Our
people are becoming more informed and aware of environmental values and the need
for effective protective measures. Moreover, they have the potential to make their
own real contribution to environmental management. The potent force that is the
mass media can serve us well as our environmental watchdog. All these factors
inspire me to think that Southeast Asia can, and will, be a model for truly sustainable
economic development.
SUSTAINABLE
DEVELOPMENT: THE SOUTHERN VIEW By Anand Panyarachun
International
Management Symposium
St. Gallen University, Switzerland
May 22,1995 I
would like today to offer you a view of the concept of sustainable development
from the less-industrialised, less-developed part of the globe. This area is often
called the ”Third World”, but the phase shall doubtless disappear now that the
industrialised nations are no longer split between-to uses the old shorthand –
capitalist and communist . How can there be a Third World, when there are no longer
First and Second Worlds? The Third World is also a more heterogenous place than
ever before; indeed, some countries in Asia and Latin America are more “developed”,
in terms of most indicators of human progress, than many newly emerged nations
in Central and Eastern Europe. Let us instead
use, again as shorthand, the benign terms of North and South, even though most
of the more populous developing countries lie north of the Equator. The
North has developed, and continues to thrive, through easy access to affordable
resources. In Europe’s case, a great deal of resource-based wealth came from the
colonies. Societies aspiring to a similar prosperity see resource utilisation
as their first priority. Yet the South already contains some four-fifths of the
world’s population, and is expected to be the scene of over 90 per cent of future
population growth. Obviously, if the south were simply to extrapolate past levels
of resource use to meet present reasonable ambitions and future population growth,
this would be extremely unsustainable. Increased fossil fuel use is one of the
most obvious and oft-discussed dangers. It is hard to imagine a stable and predicatable
global climate if the populations of China, India, Bangladesh and Indonesia begin
burning fossil fuels at the same rates as North Americans. In
the past, the North used resources for economic development whilst degrading its
environment locally through air and water pollution - hence Blake’s famous image
of “dark satanic mills”. But with economic development came the economic power
to clean up. Also, there came a progression from dirty, old manufacturing industries
to both cleaner factories and cleaner forms of economic development, such as services
and information industries. Yet the North
has now moved from local pollution to global pollution, and has been responsible
for the greatest releases of greenhouse gases and ozone-depleting gases. Occasionally,
although less and less of late, the North has actually tried to get rid of its
rubbish, both nuclear and toxic, by shipping it South. The
South most avoid the old northern development pattern for two different reasons.
Firstly, it cannot afford to go through a period of intense local pollution. During
the Victorian era, the English were willing to put up with rivers that stank,
air that killed, and pollution that turned whole regions black. But 21st
century Thais will not accept such “progress”. Secondly, we cannot-for the globe’s
sake-become a producer of global pollution on a scale in proportion to our numbers. Yet,
given the importance of resource utilisation for development, it is inevitable
that the South will have to increase its level of resource use. The challenge
for the South, therefore, will be to moderate the rate of this increase. For example,
Thailand is doing its utmost to conserve energy resources through a major Demand
Side Management program. By improving energy efficiency, Thailand’s industrial
and commercial sectors are being provided with much-needed energy at a fraction
of the cost of adding new generating capacity. So,
when we speak of “growing constraints on resource use”, we must be clear that
we are not talking about the South’s cutting right back. We are talking instead
about creating a new balance between North and South in the quantity and quality
of natural resources each uses. The North will have to cut back to offset inescapable
increases in the South, whilst the South will have to find ways and means of containing
these increases within reasonable bounds. But,
for both, resource use must be more respecting of environmental criteria at all
stages – extraction, processing, use and disposal. Only if these criteria are
met throughout the cycle can such resource use really be made sustainable over
the long term. Advances in techniques of
exploration and exploitation are continually increasing the resources available
for our use. But using these techniques indiscriminately can lead to ruin – both
environmental and economic. The recent collapse of some major fisheries and the
near–collapse of others offer good examples of how the desire for economic increase
can overcome both scientific knowledge and common sense. Fisheries scientists
warned repeatedly that too many boats using the most modern fish-finding gear,
and catching smaller and smaller fish, would lead to virtually no boats catching
no fish. Neither fishermen nor governments listened. In
theory, the “free market” should prevent such resource collapses. Scarcity is
supposed to lead to price rises that decrease the number of consumers until a
sort of “supply-and-demand sustainability” is reached. In practice, there are
several reasons why this may not work. The resource is depleted more quickly than
the market can react. There is not enough, or there is the wrong sort information
driving the markets. For example, governments of both North and south often subsidies
the use of precious or potentially harmful resources, thus encouraging their over-use
or misuse. I am thinking of the subsidies in various nations on the uses of petrol,
coal, water, fertiliser and electricity. Instead
of subsidising, we should be using various economic instruments – such as pollution
taxes and charges – to ensure that prices reflect total costs, including environmental
costs. This is known as “internalising costs; for example, putting into the cost
of driving a car the cost of treating the childhood asthma apparently caused by
the exhaust fumes. You can easily see that
“internalising costs” almost always means rising prices. This is hard enough to
do in the wealthier North. How much harder then would it be to charge the “real
price” for water, timber and energy in the South where the economic development
of a nation is often a life-or-death issue for individuals. Thus
in the South, the transition away from resource-intensive economic development
– the Northern approach – must take place before market forces indicate resource
scarcity by price signals. Transition to a more sustainable, less resource-intensive
pattern of development must thus involve more use of government policy than in
the North. This will be difficult for governments,
because sustainable development appears over the short term – the term over which
all governments operate – to be the most expensive option. Governments think from
election to election, while sustainable development makes sense only from generation
to generation. This explains why governments have so much difficulty with the
whole concept. It gives them the impossible choice between choice between being
publicly in favour of unsustainable development, or of following policies that
may keep them from being re-elected next time around. To
follow sustainable pathways, the South is going to need help from the North. Amongst
that help should be some good examples to show that the North itself is serious
about sustainable development. We shall not be impressed by sermons on sustainability
unless the North adopts the religion it preaches. How
often have you heard someone in the North argue that we must protect the rainforests
of the South because they and the species they harbour are “the common heritage
of mankind”? But how often have you heard of a northern government offering a
realistic sum of money to help pay the people of a rainforest country the opportunity
costs of not developing those forest areas? This has rarely, if ever, happened.
The real message to be: “it is our common heritage, you pay the costs of protection”. It
is appropriate that the consumption patterns of the North are now becoming and
international issue. But this issue provides logical difficulties for the South.
On the one hand, we do not want to discourage the North from buying a lot of the
sugar, leather, timber, oil and other resources that we produce. On the other
hand, a small planet cannot long survive a system in which a fifth of the population
consume four-fifths of the resources. Northerners still tend to seek convenience,
comfort and wealth over living within planetary means. Frugality in resource use
is not yet viewed as a virtue. Furthermore,
technology is coming to be seen as a panacea, something that will save us from
our spendthrift ways – rather than as a set of tools which will save us only if
used with the greatest skill and foresight. So
the North must realise that whilst it may be “developed” in terms of industry
and infrastructure, it is not necessarily sustainable in terms of global pollution
or over-use of resources such as water and topsoil. To be fair, however, the North
is making progress. The European Union has adopted sustainability as a criterion
for policy at the highest level. In response, many Northern governments are now
consciously moving towards a strategy relying on the application of information
and information-based tools, plant and equipment, to enhance the efficient use
of resources, or even to substitute for resource use altogether. But this progress
makes it all the more evident that only the richer, more technologically-advanced
countries have a capabilities to follow such a course through. These are the countries
of OECD, plus the Newly-Industrialised Economies of Southeast Asia. For the rest,
the advent of an information-based society must await substantial conventional
development. Thus, another sort of help
we shall require is cooperation on those technologies described above that will
allow our businesses to become more “Eco-efficient”. This is a term the Business
Council for Sustainable Development coined for the Earth Summit in Rio de Janeiro
in 1992. Eco-efficiency refers to a type of efficiency whereby companies add ever
more value, using ever less resources and releasing decreasing amounts of pollutants.
We do not want gifts or old-fashioned ”foreign-aid”. We do want innovative investment
thinking that brings together companies, government agencies and perhaps the World
Bank and regional development banks to encourage the introduction and dissemination
of new, resource-efficient technologies. One mechanism which may facilitate this
process is Joint Implementation, which represents a way in which countries can
fulfill their commitments under the UN Framework Convention on Climate Change.
By promoting technology and information transfers to reduce greenhouse gas emissions,
Joint Implementation appears to hold real promise for disseminating Eco-efficient
technologies. In one sense, the spread
of resource-efficient technologies is happening automatically. As markets become
more global, competition becomes more global. To compete successfully, Southern
companies must modernise, and more modern production equipment is almost always
more Eco-efficient. But we need to speed up this process. The
issue of “Technology transfer” was very controversial at Rio, and remains controversial
today. In the South there are far too many unprofitable, unproductive steel mills,
aluminium smelters and oil refineries “transferred” by the process of development
aid. We argued in Changing Course, the book produced by the Business Council
for the Earth Summit, that technology is best moved through a process of “ technology
cooperation” between businesses, which includes training, communications and technology
development. When Business is involved, you can be sure that the technology is
wanted and will be used - which is not always the case in “aid” projects. Especially
when the aid is tied to the purchase of a certain country’s goods. Tied aid tends
to move technology unwanted in the North to those in the South who does not want
it either. Even so, the South remains hampered
by the fact that most Eco-efficient technologies which are helping the North attain
a more sustainable economic system were developed and designed specifically to
meet northern requirements. There is an urgent need for Southern-specific technologies
and applications. For this, besides greater effort in technology cooperation and
adaptation, human resource development becomes vital. Only when the South has
at its disposal a trained cadre of men and women able to integrate the new technologies
with the need and potential of the South, and to research new ways of tackling
local problems, will a truly sustainable, and truly endogeneous, solution be found. Why
should the North be at all interested in helping the South towards sustainable
development? Has not the age of international charity ended and the age of international
competition begun? The most compelling
answer the question of “why?” may be that it is in the survival interests of the
North to offer such help. Few have noticed it, but there has been a major shift
recently in the issue of international security. There was a time when the poorer
nations of the world offered absolutely no threat to the security of richer, better-armed
nations. The spectres of global warming and ozone depletion change this. If the
populous Southern nations follow a carbon-based development part, they will disrupt
the climatic systems that drive the agriculture of the United States and Europe.
Rising seas may eventually destroy major port cities, for example Venice. Such
damage would be as physical and as costly as any military damage. Another
reason for the North to help is that the unsustainable development of the South
is primarily a long-term global problem. In the past, the North massively overburdened
the Earth’s carrying capacity, and now has prior responsibility for the fragile
state of the world. Its continuing role as originator of the technologies and
practices which place such pressure on global systems means that it is only equitable
if some of these fruits of past and present exploitation were to be shared. We
are not asking for a “redistribution of wealth” – even a massive shift of resources
would not provide a long term solution. No, the only real solution must be one
based on a redistribution of the ability to create wealth. This involves the creation
of new, fairer trade regimes and technology cooperation regimes based on the mutual
understanding that the South is entering the game with the odds stacked against
it. If there is a price for sustainability, it must be paid principally by the
North - for reasons that have to do with both practicality and the fair play. Important
move in this direction has been made by developing ISO 14000 environmental management
standards. By standardising international management tools and environmental systems,
ISO 14000 is attempting to minimise trade barriers and thus promote technological
cooperation. However, we must be particularly
careful not to move in the opposite direction: towards a growing gap between North
and South. There were times at the Earth Summit when it appeared that the old
East-West split had simply been rotated 90 degrees to become a North-South split. Two
processes could exacerbate this split. The first might be a selfish technological
revolution in the North which bypasses the South. It is often claimed that we
are on the brink of a new Information Revolution, surpassing in its effects both
the Agricultural and Industrial Revolutions, in which information will replace
capital as the driving force in human affairs. If this is the case, then information
and the ability to manage that information must be spread Southwards. Otherwise,
the two halves of the globe will simply not be able to communicate. A
second North-South splitting process would be any move on the part of the North
to “punish” the South for perceived environmental crimes. Such punishment might
take the form of trade barriers. Economic development in the South is not about
increased GNPs. It is about alleviating hunger and saving the lives of the millions
of children now dying each year from contaminated water. We can change our approaches
to development, but we cannot forego development because the North thinks we should.
As I have noted, we expect the sacrifices to come from the other direction - from
the North. Some of what I have had to say
may seem pessimistic, or antagonistic, or both. I am in fact a cautious optimist.
We have the technology, both in terms of Eco-efficient production and in terms
of the communications we need, to develop the necessary partnerships for sustainable
progress. Through partnership, those who benefit from economic growth can also
be rendered more responsible for the way that growth is generated. With greater
public awareness of the costs and penalties of unsustainable pathways to growth,
improvement in the quality of life for the South’s citizens need not always be
at the expense of the environment.
Merging
Business and Environment -
Three Steps
to Leadership by Mr. Anand Punyarachun
Chairman,
Business Council for Sustainable Development (BCSD)
Chairman, Thailand
Business Council for Sustainable Development (TBCSD)
Asia Pacific 94: Merging
Business and the Environment
The Regent Hotel, Bangkok
7-8 December 1994 Mr.
Chairman, Distinguished guests, Ladies and Gentlemen, It
is a great pleasure to be among so distinguished a gathering, at such an important
conference. My sincere thanks go to the International Herald Tribune and to the
Thailand Environment Institute for making it possible. I
remember very well the previous conference they organized on “Merging Business
and the Environment” in January 1992. That was less than six months before the
Earth Summit – when the world’s attention was beginning to focus strongly on Rio,
and when there was a growing sense of expectation, not least among ordinary men
and women, about what would emerge from that great event. This
conference is being held in very different circumstances. Most major economies
have experienced serious difficulties since then, and even now, some have still
not fully recovered. This has had two consequences. One,
the environment has not been as prominent on the agenda as we hoped it would be
following Rio. Two, the expectations raised during the run-up to Rio, and especially
at the conference itself, have not been fulfilled to the extent we believed they
would. This is a great pity – and it is
urgent now that we act to ensure it does not become a tragedy. To
my mind, the real success of Rio was in forging a broad consensus in support of
change – in some areas, radical change towards sustainable development. And it
marked a particular milestone in drawing business into a process which hitherto
had been driven mainly by government and environmentalists. Through
organizations such as the Business Council for Sustainable Development, business
participated actively in the preparations for Rio, in the conference itself, and
in fashioning the post-conference action agenda agreed there. Crucially, Rio recognized
that the private sector had a major part to play in implementing that agenda. In
short, we can be encouraged that business as a whole has begun to develop new
attitudes and approaches – just as governments around the world have begun to
explore new strategies and policies to implement that agenda. Yet,
there is a sense of disappointment at what has actually been achieved during the
past two and a half years – and I personally share this. In Rio, the baton was
passed from the NGOs to the politicians. As a former Prime Minister of my country,
I know how difficult it can be to effect change: and I well understand how the
fierce winds of recession in the West pushed governments off course. Even
so, progress on the political front has generally been slow. For
example, it is hard to detect a real sense of urgency by governments on fulfilling
their commitment to accelerate the process of internalizing environmental costs
into market prices. Tackling the problem of subsidies also have replaced common
sense and business sense. One impediment
to change is the political process itself – the procedures for decision-making
in the current administrative structure are simply not up to the task. We need
to reinvent government. We also, let me
add, need to reinvent the international institutions. The United Nations, the
World Bank, regional development banks all ought to be the primary agents for
change towards sustainable development. But while some have started to come to
grips with what their role should be, their structures and systems weigh against
them. There is clearly something amiss for instance when by some estimates, the
World Bank now loans 20 times as much for the production of energy as it does
for energy conservation. It would be unfair
to suggest there is a political vacuum. Yet in my view, the baton is not being
moved forward at the political level as rapidly or with the sense of urgency that
is clearly needed. I believe therefore,
it is time now for business to seize that baton, and lead the race towards sustainable
development. I feel confident this will be welcomed. Indeed, I judge there are
growing public and political expectations of business to take the initiative. What
I would like to do in these brief remarks is identify three concrete and key steps
which business can, and should take to demonstrate a new level of leadership on
the environment. The first is accounting
for environmental costs Sustainable
development is a vision of economic activity that effectively manages the Earth’s
resources for sustained, equitable growth worldwide. This vision can best be realized
through market economies and economic incentives. That
is why it is imperative that governments move rapidly internalize environmental
costs, preferably through economic instruments. This will make producers pay the
costs of using the environment. It will spur companies to find new technologies,
new processes, even new products to use raw materials and energy more efficiently,
and reduce – ultimately eliminate – pollution. It will drive them to become eco-efficient. But
business does not have to wait for government to act. It can already move some
way in that direction through a two-stage strategy. The
first phase is to quantify and allocate existing environmental costs: to measure
the costs associated with product, production processes and their related waste
streams to find out the true costs of the products or services they currently
deliver to the market. Some companies are
doing this – Ontario Hydro led by Mr. Maurice Strong is one. Most are not. It
is time that accounting for environmental costs becomes the norm in business,
with those companies experienced in internal environmental accounting sharing
their knowledge with others. I believe, too, that various industry sectors should
begin to develop eco-efficiency criteria and indicators. The
second phase of the strategy is for companies to recognize and incorporate future
anticipated environmental costs connected with their operations. The key to this
is a life-cycle approach to the entire chain of production from natural resources
to disposal. Again, some companies are beginning to internalize these kinds of
costs. It is time now for all companies to start capturing environmental costs
they do not presently include. The second
area where business can demonstrate true leadership is on environmental reporting. The
Agenda 21-action program, approved in Rio, says that companies should be encouraged
to “report annually on their environmental records, as well as on their use
of energy and natural resources.” In
Changing Course, its report to the Earth Summit, the BCSD said that “a
vision and implementation strategy for sustainable development is most useful
if the resultant actions can be reported, offering chances for feedback and improvement.
Companies need to issue regular reports to their stakeholders on their
progress toward sustainable development.” At
the time that the report was written – nearly three years ago – a survey of business
in more than 30 countries found that most companies did not provide public information
on their environmental or sustainable development policies or activities. Today,
an increasing number of major companies produce annual environmental reports,
charting their progress in such grey areas as emissions, waste management and
resource use. Some of them – from Dow. Du Pont, Norsk Hydro, Ontario Hydro to
name a few examples – are excellent, not least because they show, with commendable
transparency, those companies’ shortcomings, as well as successes. Yet
the disappointing fact is that most companies – indeed, the overwhelming majority
– still do not issue environmental reports, and many even fail to disclose such
information in their corporate annual reports – and most companies have no plans
to do so. Their explanations are many and
varied. It will cost too much to audit their operations. There is actually no
pressure on them to report on their performance. If they do report, they will
bring unnecessary and unwelcome scrutiny to their company activities. If they
admit to problems with emissions and waste management, they will be accused as
polluters. Frankly, I am unpersuaded by
these arguments. In my view, when a company uses environmental resources, it should
report – to its shareholders, employees, customers, and to the public – on how
it is using them. As Norsk Hydro stated in its 1993 annual report: “Industrial
activity is followed critically by a concerned public. Much of the public distrust
is caused by industry’s own lack of openness.” Those
companies which do report believe that the benchmarking of corporate environmental
performance will emerge as a high priority issue. I believe they are right. And
I agree with those corporate leaders who foresee the corporate “responsibility”
agenda of the 1970s and1980s evolving into a more demanding “accountability” and
eventually “sustainability” agenda. Therefore,
it is time for all companies to include environmental reporting as a matter of
course in their overall reporting procedures, so that their shareholders can judge
their performance on such critical areas as material use, energy consumption,
air and water emissions, packaging waste, waste management/disposal, and product
impact. The third area – closely linked
to the question of environmental reporting – is the fixing and announcing of
clear, measurable goals for environmental performance. In
Changing Course, the Business Council stated: “The basis for reporting
is goals. Operational policies need to lay down corporate objectives and standards
in ways that can be measured, for as the business adage has it, “What gets measured,
gets done.” The report added: “A
decision to act without commitment to measurement is hollow.” Some
companies have publicly set clear and measurable targets. They include, to name
some AT&T – which has committed
itself to reduce reportable toxic air emissions by 95% by the end of 1995. S.C.
Johnson and Son, Inc. – which has pledged to reduce its air emissions, water
effluents and solid waste disposal in the company’s manufacturing operations by
50% as a ratio to total production by the end of 1995. Du
Pont – which has set out a series of specific environmental objectives, including
reducing or eliminating dangerous air emissions, hazardous waste, packaging waste
within clearly laid out timescales. These,
and other companies, are – to use another expression – prepared to “stand up and
be counted.” They are willing to be judged by failure as much as by success. It
is these companies which are today’s leaders in merging business and the environment. But
they remain the exception, not the rule in business. Too often, companies confine
their environmental commitment – that is, where they acknowledge the need for
such a commitment – to a well-written mission statement that reads well, but says
little of substance because it is long on generalities, while conspicuously absent
of hard-edged specifics. Those companies
believe this is enough to “get them off the hook”. In my judgement, they are unwise
to believe so. Hiding environmental performance behind fine-sounding words – worse,
substituting bland phrases for actual performance – is no longer an option. The
public and politicians expect more. And business must provide much more. I
am rather pleased to note that in Thailand, the Thailand Business Council for
Sustainable Development has begun taking up the challenge. Though it was only
established in October last year, it has moved rapidly to promulgate its own 10
points business agenda for sustainable development on which its members now subscribe. As
of June this year, an implementation plan is now in place for members to establish
their own corporate environmental policies, initiate environmental activities,
carry out self audits and to eventually publish environmental reports to the community
and the public. From these initiatives, I foresee that in the next few years,
I could be at liberty to mention some convincing examples of how Thai business
is demonstrating the new level of environmental leadership that I have just mentioned.
This I can say because I am witnessing this trend now being demonstrated by some
companies such as: - The Siam
Cement Company, Ltd. Is showing its social responsibility by establishing
its own Environmental Standards Coordinating Committee that overseas the implementation
and dissemination of information about their environmental policies to the public.
- Volvo (Thailand)
Co. is one among the many subsidiaries of the parent company to apply green
thinking in all its operations. It has spent 10-15 million baht over the last
5 years reducing its carbon monoxide emissions as well as cutting its solvent
use by 30%.
- Esso
Standard Thailand Ltd. Also takes care to address environmental needs
of the communities in which it operates. It has upgraded its response capability
by investing 100 million baht over the last 3 years for oil spill equipment and
founded the Oil Industry Environmental Safety Group, an organization set up to
share resources in the event of a major oil spill.
- Saha-Union Public Company, together with its business
partner, have invested more than 100 million Baht in the first half of 1993 on
ultra-purified water cleaning process for electronic components, thereby eliminating
the use of ozone-depleting substances or CFC’s (chlorofluoro-carbons) from its
manufacturing plant in Chonburi.
- Lever Brothers (Thailand) Limited has invested 300 million Baht in
a new plant to make naturally derived ingredients, a further 150 million Baht
in a facility to make powders by a process which uses no waste, 80% less energy
and produces no emissions. They have also installed automated pollution control
systems in their factory. In addition, Lever is responsible for a 50 million Baht
scheme to plant 1 million trees in Thailand over the next 2 years.
I
believe that every company CEO should now feel it is incumbent for his company
to announce specific commitments on what it intends to do to:
- achieve substantive energy efficiency improvements within
their organizations
- reduce emissions of pollutants into the air
- cut discharges of polluting effluents into seas, rivers and
other water sources
- increase the recycling of paper, cardboard, plastic, glass and other materials
in manufacturing and/or office facilities
- minimize the environmental impact of their products
In
other words, business should, across the board, commit to clear, measurable targets
for a range of key, urgent and specific environmental performance actions within
specific timeframes. I have tried to set
out a new three-point agenda for international business to implement to set us
back on the course agreed in Rio: an agenda which would enable business to demonstrate:
- positive action on environmental costs – through environmental
cost accounting
- true
accountability of their use of environmental resources – through full environmental
reporting
- real
commitment to environmental performance – through setting, clear, specific
and measurable goals
It can
be done. The best companies – those I have mentioned, and others – are doing it
already. And while of course, it presents a challenge – a tough one for many companies
– leadership is about accepting tough challenges. The
problem is that business is like a convoy – and even when it is heading as one
in the same direction, the speed is usually dictated by the speed of the slowest
members. It may take a combination of peer pressure and public pressure to convince
the rest to hurry up. But hurry up they must. For
there is a leadership role waiting to be filled in moving the post Rio agenda
on sustainable development forward, further and faster. If business can assure
the politicians and the public that it is serious about merging its agenda with
the environmental agenda, business will show its leadership credentials. Such
a leadership role is waiting to be filled. It is essential it is filled. Governments
have been distracted, and have yet to convince us that they will re-engage with
the same vigor and commitment they showed in Rio. There is therefore, an expectation
of business to assume the responsibility. It
is obvious that fundamental change is needed. We have two choices – to resist,
or join those shaping the future. I believe that in the end, it will be impossible
to resist. Therefore, I am inviting – indeed challenging – all my colleagues in
business to participate. It is the most rewarding option, and the right one.
Keynote
Address on
Business and Environment Challenges
Ahead
by Mr. Anand Panyarachun
Chairman,
Business Council for Sustainable Development
Chairman, Council of Trustees
Thailand Environment Institute
At the Environment Seminar and Exhibition
Organised
by the British Embassy
MOSTE, Thailand Environment Institute, Chulalongkorn
University
Regent Hotel October 17, 1994
Your Royal Highness, distinguished guests, ladies and gentlemen,
it is my honour today to welcome you to Bangkok and to participate in “Britain
in Thailand” week. It is indeed a pleasure
to welcome such a gathering of British businessmen and experts working in the
fields of environment, water management, and health to our Capital City. The
sponsors of this week are undertaking a commendable task in expanding our knowledge
of topics which are of obvious and increasing importance for Thailand and the
other rapidly industrializing economies of Asia. As
a former student of Cambridge University, I was privileged to gain a clear insight
into the educational traditions and strengths in British which have fostered the
expertise and technical excellence we see exhibited by many of the British companies
taking part in this event. I wish you well
in the week ahead and firmly believe there continues to be great scope for Thai
and British companies to work together and to learn from each other in these vital
areas. Economic Dynamism and Environmental
Costs Businessmen visiting Bangkok,
and any of the major centres of the region, can easily see and feel the dynamism
of the processes of industrialisation and urbanisation at work in this vibrant
part of Asia. The power of the market forces
present in Thailand are tangible; the raw energy and entrepreneurial drive underpinning
the economy are obvious. For Thailand and
our regional neighbours, significant periods of economic stability combined with
openness to foreign investment and an increasing emphasis on investment in people,
have combined with the entrepreneurial flair of many talented individuals, to
create a situation where at current growth rates, grouped together, the economies
of the region coupled with that of China could become as large as Western Europe
by 2005. It is fair to say the markets
have treated us well from an economic standpoint and now we must ensure they work
equally well for our environment. Across
business and industry in Thailand, awareness is growing that our ability to compete
in fast changing International markets is prerequisite for continued prosperity.
If we are to maintain the impressive progress of recent years, we will have to
maintain strong export growth, to develop new markets, and to adjust to challenges
emerging as the forces of Internationalisation take hold. During
the past 20 years, we have seen labour and resource intensive development unleash
powerful forces of industrilisation, allowing us to further explore, develop and
feed export markets in Europe, North America, Japan and other trading partners
with our products and raw materials. Those
forces have sometimes proceeded at break-neck pace. It is an unfortunate truth
that the downsides of, at times, explosive growth and industrialisation are also
obvious in our cities and manufacturing centres. Intense
traffic congestion, deteriorating air quality, and widespread water pollution
are an everyday reality, which are exacting an incalculable cost in terms of productive
time lost, health, quality of life, and the natural environment. Trade
and the Environment: A Challenge for Thailand A
complex set of new challenges for Thailand comes with the ever-increasing International
emphasis on environment and sustainable development. As
we approach the year 2000, the Thai economy must again go through transition to
ensure ongoing International competitiveness. Naturally, we must build on the
industrial base created since the mid 1970s. As part of the new transition we
must clearly focus our efforts on building up knowledge and high-technology development. As
a separate part of the adjustment, but nonetheless important-to-maintain competitiveness,
a much higher emphasis must be given by domestic producers to environmental management
in response to the new environmental trade pressures which are emerging in key
export markets around the World. Increasingly,
we see that our ability to compete as an exporting nation will be deeply affected
by the environmental management performance of Thai industry. It is also well
accepted that in the post Uruguay Round era, environment possesses the potential
to become one of the most explosive and divisive trade issues, if the developed
and newly industrializing countries were allowed to meet head on over it. This
must be avoided at all costs. There is
no doubt that the Trade and environment debate throws up many complex and taxing
questions for businessmen around the World, particularly for manufacturers in
newly industrializing countries. Also, we must acknowledge early on that there
is no trade-environment panacea. A clear understanding of the issues and many
years of negotiations lie ahead, if balanced answers are to be achieved for such
subjects as environmentally-related product and process standards. We
see that environmental issues in trade are already firmly on the agenda. environment
is embedded in International trade agreements such as NAFTA, the various trade
initiatives of the European Community and its member states, and there is no doubt
environment will come to the fore in the deliberations of the World Trade Organisation
(WTO), once that body is firmly established. I
therefore would like to spend some time this morning on the challenging subject
of Trade and Environment and look at ways in which Thai and British business people
might work together to improve the environment in Thailand. Simply
stated, business in Thailand must change course on its handling of the environment
as part of the adjustment required to maintain a competitive International trading
position. Before looking at these issues
in some detail, I would like to spend a few minutes telling you about the environmental
management changes already underway in Thailand and why I believe the country
is now well placed to make the adjustment required for on-going International
competitiveness. The country has, in fact, laid the groundwork to put it on the
pathway to achieve Sustainable Development. Thailand
Steps Forward While acknowledging that
Thailand is in the early stages of its environmental adjustment process, I would
say that since 1992 the country has, in anyone’s terms, made impressive legislative
and institutional changes and we are now beginning to see greater understanding
of the issues in business and industrial circles. There
is growing awareness of the need to utilize economic instruments to internalise
environmental costs and, as part of that, the Polluter Pays Principle solidly
underpins the country’s revised environmental legislation. The
keen interest and efforts of their Majesty’s the King and Queen in many environmental
projects have mobilised the Thai people in protecting our country’s rich natural
heritage and environmental health. In influential
sectors of the Thai society, awareness is growing of the need for government,
business and communities to work together to address environmental management
and natural resource concerns which have arisen as a dark shadow haunting our
impressive economic growth. Let me highlight several positive examples:
- Firstly and most recently, the creation in 1993 of two bodies,
the Thailand Business Council for Sustainable Development (TBCSD), which includes
as its members many of the country’s leading industrialists and business figures,
and, secondly, the Thailand Environment Institute.
These two bodies provide forums which are energetically exploring and formulating
mechanisms for co-operation between business, government, and communities to combat
natural resource destruction and industrial environmental concerns.
- Secondly, the early 1990s saw a rigorous overhaul of the
country’s environmental legislation and we are now seeing the early effects of
these changes. Notably, a new National Environment Protection Act was introduced
and specifically dove-tailed with a strengthened Factories Act, to create a solid
foundation to support development of integrated environmental management, now
and in the future.
- Thirdly,
legislative changes have been made to address specific and pressing problems.
For example, the 1992-enacted Promotion of Energy Conservation Act is an innovative
piece of legislation to encourage more efficient use of our energy resources in
the industrial, residential and commercial sectors. Some may say this act was
a visionary step for an industrialising country to take. The acceptance of a Demand
Side Management (DSM) plan by the power authorities is also a significant development
in the energy sector.
- Lastly, of all the positive developments, I feel it was the restructuring
and institutional strengthening of the country’s environmental agencies which
is of greatest significance. Our former Science and Technology Ministry was reorganised
into the Ministry of Science, Technology and Environment and three new departments
within that Ministry were created to deal with specific environmental management
tasks. Two years later we are seeing a much higher level of activity from a group
of energetic officers staffing the new departments.
These
are just a few examples of the many positive developments which are creating a
firm foundation for much improved environmental management in Thailand. I
firmly believe that it is government’s duty to create a strong, transparent and
effective regulatory framework, which will allow business to adjust steadily in
developing improved environmental practices while maintaining competitiveness. I
cannot emphasis too strongly my view – and this applies not only to Thailand,
but to all countries – that business must be brought more closely into the policy-making
process. Government cannot do it alone, and neither can business. We need a partnership
to work out an agreed agenda, develop common policies and decide our respective
roles for implementing the actions we have resolved to take. Environmental
Management Challenges Returning to
the Trade and Environment question, I have said that while adapting to the demands
of tougher domestic legislation and enforcement, Thai industry, like others around
the World, will be increasingly challenged by higher environmental trade requirements
in major export markets. Already we are
seeing a plethora of new environmental trade initiatives and upcoming standards:
ISO 14000; the British Standard BS 7750, which I will come back to later; and
the European Community’s 1993 Eco-Labelling Scheme and its Eco-Management and
Audit Regulation (EMAR), to name but a few. For
observers who follow environmental developments closely, this is a challenging
time of great change. For business people who fear the impact of environmental
pressures, whether domestic or International, on their bottom line, the mass of
information and speed of new developments can be intimidating. Despite
the best efforts of various International organisations, it will be some years
before we see a true consolidation, creating a clear and Internationally-acceptable
norm for environmental trade issues. There
is a likelihood that many of the efforts underway will be viewed by politicians
and business people in newly industrializing countries as non-tariff barriers
to trade, created by Western countries, to allow unilateral imposition of trade
devices to promote their own national environmental objectives. It
is a fact that the International community must guard carefully against the unfair
imposition of such trade tools, for nothing will undermine International trade
negotiations as destructively, if allowed to develop. In
order to frame an effective response, it is useful to predict the environmental
trade pressures which the business community will have to contend with increasingly
during the mid to late 1990s. Firstly,
increasing attention will be paid to the appropriate ways in which products and
process standards can be fairly integrated into the environmental trade debate.
This issue possesses the potential to be the most difficult to resolve. Trade
specialists and environmentalists tend to take the opposite view on product and
process standards. The former strongly oppose process standards, other than those
regulating labour activities, and are keen to promote harmonised product standards
. In contract, environmentalists tend to
support minimum product standards, opposing harmonisation, but believe minimum
and even harmonised process standards are a necessity to mitigate the impacts
of industrial pollution. Secondly, environmental
pressure groups – who, like many in business and government, are only just starting
to grapple with the complexity of environmental trade issues – will focus more
on the environmental performance of producers in industrialising countries. Some
groups have already, and unfairly, adopted the term “Eco-dumping” to describe
the export of goods from countries where the true costs of pollution are not incorporated
into the productive process. Finally, distinguishing
genuine national trade measures from environmentally-motivated non-tariff barriers
to trade is not a clear cut matter. We see the on-going processes of structural
adjustment in many of the developed nations and, when economies are not rebounding
as quickly as governments might wish, the desire to protect domestic industry
from fierce and low cost competition, from countries where environmental management
lags behind, can become strong. Trade measures are a powerful tool and the forces
of protectionism can easily come to the fore if not contained in the debates of
International forums. The issue of competitiveness
is a difficult one. Some countries – generally, developed countries – are moving
to internalise environmental costs, with the result that the gap between them
and newly industrialising countries is growing. I am in no doubt that we in the
newly industrialising countries must accelerate our progress towards setting higher
standards – preferably through the wider introduction and application of economic
measures to internalise costs. However,
developed countries must be realistic about how rapidly we can act. Certainly
any attempt, through trade measures, to force us into acting faster will prove
counter-productive. We need the same degree
of patience on harmonising standards. International harmonisation is a desirable
goal, but we must remember that competitiveness is an amalgam of many factors
– resources, labour costs, cultural preferences, government regulations, technological
development, educational systems and so on – not simply of differing environmental
standards. What is essential, as I have
said, is that global markets remain open and competitive. This is essential on
both economic and environmental grounds. I know that Britain and British industry
support this position, and will lend its powerful influence to resisting the risen
voices of protectionism. Business Response:
Eco-efficiency and Environmental Management Initiatives It
is not a difficult task to predict the general form of the new environment-trade
pressures which are emerging but, the key question remains. How should Thai industry,
and business globally, respond to these new challenges? One
response, which is starting to gain the genuine support of influential sectors
of the International business community, is the move to promote the concept of
Eco-efficiency, a term coined by the Business Council for Sustainable Development
(BCSD) after the Rio Earth Summit. The concept is a simple one and makes ultimate
economic sense: Eco-efficiency is the process by which value is added to products
and services, while using raw materials more efficiently and aiming at eliminating
pollution. There are clear imperatives
for business to accept the challenge of Eco-efficiency and make it a reality in
coming decades. By the year 2025 it is predicted that World population will jump
from five to eight billion people, many whose even most basic needs will not be
met adequately. Further, the World Bank
forecasts that World Economic output will increase 3.5 times by 2030 reaching
approximately US$69 trillion at 1990 prices. We
should be clear that Eco-efficiency goes beyond the traditional end-of-pipe mentality,
to an approach aimed at preventing pollution in the first place. Rather than wait
until the part is broken before fixing it, the objective from the outset is to
prevent breakages occurring. And changing patterns of production will require
a particular focus on innovation – to design and develop new technologies, new
processes and new products. Let there be no doubt that Eco-efficiency is the proper
corporate response to the global goal of sustainable development. This
is an area which requires cross fertilisation of ideas between business people
if the goal of Eco-efficiency is to be realised. As Chairman of the Business Council
for Sustainable Development, a body bringing together business leaders from more
than 30 nations, I can assure you that the interest of the International business
community in Eco-efficiency is growing steadily and the concept is taking root
in Thailand. Indeed, I am pleased to say
that the Thai Business Council for Sustainable Development has just adopted a
set of business guidelines for sustainable development. They include:
- establishing a definite and achievable corporate environmental
policy based on the precautionary principle, a policy that invests in pollution
prevention rather than clean-up
- ensuring environmental soundness of products by considering their entire lifecycle
implications
- promoting
energy conservation and waste minimisation, including recycle of materials and
residues, and the use of clean technologies which will generate less waste
- introducing environmental auditing by undertaking environmental
impact assessment before initiating a project, and complying with established
standards, irrespective of regulatory mechanisms. Business should strive to set
its own environmental standards whenever government regulations do not exist
Britain,
with its introduction of the standard “BS 7750: Specification for Environmental
Management Systems” is taking an early lead in developing the tools which will
help business turn the concept of Eco-efficiency into a reality. Indeed,
it is likely that the International Standard Organization (ISO) environmental
standard, ISO 14000, currently under development, will be based in part on BS
7750. The British Standard specifies requirements
for the development, implementation and maintenance of environmental management
systems, aimed at ensuring compliance with stated environmental policy and objectives. Recently,
Thailand Environment Institute (TEI) completed a project to assess the extent
to which a number of Thai companies have adopted environmental management systems,
and the British Standard was used as a key bench-mark in the exercise. Higher
standards are essential. They will drive companies faster down the road towards
Eco-efficiency, by requiring them to look for the new processes, technologies
and products I mentioned – in short, to find new and improved ways of doing things. There
is no doubt in my mind that close co-operation between British environmental specialists
and Thai business people, will foster a climate more receptive to the new ideas
and challenges of environmental management, and ultimately Eco-efficiency. That
is not to say we should expect business to solve their environmental problems
overnight, in Thailand or anywhere else. That is simply not realistic and, if
forced too quickly, will only undermine the economic engines, namely entrepreneurial
drive, which will ensure on-going prosperity and, hopefully, a much more equitable
distribution of the fruits of growth for all. In
conclusion, let me add that there are many antecedents for Thai-British co-operation,
as well as a strong history and mutual interests linking our two countries. Indeed,
many of our current leaders, in a diverse range of political, business and academic
fields were educated at the schools and universities of Britain. There is no finer
way of breeding common understanding. I
believe there continues to be great scope for Thai-British co-operation and, might
I end by saying, no area holds such an imperative for joint learning and action
as do the fields of environmental management and environmental improvement.
Partnership
for Change and Progress Anand Panyarachun
Chairman,
BCSD Geneva
Chairman, Council of Trustees, Thailand Environment Institut
Presented
at
The East Asia Pacific Parliamentarian
Conference on
Environment and
Development (EAPPCED II)
Thursday, 21st April 1994
Phuket, Thailand During
the next three days, this conference will discuss in some detail a number of issues
of great importance to this region, and beyond. I belief
I can best serve you this morning by mainly focusing on one area: partnership
between government and the private sector – which in my judgement, is of fundamental
importance to the way we approach those issues, and others. Government
of course includes you as Parliamentarians, as well as Ministers and officials.
And I single out the private sector – business – as a partner because it has a
critical role to play in achieving a successful marriage between development and
the environment. Business after all is the driving force
behind economic growth, and the increasing prosperity that much of East Asia and
the Pacific area is enjoying. Yet, as we all know, we have
been paying a price for this economic success. For example,
you will have seen the recent World Bank report on the state of the environment
in Asia. It is a cause for dis-satisfaction. - The
levels of sulfur dioxide, nitrogen dioxide and total suspended particulates in
the air – three especially dangerous industrial pollutants – have increased disturbingly:
by a factor of five in Indonesia, eight in the Philippines and ten here in Thailand.
- Five
of the seven cities in the World with the worse air pollution are here in Asia.
- At
current rates, Asian countries will be producing more sulfur dioxide than Europe
and America together by the year 2005.
I am not attaching
blame. But I feel it encumbrance on me to apportion responsibility for addressing
this urgent situation – because in the developing countries and emerging economies
we can afford no longer to have economic progress at the expense of a safe, healthy
environment. As legislators, you most certainly have a contribution
– a major contribution – to make. But clearly the primary
responsibility will – and must – rest with business: which faces the challenge
of reducing the levels of pollution dramatically, but without harming our industrial
and economic performance. Business however cannot do it
alone. Partnership must be the cornerstone for achieving
our common objectives. Partnership between you in government
and we in business to work out an agreed agenda, and partnership to work to that
agenda through developing common policies and deciding our respective roles for
implementing the actions we have resolved to take. It is
happening – for example in the ASEAN region, through the establishment of joint
public – private consultative committees, chaired by the Prime Minister of the
country, and attended by leading CEOs in that country. This
is a promising beginning. But we need to accelerate matters, and bring business
more closely into the policymaking process. Your particular
contribution – indeed the responsibility that has been entrusted to you – is to
set the standards for environmental performance. And I say very firmly that you
should not flinch from setting high standards, tough ones. Tough,
demanding standards are important to improving the well-being of the communities
you serve – and they will be the stimulus for improving business performance.
They are not an obstacle for business to cross or worse, to circumvent – they
are an opportunity which business should grasp. Many of
you I trust have heard of the motion of Eco-efficiency. It
is a concept developed by the Business Council for Sustainable Development in
its report ‘Changing Course’ to Rio. The BSCD is a group of business leaders
from around the World, and I am privileged to be its current Chairman. An
Eco-efficient company is one that adds value to its products and services, while
using raw materials and energy more efficiently and aiming towards – and ultimately
succeeding in – eliminating pollution from its processes and products. This
approach goes beyond the traditional end-of-pipe mentality, to one of striving
to prevent pollution in the first place. Rather than wait until the part is broken
before fixing it, the objective from the outset is to prevent breakages occurring. Eco-efficiency
is the proper corporate response to the global goal of sustainable development.
It is also the right response to the particular situation we in this region face
at this stage in our development – and it should become the benchmark by which
business sets out to measure itself, and be measured by, in the future. There
is much that we in business can do ourselves – and should be doing – to move our
process and products further and faster towards that goal. But
as I stated, no-one at this conference should assume that it is down to business
to do it alone. On the contrary, government – including Parliamentarians like
yourselves – must support, and work with business to promote and step up the process
of change. I said that high environmental standards are
the key. They are, Tougher standards will drive companies faster down the road
towards Eco-efficiency by requiring them to look for new processes, technologies
and even new products – in short, to find new and improved ways of doing things. But
the manner in which government – you – lay down those standards will be crucial
to their effect, and to their effectiveness. Most businesses
– wherever they are in the World, and this region is certainly no exception –
operate within both a set of laws and an economic framework laid down by government. You
can impose new laws, and the means to enforce them. They will serve their purpose
– to a point. But by themselves, new regulations will not
be enough to reap the economic and environmental dividends that are possible. We
need to reform business behaviour so that it reflects environmental truths. But
we must also see that society’s behaviour reflects those truths too. For
example, if we want business to include environmental costs in its balance sheet
– and we should want this – society must accept the consequences. There will be
a price to pay – literally – as environmental costs are allocated to processes
and products, and therefore we must make changes to our economic system to take
account of that reality. We are in danger of overlooking
the fact that at Rio, the heads of state and government signed off on an economic,
not an environmental agenda. The changes they endorsed were economic – not environmental
– in scope. The emphasis in the Agenda 21 program – indeed
in every major document approved in Rio – on the role of economic instruments
(taxes, charges, permits and so on), and their importance to internalizing costs
illustrates the point. Economic instruments are – as their
name says – an economic measure, not an environmental weapon. The benefits will
be both environmental and economic; moving us away from the present wasteful use,
over-consumption and depletion of resources to a system that values, encourages
and rewards conservation, pollution avoidance and efficient resource use. That
will be to the immense benefit of every citizen – and it will also be good for
business. Traditional command-and-control regulations will
continue to play a role. But increasingly – as Rio tacitly acknowledged – economic
instruments will prove a more effective means of improving corporate environmental
performance, and the environment generally. I also urge
you to take this into account when you come to consider new, higher environmental
standards. I also urge you to work with business – and other
groups with a direct stake in these issues – to implement a common agenda: an
agenda which should include:
We should be aiming to simplify regulations, rather than
add new complexities to the regulatory regime. Government
should accompany any measures to introduce economic instruments with reforms of
existing regulations to make the market work better. Existing
fiscal systems should be reviewed with the aim of shifting the tax burden from
income, value added and investment towards resource use and pollution. Removing
perverse subsidies should be a priority. We need to
agree and lay out a clear timetable for the gradual internalization of costs,
so that business has a stable platform for investment. Such
an agenda will enable us to meet our common objective – which is to make the markets
work for sustainable development. The markets have treated us well from an economic
standpoint: now we must ensure they work as successfully for our environment. Plenary
Session III on Saturday will deal with trade and environment. I think it appropriate
for me to address this topic. Open, competitive global markets
are essential on both economic and environmental grounds – and the successful
completion of the Uruguay Round is clearly a milestone towards a further opening
of markets, and to increasing competition. However, as you
know, we are now moving into a next phase – with GATT and its successor, the World
Trade Organization due to embark on a two-year work program designed to make trade
and environment policies mutually supportive. That program will embrace some difficult
areas, and I fear that some of the tensions apparent during the Uruguay Round
negotiations are likely to resurface. The issue of competitiveness
will, I believe, assume an even higher profile on the agenda – especially as countries
move to internalize environmental costs in different ways, and at different speeds. The
particular risk is that governments will perceive a loss of competitive advantage,
and will respond by resorting to trade measures against countries with, in their
view, lower environmental standards. We are all familiar with the argument that
weaker environmental regulations in mainly developing countries give producers
there an unfair advantage. It is a fact that generally speaking,
developed countries are internalizing costs faster – and according to the OECD,
the gap between them and developing countries is growing. I
repeat my view that we in the developing countries and emerging economies should
accelerate our progress towards setting higher environmental standards, preferably
through the wider introduction and application of economic measures to internalize
costs. At the same time however, developed countries must
be realistic about how rapidly we can act. And certainly any attempt, through
trade measures, to coerce us into action faster, will prove counter-productive. The
issue of trade and environment, and competitiveness are also related directly
to the harmonization of environmental standards. Certainly,
this is needed in some key areas – climate change, ozone layer depletion, endangered
species, biodiversity, acid rain and cross-border pollution – and there are in
fact some 15 International environmental agreements in place. But
let us remember two things: - It takes time to reach
an International consensus on issues. And if governments expect International
standards to be agreed, they may use this as an excuse to delay implementing their
own domestic policies meanwhile, I sincerely hope you will avoid that trap.
- International harmonization may be a desirable goal. But we must keep
in mind the national, sometimes regional, differences in ecological carrying capacities,
climate conditions, natural resource endowments and environmental priorities –
which are all sources of a country’s or region’s competitive advantage, and which
we will be loathe to relinquish without proper safeguards.
Indeed,
competitiveness is an amalgam of many factors – resources, labor costs, cultural
preferences, government regulation, technological development, effective educational
systems and so on – not simply of differing environmental standards. Harmonization
is desirable as a long-term objective. But the majority of environmental problems
are local, and in my view are best treated at that level. And we should not be
sidetracked from the urgency of our task here – which is to raise our environmental
standards throughout East Asia and the Pacific. I would
also like to mention the issue of Joint Implementation – as a specific example
of what the private sector can do to strengthen collaboration between developed
and developing countries. As you know. The Climate Change
Treaty which came into force on March 21 for those countries which ratified the
Rio Convention, includes the principle of Joint Implementation. This
allows countries to partially meet their commitments under the Treaty to reduce
their greenhouse gas commitments by investing in emission reduction in other countries.
Most of the World’s greenhouse gas emissions come from developed countries – and
the expectation is that Joint Implementation will mainly involve agreements with
developing countries. For example, a North American coal-burning electric utility
could earn credits by lowering CO2 buildup through increasing the efficiency of
coal-based power production in China. There are a number
of concerns, especially among developing countries, about Joint Implementation.
One is the fear that it may absolve the North of changing its behaviour while
adding burdens on developing countries. Another is it may cause traditional sources
of foreign aid to dry up. Joint Implementation has even been called a form of
‘eco-colonialism’. I understand those concerns
– but personally, I do not share them. In my view, Joint
Implementation is an important example of how the private sector can play a critical
role in providing significant, tangible sustainable development benefits – important
new resources to developing countries – through Eco-efficiency and Technology
Cooperation. And the role of the private sector is particularly
critical because it is clear that available government financial resources to
reduce greenhouse gas emissions will be inadequate – and private sector capital
will be needed. I am pleased to say that the BCSD has a
task force examining this whole issue. One of its tasks is to provide the business
perspective to the debate, and to raise awareness of Joint Implementation and
its benefits. In conclusion, let me say that in East Asia
and the Pacific, we face a considerable challenge. We need
to redress the damage already done, to make our cities liveable, to make the lives
of millions of our peoples bearable. And, as we develop our economics further,
to sustain our competitive presence in the World, we have to avoid compounding
the waste and pollution that already besets us. But with
that challenge comes an opportunity to show to the rest of the World that it can
be done: that we can achieve significant rewards – for the environment, and for
today’s and tomorrow’s generations of our peoples. I have
no doubt that together we can prove ourselves to be more than equal to the moment.
Speech
Archives in English Section
10 : Internatinal Relations
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Asian
Economic and Business Outlook for the New Millennium Keynote
Address to
The Eight Pacific Basin Finance Economics and
Accounting
and the Second ADSGM
International Conference
by Mr. Anand
Panyarachun
June 1, 2000 Dean
of the Southeast Asian Graduate Schools of Management, Honoured Guests, I
must confess to feeling somewhat intimidated at the prospect of speaking to so
many deans and PhDs. When I saw Dr. Chirayu’s invitation to talk about
the economic and business outlook for the new millennium, I felt even worse. With
the volatility in today’s economies and markets it is hard enough to predict what
will happen next week, much less in the next millennium. You have set me a very
tough examination. I hope I don’t flunk. The only saving grace I can see in making
predictions for a thousand years is that despite the best efforts of my doctors,
I am not likely to be around long enough to see how wrong I was. So, let me tell
you not what the future will be, but what I realistically hope it
will be. As we look forward to the new
millennium, the first obvious thing to note is that it is starting off with a
huge increase in the amount of information available and with fantastic new technologies
to deliver it all over the world in seconds. This is very exciting and it is,
potentially, of great benefit, but we must not forget that people, not information
or technology, remain the key to the future. People will decide how to use the
technology. People must learn to receive, organise, understand and act on all
that information. I heard a joke about
this, the other day. It seems there was a senior citizen - meaning someone much
older than I am - driving for the first time on the new expressway north of Bangkok
when he got a call from his daughter on his mobile phone. “Father - please be
careful. I just heard on Jor Sor 100 (that’s the traffic radio station) that some
idiot is driving the wrong way on the express way.” “It’s
even worse than that,” the senior citizen replied. “Its not just one car; its
hundreds of them - all going the wrong way and blowing their horns at me.” The
situation in Asia in 1996 and 97 demonstrates this lag in understanding warning
information. We should have seen lagging stock markets, sagging property prices,
declining export figures, current account deficits and pressure on our currency
as warnings we were going the wrong way. I am afraid we were so sure we were going
the right way and so proud of our high-speed economy that we were not ready to
listen to warnings. In this analogy, I suppose, that mobile phone call would have
come from George Soros. Now we are left
to clear up the wreckage from the financial crisis, make sure we get headed in
the right direction, re-train the drivers, slow down a bit and set up systems
to ensure that the information we need to correct course gets to us more quickly
and effectively. This work is largely the
responsibility of the people in Asia and, of course, you, as the leaders of Asian
institutions of management, have a major role to play. There are many local institutions,
rules, attitudes and management practices that need to be changed. I’ll
get back to our responsibilities in a minute, but first I want to note that world
leaders and global institutions also have a responsibility to adjust. Part of
the problem we faced in Asia was with an international financial system that did
not develop in sync with systems of regulation to moderate volatility. The new
millennium will bring changes in the international financial system, including
the major institutions, the IMF and the World Bank, that are part of that system.
These institutions need to get better information. They need to interpret it more
accurately and act on it more quickly. Most importantly, they need to involve
local people, so they better understand local situations, rather than applying
the solutions that worked in other places, in other circumstances. So,
I think and hope that the first years of the new millennium will begin with these
changes needed to prevent even more serious crashes further down the road. Existing
multi-lateral institutions, for instance, need to be more open and more responsive.
At a time when the pace of change is frightening many people, the IMF, ADB, and
WTO seem like isolated bureaucracies unresponsive to human concerns. That is why
we see protests and demonstrations, however irrational some of them may be. I
believe we will see these multi-lateral institutions become more open, more accessible
and more responsive in the years to come, even though they will not change their
main objectives. Other institutions should simply be discarded. The G-8, for instance,
is now outdated, ineffective and perceived to be elitist. More nations and more
institutions need to be included in global strategizing. A members-only club of
a few developed countries, however wealthy, cannot provide effective global leadership
in the new millennium. Tinkering with international
systems and developing new information hardware, however, will not be sufficient.
In the recent past, we may have been diverted by great technical achievements
from the importance of the human side of development. We in Asia need to find
ways to help our people change and develop so that those directing the new technology
will remain focused on the needs of people. That is a great responsibility that
you have as educators. I am afraid we will never be able to eliminate human greed,
but, as educators of business and management, we can find ways to steer the power
of greed in directions that help rather than harm people. In
environmental management, for instance, there is a simple and powerful principle,
that “polluters pay” for the real costs of the damage they inflict on society
and the natural ecology. We introduced this principle in Thailand nearly a decade
ago, but it is still not being implemented. The main reason for this slowness
is a shortage of the political courage to explain to the people that they too
are polluters and will have to pay. I believe that people are willing to pay,
but only if those in authority involve communities and businesses in the decision-making.
Our leaders need to engage the people in two-way communication on the benefits
as well as the costs of pollution prevention and reduction. Sometimes, our leaders
underestimate the good sense of our people and fear they will be punished at the
polls if they propose any sacrifice, even if it is in everyone’s best interest. Once
the “polluters pay” concept and its application are accepted, business managers
focused on the bottom line will rush to find the management tools needed to prevent
pollution, to reduce waste, and to account for full environmental costs. Management
schools must be ready to provide the managers of the future with the skill-sets
needed. This just one example. I believe
there are other ways that markets in the new millennium will be re-structured
to serve human needs rather than changing people to serve imperfect markets. Business
schools and business school professors have an absolutely crucial role to play
in this process. We need to undertake research that helps us understand the complex
and rapid changes underway in the global economy that have brought different societies,
different institutions and different world views into much closer contact. Business
schools have the duty to train a new generation of business leaders who see the
necessity of ethical, effective, environmentally-conscious business, that ultimately
serves the greater, long-term ends of human society. These
tasks do not belong exclusively to business schools, of course. Systemic change
is part of the task, and that is the joint responsibility of government, business,
academia, civil society, labour and mass media. Let me quote Joseph Stiglitz,
the recently retired chief economist of the World Bank. “Development
entails not only creating market institutions, but also political institutions,
and the two are intimately inter-twined.” In
the millennium ahead, I predict, or at least I hope, there will be major changes
in political institutions and in the connections between business and government.
I am proud to say that Thailand has been a leader in beginning such change, but
perhaps that is because we were the leaders in suffering the penalties of having
outdated and inadequate institutions. We
have experienced the costs of corruption, inadequate government regulation and
poor corporate governance. Our new constitution is an important starting point,
but just a starting point, and a strong signal of the desire for change. The constitution,
which came out of a broadly consultative process, includes strong provisions for
honesty in government and elections. I am pleased to see that some initial steps
have been taken to enforce those provisions. A lot more work still needs to be
done because the constitution is but words on paper. To work, it requires institutions
with the ability to enforce its counter-corruption provisions and people willing
to act, both inside and outside government, to make sure that those institutions
perform. Unfortunately, passive obedience
to the new rules is not enough. We need people willing to work together to ensure
that the rules are followed and that those breaking the rules are exposed. There
have to be some whistle-blowers and some troublemakers for the benefit of society.
Recently, we had the example of one Thai mother, concerned about unfair school
entrance examinations, start a process that has led to major improvements in access
and fairness all over the country. The
defence of human rights requires the same willingness to speak up. Some people
fear that globalisation will result in impersonal multi-national corporations,
above government control, abuse human rights for their corporate gains. That is
a possible danger, but I envisage a different outcome in the new millennium: new
technologies, global markets, international standards, and faster flows of information,
that give concerned people the weapons to ensure that corporations and governments
protect the rights of their workers and their local communities. Much more needs
to be done, but we see a clear direction: global markets and global brands are
leading to global standards of conduct. That
means change, not only for the big brand names, but also for their thousands of
suppliers all over the world. The new logistics technologies and “Just-in-Time”
management techniques mean that buyer and supplier must be tied closely together
by constant information flows. This extends from inventory, designs and shipments
to health and environmental standards. It forces knowledge down through the organisation
and out to the suppliers. This will mean that employees at all levels in the supply
chain must handle sensitive information. That, in turn, will mean that corporations
and their suppliers must develop co-operative, rather than confrontational relationships
with their workers. It is already clear that JIT does not work in a confrontational
system and this trend will only continue to expand in the future. I
believe the same is true of the hot new e-commerce technologies. In some ways
these technologies do the same thing as a client and a customer sitting down together
to talk. There is an exchange about needs, products, costs, capabilities, and
delivery information. Then there is an agreement on a sale and a payment. E-commerce
does the same things, but on such a scale and with such ease, speed and geographical
reach that it is rapidly changing important aspects of business. This technology
has provided such exciting new opportunities that there has been talk, particularly
with respect to stock markets, of a distinction between an “old economy” of physical
goods that grows slowly and a “new economy” of digital services that grows so
quickly that price/earnings ratios are irrelevant. I do not believe that this
distinction will last very long. Within a few years, the new technologies will
be incorporated in some way into almost every business, so the real distinction
will be between those companies that use electronic capabilities well and those
that don’t. What we need to do in Asia
is to ensure we climb the e-commerce learning curve quickly enough, so that our
businesses are not left behind and destroyed by global competitors who learn how
to use e-commerce ahead of us. Fears that
globalisation will destroy not only local companies, but also local communities,
environments and customs, have recently been the cause of much protest and controversy.
It has been argued that globalised; multi-national corporations are out of control
because they are too powerful and too geographically spread for individual governments
to handle. It is said that unelected corporate managers who affect what happens
to people around the world are accountable to no one. I
believe that is not actually the case now, and it will be even less so in the
years ahead. Managers are increasingly accountable to shareholders, employees
and customers. Information flows and human concerns are at the heart of this accountability.
New mechanisms are coming to ensure that all shareholders get the information
and analysis that is available to corporate-insiders and institutional shareholders.
Networks of NGOs and the power of the Internet ensure that corporate misconduct
in even remote parts of the world is soon known to the corporation’s customers
around the globe. Enforceable standards will make it much more difficult to lock
the fire doors of a toy factory, as was the case in Bangkok several years ago,
to improperly store hazardous waste or to use child labour. It
has been said that business managers are like sub-atomic particles. Observation
changes their behaviour. In the new millennium, I see increased observation of
management, whether in government or the private sector, leading to improved standards,
greater acceptance of standards and more effectively enforced standards. This
will lead to better lives for workers, better returns for shareholders and better
protection of local communities. Your students will be managing in a fish bowl
much of the time and you have to teach them how to do it. Observation
will not only come from outside the company. The new millennium will not work
in a top-down fashion. Business will have to involve employees and, indeed, all
stakeholders through much freer and fuller flows of information in good governance
processes. Recent research has shown that greater worker participation and better
information flows within a company, lead to higher motivation of employees, better
management decision-making and increased productivity These
flows of information in the new millennium will not be limited to workers’ issues.
As population growth and industrialisation increase, the pressure on the natural
environment, corporate treatment of the environment will become an ever more important
issue for management. Research at the Kenan-Flagler Business School has shown
that the companies that take the best care of the environment are also the most
profitable. Why should this be so? First
of all, pollution consists of materials that the corporation paid for that it
is now dumped into the environment without anyone to pay for it. Better design,
better production processes and better accounting for costs can reduce wastage
and make the company more profitable. Second,
production of waste entails disposal-costs or penalties. Avoidance of these costs
not only reduces expenses and legal fees but also reduces a serious demand on
management time and attention. Third, environmental
management systems cannot work effectively top down. They must involve workers
at every level. Workers tend to value working for a company that places a high
value on the environment. Involvement in environmental management motivates employees. Fourth,
the damage to corporate reputation among customers, may be greater than any penalties
paid to regulators, because it is damage that can persist for a long time. Even
decades after the Exxon Valdez, the corporate name is damaged by the memories
of the Alaskan oil spill. In the new millennium,
corporations will be known to workers, regulators, and communities by their actions
to protect the environment. Business schools need to give managers the skills
and attitudes to manage more open systems, that protect both the environment and
their workers. Open-ness to stakeholders
- workers, shareholders and communities - will also provide corporations with
mechanisms to avoid undue risk, cut costs and attract financing. Much
has been said about corporate governance and some progress has been made, at least
in the rules, with requirements for greater disclosure, audit committees, and
better accounting practices. It is still up to people to take actions. Workers
can passively follow management orders or they can speak up. Had workers understood
how the risks being piled up in Asian banks and corporations would lead to their
own loss of jobs, they would have spoken out, and those risks might have been
better managed? In the new millennium, I believe there will be systems that provide
timely risk information to employees. Company
executives, must learn ethical behaviour and new ways of management. Particularly
here in Asia, there needs to be a change in the old pattern of patriarchal, top-down
management. I am afraid this will be difficult for many of the dinosaurs of Asian
business to accept, but there will be little choice. To satisfy international
markets, international suppliers of capital, local communities and local government,
the managers of the new millennium will have to be more professional, more democratic
and less secretive. This is not just a nice thing to do; it is essential for survival
in the global economy of the new millennium. Ethical behaviour will be a source
of competitive advantage for nations as well as corporations. The
Thai government learned to its dismay that simply keeping its own state debt under
control is not enough, if the private sector undertakes high debt and high risk.
The suffering that accompanied the economic crisis, spread well beyond the managers,
regulators and entrepreneurs who made the mistakes. Employees were laid off; salaries
were cut and benefits reduced. We learned that we had few safety nets for the
victims of the downturn. We also learned that no safety net can replace a strong
economy. Unfortunately, market signals
are not perfect, and attention to markets alone will not achieve the kind of transparency,
good governance and ethical conduct that I envision for the new millennium. We
have learned to our cost in Asia that markets require strong and effective regulation.
Who is to regulate the new global economy? Some have suggested that this need
require a super world government that will be more powerful than the corporations,
and able to deal with rogue governments. I do not see this happening. We are still
hoping that the United States will pay its financial obligations to the United
Nations. We are still trying to get a long list of countries to respond to the
UN’s human rights committee. We are still trying to free the World Bank, the IMF
and the WTO from undue political interference by national governments. So a world
government is unlikely and, I think, unneeded. What
I see developing is not global government, but global governance. Not a super
bureaucracy, but a set of internationally accepted rules of conduct that protect
global interests. This global governance will be provided, not only through governments
and multi-lateral organisations, but also through activist NGOs, educated consumers,
civil society organisations, labour unions and corporations working together for
mutual self-interest. It will require the willingness on the part of some, to
give up special privileges, to protect the interests of future generations, and
to fore-go immediate advantages for long term, sustainable growth. In short, it
will require ethics and a sense of justice. This
sense of ethical behaviour needs to be instilled as early as possible - through
the family and through the education system. Since you are educators, let me expand
on the role of academia and education in the new millennium. First of all, we
need to teach our young people to understand how their actions can affect people
all over the world, whether it is making a decision that pollutes the atmosphere,
or taking on a risky loan. There has to be an emphasis on the social, ethical
and environmental bonds that connect us all. New communications technology will
help communities form around mutual interests rather than geography. Translation-software
will reduce language barriers. Second,
it is more important than ever before to teach our students how to think and how
to learn. Knowledge is changing so quickly, that in many disciplines about half
of the knowledge base for an advanced degree becomes obsolete every five years.
So we need to teach our students how to learn, because they will not conclude
their learning with the acquisition of a graduate degree, they just begin another
phase of it -continuous, self-directed, life-long learning. Learning
how to learn is not simple. It requires the tools of research, including the new
Internet tools, but more importantly, it requires the ability to think logically
and independently. Asia has immense talent,
but we must nurture it with quality education that is not directed only at a test
or a degree, but at real learning and ethical action. If we can do that, this
region will have an immense comparative advantage for the future. It is sometimes
noted that 60% of the world’s population is Asian and the percentage is growing,
therefore Asia will dominate the world economy of the 2lst century. While the
power of demographics is considerable, it is not numbers alone that will provide
leadership. It is the education of those people to think creatively and act responsibly
that will make the numbers important. We certainly have the bright young minds
to be successful; it is up to us, the not yet senior citizens, to make sure the
education we give them is good enough. Fortunately,
Internet technologies provide not only the challenge of improving learning, but
also give us new ways of doing it. We will not be far into the new millennium
when a large portion of education will be computer-aided and internet-based. Learning
will be less confined to the traditional years and more spread throughout a lifetime.
Education, like information and entertainment, will be digitised and delivered
electronically almost anywhere the consumer wants it. This is not to say that
all education will be electronic; we still have live theatre and concerts despite
television and hi-fl equipment. We will, and must continue to have, live inter-action
between student and teacher. Undoubtedly, however, education will be increasingly
electronic, inter-active and customised. The greatest change is likely to come
in those parts of universities that offer advanced professional education. Universities
will cease to be places of learning and increasingly become the guarantors
of the quality of education, that can be delivered anywhere and any time. The
past few years have been full of change. The pace has been dizzying. Sometimes
we just wish that things would slow down long enough for us to catch our breath.
That will not happen. More than 2,500 years ago, the Lord Buddha taught that the
only thing that does not change is the existence of change it. So I feel safe
in predicting that Asia will see even faster and more incredible changes in the
years ahead. It is your responsibility as scholars and educators, to ensure that
our students are equipped with the intellectual skills and moral strength, to
ensure that this inexorable change is for the betterment of all.
ASIA:
Back to Basics? Remarks by Mr. Anand Panyarachun
Chairman
of Conference
Shangri-La Hotel, Bangkok
July 29-30, 1999
Prime Minister Chuan, Ladies and Gentlemen, Over
the next two days, the conference will provide us with an important opportunity
to look at the economic crisis affecting Asia. It will give us the chance to think
through some of the difficult issues facing us as a consequence of the crisis,
and, just as important, how we can avoid a recurrence of such a crisis. The
premise of the conference is that we need to look for answers by reconsidering
the basics of economic development: the effective use of land, human resources
and capital. With challenging speakers and discussants from government, academia
and the private sector, this conference gives us an opportunity to reason together
without defensiveness about the past. In
a crisis of this magnitude, everyone has made his share of mistakes: governments,
banks, companies, and multi-lateral institutions. The challenge is to draw the
right lessons from those mistakes, so the terrible pain of this crisis can be
the starting point for needed change. Although
this crisis has given us an opportunity for change, it is not a simple matter
to determine exactly what change is needed and how it is to be accomplished. Defensiveness,
self-interest, pet theories, disputed or incomplete data and maneuvering for future
economic advantage, all add to the smoke of intellectual battle that can obscure
the best way forward. What we need to do over the next two days is to listen carefully
to all views and focus on the essentials of what needs to be done to put our economies
in this region back on the road to sustainable development. In
the past decade of rapid development, these basics have sometimes been overlooked
and occasionally ignored. The productive use of land through agriculture was our
first and perhaps most fundamentals source of wealth, but in the past two decades
of rapid growth, agriculture trailed far behind the growth of industry and services.
Since the majority of the people of Asia still make their living from agriculture,
it meant that the majority was left behind in the boom. This sharpened income
disparities and accelerated urbanization. Over-emphasis
on industrial, rather than agricultural development contributed to social and
environmental problems. Asians became more dependent on imported fuel and food,
and therefore more dependent on the international trading system including international
exchange rates. Clearly, changes in the way that land is allocated and used are
needed to lead to more sustainable, more balanced and more evenly distributed
development. Similarly, the economic boom
generally outpaced the development of human resources. Perhaps exceptions are
Japan, Singapore, and Taiwan. It is, of course, a cliche to say that economic
development depends on an well-educated population. During our boom years, not
enough was done to build the systems needed to provide young people with the kind
of education that would allow them to reach their full potential. There was not
enough investment, despite the availability of funds. There was too little connection
between the manpower needs of the private sector and the education provided by
largely state-run educational systems. There was not enough pressure for changes
in the way that our people are educated. The
problem is widely recognized, but the solutions are much less clear. Should governments
be investing more in education? Should there be more reliance on private sector
education? Can useful links be created between government and industry in joint
efforts to teach immediately useful skills? How do we stop the brain-drain out
of education? Should technical education be the main priority? Some
would argue that as great as the shortage in technical training has been, there
has also been an important shortage in ethical training that is just as damaging
to progress as the lack of scientific and managerial expertise. In
contrast to these first two basic factors, the use of capital has received great
attention. Even before the crisis, there was rapid change in the financial systems
of all our countries. We opened our economies up to world capital markets, liberalized
banking, welcomed foreign investment and initially benefited from the rapid inflows
of external resources. New economic empires were created around the ability to
mobilize capital. Scarce managerial expertise was pulled into finance with high
salaries and rapid promotions. This focus
on capital was incomplete. Too much attention was paid to the attraction of capital
and too little to its effective and productive employment. Instead of spending
the time and money to build systems that support the allocation of capital towards
its most effective use, we simply assumed that reliance on market forces was sufficient.
Our banks became pawnshops; our stock markets became casinos. Insider trading,
conflicts of interest and simple criminal misuse of funds undermined our financial
systems and many of them go unpunished. Neither
foreign investors nor multi-lateral lending institutions insisted on reform. On
the contrary, foreign financiers were at our doors every day, insisting on lending
cheap money. While some noted the shortages of the ethical training, supervision,
regulation and enforcement needed to make those systems effective, the problems
were not taken seriously enough to slow investment. The high growth rates and
the profits available overwhelmed such objections. So,
while there are important changes needed in the various national financial systems,
there are also important issues for the international community to address. The
ignorance, irresponsibility, and heard mentality of those charged with moving
huge amounts of international capital around the world contributed to the crisis.
Advances in computers and telecommunications have dramatically increased the speed
at which capital can be moved. This has reduced the time allowed to investors
and fund managers to give careful consideration to their capital investment decisions.
It has led to irrational decisions to invest and to dis-invest in Asia. Has
our ability to move capital quickly now outstripped our ability to move capital
intelligently? Is there anything that can be done to protect economies from the
effects of these rapid movements? Finally,
as we look at changes in these three basics - land, labour and capital - we must
also look at the balance among them and the way we go about making changes which
would lessen the conflict between economic growth and social justice. Balance
is needed to avoid the capital intensive bubble growth of the recent past, but
how do we achieve it? The problems in our finance and business sectors that now
appear obvious, were not simply an accumulation of individual mistakes. Some mis-allocation
of capital cannot be avoided in a free enterprise system, but the extent of misallocation
we have seen in the recent past indicates a systemic problem of governance that
needs to be addressed. We need to think
about the processes through which our key economic decisions are made. Those processes,
whether in government or in private business, must be reviewed to ensure that
they are not distorted by special interests. The best way to do this may not be
to simply toughen laws and strengthen enforcement because it is so difficult,
well-nigh impossible, to invent regulations that address all possible situations. Greater
transparency, so that accurate, timely information is available to all of those
concerned - whether citizens or shareholders - is probably the greatest single
mechanism that can lead to improved governance and better performance. Even transparency
must have some limits. Where do we draw the lines? How do we build a new culture
of transparency and public responsibility that will be the real guarantee of good
governance? How do we incorporate the best of Asian traditions and practices into
this new culture of transparency? These
are difficult challenges. We cannot expect to meet all these challenges in a two-day
conference, but we can at least contribute to the process that will involve us
over the next several years. We can contribute with appropriate data, with new
ideas, and with careful analysis. Perhaps most importantly, I would like to see
a contribution in terms of the public spirit of the discussion that is aimed at
practical action and achievable goals. You have my best wishes for success in
this endeavor.
The
Leadership Forum Speech by Mr. Anand Panyarachun
Chairman
of Saha-Union Public Company Limited
Former Prime Minister of Thailand
Bangkok
February
25, 1999 Khun
Arsa Sarasin, Chairman of the Foundation for International Human Resources
Development, Excellencies, Distinguished
Participants of the Leadership Forum, Ladies and Gentlemen, I
would, first of all, like to thank Khun Arsa for that warm and generous introduction.
I would also like to take this opportunity to congratulate him on being appointed
Chairman of the Foundation, which is just one of the many important positions
that he has been asked to assume. I am sure this latest assignment will involve
many challenging tasks ahead and will require the kind of determination, commitment
and experience that Khun Arsa has always brought to bear in every endeavour he
has undertaken. When I was asked to give
this talk, I was not sure what would be the appropriate subject for me to address
in my remarks this evening. But I was informed that the aim of this forum was
to discuss and search for possible solutions to issues of economic development
in the light of the current economic crisis, and particularly the implications
for human resource development. I think
that with the brainpower in this room, you may have already made much progress
towards finding such solutions. So let me offer by way of a disclaimer that I
may have little of substance to add to the discussion. Indeed, my remarks should
be taken as the musings of one man, and if what I say here makes us think - and
care - more deeply about human resource development, I shall consider that to
be ample reward. It seems that since the
Asian crisis broke out, with Thailand as the epicentre, we have all gone through
considerable soul-searching, particularly with regard to our development strategy.
What went wrong? What are the lessons to be learned? What do we need to change
to be able to thrive in the globalised economy? These are hard questions that
we have to keep asking ourselves if we are not to repeat the mistakes of the past. Certainly,
there is no shortage of theories on the origin of the crisis. Some blame it on
rampant capitalism, while others see a conspiracy led by “rogue” financial speculators.
Some point to the fallacies of so-called Asian values and the Asian model of development,
while others see globalisation as the main source of all our problems. There
may be elements of truth in all these analyses. But I believe that at the heart
of it all is the plain and simple fact that we became victims of our own success,
success which we defined much too narrowly and which lulled us into complacency. What
happened was that we came to see economic development purely in terms of material
wealth and astronomical GDP growth? We
equated economic success with the outward trappings of modernity such as high-rises
and luxurious lifestyles, whether or not they were cost-effective and appropriate.
Even as we enriched our pockets, we failed to enrich our minds and spirits. Success
bred excess. Traditional Thai values of thrift and spirituality gave way to consumerism
and materialism. The Asian values we trumpeted only served to justify a system
of patronage and favouritism that led to the misallocation and mismanagement of
our resources. We touted the abundance
of our natural and human resources but it turned out to be an open invitation
for the exploitation of cheap labour and the destruction of our environment. Certainly,
we can blame outside forces for the devastation wrought upon us, but complaining
would not get us very far. It would be a much better use of time and energy if
we were to realistically assess our strengths and weaknesses, determine what needs
to be done, and do it. When we talk about
the causes that contributed to the crisis, one weakness we tend to overlook is
in the area of human resource development. We have to admit that Thai society
has not traditionally devoted as much attention to developing its human potential,
as it should have. The paternalistic nature of our society has meant that ideas
and change mainly came from the top down. Authority
spoke, and the people listened and complied. While this social structure made
for great political stability, it meant that society was ill equipped to deal
with change, particularly rapid, sweeping change. And
change is what Thailand’s integration into the international system brought. Father-knows-best
leadership works well enough in closed systems, but when father himself is overwhelmed
by outside forces, the children have to fend for themselves. To do so successfully,
they have to be empowered to think for themselves. But
human resource development is a long-term proposition. For many years, the crucible
of the Cold War made the idea of people empowerment and independent thinking politically
unpalatable. Grassroots movements that aimed to build on society’s traditional
strengths, such as by fostering rural self-reliance, were regarded by the authorities
as controversial. Thus even with the advent of national development planning,
the workforce was generally taken to mean the labour force, with labour another
ingredient in the industrial development recipe - a raw ingredient, rather than
one that needed to be refined and developed. Without
the economic crisis, we would have probably continued on that unsustainable path,
and a bigger crisis would have been waiting for us further down the line. But
now we have had our wake-up call. The Cold War is no longer, and rapid change
is buffeting us from all sides. The trend towards democracy and good governance
is irreversible. If ever there was a time to reconsider our approach towards human
resource development, it is now. What is
most important is that we must return the process of economic development to where
it belongs, to the people. We have seen that a top-down or trickle-down approach
does not work. The State has shown that, for all the resources at its disposal,
it does not know enough to outguess the market, much less to achieve any degree
of efficiency in managing economic development. The business elite has also demonstrated
that it is not above making costly mistakes that can run the economy into the
ground. To be sure, there is a place for
the State and a place for the private business sector, but it is high time we
brought out the latent energies of our greatest asset, our people. After all,
you can invest as much as you like in all the skyscrapers, expressways and other
physical infrastructure, but it is the human infrastructure that matters the most
and potentially offers the highest return on your investment. A nation can pour
as much money as it likes in acquiring military might but no nation can feel truly
secure if its people languish in deprivation and social injustice. If
we are to become competitive as a nation, if we are to have social equity, if
we are to foster sustainable development, we have to put the people at centre
stage. The development of the human potential
must be the most important investment that any nation could make for the long
term. And it can only be achieved when people are free to learn, to think, to
express their views and to decide on their own choice of government and to engage
in the economic enterprise of their choosing. There
are some encouraging signs. An education reform bill has been passed. Human resource
development has become something of a mantra in policy circles. And in the midst
of this crisis, the word “human” has been given the kind of prominence
that it never received just a few years ago. In the press and in seminars, we
read and hear about the human impact of the economic turmoil, the imperatives
of promoting human security and human development. If there is a silver lining
in the dark cloud of the crisis, it is that it has put the human agenda at the
top of our development priorities where it rightly belongs. Perhaps,
despite all our efforts, we will never be able to rid our societies of inequality
and injustice. But at the very least we can offer our peoples more equal opportunities
for bettering their lives and livelihood. And there can be no better means of
providing such equal opportunities than education and human resources development. When
we speak of education, it should not be confined to the formal schooling every
child receives. Our attitude towards education and its role in economic development
must reflect the changes in today’s world. Education should not be seen as a process
that is completed upon receipt of a diploma or degree. Education must be a life-long
process both in and out of school. Our higher education has to be geared towards
producing independent, critical thinkers, not just workers and bureaucrats as
required by national development objectives as determined by the State. Students
have to be encouraged to question authority and not to settle for rote-learning
and accepting the wisdom of their teachers. Education needs to become more than
a ritual, a license to a good job and a good life. Learning must become second
nature, a habit that we instill in all our people from childhood onwards. I
regret to say that here in Thailand, in spite of all that has been said about
its importance, education has been given short shrift. It is a well-known fact
that the rate of functional literacy in Thailand is lower than in some of our
less-developed neighbours. Unfortunately, education has now become too much commercialised
and politicised. Teachers and lecturers nowadays care more about making money
than passing on knowledge and thinking skills. Universities and colleges now care
more about increasing enrolment than about producing quality graduates. Despite
claims about the decentralisation of education, the setting of school curricula
is still very much in the hands of the central government, making them rigid,
often times outdated, and unresponsive to real-world needs. I do not mean to be
harshly critical but I am simply stating some of my concerns about the present
state of education in Thailand. But the
main point that I should like to emphasise with regard to education as it relates
to the current economic crisis is the question of ethics and values. Human resources
development is not simply about instilling marketable skills and knowledge. We
need not remind ourselves that the problems besetting our economy were not due
just to the failure of our financial institutions. At the heart of it was the
erosion of moral standards, the excessive value placed on a culture of profligacy
and consumerism, the cosy relationship between businessmen and politicians, the
abuses of public trust and the lack of transparency and accountability in both
the corporate sector and government. Human resource development means that we
must restore personal responsibility and moral integrity to the economic development
equation. This is, of course, more easily
said than done. But the crisis has shown us that not doing it carries an extremely
high price. The renewed interest in Buddhist social values as a result of the
crisis appears to be a step in the right direction. By drawing upon the traditional
strengths inherent in our culture, we can restore our moral compass and use it
as a guide in managing change, rather than let change overwhelm us and cast us
morally adrift. Perhaps more important
than the various economic reform measures being undertaken is the need to build
into our political, economic and social systems a standard of ethics based on
the concept of good governance. Good governance, as far as the public sector is
concerned, means a government that is transparent, responsive and accountable
to the people. It must put the public interest before the interest of certain
individuals or of certain specialised groups within society. Good
governance does not stop at governments. Accountability and transparency must
also be demanded of companies and all others that exert a disproportionate influence
in public affairs. I have no doubt that
if good governance is going to become a permanent fixture in our society, it must
come through effective leadership. Those in positions of leadership must set an
example and show responsibility, vision and vigour - qualities which I believe
are the very essence of good governance. It is also necessary to bear in mind
that leadership means more than convincing and inspiring others to follow you.
Leadership is also about inspiring others to be the best that they can be, so
that if you inadvertently lead them down a blind alley, they can find their own
way back and set out in the right direction. And that is what human resource development
is really about. The way forward from the
current crisis is to critically rethink our policies and priorities. We need to
strike a balance between competing priorities. We need to focus on the fundamentals
of economic development. We need to reconcile our traditional strengths with the
power of the global economy. The way forward requires our nations, individually
and in partnership, to work towards the promotion of sustainable development -
through good governance in both the government and corporate sectors, through
effective leadership and through protecting the diversity and abundance of nature. Most
of all, we need to remind ourselves that modernization is not development. The
objective of development is not to have bigger buildings and more expensive cars.
Development is about uplifting the material and spiritual well being of each individual
in society. And that is best accomplished not by a top-down approach, but by empowering
each person to make the best of his circumstances and determine his own destiny.
Only then can we truly realise our potential as individual human beings and fulfil
our common aspirations as members of the human race.
Keynote
Address
Integrity in Governance in Asia by
Mr. Anand Panyarachun
Delivered at Workshop on integrity in Government
in Asia
United Nations Development Programme
Transparency
International - Thailand
June 29, 1998 Ladies
and Gentlemen, First of all, allow me to
congratulate the organizers for gathering such a distinguished group of people
from the Asian region to deliberate on an important topic. To counter corruption
is not only critical to good governance but it is also central to an equitable,
balanced and sustainable development. Simply stated, corruption needs to be challenged,
curtailed and in the long run, hopefully eradicated. For corruption not only depletes
our already limited budget and resources, but it also demoralizes the spirit of
a nation and its people. Corruption, if allowed to persist unchecked, would inhibit
and dwarf the moral integrity of a society. The
current economic crisis in Asia has inadvertently brought much attention to economic
problems and their solutions. This rather single-minded focus on the economy may
have overshadowed other urgent issues that need to be addressed in the region.
Typical of conventional approach and thinking, the trend to divide problems and
issue into segmented categories would propel us to deal with them in a disjointed
manner, as if realities can be neatly divided into compartments where one could
systematically prioritize them and deal with them one at a time. At
least in the Thai situation, our economic woes are closely intertwined with failures
in our political and social-cultural institutions. Many Thais have wondered aloud
that if the first signs of financial mismanagement were taken seriously and immediately
and properly dealt with, perhaps our economic woes might have been lessened. Other
might hasten to add that the fact that the economic ills were allowed to escalate
and worsen indicated suspected acts of “cover-up” and “favoritism” in return for
special “favor” by powers that be. I would add that at the core of our “dark experience”
lies the ugly truth that there was an absence of transparency, accountability,
public interest and public responsibility. Socio-cultural
values, which propagated consumerism, conspicuous consumption fortified by the
practices of cronyism and patronage in politics and administration has invariable
combined to doom the Thai economy. Because socio-economic and political factors
are so inextricably intertwined, a holistic approach, which focuses on their inter-relationship,
will serve us well. The combat against
corruption is not an individual quest nor even solely a government’s duty. In
fact, it should be a joint effort of different players. Government should be an
active partner in this effort. But a strong civil society where average citizens
cohere to volunteer their time, energy and effort to monitor situations and persons,
which engender corrupt activities and behaviors will prove to be the most enduring
deterrence against corruption. Likewise, civil society organizations such as NGOs,
people’s group and informal associations of like-minded people will undoubtedly
and unmistakably be good partners for individual volunteers and government. In
reality, we will need to create an environment where cooperation and participation
from the public to tackle with corruption goes beyond verbal endorsement and commitment. Such
an “enabling” environment where integrity in governance is high would need to
meet certain requirements such as:
- Leadership with good moral characters and high integrity. Role models aside,
leadership with true commitment to foster transparency and accountability in governance
and a willingness to welcome public engagement and involvement in solving social
issues.
- Constitution or basic
law that provide the legal framework and assurances that people’s voices, needs,
participation and involvement in exercising their civil rights are not only guaranteed
but nurtured.
- A set of values
that are congruent with activism, engagement and participation in public life
by private individuals. Too often, in the context of many Asian countries, historical
conditions were such that an average citizen is made to feel not only his/her
insignificance and vulnerability vis-a-vis government and other powerful forces
in society, but he/she is also conditioned to submit to authorities with silence
and to endure all conditions, however onerous, with patience and tolerance.
I
would like to draw you attention especially to the last point - value system and
value change for social activism. Traditional Asian values speak of loyalty to
family and kins, commitment to honor and obligations, adherence to a system of
integrity, and a code of business ethics built on personal trust and relationship.
These values may be construed as antithetical to the values of modern society
where disengagement from familiar and kinship ties and reliance on legal contracts
are stressed. However, I contend that traditional
Asian values could be extrapolated to strengthen our present call for value change,
for integrity in good governance. Allow me to elaborate. Imbued
in some of the traditional Asian values already stated are the virtues of a moral
and integrity system which bind an individual to his social relations. Loyalty
to family and kinfolks submits an individual to an immediate social group for
the good of the group instead of for one’s own personal ends. The requirement
to honor and repay obligations serves to strengthen an individual’s commitment
and responsibility to social acts. It also serves to remind one that the social
world is a web of interrelated exchanges and reciprocities where one could not
act independently, disregarding social consequences and implications. As for the
code of honor and integrity in business, the virtue of honesty and basic trust
in the goodness and integrity of other human beings are hereby extolled. These
virtues could be and should be captured for our task at hand to interpret and
incorporate them into a set of values system that will counter the forces of corruption. We
could translate commitment to family and kins into commitment for an even larger
social group, which is society. That an individual’s obligation to society requires
participation and involvement and even vigilance to fend off the corrosive effects
on society which corruption inevitably incurs. The moral and integrity code of
business practice easily translates into an integrity system where corruption
could have no place and would not be tolerated. In
essence, through the cooperation of the media as a partner in the effort to stamp
out corruption and install transparency and accountability in all spheres, the
public will not be motivated to actively participate as alert monitors of wrong
doings only, but they will cultivate a strong distaste and contempt for both wrong
doings and wrong doers. They will also be concerned enough to act and not just
to sit back and complain. What should ordinary
citizens do and how could they be effective in battling corruption? I do not presume
to know all the answers, especially in the face of divergent socio-cultural economic-political
contexts. I trust that you will be addressing these questions among others in
the next few days. I wish you my best in your deliberations.
Facing
the Future Keynote Address
by Mr. Anand
Panyarachun
Chairman of Saha-Union Public Company Limited
Former
Prime Minister of Thailand
at Chulalongkorn University
Bangkok,
Thailand
March 23, 1998
Distinguished Guests, Ladies and Gentlemen, It
is a great honour to be invited to deliver this Keynote Address to all of you
attending this Conference on the “Social and Political Dimensions of The Asian
Economic Crisis” organised by Chulalongkorn University Social Research Institute,
the Asian forum for Human Rights and Development and Focus on the Global South
on March 23 and 24,1998 in Bangkok. Whither
the “Economic Miracle”? In a short
period of a few months only the “economic miracle” of Southeast Asian countries,
built over decades, has shuddered to a halt. Since July last year this country
and many others in this region have been several affected by an unprecedented
economic and financial crisis. In a short period of a few months, thousands have
been left jobless, drastic budget cuts have been made in government’s public spending
and prices for essential consumer goods have skyrocketed in some areas. On the
other hand, the financial system has been subjected to a thorough overhaul under
the direction of the International Monetary Fund (IMF). Many of our countries
in this region had to be “bailed out” from this crisis through a comprehensive
but stringent “rescue package” put together by the IMF. The suffering for the
people that began with this crisis last year continues today, and is showing signs
of becoming more serious in the coming period. I
believe that the “economic fundamentals” of the countries in this region remain
sound. The crisis was an indication of the vulnerability of our countries to the
fluctuations of the international capital markets and unguided “open economic”
policies that had little roots in one’s own country, but were totally dependent
on foreign investment. Our “miracle economic
model” of development has been challenged to its fundamentals by the current
economic crisis in Asia. This was a model that was based on rapid growth and liberalisation
which catered more to the interests of foreigners (“external”) than to local people
(“internal”). This was a model that was biased towards the “rich”, and largely
neglected the poor and the vulnerable sections of our society. Under the influence
of this model, we all became its agents and preferred “extravagance” to “efficiency”,
“high growth” to “equitable income distribution” and “quick profits” over “sustainability”
I believe that the main cause of the economic
crisis was our “social deficiency”. Let me explain this concept:
- We did not have an effective monitoring system
to oversee the financial and commercial sector, as well as overall direction of
our economic paradigm,
- Our government seemed to
be less transparent and accountable and more “rapid growth” driven,
- Our civil society, while reaping some benefits of the economic miracle, generally
remained aloof to the economic direction of our country,
- Finally, there was little to no participation of the ordinary people in decision-making
on important economic and commercial policy making that affected the country as
a whole.
Development
Is More than Just Growth We know that development is not
just growth. The experience of our countries shows that rapid and high growth
can indeed take place, but many other crucial aspects of development remain stagnant
or neglected - viz., social justice and human rights, sustainable environmental
management, equitable sharing of the country’s resources and promotion of self-reliance
and local enterprises. The general discourse
on development revolves around two polarised positions, both of which I believe
are seriously questionable:
- Those that believe that mainstream development based on rapid
modernization (“globalization”) is the only way forward for development of the
country, and hence reject traditional and “local wisdom,”
- Those who believe only in traditional and “local wisdom” and reject all forms
of modernization.
I believe
there is a mid-way between these two juxtapositions. I am a firm believer in the
“middle-road” that blends and integrates the best elements in both positions -
the traditional and the modern; the local and the mainstream; the local economy
and the global village. It is only with this merging of historical paradigms of
development that we can achieve genuine self-help, self-reliance, sustainability
and overall human development for all. The
Way Forward The way forward from the current crisis is
to restore the value and spirit of the fundamental principles of human life and
good governance - viz. transparency, accountability and participation. Good governance
does not stop at governments. At the present time, we should be talking more about
“corporate governance” and “financial governance” we need to make companies and
corporations more transparent and sensitive to our people. We need to make them
more accountable to the environmental and social costs of their policies and actions. The
way forward from the crisis is to critically re-think our policies and priorities.
It was not our integration with the global economy that is to blame for the crisis
- it is our inability to balance various development priorities and build a foundation
of self-reliance based on our sound indigenous “economic” and “human” fundamentals.
We now need to go back to these fundamentals
- both the economic and the human - to restore confidence in our people, to rebuild
our country from the bottom-up, to draw inspiration from our local wisdom and
our local practices that emphasis sufficiency, mutual respect, equality, justice
and fair sharing of resources. In short, we need to reconcile our traditional
strengths and the power of the global economy. This is the task of “bridging”
that we are all called upon to play at this juncture in our history. The
Significance of This Conference This Asia-Europe People’s
Forum with its main aim of facilitating the involvement of civil society groups
in the ASEM process in order to ensure that the interests and needs of different
groups, especially children, women, the poor and the marginalised in society,
can be articulated; is an important step in the right direction. We need to build
dialogue and understanding between the government, business and private
sector, civil society groups and donors in our common endeavour to respond to
the plight of the poor and the vulnerable sections in our societies. We
need to recognise that people have struggled hard to build local level alternatives
that safeguard self-reliance, social justice and equality. We need to facilitate
their voice to be heard in national and international fora in order to influence
policy makers and our political leaders. Democracy and Development begins at the
grassroots levels first - it is a challenge to all of us to ensure that this experience
transcends the frontiers of nation states and becomes a global reality. I
am pleased to be part of this important Conference and wish the organisers and
all the participants from so many Asian countries and abroad, the very best in
your deliberations in these two days.
Keynote Address by
H.E. Mr. Anand Panyarachun
Former Prime Minister of Thailand
Socio-Economic
Summit Nepal 1998
"Strategy for the New Millennium"
Kathmandu,
Nepal, 20 February 1998 Excellencies Distinguished
Guests Ladies and Gentlemen It
is a great pleasure to be in Nepal, a kingdom that has so much in common with
my own. Not only do we share similarities in our cultural heritage; through the
centuries, both our countries have managed to remain free of foreign rule. But
in our own way and in our own time, Nepal and Thailand has each had to open up
and adapt to the currents of globalization. And judging from rush-hour traffic
in Bangkok and Kathmandu, it seems we also face many of the same challenges on
the road to development! Thailand, of course,
had something of a head start. And by most conventional measures, we succeeded
spectacularly. In some three decades, we had gone from practically nothing to
become a role model for the developing World. Between 1985 and 1995, we achieved
the fastest economic growth in the World, were hailed as the latest Asian economic
tiger, and made the World Bank's top-ten list of projected biggest economies in
the year 2020. Our crash, when it came
in 1997, was equally spectacular, sparking an Asian crisis that has since gone
on to engulf much of the developing World. It has also given rise to much soul-searching
over whether our development path was the correct one. The
question asked most frequently is: How can Thailand's development experience turn
so quickly from blueprint for success into cautionary tale? How can something
so right turn out so wrong? Or was it wrong to begin with, only we didn't know
it, like someone who only realizes there is a problem with his diet and lifestyle
when he gets a heart attack? There are
no simple answers. National development has never been a cut-and-dried proposition.
You base your actions on the available knowledge at the time and make corrections
as you go along. Certainly, the crisis has severely shaken our confidence. But
we must be careful not to throw the baby out with the bath water. Yes, we made
mistakes along the way, but there were also some things that we did right. Today,
with the 20/20 vision of hindsight, I hope to share with you some insights on
how to tell them apart. First, to give
you some idea how far Thailand has come, let me take you back some four decades,
before we began to even think of economic development. In 1956, Thailand was what
economists in those politically-incorrect days called a backward economy. The
country's population stood at a mere 23.4 million. Bangkok was a tranquil city
of placid canals and tree-lined roads, its skyline dominated by temple spires.
By far the most important sector of the economy was agriculture, which accounted
for 42 percent of the country's GDP, engaged 88 percent of the country's labor
force and made up 98 percent of total exports. Industry, which consisted of light
manufacturing aimed mainly at the domestic market, made up only 12 percent of
GDP and employed just 2 percent of the country's labor force. Fast
forward to 1995, just before the first signs of trouble appeared. Thailand's population
had more than doubled to almost 60 million. Most Bangkok canals had been paved
over, the trees cut down to make way for more cars, the temples long since eclipsed
by high-rises. Bangkok had come to dominate the economy as few cities in the World
do, accounting for over 42 percent of Thailand's GDP and almost 15 percent of
its population. In the country as a whole, the contribution of agriculture to
GDP had fallen to just over 10.4 percent, while that of industry had risen to
almost 40 percent. What had happened in
those forty years to bring about his transformation? The
short answer is a combination of laissez-faire capitalism and fortuitous timing.
Over the years, a series of shifts in economic policy integrated Thailand ever
more closely into the World economy. Beginning
in the late 1950s, upon the advice of the World Bank, Thailand's leadership decided
to pursue economic development through private-sector-led, import-substituting
industrialization, while reducing the role of State enterprise in the economy. Another
significant shift in policy was the change from industrialization based on labor-intensive,
import-substitution to capital-intensive, export-oriented production. Announced
in the early 1970s, this policy began in earnest in the early 1980s. Finally,
and most controversially in light of the financial crisis, a process of financial
liberalization took place between 1991 and 1994, resulting in huge inflows of
capital that, in hindsight, we were unprepared to deal with. The
pace of foreign investment inflows began to quicken at about the same time that
Thailand launched its export-oriented industrial promotion drive in the 1980s.
When the Plaza Accord of 1985 pressured Japanese companies to move their manufacturing
operations offshore, Thailand was a logical choice-thanks to its abundant natural
resources, cheap labor, investor-friendly policies and a strong Japanese market
presence. And when Western fund managers
began looking for alternatives to the unexciting rates of return offered in the
advanced industrial economies, open, dynamic Thailand emerged as a strong favorite.
Between 1985 and 1990, foreign direct investment flowing into Thailand shot up
from $178 million to $2.5 billion, with Japanese investment rising from $124 million
in 1986 to $1.2 billion in 1990. When that flow began to slow down in the early
1990s, foreign portfolio investment took up the slack. Net portfolio investment,
which averaged $646 million in 1985-89, rose to $927 million in 1992 and jumped
to $5.5 billion in 1993. Thailand was no
longer a backward economy, but an East Asian miracle, a Newly Industrialized Country.
Thailand did everything by the book, and had the numbers to show that neo-classical
economics worked. But there was a darker
side to the success story. Even as Thailand was logging record growth rates, the
country was showing signs of strain. Rapid industrialization was creating social
and environmental externalities that could not be addressed within the existing
growth-oriented paradigm. The private sector was extracting resources and polluting
the environment faster than they could be replenished or restored, creating ecological
devastation on a grand scale. The income gap was widening between rural and urban
areas, and between the rich and the poor, resulting in a flow of labor from rural
communities to the city. Bangkok became overcrowded and polluted, with the slums,
disease, drugs and prostitution that typify so many of today's mega-cities. Was
this a reasonable price to pay for a decade of double-digit growth? The answer
would depend on whom one asks. Those paying the price and those enjoying the fruits
of rapid growth were not necessarily the same groups of people. Our economic growth,
while high, was unbalanced, inequitable and unsustainable.
Does this represent then, as some have suggested, the failure
of capitalism? To be sure, if we had not
opened up to global capitalism, there would have been no crisis, or at least the
Asian crisis would not have started in Thailand. But that is like saying one would
never have fallen if one had not attempted to walk. Capitalism
is not inherently good or evil. As long as man continues to be driven by self-interest,
capitalism will remain the least "evil" way of allocating resources. Like it or
not, it is more useful for us to learn to manage capitalism, rather than repudiate
it. The financial crash may also be seen
as a harsh market correction, or in the words of Joseph Schumpeter, an act of
creative destruction, from which hopefully we will draw the right lessons. So
if anything, I would say that the crisis is a reaffirmation of the laws of the
market-place. I would further suggest that
Thailand's lopsided growth and financial crash occurred not because we were abiding
too faithfully by market principles, but because we did not take those principles
sufficiently to heart. This may be a somewhat
controversial Statement, so let me explain. Earlier
I stated that Thailand undertook policies to integrate itself with the World economy.
But if you look more closely, you will see that while we adopted the outward trappings
of capitalism, much of our economy continued to be dominated by practices that
were not market-friendly -- in particular traditional social relationship patterns
involving personal connections, patronage and paternalism. Thus
it was that instead of allowing the laws of demand and supply to determine prices
and the most efficient allocation of resources, the State directed the process.
Instead of developing our comparative advantage to the fullest, we inadvertently
weakened it. Instead of fostering a competitive domestic environment, we encouraged
monopolies and oligopolies as a means of capital accumulation. One
of the clearest examples of this unwitting distortion of the marketplace can be
seen in our agricultural policy. Thailand has long had a tremendous natural comparative
advantage in agriculture. Every Thai child knows by heart the ancient inscription
describing 13th century Siam: "in the water there is fish, in the fields
there is rice" - an apt description of Thailand even in the 20th century. It
is therefore rather ironic that farmers have always been the poorest members of
society. Ever since Thailand began exporting rice in the mid-19th century,
the rice surplus was taxed, enriching the land-owning upper classes while keeping
farmers mired in poverty. When we decided
to industrialize the economy, it was again achieved at the expense of agriculture.
Industrial enterprise was subsidized through tax breaks and other preferential
privileges. Rice exports, meanwhile, were
subject to a tax - the so-called rice premium-, which was, ended only in 1985,
in response to US subsidies of its rice exports. What the rice premium did was
raise revenue for the State and keep rice prices artificially low for the benefit
of urban consumers. Unfortunately, it also reinforced the chronic impoverishment
of rural farmers. Allowing the market to determine prices instead would have raised
the income of farmers and energized agriculture, but it was feared that the resulting
higher cost of living would spark urban unrest. Agricultural
small-holders therefore remained dependent, orphan-like, on the "patronage" of
the State. It was the State that farmers relied on to provide infrastructure,
to grant loans and subsidies, even to tell farmers what crops o grow, how to grow
them and what animals to raise (advice which often turned out to be misguided).
The effect of this culture of dependence and the anti-agriculture bias in government
policy was to weaken the agricultural sector by discouraging initiative, innovation
and improvements in efficiency on the part of farmers. I
raise the issue of agriculture not only because it illustrates how political considerations
have pervaded the process of resource allocation, but also because it is crucial
in understanding many other phenomena in Thailand. Many of our social problems
can be traced to rapid industrialization and the imbalances it creates or aggravates
between agriculture and urban interests. Chronic rural poverty and indebtedness
have transformed farmers- the "backbone of the Thai economy" - into unskilled
labor feeding the country's industrial expansion. Rural communities are sapped
of their vitality, as Bangkok becomes ever more crowded, its infrastructure and
services stretched to the limits. Another
reason farmers have been so exploited and dependent on the State is lack of education.
Thailand's development policy has always rested on the assumption that our biggest
strengths lay in natural resources and cheap labor. Successive governments have
therefore paid scant attention to upgrading the quality of the workforce, preferring
instead to promote our advantage in cheap unskilled labor. But
the entry of new players into the global market after the Cold War has shown that
cheap labor is an advantage all developing countries have. Thus it was only relatively
recently that human resource development became a new mantra in policy circles,
with an emphasis on the upgrading of technical and management skills. Here
I should also add that HRD should not be confined to only the industrial sector.
We must make sure that farmers are not excluded, but encouraged to learn how markets
work and to develop the skills that will allow them to make independent, informed
choices. Education is a public good, like roads and public utilities, without
which development is impossible. This may seem obvious, but the short shrift education
tends to receive in our development policy suggests that the link between education
and development may not be as widely appreciated as it should be. So
far I have argued that the State should let market forces do their work without
imposing distorting incentives favoring or punishing a particular sector. I have
also pointed out that it is the obligation of the State to provide public goods
such as education to allow the economy to achieve its full potential. That
said, I must also note that markets as a rule do not function perfectly. Left
to themselves, markets give rise to monopolies, speculative bubbles, insider trading
and other assorted distortions. Hence,
the State cannot totally disengage itself from the economy and rely on the invisible
hand alone to maintain proper functioning. The State has an obligation to foster
competition, prevent market failures, and ensure that private gains are not made
at public expense. A minimalist State, or a State that is co-opted by the private
sector, will have difficulty performing such duties. A
peculiarity of the Thai State is that it was too hands-on with regard to agriculture,
but too hands-off with regard to industry and finance. Even in 1991, a World Bank
report noted that Thailand was "a private enterprise system where few controls
are imposed, [and] increased material standards and private gains have been secured
at an observable communal expense." This
insight is helpful in explaining how unintended consequences came about. When
capital and currency controls were lifted in the early 1990s, it was with the
intention of taking Thai industry to a higher plane of development. The policy
of financial liberalization, combined with fixed exchange rates and high interest
rates, did indeed attract a torrent of foreign capital. The missing part of the
equation was the mechanisms and institutions to ensure that this glut of capital
was channeled into productive activities, such as agriculture or manufacturing.
The situation thus unleashed unprecedented opportunities for the nimble to make
quick profits- in stocks, real estate and other speculative areas. The
mood in those years became one that Alan Greenspan aptly describes as irrational
exuberance. Flush with cheap money in search of borrowers, banks and finance companies
became undisciplined, grossly inflating asset values and over-extending credit.
Short-term loans, unhedged thanks to the perceived safety of the baht's peg to
the US dollar, were taken to finance long-term activities such as construction
projects. Businesses began ploughing their earnings from manufacturing into property
speculation. Over-capacity began to build up in sectors such as housing, industrial
estates, petrochemicals and steel, many sectors of which had been promoted by
the State itself. By 1996, signs appeared
to suggest the party was over. As the US dollar strengthened, so did the pegged
baht. Export growth dropped from 24 percent the previous year to zero percent,
while the current account deficit stood at a worrying 8 percent. Foreign investment
began moving out. Despite reassurances by the government that all was well, it
was apparent that the baht was overvalued, a point not lost on speculators. After
a series of bruising currency attacks, the government was forced to float the
baht on July 2, 1997. This episode in our
economic history demonstrates that if we wish to prosper in the modern market,
we cannot afford not to play by its rules. Here
again we have a clash between the traditional and the new. A banking system based
on mutual trust and support between lender and borrower, such as that which exists
in many Asian countries, is fine for the domestic capital market, but hopelessly
out of step in a globalize capital market. Not
only financial institutions but the State as well have to adjust their way of
doing things. In an open capital market system, the State, because it usually
guarantees bank deposits (with taxpayers' money, no less), must supervise the
banks to ensure that the risks taken by the banks are based on project evaluations
and kept within certain bounds. This means that a clean, transparent and effective
corporate governance system must be in place. Shareholders in a company that misuses
other people's money must be punished and not bailed out by the taxpayers. To
enforce this, effective supervision by the central bank is required, which in
turn presumes that a clean, transparent and effective government is in place.
The problem for most developing countries is how to get such a government -- one
free of corruption. Another area where
the State has an important supervisory role to play is in promoting sustainable
development. Developing countries, Thailand included, tend to take their natural
bounty for granted. Forests are chopped down for timber or farmland, minerals
are extracted with little regard for environmental damage, pollution clogs rivers
and lungs, all in the name of progress. Thailand
is beginning to realize, hopefully not too late, the importance of sustainable
development, which the Brundtland Commission's 1987 report defined as development
which meets the needs of the present without sacrificing the ability of the future
to meet its needs. From the beginning,
the Thai development model has focused single-mindedly on rapid growth. In recent
year, as our economy grew while our environment deteriorated, more and more people
are wondering if growth is really the panacea it is often made out to be. Given
time, nature replenishes its resources, such as trees, and breaks down most waste
products. But rapid industrialization and rampant commercialism tends to create
social and environmental externalities that outstrip the carrying capacity of
nature: prawn farms that destroy mangrove forests, logging that destroys human
and wildlife habitats, vehicle engines that emit noxious exhaust fumes, factories
that release toxic substances into the underground water table and waterways.
It is by no means certain if our runaway growth has not already compromised future
generations' ability to enjoy a reasonably good quality of life. Here
then is clearly a case where unfettered market forces cannot be counted on to
work for the greater good, particularly in the context of a global economy, which
by its very nature encourages large-scale resource extraction. The pervasiveness
of patronage and graft in Thailand aggravates the situation even further. Export-oriented
exploitation of resources is therefore simply not sustainable without some degree
of government regulation. What the State
should do is to inject greater rationality into the balance between economic and
environmental priorities. It can pass and strictly enforce environmental legislation.
It can require that prices reflect the internalization of such externalities,
rather than allow the socialization of environmental costs. But too often, the
State's agents are beholden to well-connected private interests and not particularly
keen to protect public resources. So overall,
Thailand's growth has been a mixed blessing. We have tried to compress centuries
of industrialization into a few decades, and in the process have discovered how
detrimental some of our most entrenched traditions and social institutions are
to our country as it tries to fit into the global market. If
those old ways were to disappear, I for one would not be nostalgic. In many cases,
they hark back to an unjust social hierarchy that perpetuated poverty for the
masses and enriched a wealthy few. I am not saying that we should dispense with
our cultural identity and blindly embrace the monoculture of the global market.
What I am saying is that, as in any culture, there is much that should be retained
and much that needs to be changed. If we are wise enough, we will know the difference. Indeed,
some wisdom seems to be emerging from the ashes of the financial crisis. Thai
society has become more introspective, asking itself where its strengths and weaknesses
really lie, and what are the things that really matter in life. A
reform process has begun towards an open society and more effective rule of law.
In the aftermath of the crisis, this movement has gathered momentum and is enjoying
wide public support. The shortcomings of the State are being redressed through
political reform as well as good public and corporate governance. The State is
trying to reduce its role in directing the economy, while strengthening its supervisory
and regulatory capacities. Transparency, full and timely disclosure of information,
and accountability have become watchwords in both the corporate and government
sectors. At the same time, the State and
the market are also being monitored by a society that is more aware than ever
of the potential for excess and inefficiency. Civil society -- and NGOs in particular
-- is playing a more active role in strengthening communities and empowering ordinary
citizens. The media have also been a powerful force for change, especially by
exposing wrongdoing in high places. Citizens now have the right to access official
information, a right that is being vigorously exercised and receiving the backing
of our independent judiciary. The financial
collapse therefore marked the beginning of a new chapter in Thailand's development.
We are under no illusions as to when we can achieve our goal of development that
is just, equitable and sustainable. We recognize that our efforts towards an open
society must proceed in tandem, at roughly the same pace, in both political and
economic areas. What we have learned is
that when you take steps towards greater economic openness, and especially financial
openness, there are a few rules of thumb to bear in mind: Do let the market do
its work of determining prices; do provide public goods such as education and
infrastructure; do intervene to correct market failures; and do intervene to prevent
private self-interest from damaging the common interest. There are also a few
don't 's: Don't second-guess the market; don’t favor certain sectors or groups
over others; and don't use public funds to bail out private mistakes. Even
when we know the rules, it is not always easy to live by them. South East Asia
has the advantage of being able to learn from the successes and mistakes of others.
You also have much experience in the way of appropriate technology, which is usually
more environment-and community-friendly. We should use the various regional fora--
such as the Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic Cooperation forum,
or BIMSTEC--not only to promote trade and economic cooperation, but also to exchange
ideas on development strategies. Globalization,
like capitalism, is a powerful force that should be harnessed for the greater
good of mankind. We need to change and grow and become wiser if we are to survive
it with our identity intact, so that future generations may look back at us with
approval for bequeathing them a World that is not chaotic and bursting at the
seams, but a World that is just, equitable and sustainable. Thank
you.
Constitutionalism
and Democracy in Asia by Mr. Anand Panyarachun
1997
Ramon Magsaysay Awards
Awardees’ Forum Series No. 1
Manila,
September 1, 1997 The link between constitutionalism and
democracy in Asia is, in certain interesting ways, reminiscent of the inter-action
between law and order. Law and order comprise a neatly matched term commonly associated
with authoritarianism, or autocracy. It is often said – through clenched teeth
– that law and order constitute the primary legacy of nineteenth-century colonialism
in Asia. However, the disdain with which the term is often used contains a kernel
of truth and even a faint wisp of humanity that we would do well to consider further.
Much of Asia today treads a thin line between authoritarianism
and populism. The former represents the subjugation of the people to political
masters who, only in the most fortunate and rare of circumstances, provide enlightened
leadership. The latter spells political chaos, and typically results in metamorphosis
into the most vicious sorts of authoritarianism. If
we are to avoid straying from the thin line between authoritarianism and populism
– that is, if we are to have law and order without its accompanying evil of a
new, home-grown, indigenous colonialism consisting of a master class ruling a
subject population – we must pursue constitutionalism. What
do I mean by “constitutionalism”? I am not too humble to admit that my views on
that subject derive from the political theories initially advanced by the ancient
Greeks. It was Aristotle who referred to constitutionalism as “the arrangement
of the offices of a State.” Based on that definition, every State, no matter how
badly governed, has a constitution, written or not. But
the mere existence of a constitution does not represent constitutionalism. That
is because a constitution, to be respected as viable and democratic, must fulfill
certain necessary conditions. - A
constitutional government must, first and foremost, be “representative”.
The people must decide who is to lead them, and those in office must conduct themselves
as representatives of the people.
- Second, enhancement of “individual rights or liberties” should
be a cornerstone,
- Third,
a system of “checks and balances” is required of any constitutional
government to deter against abuse of power. Constitutional governments, therefore,
typically divide power between the legislature, executive and judiciary, as well
as between the center and the State, provincial or local levels of authority.
- Fourth, “simplicity” of form and of modus
operandi is required so that the system can be understood by the people and
not only by the professional politicians, and in order that it avoids the pitfalls
and loopholes that are the bedfellows of verbosity.
- A fifth requirement is “procedural stability”,
meaning that certain fundamental procedures of government must not be subject
to frequent or arbitrary intervention. Citizens must know the basic rules according
to which politics are conducted. Stable procedures of government provide citizens
with adequate knowledge of the probable consequences of their actions.
- Sixth is “accountability”. Measures must be
in place to ensure that those who govern consistently account for, and can be
held accountable for, their actions on behalf of the governed.
- The final essential element of a constitutional government
is “transparency”, as only through full openness and disclosure
about the affairs of government will the people be able to make informed judgments
and decisions on the future course of governance.
Written
constitutions provide a firm standard by which the legitimacy of government action
may be judged. In constitutional democracies, accountability can be enforced through
a great variety of regular procedures, including elections, systems of promotion
and discipline, fiscal accounting, recall, and referendum. The
accountability of government officials to the citizenry makes possible the citizens’
responsibility for the acts of government. The most obvious example of this process
of responsibility and accountability is the electoral process. In
constitutional systems, as we have noted, powers of legislation and enforcement
are divided among executive, legislative and judicial components, and the ability
of any one person to continue to hold power is subject to periodic recourse through
the electorate. In contract, totalitarianism
amounts to the abdication of constitutionalism. Totalitarian regimes emerge when
an organized minority seizes power by force or fraud, or through the apathy of
the electorate. Opposition to the dictator is stifled by the imposition of State
control over all forms of expression; the institution of clandestine police and
intelligence networks; and the suppression or destruction of all opposing political
parties. Autocracy is sometimes difficult
to distinguish from democratic rule. As we have often seen, autocracies try to
borrow legitimacy by adopting the language of the constitutions of democratic
regimes or by camouflaging themselves as “shadow” institutions. It
is common practice in modern totalitarian States to establish such shadow institutions
as parliaments or national assemblies, elections and political parties, courts
of justice and legal codes, and similar so-called “constitutional” bodies that
differ little in appearance from the institutions of genuine constitutional democracies.
Similarly, the language of constitutions promulgated by totalitarian regimes is
often couched in terms of the doctrines of popular democracy. Despite
the facades, the underlying realities of totalitarian rule are invariably the
concentration of power in a single centre and the mobilization of force to prevent
the emergence of opposition, democratic or otherwise. Constitutional
democracy is, as its name indicates, based on (1) a constitution, or basic law,
and (2) the people’s active participation. The
essence of a constitution is that it formalizes a set of fundamental norms governing
the political community and determining the relations between the rulers and the
people and the inter-action among the centres of power. The
“political party” is the other chief instrument of constitutional
democracy. It is the agency through which the electorate is involved in both the
exercise and transfer of power. The party in a constitutional democracy is at
once a means of representing a mass electorate in the exercise of power and also
a device for the peaceful replacement of one set of power holders with another. In
short, a constitution provides the starting point for the pursuit of democracy
and the building of good governance. Those
of you who have been following developments in Thailand can see that our current
economic crisis is a result of the weakness in Thailand’s political structure.
We face an erosion of faith and confidence in our political institutions that
needs to be urgently addressed for the continued advancement of Thai society. The
political reform process that has been initiated, provides Thailand with an opportunity
to take the first step in laying the foundation for true democracy and good governance. For
the last eight months now, I have been intensively engaged in the process of drafting
a new constitution for Thailand, a process that – I am happy to report – has been
marked by its openness to public participation and debate. As
some of you may know, Thailand has the dubious distinction of having had 15 constitutions
since the inception of its constitutional monarchy 65 years ago. Some of these
constitutions have been discarded as a result of coups d’etat; some have been
distorted through ill-advised amendments. The common feature of all these 15 constitutions
is that they have all been drafted by those in power, and not through any process
of consultation with the people. As a result,
these constitutions have not been respected, nor have they ensured good governance.
We aim to change that. Taking into account the guiding principles that I have
referred to earlier, the Constitution Drafting Assembly of Thailand during the
course of the past eight months was engaged in an intensive process of dialogue
with the people in the preparation of the draft constitution, to ensure that it
addresses the concerns of our citizenry. People’s
participation in the process of decision-making has been an important concept
in the political reform process. We feel that it is necessary to instill a sense
of ownership among the people of this important social contract between the State
and the people. There is no political
system in the world that can claim legitimacy that was not in some sense based
on “the will of the people.” This is the first time in Thai history that the people
have the right to contribute to this important process. We hope to have a government
“of the people, by the people and for the people.” But
I must emphasize here that the adoption of an enlightened constitution represents
only an initial step to the goal of stabilizing democracy in Asia. For democracy
to function effectively in Asia, we must also address the fundamental socio-economic
problems prevalent in Asia. The first is
to eradicate absolute poverty. Every one of Thailand’s citizens deserves
the opportunity to achieve an acceptable standard of living. Any obstacle
in the way of such opportunities, whether constitutional or extra-constitutional,
must be removed. This is axiomatic in any political system that claims to call
itself a democracy. It is also a pre-condition for sustainable democracy. As has
been most evident in modern Thai history, poverty is an invitation to one of the
easiest steps to authoritarianism: vote-buying. We must reduce the demand
for vote-buying through reducing the level of poverty in our countries. Otherwise,
vote-buying will continue to compromise the integrity of our electoral process.
Asian governments thus need to pursue “growing with equity” and bridge
the gap between rich and poor. Secondly,
we must provide our people with the education, skills, and opportunities
to enable them to function effectively in society and secure a livelihood. Experience
has shown that as peoples’ income rise and their horizons broaden, they will more
likely demand the right to participate in government and to enjoy full protection
under the rule of law. An informed electorate that is politically aware, knowledgeable
and committed to democratic principles is the key to good governance. Thirdly,
we must develop civil society. The Philippines has led the region
in this respect and provides a valuable role model for the rest of Asia. The contribution
of non-governmental organizations to national development has been commendable.
The Philippines’ respect for freedom of speech and the press should be the norm
for the region. Donald Kagan, a distinguished
scholar of ancient Greek history, in his book Pericles of Athens and the Birth
of Democracy, writes that democratic governance relies on three conditions:
- The first is to have a base of well-established political
institutions;
- The second is to have a body of
citizens who possess a mature understanding of the principles of democracy;
- The third is to have capable and responsive leadership.
We
must recognize that all this takes time – not just years, but decades and the
passing of generations. The road to democracy
is long and arduous, especially for countries which have long suffered economic
disadvantage. It is claimed by some in Asia that democracy is economically inefficient,
and that, “enlightened authoritarianism” is a more effective means
of generating economic growth. Some go so far as to say that this is a basic Asian
value, to be cherished and nurtured. This to some degree may be true. I would,
however, like to express a word of caution here. While a strong hand may guide
a nation out of hardship, even the most compassionate authoritarian leader is
likely to be vulnerable to the corrupting influence of power. Asia
today faces a moral dilemma. Constitutionalism is being questioned by powerful
voices, often acting in what they believe are the best collective interests of
the people. It has been implied that constitutionalism is anti-ethical to Asian
values, that it is an alien intrusion carrying the seeds of chaos. Yet,
it is my contention that constitutionalism is the key to law and order in the
best sense of that term. Strong and effective leadership in this region must be
based on the will of the people and must respect individual freedom. Only through
constitutionalism can this region hope to sustain its moral integrity, and thus
its vigorous progress, into the coming millennium. I
should like to conclude this address with a modest proposal. I propose that each
Asian State establish an independent body, representative of the people, to review
its national constitution. That review would assess the extent to which the constitution
fulfills the seven requirements of constitutionalism that I have outlined here.
It would propose means whereby constitutional reforms might be pursed to ensure
the full and free participation of all the people in the life of the nation. By
that means Asia would come to lead the world in our continuing struggle for law,
and for order.
Forging
A Partnership with the New Asia Address by H.E. Mr.
Anand Panyarachun
Former Prime Minister of Thailand
The Trilateral
Commission
Tokyo, March 22, 1997 Excellencies,
Ladies and Gentlemen, I am very pleased
indeed to have the honour of addressing this distinguished gathering. The
world today is almost unrecognizable from that which existed when the Trilateral
Commission was formed in 1973. There is
no longer a single defining factor of international politics. In place of the
Cold War is a “hodge-podge” of economic and political issues, over-lapping one
another, blurring the traditional boundaries between the sub-national, the national,
the regional and the global. The pace of technological advancement has so compressed
space and time that ever more issues and players compete for our immediate attention.
Global-free market forces have pervaded every aspect of economic life, bringing
prosperity and growth even as they constrain the ability of governments to manage
national economic policies. Obviously,
the complexity we now face is different from that which had shaped our way of
thinking for over four decades. With the growing number of issues and actors,
traditional notions of economics, security and national sovereignty are increasingly
called into question or even flouted outright. One would think that after Francis
Fukuyama announced the end of history, the important questions would have been
handily resolved. Instead, vigorous debates are going on about the place of cultural
values, growth-oriented policies, the role of the State, and the role of the market
in promoting human welfare. In the arena of politics, speculation is rife as to
whence the next major conflict is likely to come. Amid
all these changes, a major testing ground will be Asia. Asia
has now joined the ranks of North America, Western Europe and Japan as an engine
of world economic growth. Asia, of course,
is not so uniformly industrialized or democratic that it would constitute a true
and comprehensive third side of the Trilateral Commission. In fact, its success
poses something of a conundrum. Can the Asian miracle be replicated elsewhere?
Is there an Asian model of development? Is there a set of Asian values that underlie
the region’s stunning performance? Or is it simply a matter of mobilizing capital
and labour inputs in sufficient quantities? The
diversity of Asia allows no easy answers. Every explanation begets a counter-argument.
All that can be agreed on is that the rise of Asia is the biggest event of the
late 20th century. Even if we allow for the recent drop-off in Asian growth rates,
or a downward revision in the GDP based on purchasing power parity (as the World
Bank did for China last year), the economic weight of the region will still be
considerable, thanks to its enormous and ever-wealthier population. For the rest
of our lifetimes, at the very least, the impact of developments in Asia will be
felt far beyond its shores. Asia’s economic
resurgence has led to a new-found confidence. Pundits such as John Naisbitt foresee
an increasing assertiveness of Asian identity, and prominent Asian leaders are
making a case for the importance of Asian cultural values for economic growth
and development. A growing number of influential thinkers, led by Samuel Huntington,
ascribe to culture a significance that surpasses even traditional economic and
political factors. This is actually a replay
of a debate in political science circles that took place a few decades ago, when
American academics were assessing the development chances of Third World countries.
The difference is that this time the cultural explanation is receiving a wider
audience in policy circles. The trouble
with culture and values, as the debate on political culture the first time around
showed, is that they are so hard to pin down. In
this world of inter-dependence and globalization, I suppose the assertion of values
as an explanatory variable can be re-assuring to some. It is difficult to tell
how much of, say, Asia’s economic success can be attributed to values or to the
right policies and institutions. What’s more, nations do not always fall neatly
into the civilizational slots assigned them. When
the concept at hand is so vague and impractical, yet is presented as the major
force that will lead to future conflict, it can hinder us from taking a constructive
approach towards one another. Rather than a clash of civilizations, the true clash
may be a clash of dogmas. I think we should
recognize the values debate for the distraction it is and focus on ways to build
bridges among us. The world has a vital stake in the future of Asia. Our common
interests will be better served by concentrating on that which binds us together,
by identifying areas where we can co-operate for mutual benefit. It is our duty
to prove that the champions of cultural and civilizational rifts are wrong. More
substantive challenges face the international community as it attempts to come
to terms with Asia’s growing economic - and inevitably political - clout. There
seems to be an odd mixture of optimism and apprehension in the West over the prospects
of an Asia ascendant. I tend to see the challenges as opportunities in disguise.
The trick is to approach them in the right frame of mind, to keep things in perspective. Keeping
things in perspective can be hard, but it is necessary if we are to continue on
the right path. Seeing skyscrapers spring up from rice paddies and fields of roof-top
satellite dishes can easily lead one to take for granted the glowing projections
about Asia in the 21st century. There is
no greater hype about Asia than the label “economic miracle.” To paraphrase an
old show biz saying, it took the East Asian countries decades to become “overnight
successes”, and plenty of toil and tears to pull off the miracle. A
miracle is by definition an un-natural phenomenon. As such, it should not be expected
to last indefinitely. Admittedly, it is
heart-warming to see institutions such as the World Bank use boom-year figures
to extrapolate Asia’s growth up to the year 2020, because that would make Thailand
the 8th largest economy in the world by that time. When
we consider how hard it is to forecast accurately even the next five years in
this fast-changing world, such academic exercises can lull us into complacency. In
between World Bank projections of Asian economic dominance, we should also take
into account the predictions of the doom-sayers. Andy Grove of Intel Corporation
says only the paranoid survive, and I think that’s an appropriate sentiment to
bear in mind as we sail into the uncharted waters of the new millennium. Whether
and how quickly Asia fulfills the prophecies made for it will depend on how it
strikes a balance between sometimes conflicting priorities. One
example is the balance between the State and the market. Many governments are
paranoid, but not quite in the way Andy Grove meant. They want both the benefits
of opening up their economies, yet balk at the prospect of surrendering control
to the vagaries of the market. As globalization intensifies, as market forces
and technology strip away the ability of central authorities to control flows
of capital and information, governments still attempt to cling to the old certainties. In
Southeast Asia, we see evidence of this ambivalence. At one level, the region
is heading towards greater economic openness and integration. The ASEAN Free Trade
Area, which is on track to be completed by the year 2003, will make ASEAN a market
comprising some 470 million people. The ASEAN members are firmly committed to
AFTA, because they recognize that delay or backtracking means AFTA will be made
redundant by APEC and the WTO. ASEAN’s competitive edge and credibility depends
on AFTA staying one step ahead of the game. At
another level, there is evidence that not all countries in the region are quite
ready to let the market decide. While Thailand has become a regional hub for the
automotive industry without State direction, countries such as Malaysia and Indonesia
have invested heavily in national car projects, and Malaysia is promoting a huge
Multi-media Super Corridor designed to attract hi-tech companies, in an Asian
version of Silicon Valley. Such efforts may well turn out to be successful in
the long run, but more importantly, they show that despite what proponents of
the border-less world say, governments are not about to go quietly into the night. This
ambivalence about giving market forces free rein is part of a larger trend. Mainstream
liberal thinkers, including Robert Kuttner and even George Soros, are increasingly
questioning the gospel of free-market capitalism. In
economies newly emerging from the constraints of central planning, laissez-faire
is the order of the day. In Asia, unfettered market forces are creating new wealth
and prosperity. At the same time they are also creating new problems, of widening
income gaps, of environmental degradation, of unsustainable resource use. This
presents another dilemma for Asia. The very factors that will make East Asia an
economic colossus, pose challenges for long-term growth. This is the world’s most
populous continent, with almost 1.3 billion in China alone. The latent energies
of this mass of humanity are only beginning to be tapped, as governments open
up their economies and compete for foreign direct investment. As the developing
countries’ manpower enters the world labour market, it forces earlier industrializers
to upgrade their production structure to stay one step ahead, in a kind of economic
domino effect. The upside to all this is
that incomes will rise, as will demand for goods and services. This will in turn
spur trade and investment, within Asia and with the world. Barring catastrophic
upheavals, Asia will become the pre-eminent economic centre of the world, even
if actual growth rates fall short of those in the late 20th century. The
downside to Asia’s growth is the strain it will exert on the environment and the
earth’s resources. This can in turn lead to international frictions. Neo-Malthusian
predictions, of course, are nothing new. The population bomb scare of the 1970s
was eventually proven wrong (or premature, depending on how one looks at it),
thanks to scientific advances and the “green” revolution. Current thinking, though,
has it that the limits of sustainability are quickly being reached. Not only is
the population growing, industrialization and its side effects are on the verge
of outstripping the earth’s ability to repair itself. This sort of argument comes
not only from dyed-in-the wool tree-huggers, but increasingly from mainstream
research. Among the most pressing issues
for Asia is water. A recent UN report noted that only 0.007 per cent of the earth’s
water is readily accessible for human uses, and that water use has been growing
at more than twice the rate of the population increase during this century. With
the world population expected to increase from 5.7 billion now to 8.3 billion
by 2025, with more water needed for agriculture, irrigation and industry, and
with a growing proportion of consumers, the strain on water resources can lead
to more frequent international disputes over water rights. The Asia Development
Bank estimates $80 billion to $100 billion will be needed over the next five years
to lay an acceptable foundation for a water infrastructure in Asia. Moreover,
as arable land is increasingly converted to industrial use, grain production in
rapidly industrializing economies may not be able to keep pace with demand. Likewise,
the demand for energy will surge as Asia’s newly affluent adopt Western life-styles,
with TVs, refrigerators, computers and cars. Already,
trade in non- or semi-renewable resources has burgeoned, as wealth spurs demand
for such commodities as timber, oil and gas, and even endangered animal species
believed to have medicinal properties. These
developments will play a key part in determining foreign policy, as nations seek
to secure supplies and supply lines. Poorer countries, which tend to also be the
most abundant in natural resources, will have little choice but to comply with
the demands of the market. This is one
key area where the West and Japan can make a useful contribution. Asia’s industrialization
has come at a high environmental cost, and this is one of the most serious obstacles
to sustainable development. As early industrializers, Western governments are
familiar with the growing pains of rapid development, and have worked out ways
to manage resources and even undo decades of damage. A growing environmental movement
is gathering strength in Asia, and companies from America, Europe and Japan are
well placed to address their concerns. As Asia seeks to clean-up, so can environmental
management companies. There are other areas,
such as information technology, where our interests coincide - where the strengths
of the trilateral countries can help Asia’s development, while themselves benefiting
in the process. Let us not be side-tracked into giving tangential issues more
importance than they deserve. It is not in anybody’s interest to attempt to remake
others in their image, as the only response will be resistance. As inter-action
and inter-dependence increase, a certain degree of convergence will occur naturally.
Let us remember that diversity is healthy for the survival of the species. Let
us find mutual benefit in our diversity, and learn from one another, for only
by doing so can we grow together into a community that transcends all boundaries.
Keynote
Address
by Mr. Anand Panyarachun
Former Prime Minister
Chairman,
Saha-Union Public Co. Ltd.
in the Fourth AFCRA Conference on
“Competitiveness
of Asian Emerging Economies”
November 29, 1996 Mr.
Chairman, Distinguished Guests and Colleagues, Ladies
and Gentlemen, It gives me great
pleasure to be here in another activity representing the development of
cooperation among ASEAN member countries, namely the Fourth AFCRA Conference. For
many years I have witnessed the increasing sense of ASEAN spirit and partnership
which translates cooperation of organizations and professionals across the region
into important and visible institutions in their own right. Such a leading institution
has been the ASEAN Forum of Credit Rating Agencies or AFCRA. AFCRA
has been a successful model of ASEAN values of consensus and cooperation
in action. As you know, rating agencies provide a crucial role in today’s global
financial markets. They inform investors of the risk of their investment and this
creates a better climate for future investment. They
also send signals to governments, such as Thailand, to improve their financial
and economic directions as well as to companies to maintain prudent debt management. AFCRA
should be congratulated on its past development and is to be encouraged to continue
its successful collaboration. Let me begin
my discussion of competitiveness with a personal observation. I
have often found discussions of competitiveness very much like the proverbial
ten blind men describing an elephant from one of its parts. No one has a full
picture of it. Therefore, I am very pleased that AFCRA has taken the challenge
of trying to understand competitiveness in all its facets. When
we look at the top 25 companies in ASEAN, three observations come to mind.
First you will see international companies: SONY (3), CALTEX (4), SEAGATE (5),
MATSUSHITA (9) and HEWLETT PACKARD (11). These
companies represent consumer electronics, computer-related and energy. They are
all based in Singapore. Secondly, you will
see a variety of public enterprises: Pertamina (1), Petroleum
National (2), Petroleum Authority (7), Singapore Airlines (8) and Electric Generating
Authority of Thailand (12) These are all
State-owned companies in the energy sector, with the exception of Singapore Airlines,
which has been privatized. A final group
of companies representing major local businesses are Astra International of Indonesia
(6), Sime Darby of Malaysia (10), Siam Cement of Thailand (15), San - Migual
of the Philippines (18) and Hong Leong Investment of Singapore (21). These
are businesses, which have achieved a strong level of performance and a
recognized level of business leadership in ASEAN. Two
key questions are reached: First, does
it appear that countries are not competitive while companies are? Second,
why are international companies so often based in Singapore - is it because Singapore
is the number one in competitiveness or is Singapore number one because so many
leading companies, because of their own competitiveness, choose Singapore for
strategic reasons? My own
assessment is that it is the competitiveness of companies that is the key factor.
Countries that provide excellent supporting conditions attract the companies and
this in turn stimulates the economy. Let
me support this assertion by looking at the factors or criteria used to indicate
competitiveness: 1. Economic strength 2.
Internationalization 3. Government regulations and policies 4. Financial
market 5. Science and technology 6. Management 7. Infrastructure 8.
Human resources It is interesting
that with the exception of management, the remaining factors are all public policies
related. The key point is that a climate
supportive of competitiveness requires effective public policy to guide the economy
and international trade, science and technology, infrastructure development arid
human resource development. Thus, what is perceived, as “a country’s competitiveness”
is more likely a measure of how good its public policy is? Let
me consider the definitions the World Economic Forum used of management: “Management
measures the effort of business leaders and business organizations to respond
to market opportunities. The countries with a well managed capacity will display
a higher rate of economic growth.” To simplify
this: Management capacity and business
capability - sustained economic growth. It
is the role of business to develop the economy, and the role of government
to provide the supporting environment for this development. It is not the other
way round. Let us consider the ASEAN rankings
for competitiveness: Singapore (1), Malaysia (10), Thailand
(14), Indonesia (30) and the Philippines (31). What
this indicates to me is an assessment of how good public policy is in the various
member countries. Please allow me to draw
your attention on the role of human resources and competitiveness. One
major failure in supporting competitiveness in the ASEAN region has been the insufficient
attention to human resource development. For
example, in basic skills the rankings are not very promising: Singapore (29),
Malaysia (31), the Philippines (33), Thailand (39) and Indonesia (45) On
the contrary, in this same ranking the U.S. is #1 and Japan is #10. This strongly
indicates to me the lack of attention ASEAN members have for human resource development. It
seems to be that it is not the cost of labour, which relates to competitiveness
but the skill and quality that labour can provide. This
conclusion can also be illustrated by another factor, i.e. the comparison between
productivity and wage increases over time, between 1983 and 1993.
| | Productivity | Wage
Increases | | Singapore | $4.8 | $11.3 |
| Malaysia | $4.8 | $5.3 |
| Thailand | $5.7 | $8.8
Asian
Business Leadership: Planning for the Future Dusit
Thani Hotel
March 3, 1996 I am honoured to be
here tonight to address some of the top CEOs and presidents from around the region.
This is the first forum that I can think of that has drawn senior Asian company
executives together to share views and insights. I believe that Asians have a
great deal to learn from one another and I welcome other Dialogue programmes that
focus on the dynamic companies and leaders of Asia. The importance of this event
is underlined by the re-scheduling of a previous engagement to attend ABL. Tonight
I would like to speak on the roadmap for Asian business leadership and planning
for its future. Asia is a complex environment
in which to do business. Each country has its own unique history and culture.
In addition to these characteristics, the politics and economic development in
each country has greatly influenced the business structures, which have developed.
Successful companies such as the Birla Group, Sime Darby and SGV, however,
were early pioneers that focused on the similarities in this diverse region to
develop their regional businesses. Managing and operating as a regional business
rather than a national company is an important factor in their success. I believe
Asian companies will increasingly look to similar Asian companies as a model to
develop or enhance their regional businesses. These successful Asian companies
will also change how Asian companies are organised, managed and will plan for
the future. As international trade barriers
are eliminated, Multi-National Corporations (MNC) and regional players will increasingly
try to identify markets where they have a competitive advantage. Asian companies
have the ability to develop as competitive businesses as any MNC. The key to success
is to ensure the management and organisational structures are developed to respond
to the unique opportunities and challenges in Asia. San Miguel is an excellent
example of a company rising to this challenge. As San Miguel has discovered, an
Asian company can become a major player in the global beer market. A large regional
consumer market has made it possible for Asian companies to develop comparable
market volumes to truly global companies, by staying focused solely on Asia. Imagine
what could happen when that focus shifts to global arena. Asia
is often viewed as a region where companies need to court political favours to
be successful, but multi-lateral trade organisations are changing how business
is conducted in Asia as well as other parts of the World. Asian companies must
begin to explore key management issues as the means to get ahead. Companies must
rely more on their ability to manage resources and people rather than count on
political favour for their competitive advantage today. Our goal should be to
develop world class market leaders that are as common in Asia as they are in the
US or Europe. The forum over the next few days offers an excellent opportunity
to learn from some of the best strategists and management-thinkers in the world
and bring this vision to reality. Asian
companies have three distinct competitive advantages. One of the greatest advantages
Asian companies have over other large companies such us MNCs are flexibility.
This trait has allowed many companies to grow and flourish, and has even enabled
many smaller players to compete successfully with larger MNCs. Many companies
that develop into large market-leading companies become too complacent and even
risk-adverse, focusing on asset maintenance rather than growth. Asian companies
should learn from this and strive to maintain flexibility as they prosper. Another
advantage of many Asian companies is the family-owned business structure. The
ability of these companies to focus on the long term without outside investor
pressure is a key competitive advantage. As family-owned businesses grow and expand
regionally, a transition from family-owned and family-managed to family-owned
but professionally managed is occurring. The challenge to family-owned and managed
businesses is the retention of qualified management; professional managers will
not stay long in family companies where decision- making is based on family status.
The balance between family-owned but professionally managed companies exists to
a high degree in Korea. This can be used as a model on which to propel family-owned
businesses into the global arena. Asian
companies are less likely to be weighted with outdated technology. The ability
to leapfrog generations of older technology without the burden of replacing older
units, is also a competitive advantage. In addition, as technology becomes less
of a factor in companies maintaining market leadership and as the lead times to
develop new products is reduced, the availability of technology becomes more like
a commodity. These three competitive advantages
are just a few of the factors transforming business organisations in Asia. So
where does this leave us in terms of looking at some of the challenges ahead for
the leading companies in Asia? There are
some key challenges facing Asia’s business leaders, which require us to continue
to change and adapt our organisations and practices in order to respond effectively
or face being left behind. In making these changes in our organisations, in order
to compete in the future, it is my hope that we do not discard some practices,
which have served us well and are common across the region. In
Asia, the biggest challenge facing business today is that of human resources.
The lack of qualified and well-trained executives has the potential to de-rail
our progress, more than any other single factor. While infrastructure projects
are basically a one-time expenditure, education requires a continual investment.
It is clearly an issue that needs attention. A shortage of skilled middle and
upper management already exists. To develop a long-term solution, we must turn
our attention to academic institutions. The
Malaysian Minister of Education expressed it best when he said, “We have been
recipients of knowledge from the West. The time is ripe for us to be originators
of it.” The global thought leaders who have one to Bangkok to share some of their
insights, come mostly from business schools in the West. They have useful insights,
and through extensive study and research have contributed to the field of management.
How many executives could name the Minister of Education for any country including
their own? Business leaders must take leadership to improve education and to develop
regional talent. The business leaders need to be part of a solution. Companies
profiting in Asia should give back to society in the region. There
is a need, for leadership within the business community for work across the region.
The scope of business research conducted is focused on local issues, however,
not at cross-border issues, which Asian companies face. Business leaders should
unite and promote the development of funds to develop projects that focus on relevant
cross-border issues. If our business schools
are unable to adequately undertake such research, the fund could be used to undertake
joint co-operative research with researchers from Western institutions, thus helping
to upgrade university students' research skills. A commitment of US$25,000 from
one hundred companies will go a long way to attract talented academics back to
Asia and also help us to understand what business practices work best in Asia
for the long term. As business leaders, you not only help yourself but also take
one small step towards addressing this major problem faced throughout Asia. The
challenge of business leaders is to show vision and commitment to develop our
own role models and management gurus. While
there are other challenges faced by companies in Asia, I think one of the most
formidable is the shortage of middle management and human resources in the region.
While we have our national business leaders, we also need regional business leaders
to step forward. I hope this has perhaps made a few people think about one small
thing they can easily do. If it has made one person begin to think about their
role and responsibility to the region in addition to their country or company,
I think this will be a healthy development in our corporate development. Avoiding
the natural nationalistic tendencies for companies that dominate one market is
important. The only other challenge I would
like to discuss is the building of lasting organisations. This requires developing
and instilling core values within every member of the organisation. This value
system will help organisations get beyond owner-dependent personalities. It should
be our goal to fill Asian companies’ corporate annual reports with quotes from
Asian leaders and legends, rather than the quotes by Western figures as currently
seen in so many corporate annual reports. Thank
you for your attention. I hope I have left you with enthusiasm and the knowledge
that you have the opportunity to influence and lead the direction of your organisation
and contribute to the future of the region. It is easier to shape the future
than to react to it!
Quest
for Investment Liberalization Luncheon Address
by
Mr. Anand Panyarachun
Chairman, Saha Union Public Co., Ltd.
Former
Prime Minister of Thailand
at APEC Investment Symposium
Shangri-la
Hotel, Bangkok
October 2, 1995 Distinguished
Guests, Ladies and Gentlemen, It is a great
pleasure for me to be here today at this event and to address such a distinguished
gathering. This is a unique occasion where we have government officials, business
representatives, and academia from APEC member economies as well as representatives
from international organizations, all gathered here in Bangkok to discuss how
APEC should move forward to achieve freer investment flows. I
believe there is no need to stress the importance of the topic that you, distinguished
guests, are focusing on at this symposium. We are all aware that investment is
an area without concrete frontiers. A broad spectrum of issues is related to investments.
It is undeniably a complex, difficult issue with far-reaching implications for
every economy. Nevertheless, this challenge is worth exploring, particularly for
APEC, which has a goal to achieve free and open trade and investment by
the year 2010 for developed members and 2020 for developing members. Investment
liberalization is a prevalent policy theme around the globe in recent years. The
Agreement on Trade-Related Investment Measures (TRIMs) has been created under
the Uruguay Round trade talks to discipline the use of performance requirements
imposed on investors, and stresses non-discriminatory practices. APEC has produced
its own set of non-binding investment principles. Thailand supports the notion
of the WTO as the best forum for negotiating actual regulations because of its
inclusive, multi-lateral nature. OECD is currently in the process of negotiating
its Multi-lateral Agreement on Investment. Bi-lateral negotiations on investment
issues are conducted on a continual basis. These are just a few examples that
indicate how active development of international investment is right now. The
question is not so much on whether or not governments should liberalize their
investment regimes. Long-term benefits arising from liberal investment environments
are well recognized. In an area with strong intra-regional investment like APEC,
increasing investment flow is certainly desirable as long as it does not isolate
the region or polarize global markets. I
believe that questions of investment liberalization concern “how” and “when” rather
than “whether or not”. The Bogor Declaration has set a general goal for APEC to
achieve free and open trade and investment by the target dates. The details of
“how” and “when” are left to most of you here to figure out. This is not an easy
task, and should be thought about in the larger context of the WTO as well as
APEC. As a former diplomat and presently
a businessman, I would like to take this opportunity to share my views with you.
When I assumed the responsibilities of Prime Minister of Thailand, I had a chance
to be involved in various investment facilitation and liberalization schemes.
As Prime Minister, I also chaired the Board of Investment. My experience tells
me that the agenda in front of you is extremely complicated. A broad range of
factors has to be taken into consideration, and theoretical expectations may diverge
widely from realities. We often hear of
two motives underlying investment liberalization. One is to enhance an economy’s
attractiveness as a foreign investment location. Creation of a level playing field
is often cited as one of the most effective means to attract foreign investment.
The other motive is to benefit consumers. Perfect competition, as the basic economic
theory goes, creates a win-win situation: The industries of an open market and
the global market as a whole are stimulated to work more cost-effectively and
efficiently as a result. Consumers then enjoy the largest range of products at
the best prices. In effect, I believe that
most policy makers have no quarrel with the benign objectives of investment liberalization.
Most governments recognize that competitiveness is a key to thriving in today’s
global economy where distinct borderlines between international economic transactions
do not exist. However, whether these desired objectives can truly and effectively
be materialized remains a moot point. As
one of the creators of the ASEAN Free Trade Area, I certainly have all the reasons
to believe in removal of major barriers to investment. One crucial motive behind
the establishment of AFTA is to induce more foreign investment into this region.
It was not to form a trade bloc. Our idea is that it is easier to begin removing
barriers in a smaller region - and then to keep expanding the barrier-free environment
with the long-term goal of creating a truly free global market. Common
international rules governing the treatment of foreign investment by host governments
are believed to be a means to promote its flow. More freedom and less unpredictability
will occur in an environment where everyone observes the same rules and practices.
You will probably hear about the development of the creation of the Multi-lateral
Agreement on Investment Agreement being pursued by OECD at this symposium. This
so-called “MAI” is expected to provide foreign investors from every part of the
world with the same rules of the game. So, ostensibly, the level playing field
can become a reality. Many policy makers
may argue against the necessity of international rules, claiming investment policies
lie within the sovereign rights of host governments. Moreover, the exact same
set of rules cannot be equally appropriate for both developing and post-industrial
economies. This principle is recognized by GATT, which allows countries trying
to attract investment to poor rural areas to use incentives to lure industries. It
should be noted that barriers to investment do not come from public policies alone;
natural resources, history, geography and other factors all come into play. However,
one school of thought holds that by creating a set of common rules, economies
will ensure the requisite environment for foreign investment. However,
it is not my intention today to debate for or against the formation of the MAl
but to use this as one example of the numerous on-going attempts to establish
universal rules for investment which are believed to promote greater flows. In
the long run, the larger the arena of players, the more efficiently the market
should function. In the shorter term, though, we need to look carefully at the
motives of those pushing regulations on smaller economies. Sometimes, those demanding
common standards are really seeking advantage for themselves, not a cleaner planet
or better treatment of workers. It is notable
that even without a set of common universal rules, liberalization is the current
theme for policy makers in most economies. If we look around the globe, we witness
actions taken by many governments attempting to deregulate and liberalize their
investment regimes with an intention to improve their competitiveness. Rivalry
for foreign investment is growing increasingly severe. This situation naturally
prompts contemplation of positive changes. These actions may have nothing to do
with obligations of governments under international agreements or legal obligations.
Some economies experience success whereas others are still struggling with adjustment. Thailand
is also one of the countries that has chosen a pro-active, yet gradual approach
towards liberalization. We realize that benefits cannot be possible without appropriate
adjustments to cope with the new environment. Gradual steps have been taken to
minimize negative effects. This leads to the whole question of approaches. When
facing external pressure to open up investment regimes, many policy-makers, like
some of you here, may query whether governments should design their own liberalization
regimes rather than having legal “boiler-plate” forced upon them. To create change
is a challenge, because you face resistance arising from inertia and other reasons.
Many people argue that if there is no channel to force things to happen, change
will never take place. It is often said that governments will only take liberalization
steps when they have no alternatives, because they cannot take the short-term
political “heat.” This may hold true in many circumstances, but we have seen a
great number of governments taking bold steps in liberalizing their investment
regimes for economic reasons. The key point
here is the readiness of economies to embark on a liberalization journey. Benefits
such as “increased competitiveness” or “greater efficiency” remains theoretical
and abstract until a country has advanced to a certain level of industrial development.
Until that point, when its economy can begin to cope with a globally oriented
environment, such terms lack the meaning and substance attached to them in developed
countries. Given the great diversity in
socio-economic development among APEC economies, there is not one ready-made formula
for successful liberalization. The needs and priorities of one economy greatly
differ from those of others. Ways and means to open up an economy have to be designed
specifically to accommodate relevant settings. With
the same goal and objective, we may take varying routes leading to a common target.
Some governments may prefer gradualism, while others choose to take more radical
steps. Thailand is among the economies that opt for a gradual route. Sustainability
of economic development is probably the single most important factor that determines
ultimate success. Liberalization that leaves an economy in a poorer and more vulnerable
situation than it was should not be APEC‘s goal, or WTO’s. Economic sustainability
is particularly crucial in developing countries, when designing liberalization
packages. I know that many of you here are facing this challenge at this very
moment, and feeling some pressure from countries with larger, stronger economies. Investment
liberalization creates positive effects to economic systems in the long run, but
tends to lead to negative impacts in the shorter run. Can short-term problems
be avoided? Not completely. However, disturbance can be minimized when the right
mechanisms are in place. Gradualism is one way to avoid sudden shocks to domestic
entrepreneurs. Steady, measured change that gradually reaches the goal, is often
the best path for developing economies. Short-term
agitation has to be carefully dealt with; otherwise, backlash can occur and the
expected long-term benefits of liberalization will never be realized. “Equal footing”
competition is often quoted as an objective for which we should strive Today’s
world does not consist of economies or companies with the same features, operating
in similar competitive environments. In
concluding, no one doubt the merits of investment liberalization, but how to go
about it still pose several questions. No success formula that applies equally
to every economy exists. We have to create our own individual concoctions that
address particular features of our economy. I truly believe that we do have many
options to choose from, in achieving the goal of free and open investment.
AIDS
and Social and Economic Progress in the Asian and
Pacific Countries
by Mr. Anand Panyarachun
Third International
Conference on AIDS in Asia and the Pacific
Fifth National AIDS Seminar
in Thailand
Chiang Mai
September 21, 1995 Excellencies,
Distinguished Guests and Participants, Ladies and Gentlemen,
Over the past few days of deliberations on the myriad issues
and topics relating to AIDS in the region, it seems that there is a wealth of
knowledge and experience on addressing the issue of AIDS. It seems that we have
a good idea of what we must do. Then, why must we continually call for action
to prevent the further spread of AIDS? As
I reflected on the topic for discussion today, I felt the most useful contribution
I could make to this forum was to share the perspective of a group that seems
to have been otherwise excluded from the deliberations here - the heads of government
and national leaders. My humble opinion is that without the commitment of leadership
at the highest level to preventing further spread of AIDS; we will never see the
scale of action necessary to address this issue and its social and economic consequences. AIDS
must be viewed as a national development issue. If we present AIDS as a health
problem, it will be treated as such. AIDS is not a health problem, it is a behavioral
and a societal problem - and an urgent national development priority. Today, AIDS
remains the most critical threat to the social and economic progress of the region
- along with environmental degradation. The
leaders of our countries are not taking AIDS seriously enough. I am here today
to tell you about my view as the former Prime Minister of a country facing one
of the fastest spreading AIDS epidemics on the planet, in the hope that we can
get more leaders to take AIDS more seriously. We need more action! II.
The Case of Thailand You and many others
around the world have heard much about AIDS in Thailand. You will continue to
hear about AIDS in Thailand because many people are infected and they are only
beginning to become sick. We are only beginning to feel the impact on our society.
It will become severe, as it has already in some communities, and it will become
more and more painful. Even with the hard-earned
successes to-date, Thailand must still learn to care for the 800,000 infected
people and their families - many of them live not too far from where we sit at
this moment. Many resources from the pockets of these families, from government
budgets, and from our society as a whole, will be consumed by these infections
and associated illnesses. Thanks to many
people here in this room, you have heard many reports on some of the successes
here in Thailand so far. There is much more to do, on many fronts. We must be
honest and accept that there is still too much discrimination against people with
AIDS in this country. Action must start at home, with our own attitudes. Many
companies in Thailand have adopted progressive AIDS education programmes in the
workplace, but still many companies - including some foreign firms - continue
to discriminate against people with AIDS. There
are some important lessons in Thailand’s experience. We must focus on action,
time is running out. We must enlist the commitment of the highest levels of authority
and begin implementing the necessary prevention programmes on a meaningful scale. In
early 1991, I assumed the Office of the Prime Minister, here in Thailand. This
was a time when Thailand was moving from several years of denial, to a gradual
acceptance that AIDS would pose a significant threat to social and economic progress.
Already in place was an immigration regulation, prohibiting HIV-positive people
from entering the country. Awaiting my
government’s consideration from the previous year, was proposed legislation, whereby,
HIV-positive people would be subject to close scrutiny by health officials and
could be detained if their behaviour was determined a threat to public safety.
This legislation would also require the head of every household to report to the
authorities any HIV-positive member of their household. In
addition to this legislation was a proposal to establish “therapeutic communities”
where HIV-positive people were to be sent, under quarantine. This gives you a
sense of the prevailing attitude at the time - those were dark days. So,
when I entered office these proposals awaited us. Had we not paid close attention
to these issues, we could have followed quite a different path. With close assistance
and cooperation from the NGO sector, we were able to prevent these proposed draconian
measures. Upon assuming office, we faced
a whole host of pressing issues regarding trade and investment, land reform, education,
and many more. The economy had been growing at over eight percent for ten years,
and some important actions were required to set the stage for another decade of
growth. As we looked at national development, we could not ignore the AIDS controversy. There
was no consensus on the extent of the problem, so the previous governments had
difficulty agreeing on a solution - let alone implementing it. We made a concerted
effort to analyze the actual situation. We were open and honest about the size
of the problem because this was the only way to mobilize the required response
of a corresponding magnitude. This is a
critical point. Without an open assessment of the current extent of the problem,
we are unable to plan the necessary response. Today, there is far too much deception
and denial about the extent of AIDS in the countries of this region. When we made
public our projections, we became highly unpopular among the tourism industry.
I am happy to say that because of our actions back in 1991, we still have a tourism
industry today. In fact, there are more tourists this year than in 1991, and you
can be sure there are more people with AIDS. If we do not address the problem
early, we are ensuring the early demise of tourism. So, effective action on AIDS
begins with a realistic assessment of the problem and a planned response of corresponding
magnitude. To achieve the goals of our
plan, we needed a comprehensive multi-sectoral effort. To mobilize these sectors
and maintain a focus on this urgent issue, I accepted the Chairmanship of the
National AIDS Committee. I am told that I was the only head of government at the
time to lead a national AIDS effort, but - for me - there was no other way. For
effective action against AIDS, you need both: the highest level of authority and
the broadest base of support. I put the
National Economic and Social Development Planning Board, our national planning
authority, in charge of formulating our National AIDS Action Plan. They included
AIDS in the National Development Plan and ensured smooth cooperation between the
ministries and government agencies in formulating a comprehensive action plan
for the long-term. Our AIDS prevention
efforts included all sectors; it was the only way to mobilize a meaningful response.
We made a point to enlist companies, schools, all government ministries - including
the Army and Police, the NGOs, and the communities themselves. I invited all relevant
groups to join the National AIDS Committee - the Tourism Authority, the Hotel
Association, and the Federation of Thai Industries, the Chamber of Commerce, and
the Thai Bankers’ Association. They all had to play a part, so we gave them a
constructive role. By including them in the process, we could depend upon their
cooperation and assistance. As the Prime
Minister, I demanded that all government ministries play an active role in AIDS
prevention and we granted necessary budget allocations for these activities. AIDS
is much bigger than the Ministry of Health; it is much bigger than government
as a whole. In fact, many other ministries play the most important roles in communicating
to the public and educating people about AIDS. Government
budgets are critical. We could not expect all of the ministries and provinces
to play the active role we were demanding, without giving them the necessary resources.
So, we approved supplemental budgets for AIDS activities. We
mobilized foreign donor funding and maximized in-kind contributions, like radio
and television airtime from the stations and creative media talent from the advertising
companies. Companies even paid for the printing of most of our public information
materials at the time. We did not see HIV
as a health problem; we approached it as a national development issue. We were
facing a potential economic impact equivalent to 20% of our GDP by the year 2000,
not to mention the social devastation an epidemic of such a scale would cause.
Without such a comprehensive effort, our response would have amounted to “throwing
a bucket of water at our burning house”. ‘Without
our own financial commitment, others would not have taken us so seriously. AIDS
is our national development issue, and it requires our own investment. We must
demonstrate our political and financial commitment, before we can expect anyone
else to contribute. My government was not
popular for promoting AIDS prevention so openly at the time, but research now
shows that these efforts were effective in changing behaviour and reducing the
rate of increase in all sexually-transmitted disease infections, including HIV.
It was recently reported in the Lancet that during the years 1991
to 1993, the incidence of sexually-transmitted diseases decreased by 77 percent.
So, action works! In some ways, Thailand
is lucky. However, it is tragic that it took us over three years to mobilize enough
of an education and prevention effort to begin changing people’s behavior - and
many people were infected during this time of denial and cover-up. However, because
we did make a concerted effort to educate people and equip them to prevent becoming
infected, I would like to think we were able to avoid many more infections. Even
now, we must remain vigilant. AIDS has slipped from the consciences of our own
leaders of late. If left unchecked, AIDS could still proliferate and impede Thailand’s
social and economic progress far into the future. The US Bureau of the Census
has estimated that if Thailand is unable to slow the rate of AIDS infections:
the Average Life Expectancy at Birth in the year 2010 will be only 44 years -
a dramatic drop of 30 years from the 74 years we would achieve without AIDS. This
would return our life expectancy back to the same level as in the 1930s. The
same study shows that in that year Thailand will experience a negative annual
population growth rate of minus 0.8 percent, compared to a positive 0.9 percent
growth rate without AIDS. Ten years later, in the year 2020, our population would
be about 62 million rather than the projected 78 million without AIDS - a full
16 million people less, due to AIDS-related deaths and associated demographic
changes. This is the equivalent number of population growth for the next 20 years! Today
in Thailand, we need continued action to educate young people about sexuality
and its consequences. We must demonstrate compassion for those already infected,
and seek to provide them with as much decent care as we can afford. We must constantly
remind ourselves, that action can prevent further tragedy. Ill.
Implications for the Region As we consider
the implications for other countries in the region, I think we must accept several
hard truths. Despite some action and awareness,
the progress made to date is still small. AIDS is prevalent
throughout the region, now more than ever. AIDS will affect ALL
countries in the region - rich and poor. Countries
enjoying rapid economic growth could face serious obstacles to further economic
progress, if AIDS is not addressed as a national development issue now. For those
Asian countries experiencing high economic growth - like Thailand, AIDS will affect
some critical economic sectors such as tourism, labour exports, and foreign direct
investment. Tourists are reluctant to visit
countries where they know that AIDS is not under control. This will be exacerbated
when we consider that the more people there are with AIDS, the more hosts there
are for communicative tuberculosis. This will surely keep tourists away. Similarly,
there will be a greater reluctance from certain countries to accept guest workers
from places known to have a high prevalence of AIDS. After all, AIDS is most prevalent
among the most economically active segment of the population. As
more and more people become sick from the illnesses associated with AIDS, labour
costs will be forced to increase. More health costs will have to be covered and
more people will be removed from the labour supply. With higher labour costs,
foreign companies will be deterred from investing and will seek other places to
locate their business. This will affect us as a region because all Southeast Asian
countries will eventually face a similar fate. In
poorer countries, AIDS threatens to condemn the majority to another generation
of grinding poverty. Such countries will face significant difficulties in stimulating
economic growth if effective AIDS prevention is avoided or postponed until it
becomes too serious. National leadership must address AIDS as an urgent national
development priority and reflect this in government policies, plans and budgets
- not to make donor governments or international investors happy - but, for only
one purpose, to initiate effective action. AIDS
will have the most severe impact in countries where men frequent commercial sex
and where the government is most apathetic about effective prevention. Conversely,
those countries that take early and effective action, can minimize the scale of
the epidemic, and lessen its impact on social and economic progress far into the
future. I would hazard to guess that on
average no less than 20% of GDP is at stake for each and every country in the
region, if we do not achieve more results in the next twelve months. Of course,
we stand to lose much more, when we consider the pain and suffering, social tension,
and other unquantifiable implications. AIDS represents such a significant threat
to social and economic progress in the region, that the Asian Development Bank
should be offering substantial grants to countries that successfully initiate
effective AIDS action plans. I hope they are represented here today to hear this.
They should reward the countries that take AIDS seriously and achieve significant
reductions in the potential impact of the epidemic. This should serve as an incentive
to the governments in the region, and send a strong message to the heads of government,
finance ministers and business leaders. It could be the best investment the ADB
will ever make. Any other economic or trade
issue with the potential to affect 20% of GDP -such as AFTA or the rise of the
Yen - would have its own summit. Why should AIDS be different? Only because the
leaders do not understand that AIDS is an economic issue. IV.
Conclusion and Call to Action We have
learned many important lessons over the years. I do not think we need to spend
much more time searching for answers. I think we must focus on action - time is
running out for many in the region. Our opportunity for early action has passed
us by. We face a momentous and growing task. We must re-think our approach. AIDS
policy-making in the region is still medically oriented. Leaders still do not
realize how seriously their societies will be affected if AIDS is not addressed
properly. We must get the leaders more involved. Many
resources have been devoted to the preparation of this conference. It behooves
us to brief the leaders of this region about the important lessons that were discussed
in these halls over the past week. We need not do any further research for this
purpose; we should summarize our current findings and propose a prescription for
success. We must sell solutions. We should get the heads of government from around
the region into the same room to gain their unqualified commitment and endorsement
of national AIDS action plans by the middle of next year. We must focus on results. The
next AIDS conference should be for parliamentarians and business leaders. These
are the people that initiate and sustain action. Most of the answers to the problems
of AIDS are already known. We must communicate these to the people who control
the wheels of power and the purse. Time
has run out on millions in the region. We have the answers. We need solutions.
Let us focus on action. Let us return to our countries and enlist the meaningful
involvement of our leaders, it is the only way.
The
Future of Asia’s Past –
Bringing Conservation
Philosophy into Practice
by Mr. Anand Panyarachun
Chairman
of the Council of Trustees, Thailand Environment Institute
Chairman,
Thailand Business Council for Sustainable Development
Chiang Mai Orchid
Hotel, Chiang Mai, Thailand
January 11, 1995 Mr.
Nicholas Platt, President of the Asia Society Dr. Vishakha
Desai, Vice President of the Asia Society Mr. Athueck Asvanund,
President of the Siam Society Distinguished guests Ladies
and Gentlemen It is a great pleasure for
me personally to be among so distinguished a gathering, at such an important conference.
My sincere thanks go to the Siam Society, the Asia Society and the Getty Conservation
Institute for organising this momentous gathering. The
theme of this conference evokes excitement and vision. Some of you here may recall
a piece of conversation in “Alice in Wonderland”, by Lewis Carroll.
“Would you tell me, please, which way I ought to go from here?” asked
Alice. “That depends a good deal on where you want to go,” said the Cat. “I
don’t much care where,” said Alice. “Then it doesn’t matter which way you
go”, said the Cat. I have
the distinct impression that the organisers of the present conference not only
do know which way they want to go but also exactly where they want to lead us
to! The timing of this conference is indeed
opportune. Last month’s World Heritage Conference in Phuket has re-focussed attention
on Asia’s rich cultural heritage and natural splendour, and in doing so has highlighted
the very real threats; posed by environmental degradation, uncontrolled development
and, in particular, tourism. The preservation
of Asia’s heritage, as called for by the international community, can no longer
be neglected and must be given due priority commensurate with it’s significance. At
the same time, Asia has reached the point where responsibility for the conservation
of cultural heritage now lies squarely with national governments. In most countries
of Asia, the science of conservation has now advanced to the stage where national
institutions and experts can increasingly take on the task of architectural conservation
themselves. Heritage conservation is therefore,
moving out of what may be termed the “colonial phase” – where academics and concerned
institutions, mostly in developed countries, took the lead in preserving historic
monuments and artifacts in developing countries – and into a new “nationalist
phase” – where national experts are now in the vanguard of protecting their own
cultural heritage. It is thus significant
that we are meeting in Chiang Mai, the seat of Lanna culture, for here the challenges
and pitfalls facing heritage conservation in Asia are only too apparent. Chiang
Mai is the most important city in Northern Thailand. It was founded almost seven
hundred years ago, during the reign of King Mengrai, the ruler of the Lanna Kingdom.
According to old Northern scripts, King Mengrai chose the location and designed
the square-shaped walled city himself. From
its inception until the Burmese conquest in the sixteenth century, Chiang Mai
flourished as the capital of the Lanna Kingdom and the political, commercial and
cultural centre of the North. Following
liberation and revival in the eighteenth century, the city resumed its role as
the principal city of the North and continues to prosper today. Chiang
Mai will celebrate it’s seventh centennial next year. More than any other town
in Thailand, the city has been fighting to preserve the past and it’s architectural
heritage. And nowhere is this glorious past more evident than in the city’s many
temples; built-in the typical Lanna style with multiple-tiered roofs, gracefully-curved
eaves and a portico. But Chiang Mai has
also lost much of its appeal in recent years. The present-day city thrives on
the site of its origin. Thus giving rise to the universal problem of conservation
versus development. The pace of commercialisation
in Chiang Mai has outstripped the best efforts of town planners, resulting in
unsightly high-rise condominiums and office buildings. The traffic situation is
following the same vicious path as that of Bangkok, with consequent noise, air
and visual pollution; and in addition, rubbish disposal remains a perennial problem
for City Hall. It is obvious too that Chiang
Mai’s precious cultural heritage is suffering under the strain of modern progress. Hundreds
of historic sites still languish in neglect, encroached upon by squatters or hemmed
in and hidden by new buildings. Of those sites which are registered with the Fine
Arts Department, many receive only marginal maintenance, there being too few personnel
and funds allocated to undertake necessary repairs and restorations. The
remains of the ancient city walls, once a proud symbol of Chiang Mai’s strength
and purpose, have suffered long periods of neglect alternating with periods of
hasty reinforcement. And yet Chiang Mai
is dependent upon the very development that is threatening it’s heritage, if it
is to develop as a modern regional centre – part of the “economic quadrangle”
being enthusiastically promoted by Thailand, Myanmar, Lao PDR, and Southern China. What
then can be done to preserve the city’s cultural legacy, while at the same time
allowing the benefits of development to flow freely? Simply
put, the aim should be to integrate development with preservation. The term sustainable
development, which has come to define modern environmental thought, can be used
in this context to describe the integration of cultural with commercial demands. Such
development is already appearing; all construction within the city walls is now
required to uphold the local architectural identity, and the building of condominiums
within the old city, or construction of tall buildings in the vicinity of temples,
is strictly under control. Furthermore,
the people of Chiang Mai have added their voice to the conservation crusade. Public
campaigns have been instrumental in preserving the rich cultural heritage of Northern
Thailand. Strong opposition to the construction of a cable car up Doi Suthep resulted
in the project being dropped, and public support for the control of high-rise
buildings within the old city led to the drafting of the regulations I have already
mentioned. These campaigns demonstrate the depth of community feeling which exists
here, and the importance of public participation in the development process. Chiang
Mai is, in effect, a living ancient city, and has to live with all the problems
associated with balancing the past and future. However, the solutions to the city’s
dilemmas demonstrate that conservation must be recognised as an essential part
of development. It is important that the elements of cultural heritage, such as
historic buildings and sites, should be counted as assets, not as burdens or obstacles
to development. Historical and cultural
traditions are an important, enriching dimension of community identity. Active
community participation is therefore essential to the process of sustainable development. It
is important, however, that the community contributes fully to the process of
conservation, by which I mean there must be free access to any relevant conservation
and development plans, Dissemination of this information at all public levels
is essential to success. Furthermore, education,
both inside and outside the classroom, must play a strong role in creating understanding
and pride in our cultural heritage. It is time that conservation, for both natural
and cultural environments, was taught on equal terms with other professional skills. It
is undeniable, however, that the preservation of our cultural heritage is expensive,
and will become more so in the future as the pressures of development and tourism
mount on historic sites. Yet despite the
costs of cultural conservation, it is no longer realistic to expect international
agencies or foreign bilateral donors to continue to pay for this effort in the
booming economies of Asia. Now is the time for the governments of Asia to take
this responsibility upon their own shoulders. Ways
and means of providing for the expense of conservation in the national budgets
must be identified. There is a need to rectify the current imbalance which exists
between the promotion of tourism and the conservation of historic sites, for example.
Too often, a tourism-orientated policy prevails, and sites are preserved only
as tourist attractions. Ideally, such a
situation should be reversed so that historic monuments are preserved first and
foremost for their cultural values, and not merely as showpieces to attract more
tourists. It would be dangerous to establish too close a link between tourist
revenues and conservation, which might lead to a risk of losing cultural and artistic
independence. Perhaps we should look to
our common heritage to provide us with the answers we are seeking. Asia is a region
of immense antiquity, with a correspondingly rich and turbulent history. Many
countries in the region have inter-acted in the past, and benefited from cross-fertilisation
in arts, religion and commerce. Today,
however, we are unable to appreciate the collective effort needed to preserve
what is left of our past. This is due in part to the concern of each country with
its internal affairs – economic growth and development particularly. It is also
due to the current emphasis placed on the natural environment, rather than the
cultural environment. As an issue, conservation
of the natural environment has taken centre stage in the last decade, culminating
in the 1992 Earth Summit in Rio de Janeiro. Global attention is now being given
to issues such as biological diversity, climate change and protection of the Earth’s
ozone layer. The level of funding, the number of qualified professionals and the
degree of public awareness are higher for the protection of tropical forests,
or endangered species, than they are for restoring temples and ancient cities. This
imbalance stems in part from an imperfect understanding of our environment, and
what it encompasses. Humans are intimately associated with not only their natural
environment, but also their cultural environment. Together these two elements
form the millieu within which our societies evolved and exist today. Because
of this disunion between culture and nature, development and conservation plans
for our natural and cultural environments have progressed in different directions;
they are no longer mutually sustaining or even inter-related. But
in fact they should be. To protect the environment, man must be able to live in
harmony with nature – which means being able to cultivate its bounty without destroying
its sources. Yet, aside from physical well being, man also yearns for spiritual
enrichment, which is where culture plays such an important role. Our cultural
heritage provides us with spiritual fulfilment, which alone distinguishes man
from other species on Earth. The time has
come for us to recognise the relationship between man, nature and culture, and
to formulate appropriate strategies to conserve our environmental legacy. We must
be serious about protecting our heritage at all costs. I
would like to call for concerted action on three main fronts; Firstly,
the governments of Asia should start working together to restore cultural heritage
with both national and regional significance. The
restoration of ancient cities such as Luang Prabang and Ayutthaya will have a
significance far beyond national boundaries. Similarly, the preservation of Angkor
Wat will ensure that the Khmer heritage is saved not only for the people of Southeast
Asia but also for the rest of the world. Surely there is now enough wealth and
expertise in the region for us to take a leading role in preserving our regional
heritage. Governments also have an important
role to play as guardians of our cultural heritage. Throughout history, one of
the most insidious threats faced by sites and monuments has been looting, dismantling
and illegal destruction. National governments should now ensure that regulations
prohibiting the encroachment on, or destruction and looting of, cultural property
are in place and properly enforced. It
is now incumbent upon governments to take strong action in protecting the national
heritage. However, protection must go hand-in-hand with development programs designed
to benefit those communities living on or near historic sites. Local populations
will have to play their part in safeguarding our national heritage, but they will
only be able to do this if they have a fair share of the national resources. Secondly,
regional collaboration should not only be limited to government to government
efforts. Aside from such initiatives, I would like to call for business to contribute
to the preservation of our cultural heritage. The
private sector in Asia has been the prime mover in the economic development of
the region, and now is the time for business to put its considerable experience
and financial resources behind efforts to save our cultural legacy. Here in Thailand
for example, the Thailand Business Council for Sustainable Development and the
Thailand Environment institute are currently discussing ways of supporting efforts
to restore our ancient capital city of Ayutthaya. I believe the time is now opportune
for more of such private-public partnerships in Asian heritage protection, and
would urge businesses to explore options for taking action on heritage conservation. Finally,
the time has come for non-governmental organisations to take up a more prominent
and effective role in the preservation of our cultural heritage. As
an example of an NGO playing a constructive and commendable role in protecting
the nation’s cultural legacy, I would like to cite the Siam Society, co-organiser
of this conference. The Siam Society has an almost century-long tradition of fostering
scholars and scholarship, both Thai and foreign. The Society has played an important
role in not only the study and conservation of our region’s cultural heritage,
but also in the promotion of this heritage to the wider public. Indeed,
next month the Society will initiate it’s Historic House series, at the Bangkhunphrom
Palace Seventh-Cycle Celebration. This series hopes to channel corporate sponsorship
into the restoration of historic buildings in the Kingdom. It
is obvious however, that worthy organisations such as the Siam Society can only
do so much with the limited funds and personnel they have at their disposal. It
is for this reason that countries may wish to explore the establishment of an
independent national “heritage trust”, along the lines of the British National
Trust. This Trust manages public properties all over Britain, with over two million
members supporting its work. The establishment of such an organisation would give
both financial and political independence to the conservation effort, as well
as raise the profile of heritage conservation amongst the wider public. Asia
has now emerged as an International economic centre. As Asians, we are known for
our hard-working ethic, and our striving to improve the standard of living for
the billions of people living within our boundaries. Let
us therefore be unsparing in our efforts to ensure that our cultural legacy remains
secure and undiminished, both for this and future generations. For if we can accomplish
the union of conservation with development, and truly attain sustainable development,
then we may look forward to the glories of our future, whilst benefiting from
the richness of our past. Let me end my
address by quoting from Mr. Abba Eban, former Foreign Minister of Israel. He said,
“history teaches us that men and nations behave wisely once they have exhausted
all other alternatives.” Perhaps now is the time to behave wisely together.
Asian
Prospects toward the 21st Century By Anand Panyarachun
Former
Prime Minister of Thailand
Chairman of Saha-Union Public Co. Ltd.
at
the International Conference
sponsored by the Association for Promotion
of International Cooperation and the Yomiuri Shimbun, Tokyo
November
8, 1994 Excellencies,
Ladies and Gentlemen, Introduction
The year 2000 will mark a rare historical occasion. It will
usher in not only a new century but also a new millennium. Some, who take ancient
prophecies, literally predict that this period will be accompanied by cataclysmic
upheavals. I can see some empirical basis
for the millenarians’ fear. While the Cold War may be over, a wide variety of
international challenges still loom large before us: nuclear proliferation; ethnic
cleanings; competing claims of territorial sovereignty; East-West differences
over democracy and human rights, trade, environment and population. The world
is not in danger of going up with a bang, but we must ensure that neither will
it end with a whimper. Meanwhile, the drama
on the world stage is changing. If the end of the Cold War taught us anything,
it was that fundamental change could be swift and unexpected. While the United
States has emerged as the world’s sole super-power and Japan continues to play
an influential role, attention is increasingly focused on China as a new pole
of power and engine for growth in the world’s most economically dynamic region.
Further afield is a host of other medium-range regional countries in Southeast
and South Asia--particularly India - which are assuming an increasingly significant
role in regional and global affairs. These emergent players are actively forging
cooperation at the bilateral and multilateral levels with the various regional
players. The Asia Pacific region’s booming
economy has prompted widespread optimism about its future. Everywhere, the East
Asian “model” of development is being studied and admired. Intra-regional trade
has far outstripped that of other regions. Economic inter-dependence and cooperation
are at unprecedented levels. So, what does
the future hold for the Asia Pacific region? Regional
Economic Institution-Building The
key trend is a renewed interest in regional cooperation through institution building.
This is an apt response to the Cold War’s end, particularly for a region that
has for too long lacked a sense of common identity. Throughout most of its history,
the Asia Pacific has been an odd cluster of different economic and political systems.
For many countries in the region, colonialism has contributed to the various malefactors,
which have fed on historical distrust between regional players. The fact that
regional countries now show willingness to work together in forging new modes
of cooperation is by far the most promising development for continued peace and
prosperity in the Asia Pacific region. The
areas for such cooperation are many. So far, the spotlight has been on economic
cooperation. ASEAN is finally making good on its economic promise. This dynamic
market, with 340 million people and a combined GNP of 430 billion US dollars,
is taking steps that will ensure its vibrancy well into the next century. The
members have recently agreed to move forward the timetable for trade liberalization
under the ASEAN Free Trade Area by five years, to the year 2003. Furthermore,
the members of ASEAN have agreed to eventually include agricultural products,
which have initially been excluded from the tariff reduction scheme. These advantages
of these major steps are two-fold: it will boost intra-ASEAN trade and also make
investment in the region even more attractive. With the passage of the Uruguay
Round, this move should help ASEAN to maintain its competitive edge and stay ahead
of the game. This trend is likely, to find
echoes throughout the greater Asia Pacific area. The Asia Pacific Economic Cooperation
(APEC) is quickly gathering momentum, shedding its modest origins to become a
potent force for free trade and open regionalism. Next week, the eighteen member
countries of APEC will assemble in Indonesia to define the goals of more liberalized
trade and investments with proposed timeframes ranging from 2010 to 2020. This
will be a further complementary step in the direction towards freer and fairer
trade in the wake of the conclusion of Uruguay Round of GATT and the pending establishment
of the World Trade Organization (WTO). The APEC leaders will also have occasion
to discuss other areas of strengthening the APEC cooperation process including
education, human resources development, technology transfer and private enterprises
participation in regional cooperation. Nevertheless,
some countries are concerned about being rushed into trade liberalization. These
concerns are not entirely unjustified. The reallocation of labour into more economically
productive areas, the urbanization that accompanies industrialization - these
pose socio-cultural challenges that certainly need to be taken into account by
each country. But they should not overlook the powerful argument for economic
liberalization. As the risk of being left behind become apparent, governments
will have little choice but to open up their economies. Therefore, the sooner
each APEC member shifts away from protecting inefficient sectors and concentrates
on developing its areas of comparative advantage, the better. This
is, of course, more easily said than done. Inefficient producers often wield considerable
political clout. Governments are concerned about social dislocations and environmental
deterioration resulting from rapid shifts in economic activity. Since conditions
in each country differ, each sub-region in the expansive Asia Pacific area should
be encouraged to work out for itself the most appropriate pace and timeframe to
adjust for, the side-effects of economic liberalization by taking into account
their varying stages of preparedness and development. Regional
Security Cooperation Sustained
economic development requires a stable security climate, and this is another area
that will benefit from regional institution building. During the Cold War, the
United States security umbrella allowed the East Asian NIEs to prosper. At present,
however, Washington’s foreign policy priorities, including its security role in
the region, are in flux. Domestic pre-occupations and unresolved debates over
America’s vital interests will tend to constrain U.S. involvement abroad. While
Washington is likely to “remain engaged” in Asia, the relative scope and nature
of that engagement will probably be more limited than before out of their own
agenda. It, thus, falls to the Asia Pacific countries to assume greater responsibility
for regional security. In response to this
trend, the ASEAN Regional Forum (ARF) was inaugurated earlier this year in Bangkok.
For the first time, all ten countries of Southeast Asia were gathered under one
roof. For the first time, ASEAN and its dialogue partners from the West and in
the region resolved to engage in regular dialogue as part of a process called
preventive diplomacy. To build trust and confidence over the longer term, such
ideas as the establishment of a regional peacekeeping centre and the exchange
of military information may be tabled in the future. The
“proof of the pudding”, of course, will be whether the ARF can contribute directly
to reducing regional tensions. The three biggest potential threats to regional
security today are North Korea, Cambodia and the South China Sea. Some may wish
to portray them, as bilateral or domestic disputes, but their impact on the region,
should conflict break out, will not be confined to the disputing parties. Should
the Korean peninsula be de-stabilized, Japan and China will be the first to be
affected. Should the terrorist and brutal tactics of the Khmer Rouge escalate
into large-scale violence, neighbouring. Thailand will once again bear the brunt,
a massive influx of refugees. Should force be used over the Spratlys, vital sea-lanes
will be disrupted, and regional economies will suffer. At this early stage of
its existence, it is understandable if the ARF seeks to avoid controversy. If
it can play a constructive role in these disputes, the initiation by fire will
quickly establish its credibility. Other
Opportunities for Cooperation Other
areas can also benefit from similar cooperative efforts in the region. As I suggested
earlier, rapid economic growth can produce adverse social and environmental side
effects, and these often transcend national borders. In the early enthusiasm for
free-wheeling capitalism, these side effects tend to be ignored or overlooked.
But growth cannot be sustained over the long term if they are left un-addressed.
The fact that the side effects have trans-national consequences, make them an
appropriate subject for regional cooperation. Another
reason for taking a regional approach to these developmental side effects is their
multidimensionality. For one, as industrialization in the region quickens, environmental
problems are likely to exacerbate. Inadequate infrastructure and rampant pollution
are already lowering the quality of life in many major Asian cities. Rural areas
are no less prone to environmental damage. The conversion of farmland to industrial
use, overfishing, soil erosion, flooding and erratic rainfall patterns caused
by de-forestation may turn some previously self-sufficient countries into net
food importers. Indeed, unbridled population growth would further compound the
problem of the already under-nourished populace. Add to this global warming, which
will raise sea levels and flood rich delta areas, and the environment becomes
an issue we can no longer afford to keep on the back-burner. The Climate Institute,
in a report commissioned by the Asian Development Bank, estimates conservatively
that climatic changes in the next 80 years may create over 20 million “environmental
refugees” in South and Southeast Asia, as well as social and economic disruptions
on an unparalleled scale. Taking steps to protect the environment now is more
sensible and feasible, than attempting to undo the damage later. Still,
it is not immediately clear how best to balance the region’s developmental and
environmental needs. Since global warming affects everyone, East and West alike
have an interest in preserving the last remaining strands of tropical rainforest
in the world. But the argument that developing countries should show their development
in order to preserve the environment is not convincing. The comparative advantage
of many Asian countries lies in non or semi-renewable natural resources such as
timber, and to restrain them from exploiting these resources would be patently
unfair. Any attempt to link trade, and environmental protection, particularly
if it is seen as an attempt to set up non-tariff barrier, is likely to be staunchly
resisted by the developing countries. The
growth-versus-environment dilemma might be usefully taken up within an institutional
setting such as APEC, for here is an issue directly related to economic development.
Furthermore, it involves allocative choices between more and less developed countries
in the region. The answer may lie in some form of compensation of “debt-for-nature
swap” in which a developing country’s debt is effectively reduced in exchange
for its commitment to protect its rainforests. Such swaps have already been negotiated
in several countries, including Costa Rica, Ecuador and the Philippines. While
this sort of arrangement may provide only a partial solution, its main advantage
is that it creates no losers, only winners. A region-wide dialogue would help
identify the key issues and suggest solutions satisfactory to all. Culture:
Clash or Convergence? A challenge
that lends itself less easily to institutional solutions is the simmering debate
over Western versus Eastern values. I am pleased that the organizers of this event
have included, besides the usual politics and economics, the issue of culture.
Already, disagreements between East and West over democracy, human rights, labour
rights, reproductive rights and -- dare I say it? -- even caning rights, appear
to validate Professor Huntington’s prediction of an impending “clash of civilizations.” I
believe the clash will eventually be avoided. The reason that its possibility
looms so large now, is a function of our continuing search for a post-Cold War
order. With communism all but dead, the United States, the only super-power left,
is returning to “core American values” to guide its foreign policy. This may be
no more than an effort to establish some measure of predictability in an increasingly
chaotic world. Despite its good intentions, however, Washington is still groping
for ways to win friends and influence governments, without alienating them. I
believe the learning curve will be overcome before too long. Washington may appear
aggressive and abrasive in promoting its democracy and human rights agenda, but
the limits of a heavy-handed approach are already becoming apparent. Even
as the United States begins to appreciate the advantages of friendly persuasion,
Asia will come around on its own. As we have seen in South Korea, Taiwan, and
Thailand, prosperity creates a demand for democracy, and at a certain juncture
in the national development process, citizens will long for greater political
freedom and civil liberties. Moreover, the free flow of information, so necessary
to a vibrant economy, is also the harbinger of new ideas. Satellite dishes and
other technologies are already helping spread the gospel of Western-style consumerism.
There is no reason to suppose that the idea of free choice in politics will not
make similar in-roads in Asian societies, the efforts of governments notwithstanding. The
final point that I wish to add regarding the so-called “clash of civilization”
or the clash between Western and Eastern values is that, in fact, throughout history
we have witnessed the conflicts of ideas and values arising out of conflicts between
forces of extremism on both ends. Coming from a country like Thailand, that adheres
to the precepts of Buddhism, which espouses moderation and the middle way, I earnestly
hope that the forces of moderation will succeed in overcoming those who profess
extremism of all kinds. It may be that both Western and Eastern civilizations
are flexible enough to accommodate one another. I like to think that, rather than
a clash of civilizations, what will eventually come about is a convergence of
cultures instead. Role of the Regional
Powers For all these region-wide
trends, the future of the Asia Pacific will still be tied to the fortunes of key
regional powers. The greatest uncertainty surrounds the future of China. Even
a change in the Chinese leadership is unlikely to affect the direction of economic
policy. However, China’s double-digit growth has been accompanied by corruption,
inflation, loss of job security and a widening income gap between urban and rural
areas. A large “floating population” of unemployed peasants, drugs, prostitution
and crime are also some of the social side effects of rapid economic reform. As
in any other country, how the leadership deals with these issues, will determine
the extent to which growth translates into development. The
problem that is particular to China, meanwhile, will be the eventual passing of
the torch to a new generation of leaders. When the last of the so-called “immortals”
- such as the octogenarian Deng Xiaoping - are gone, the new Communist Party leadership
will find it difficult to command the same deference as the Long March veterans.
The Party’s tight political control will be increasingly challenged by the children
of Tiananmen and a rising middle class. Dissent will become increasingly hard
to suppress. China is not the closed society it was during the Cultural Revolution
or the Great Leap Forward. Its economy is intimately linked to the outside world,
and any significant political or social unrest will damage that link. Maintaining
social order, instituting market reforms while making an orderly political transition
will, therefore, pose a tremendous challenge to the country’s leadership. Japan,
meanwhile, is free from the prospect of any such major upheaval. Continuing present
trends, it should become an increasingly important player in world politics. A
permanent seat on the United Nations Security Council is within sight. Its repeated
expressions of remorse for its World War II role, as well as its categorical rejection
of deploying combat forces, provide assurances that Japan poses a threat neither
to Asia nor the world. These are all passive actions. Japan needs to demonstrate
its readiness to engage itself more actively and objectively in the deliberations
and decision-making process of the world organization. The
only question will be how Japan can best fulfill its new responsibilities - for
this will be a Japan, no longer dependent on the United States, but a regional
and world power in its own right. As such, it will be expected to play a leading
role in ensuring that the region’s economic development stays on the right track.
Japan has to come to a hard political decision, and by opening up its market,
it will have a vital role in the promotion of free trade and economic development
in the region. The yen is likely to continue rising and motivate Japanese industries
to relocate to Southeast Asia - and elsewhere - in ever greater numbers, facilitating
transfers of technology and managerial skills. In terms of government policy,
while official development assistance will continue to play a major role in the
region’s development, liberalization of trade and investment rules are no less
important and should be given greater emphasis. Apart
from the United States and Japan, the traditional Asia Pacific key players, as
well as emergent China, the second-tier NIEs in ASEAN will join the first-tier,
and a new second-tier will follow in turn. Among them will probably be Vietnam,
which will face a dilemma similar to China’s. Despite trying to balance political
control and economic freedom, it should still manage to grow rapidly, thanks to
its bountiful natural resources and industrious workforce. In addition, Australia
and New Zealand will inevitably identify themselves more closely with the East
Asian scene. Some countries from outside
the region are also likely to play a bigger role. India, for example, has of late
demonstrated interest in forging closer ties with the Asia Pacific. Given its
sheer size and the success of its ongoing economic reforms, India may well become
a formidable economic power in the first decade of the 21st century. Conclusion I
have tried to outline the major trends that I think will affect the future of
our region: economic and political institution-building, environmental changes,
cultural convergence, and developments in key regional countries. Assuming that
all things go well, and there are no major interruptions in the economic and political
developments in East Asia, what scenario can we then anticipate in the first decades
of the 21st century? East Asia,
including Japan, China, Korea, Taiwan, Hong Kong and the ASEAN countries, will
have together an economy larger than that of either NAFTA or the European Union. East
Asia is set to occupy the central role in the world economy. According to the
survey of the global economy in the recent issue of the Economist, by the year
2020, there will be seven Asian, namely, China, Japan, India, Indonesia, South
Korea, Thailand and Taiwan in the ten largest economies. By
2030, China will account for half of East Asia’s GDP or roughly equal to the GDP
of North America. The centre of gravity
of the world economy will then have shifted to East Asia, but America will continue
to retain its lead in basic scientific research, advanced technologies, software
and sophisticated financial services. East
Asian countries will be more inter-dependent as their economies forge stronger
linkages in trade and investments among themselves and become closely integrated
with global economy, thus providing incentives for the maintenance of peace and
prosperity. China, the United States of
America and Japan will continue to have dominant roles in the organization of
peace and stability in East Asia, including the North Korean issue. Pragmatic
diplomacy must replace self-righteousness; dialogue and negotiation must prevail
over confrontation. A strategic partnership of these three powers working in tandem
with the rest of East Asia would bode well for the long-term future. Given
the pace of change in today’s world, I would not vouch for the accuracy of my
assessment with the confidence of a Nostradamus devotee. As we slip into an uncertain
future, though, we carry with us a faith no less strongly held than that of the
millenarians. It is a different kind of faith. This faith, which allows us hope
rather than despair, is faith in humanity. While other parts of the world are
torn by strife, we in the Asia Pacific region have begun to build faith in one
another. With a little luck, the coming millennium may yet prove to be everything
we hope and strive for. Thank you.
Liberalisation
of the Thai Economy by Mr. Anand Panyarachun
for
the 4th Asian Management Awards
Bangkok, September 22, 1994 Good
evening. Your Excellencies of the diplomatic corps, distinguished members the
Thai government, business leaders and industrialists, observers and friends from
the media, faculty and students, ladies and gentlemen: On
behalf of our gracious host, Viroj Phutrakul, and the Asian Institute of
Management, thank you for joining us this evening as we honor the recipients
of the 4th Annual Asian Management Awards in Thailand. As
I watched the presentation this evening, I must say that I was just as moved as
some of the recipients - and I felt as proud. In fact I think that all of us can
be proud of what Thailand and its private sector-government partnership has achieved. You,
tonight’s recipients, are outstanding symbols of what has happened in Thailand
of how significant economic growth can be achieved in an environment where democratic
institutions and practices prevail. Our
double-digit GDP growth in the late 80’s and our projected 8% - plus growth
this year and next is enviable. Inflation in controlled at well under 5% (I hope),
we have attracted over ten billion dollars of foreign investment over the last
few years, our foreign exchange reserves at $25 billion have never been higher,
our per capital income of $2300 is very respectable and is rising and unemployment
is at a low 3.3%. Today, however, we face
a very different challenge. (The prevailing political and socio-economic
forces of the 1980’s have all changed. The disintegration of
the former-Soviet block has opened up previously controlled-economies.
New countries and republics are being formed and admitted
to the United Nations at an ever-increasing rate. It is in this light of
change, that we must forge our new vision and policies to lead us
into the 1990’s and beyond. I know
that many experts will speak of how we need to prepare for changes in
technology that will affect the way we live and the way we compete. Others
say we must be ready for how the newly-emerging economies - China, India,
and Indochina - will at the same time be our competitors
for foreign investment and markets for our products. Within
this regional context, other pundits are convinced that Thailand’s real
priorities should be to resolve infrastructure bottlenecks, alleviate rural poverty
and create a more equitable distribution of wealth. All
of these pressing concerns are important, but today we address an issue of equal
importance, one if not handled appropriately may relinquish Thailand’s competitive
edge in the newly-forming global economy. From
being a lackluster resource-based under-developed economy in the 1970’s,
we became one of Asia’s emerging dragons in the last 10 years or so. How?
Economists, businessmen and politicians-the pundits, I spoke of
- are generally agreed that our growth and success were due to both sound
macro-economic policies coupled with prudent economic liberisation. In
the 1980’s, we started to liberalise our economy with the
enactment of an export-promotion policy. At the same time, the Board
of Investment, aggressively encouraged and fostered increased foreign direct
investment, triggering a boom in foreign investment in manufactured
products. As a result, exports surged in the late 80’s. Since
the late 1980’s, more liberal policies on capital flows, privatisation
and rules on foreign investment have led to an additional influx in
direct foreign investment. This has led to further industrialisation,
growth and technology transfer for Thailand.
To drive growth into the 90’s however, Thailand must not only continue
our current efforts at liberalisation but also move swiftly
to become one of the most open trading nations in Asia. Even as we continue
to reduce tariffs, gradually liberalise our financial services sector
via BIBF, and relax rules on foreign ownership, we must do more. Competition
amongst companies and multi-national corporations is fierce. A recent
issue of the Harvard Business Review says, I quote: “Competition
is now a ‘war of movement’ in which success depends on anticipation
of market trends and quick response to changing customer needs.
Successful competitors move quickly in and out of products, markets,
and sometimes even entire businesses - a process more akin to
an interactive video game than to chess. In such an environment, the essence
of strategy is not the structure of a company’s products and markets,
but the dynamics of its behavior.” Likewise,
competition amongst nations will be equally fierce. Nobel Laureate
Milton Freedman, recently stated that: “It is today possible,
to an extent greater than any time in the world’s history, for a
company to locate anywhere, to use resources from anywhere and to
produce a product that can be sold anywhere.” What
does all of this mean for Thailand? We can only compete effectively in the
global economy if our private sector is linked to the international
community. Our success came at a time when
we were a relatively liberal economy compared to those around us:
China, India, Vietnam, Indonesia, the Philippines, and the Soviet Union
were more protected than we were. The success stones are clear:
the open ports of Singapore and Hong Kong thrived while the
controlled-economies of Burma and Vietnam stalled. But
today we are in danger of becoming more protected than our neighbours.
If this happens the situation will be reversed: we will be hurt by our
protectionism, and they will benefit from their liberalism. And
Thailand cannot afford to let this happen. The
AFTA Monitor has made a very succinct case for free trade. It says,
and again I quote: “History
has shown that protectionism hurts economic growth and condemns
consumers to higher prices and lower quality. It also created unemployment,
lower wages and lower productivity. Protectionism leads to economic stagnation
- so much so that the world economy all but collapsed during the
depression of the 1930’s, a markedly protectionist period. It was thought
that world leaders had learned their lessons from that experience,
lessons like: Cutting or eliminating tariffs
exposes domestic industries to foreign competition. This competition
forces both domestic and foreign industries to become more
efficient, either by themselves, or by forming alliances. The result: consumers,
have a wider range of goods and services to choose from and
better-quality goods at low prices. Those industries no longer able to
compete invariably shift their resources to areas in which they
can compete, i.e., where the resources are used more efficiently. This
leads to higher productivity of a country’s factors of production
and therefore to better living standards. As
an added benefit, more jobs and higher incomes result from the entry
of foreign competition and technology. Workers are trained quickly
and become more productive. Domestic industry also flourishes
as new technology is acquired and new markets are opened. Every economy
that has tried freer trade has obtained these results”. End of quote. The
ones who will be hurt the most by protectionist policies will be the protected
industries themselves. Granting indefinite protection assures that our
local business or industry will become uncompetitive in the long-run in the
quickly converging world economy. We must instead insure that as we liberalise
and move to a true “free trade” area, that our local industries
be equipped to complete globally. Consider
what protectionism alone will do to Thailand and its workers. First,
we penalise our country because being protected, we are making inefficient use
of our resources, and Thailand must strive to use its resources wisely. Second,
we must realise that for every industry that is protected, another industry is
penalised. If cement is protected, that construction industry will suffer from
high prices and lower quality. If we protect textiles or leather, then we penalise
clothes and leather goods manufacturers. Third,
we penalise consumers - our fellow Thai’s - who have to pay higher prices for
lower-quality goods. Because if goods were priced lower and were of better quality,
the industry would not need protection from foreign competition. Just
as there are well-dressed fools, there are well-dressed foolish ideas, and protectionism
is one of them. Protectionism only benefits a very small group - and only for
a short period. Meanwhile millions suffer. Government
alone cannot move to liberalise the economy. Businessmen who propose protectionist
measures must recognise the implications of indefinite protection. In the long-term,
they will be uncompetitive. They must now take the first step to prepare for a
more open economy. As the government moves to liberalise our economy and welcome
not only foreign direct investment geared towards export but foreign competition
in the local markets as well, our local industries must be ready to compete with
tough foreign challenges. This is the first and most crucial thing for us to do
as we drop our protectionist shell. I wish
to call on the rest of us in the private sector and government to be on the lookout
for and expose those who would propose and those who would implement protectionist
measures. They say that a person who sees
the advantage but not the disadvantage is like a fish who sees the bait but not
the hook. I hasten to assure you that I am no such fish. Instead of looking only
at trade-offs and sacrifices, we must seek out mutually beneficial endeavors,
those in which both parties can share in a “win-win” scenario. Let me give you
a few examples. Those in manufacturing have discovered with economics of scale
we can achieve higher quality at lower prices. So also we now know that the ideals
of democracy can be well served even with a strong central government. Well, it’s
time we believed that economic liberalisation can help us achieve a much better
standard of living for our people without sacrificing nation interest or national
pride. Just like the trophies you have
received today with their Pillars of Hercules and the saying ‘Plus Ultra’, or
‘everything lies beyond’, Thailand must go forth into the next century standing
on the twin pillars of sound macro-economic management and economic liberalisation.
The time for discussion is past. It is now time to act. And if we do, everything
lies beyond for Thailand and we can move forward with confidence. I
congratulate all of the recipients of tonight’s Management Awards. You are amongst
not only Thailand’s best, but Asia’s best. I ask that all of us here this evening,
help our nation to remain one of Asia’s best as we move to liberalise our economy. Thank
you. (CJ note: Quotes from current sources
e.g. AFTA Monitor may not be appropriate given Khun Anand’s standing.)
Address
by Anand Panyarachun
Chairman of Saha-Union PCL
at the second
Convention of the
International Bottled Water Association (Asia Chapter)
at
Shangrila Hotel, Bangkok
August 26, 1994 The
world in which we live in 1994 is a vastly different place from the one that existed
in past decades. Fundamental changes have occurred at frequent intervals and have
made such a positive impact on the global and regional scenes. The
resumption of the people’s Republic of China’s representation in the UN in 1972
was the beginning of the process. Recognition of China’s existence and its role
in international and regional affairs has brought about geo-political developments
which undermined the almost monopolistic status of the two super-powers; namely,
the United State of America and the Soviet Union. The momentum for change subsequently
accelerated and a series of adjustments, political and economic, followed in such
substantive and rapid manner that none of us could have envisaged or foreseen. The
collapse of the Berlin Wall, The reunification of the two Germanys, the breakup
of the Soviet Empire and the market reform measures in Eastern Europe were truly
momentous events in Europe that practically spelled the end of the Cold War. On
the East Asian side of the world, conflicts gradually receded into the background.
China began its second long march towards market economy and, hopefully, political
reform. Japan, a long-recognized economic giant, slowly assumed its rightful role
as a major power in global affairs. There also emerged the four little tigers
in East Asia which are on their way to becoming formidable players in international
trading systems. The countries of East and Southeast Asia have been at the forefront
in this unprecedented global economic change. The
rapidly growing economies of East and Southeast Asia have expanded over the past
several decades at rates considerably greater than the advanced western industrialized
countries. Since 1960, these economies have grown more than twice as fast as the
rest of Asia, roughly three times as fast as Latin America and South Asia, and
five times faster than Sub-Saharan Africa. They also significantly out – performed
the industrial economies and the oil-rich Middle East-North Africa region. Thailand
has been one of the leaders, even within this highly competitive group of economies,
and it has a useful part to play in encouraging and participating in the development
process for the rest of Southeast Asian mainland. Vietnam, with a population of
70 million people, is also committed to market-oriented economy, while still trying
to retain its political structure. Myanmar, with a population of over 40 million,
has already, albeit slowly, begun to come out of its shell and set up constructive
dialogues with the neighboring countries, particularly in the trade and investment
areas. Cambodia and Loas, much smaller in population and in theirs potentials,
are likewise following the same path. Curiously,
it is generally agreed that, for some time now, it has been primarily market forces
that have discovered and exploited the dynamic commercial opportunities of East
Asia. Accordingly, it is the market forces that have accelerated economic development
of East Asia counties, increased their economic weight in world trade and investments
and driven them at a rapid pace toward greater economic integration. The governments
of the successful countries in the region, especially those in southeast Asia,
have played a supportive role, first of all by adopting prudent macro-economic
policies, and secondly by creating an institutional framework in which markets
can operate freely and efficiently, with minimal distortion and influences from
government control and regulations. The
growth experience of Asian Pacific countries has led the rest of the world. If
one takes China, East and Southeast Asia together as a group, these economies,
at the current growth rates, could become as large as Western Europe in eleven
years. Fifteen years after that, they would become as large as NAFTA. If purchasing
power parity adjustments were made, the time frame would be even shorter. It
should be noted as well that the region as a whole also expanded its trade with
the rest of the world in a balanced manner. This is especially obvious if Japan’s
anomalous trade surplus situation is excluded from the calculations. It
has been, however, the acceleration of intra-Pacific trade which has attracted
the most attention. The share of intra-Asia-Pacific trade in world totals increased
from 19% to 29% between1980 and 1991. What this means is that nearly 70% of all
Asia Pacific trade is with fellow Pacific nations. In dollar terms, intra-Asia-Pacific
trade has already surpassed intra-EU trade. The
World Bank recently explained the phenomenal economic success of China, East and
Southeast Asia as being due mainly to their pragmatic and “market friendly policies.”
In particular, macro economic stability, investment in people and outward orientation
were the common attributes of their economic success. Deliberate intergovernmental
efforts to promote a regional economic integration are very low in the list of
explanations of what has happened. While ASEAN governments have conscientiously
made efforts to promote economic cooperation, the latest one being the formation
of ASEAN Free Trade Area (AFTA), their endeavours nonetheless lagged far behind
economic forces generated by the market. The momentum of the market forces will
continue unabated and will have far-reaching implications for the opening up of
markets, deregulation and decontrol, as well as competition. The
search for a new paradigm of international conduct is as likely as not to be piecemeal,
by trial and error, region by region. The
search for a new international economic and political order finds expression in
East Asia and the Pacific as well. It is repeated often that this region includes
some of the most dynamic economies in the world today, and that trade across the
Pacific has far outstripped Atlantic trade. In Southeast Asia, enterpreneural
skills, openness to foreign investment and export-driven economy have enabled
ASEAN members to achieve some of the fastest growth rates in the world since the
mid-1980s. The current decade will, however, force ASEAN countries to graduate
from labour-intensive and resource-based economy to knowledge-intensive, high-tech
and service industries. Whether they are equipped to move up the ladder depends
on how good their educational systems are. Human resource development, mobilization
of capital and infrastructure investments are priority features for the coming
decade. International focus on the environment and sustainable development will
bring to the fore new costs as well as new opportunities for business. The
growth in ASEAN countries can expect an even further boost from the successful
conclusion of the Uruguay Round of GATT and the growing number of complementary
economic integrative arrangements at different levels. The global regime and regional
frameworks must, however, be harmonized. The World Trade Organization, despite
some possible difficulties at first, will likely be a powerful force for global
free trade and economic cooperation. At the regional level, Asia Pacific Economic
Cooperation, or APEC, is hard at work finding ways to sustain development and
growth as well as bridge the gap between its richer and poorer members. The ASEAN
Free Trade Area, or AFTA, promises to take advantage of regional complementarities
by dismantling trade barriers among the ASEAN members. There are also good prospects
for the emergence of sub-regional growth circles of adjacent areas straddling
over national boundaries. It is, however, too soon to say with real conviction
that we are at the dawn of a “borderless economy” era. The
globalization of trade, however, finds no parallel when it comes to security.
There is no effective organizational authority to build or maintain a stable regional
and international political order. Crises such as Bosnia, Somalia and Rwanda only
point out how ineffectual even well-established organizations such as NATO and
the United Nations can be in the face of post-Cold War upheaval. International
organizations, I am afraid, are effective only insofar as their members wish and
make them so. The big question mark in
the Asia Pacific area, insofar as security is concerned, must be the Korean peninsula.
Current talks between the U.S. and North Korea have considerably reduced tension
in the area and we must be hopeful that they move forward steadily towards mutually
acceptable arrangement. The security question
is a pressing one for East Asia. All the economic accomplishments of the region,
and the vast potential that remains to be tapped, would be for nought without
a stable political order to underpin it. Although East Asia has never had the
benefit of the regional security arrangement along the lines of NATO, efforts
are underway to develop a new model of security cooperation in the region. The
ASEAN Regional Forum, convening for the first time in Bangkok at the end of July,
brought together the ASEAN countries, their dialogue partners, and concerned parties
for a series of bull sessions on common security concerns, as interpreted in much
wider context than in the past. The trust and confidence built through this kind
of ongoing dialogue will, with any luck, allow us to worry less about defense
buildups and expend more to improve the lives of our peoples. Granted,
Asia has its share of problems, but let me tell you why I remain optimistic despite
these developments. First I believe that
the absence today of a formal regional security framework in East Asia can be
worked around. While the region continues to grow, there is little danger of outright
conflict. In the meantime, the ASEAN regional forum, and perhaps other similar
fora, will evolve and put in place trust-building measures to which all parties
can subscribe. Second, I believe that the
obstacles to regional peace and stability can be managed, given greater empathy
and interdependence among the countries concerned. I see three categories of challenges
facing Asia in the decade ahead: domestic, regional and extra-regional. The
first challenge lies in how governments juggle pressures for political and economic
forum. The question of reform is a thorny one, particularly for the governments
concerned. We should not realistically expect countries with long traditions of
authoritarian rule to convert into full-fledged Western-style democracies overnight.
The example of the former Soviet Union has made reformers in Asia wary of proceeding
too quickly on the road to liberalism. For some countries, such as China and Vietnam,
the dilemma seems to be how to liberalize the economy while maintaining a steady
grip on political power in order to ensure the country’s political stability and
ethnic harmony. With their growing prosperity, these countries may become even
less receptive to prodding by foreign governments on what are arguably domestic
matters. This is not to say that democracy is a hopeless cause. As we have seen
in South Korea, Taiwan and Thailand, affluence, through expanding middle class,
can generate its own pressure for political reform. The
second domestic challenge is the issue of political succession. The death of Kim
IL Sung has left the future of the Korean peninsula an open question. Since North
Korea was not the only tightly-controlled regime in Asia, we can also expect similar
questions of political transition to arise in China and Vietnam, especially in
combination with increasing pressures for structural reform. At
the regional level, danger of another sort lurks. Disputes over territory and
natural resources have the potential to flare up and escalate it left untended.
Dialogue is one way to prevent such conflicts from breaking out. But dialogue
without interdependence is likely to produce little more than words. When there
is interdependence, grievous conflict is automatically ruled out, for harming
the other is tantamount to harming oneself. The increased economic interaction
among the Asia-Pacific countries will, therefore, diminish the likelihood of armed
conflict. The disputes themselves may linger, but compromise will tend to be the
order of the day. Last, but certainly not
least, is the extra-regional challenge. The single most influential stabilizing
factor in Asia-Pacific since the second World War has been the regional presence
of the United States. Like a benevolent big brother, the US made it possible for
its allies in the region to thrive and prosper by engaging in collective defence,
dispensing its aid programmes and granting proportionately greater access to its
market. The strategic rationale for this
generosity disappeared with the end of the Cold War. America’s relations with
its Asian partners have become more businesslike, as Washington attempts to gain
better access to their markets and stave off foreign competition in its own. The
heavy-handed tactics employed, and the loud and harsh words accompanying them,
are replacing the perception of America as a benevolent big brother with an altogether
different image. Uncomfortable as these
tactics make them, Asians generally still welcome America’s engagement in Asia.
But the quality of this relationship depends on whether Washington will continue
to follow its policy of strident evangelism towards its Asian partners. There
are occasions that call for this sort of approach, but dealing with friends is
not one of them. Human rights, labour rights, environmental protection, and free
trade are all worthy causes. But surely, they do not necessarily take precedence
over regional peace and stability. Nor can they replace development and national
cohesion and harmony. Very often they demand trade-offs, and priorities must be
set. There is a sense that the United States is more interested in shaping Asia
in its own image than in accepting Asia on its own term. If the US continues to
want its cake and eat it, too, its Asian partners may find it increasingly difficult
to respond. Fortunately, senior US policy makers are now beginning to recognize
this shortcoming in US policy, and the coming years should see less US rigidity
and righteousness, resulting in improvement in US relations with East Asia. President
Clinton said that democracies do not make war on one another. I might add that
countries whose economies are interdependent and growing in step with one another
also have little reason to wage war. Before we can begin to share the same values,
we must share the same interests. The next decade will be one in which Asia and
the Pacific build these commonalities, through formal cooperative frameworks and
through their own development processes. We may encounter some speed bumps on
the road ahead, but we can look forward to an exciting ride.
Address
by Mr. Anand Panyarachun
Chairman of Saha-Union Public Company Limited
At
the
Asian Investment Conference
Hosted by Merrill Lynch
at
the St. Regis Hotel, New York City
July 20, 1994 The
world in which we live in 1994 is a vastly different place from the one that existed
in recent decades. Fundamental changes have occurred at frequent intervals and
have made such a positive impact on the global and regional scenes. The
resumption of the People’s Republic of China’s representation in the UN in 1972
was the beginning of the process. Recognition of China’s existence and its role
in international and regional affairs has brought about geo-political developments
which undermined the almost monopolistic status of the two superpowers; namely,
the United States of America and the Soviet Union. The momentum for change subsequently
accelerated and a series of adjustments, political and economic, followed in such
substantive and rapid manner that none of us could have envisaged or foreseen. The
collapse of the Berlin Wall, the re-unification of the two Germanys, the breakup
of he Soviet Empire and the market reform measures in Eastern Europe were truly
momentous events in Europe that practically spelled the end of the Cold War. On
the East Asian side of the world, conflicts gradually receded into the background.
China began its second long march towards market economy and, hopefully, political
reform. Japan, a long-recognized economic giant, slowly assumed its rightful role
as a major power in global affairs. There also emerged the four little “tigers”
in East Asia which are on their way to becoming formidable players in international
trading systems. The countries of East and Southeast Asia have been at the forefront
in this unprecedented global economic change. The
rapidly growing economies of East and Southeast Asia have expanded over the past
several decades at rates considerably greater than the advanced western industrialized
countries. Since 1960, these economies have grown more than twice as fast as the
rest of Asia, roughly three times as fast as Latin America and South Asia, and
five times faster than Sub-Saharan Africa. They also significantly out-performed
the industrial economies and the oil-rich Middle East-North Africa region. Thailand
has been one of the leaders, even within this highly competitive group of economies,
and it has a useful part to play in encouraging and participating in the development
process for the rest of Southeast Asian mainland. Vietnam, with a population of
70 million people, is also committed to market-oriented economy, while
still trying to retain its political structure. Myanmar, with a population of
over 40 million, has already, albeit slowly, begun to “come out of its shell”
and set up constructive dialogues with the neighboring countries, particularly
in the trade and investment areas. Cambodia and Laos, much smaller in population
and in their potentials, are likewise following the same path. Curiously,
it is generally agreed that, for some time now, it has been primarily market forces
that have discovered and exploited the dynamic commercial opportunities of East
Asia. Accordingly, it is the market forces that have accelerated economic development
of East Asia countries, increased their economic weight in world trade and investments
and driven them at a rapid pace toward greater economic integration. The governments
of the successful countries in the region, especially those in Southeast Asia,
have played a supportive role, first of all by adopting prudent macro - economic
policies, and secondly by creating an institutional framework in which markets
can operate freely and efficiently, with minimal distortion and influences from
government control and regulations. The
growth experience of Asian Pacific countries has led the rest of the world. If
one takes China, East and Southeast Asia together as a group, these economies,
at the current growth rates, could become as large as Western Europe in eleven
years. Fifteen years after that, they would become as large as NAFTA. If purchasing
power parity adjustments were made, the time frame would be even shorter. It
should be noted as well that the region as a whole also expanded its trade with
the rest of the world in a balanced manner. This is especially obvious if Japan’s
anomalous trade surplus situation is excluded from the calculations. It
has been, however, the acceleration of intra-Pacific trade, which has attracted
the most attention. The share of intra-Asia-Pacific trade in world totals increased
from 19% to 29% between1980 and 1991. What this means is that nearly 70% of all
Asia Pacific trade is with fellow Pacific nations. In dollar terms, intra-Asia-Pacific
trade has already surpassed intra-EU trade. The
World Bank recently explained the phenomenal economic success of China, East and
Southeast Asia as being due mainly to their pragmatic and “market friendly” policies.
In particular, macro-economic stability, investment in people and outward orientation
were the common attributes of their economic success. Deliberate inter-governmental
efforts to promote a regional economic integration are very low in the list of
explanations of what has happened. While ASEAN governments have conscientiously
made efforts to promote economic cooperation, the latest one being the formation
of ASEAN Free Trade Area (AFTA), their endeavours nonetheless lagged far behind
economic forces generated by the market. The momentum of the market forces will
continue unabated and will have far-reaching implications for the opening-up of
markets, deregulation and decontrol, as well as competition. In
the uncertain post-Cold War era, it is impossible to predict with any confidence
what the next decade holds in store. The recent G-7 summit in Naples, insofar
as it discussed political matters, only under-scored the elusiveness of the New
World order we had hoped for. The turmoil in the former Soviet bloc shows no sign
of abating. The industrial countries, led by the United States, have yet to agree
on how best to maintain peace, stability and development, not only in Europe,
but throughout the world. Such tentativeness
is to be expected in any fledgling world order. The search for a new paradigm
of international conduct is as likely as not to be piece-meal, by trial and error,
region by region. The search for a new
international economic and political order finds expression in East Asia and the
Pacific as well. It is repeated often that this region includes some of the most
dynamic economies in the world today, and that trade across the Pacific has far
outstripped Atlantic trade. In Southeast Asia, entrepreneurial skills, openness
to foreign investment and export-driven economy have enabled ASEAN members to
achieve some of the fastest growth rates in the world since the mid-1980s. The
current decade will, however, force ASEAN countries to graduate from labour-intensive
and resource-based economy to knowledge-intensive, high-tech and service industries.
Whether they are equipped to move up the ladder depends on how good their educational
systems are. Human resource development, mobilization of capital and infrastructure
investments are priority features for the coming decade. International focus on
the environment and sustainable development will bring to the fore new costs as
well as new opportunities for business. The
growth in ASEAN countries can expect an even further boost from the successful
conclusion of the Uruguay Round of GATT and the growing number of complementary
economic integrative arrangements at different levels. The global regime and regional
frameworks must, however, be harmonized. The World Trade Organization, despite
some possible difficulties at first, will likely be a powerful force for global
free trade - and economic cooperation. At the regional level Asia Pacific
Economic Cooperation, or APEC, is hard at work finding ways to sustain development
and growth as well as bridge the gap between its richer and poorer members. The
ASEAN Free Trade Area, or AFTA, promises to take advantage of regional complementarities
by dismantling trade barriers among the ASEAN members. There are also good prospects
for the emergence of sub-regional growth circles of adjacent areas straddling
over national boundaries. It is, however, too soon to say with real conviction
that we are at the dawn of a “border-less economy” era. The
globalization of trade, however, finds no parallel when it comes to security.
There is no effective organizational authority to build or maintain a stable regional
and international political order. Crises such as Bosnia, Somalia and Rwanda only
point out how ineffectual even well-established organizations such as NATO and
the United Nations can be in the face of post-Cold War upheaval. International
organizations, I am afraid, am effective only insofar as their member’s wish and
make them so. The big question mark in
the Asia-Pacific area, insofar as security is concerned, must be the Korean peninsula.
In recent months, North Korea’s nuclear ambitions and her policy directions towards
South Korea and the United States have received world-wide attention and generated
intense debate among the countries directly concerned. No definitive conclusions
emanated from the process of assessment and analysis. At best, the conclusions
are still within the realm of conjecture and speculations. Before
the unexpected and sudden passing away of Kim IL Sung, the North Korean “respected
leader,” some of us and the specialists of North Korean politics, thought that
at least they were dealing with the “devil” they knew. But, did we really know
him? We knew him from his style of dictatorial rule and his iron grip over the
life and soul of his people. Nonetheless, could we have anticipated the apparently
spontaneous and unorganized outpouring of extreme grief and respect of the North
Korean people? Somehow, the old man must be larger than life itself. If his “stability”
was questioned periodically in the past, his people certainly did not seem to
share that view. There appeared to be a genuine rapport and special relationship
between their “great” leader and the subjugated citizens. Yes, it would have been
perhaps easier and more fruitful to deal with the “devil” we knew rather than
with the “devil” we don’t - as represented by his son and successor, Kim Jong
IL. So while the possibility of a nuclear
confrontation has been reduced or postponed for the time being, the negotiating
process on nuclear issues between North Korea and the United States on the one
hand, and between North and South Korea on re-unification on the other, must now
seem to be more arduous and complex than when the old man was still alive and
in complete control. What the future holds
for the parallel negotiations remains mysterious and uncertain. Let’s hope that
all sides concerned demonstrate common sense, calmness, objectivity and statesmanship.
We cannot afford any bellicose statements, belligerent attitudes and chauvinistic
policies. Most of all, we need to resort to a more quiet diplomacy and discreet
negotiating process. The stake is too high
and we must succeed in this common endeavor, or else the “Pacific” era which has
come so close to reality will remain just a dream and our people will once again
be condemned to another decade or more of devastation and instability. Surely,
we do not deserve it, and America does not need it. The
security question is a pressing one for East Asia. All the economic accomplishments
of the region, and the vast potential that remains to be tapped, would be for
nought without a stable political order to under-pin it. Although East Asia has
never had the benefit of a regional security arrangement along the lines of NATO,
efforts are underway to develop a new model of security cooperation in the region.
The ASEAN Regional Forum, convening for the first time in Bangkok at the end of
July, will bring together the ASEAN countries, their dialogue partners, and concerned
parties for a series of bull sessions on common security concerns, as interpreted
in much wider context than in the past. The trust and confidence built through
this kind of on-going dialogue will, with any luck, allow us to worry less about
defense build-ups and expend more to improve the lives of our people. Granted,
Asia has its share of problems, but let me tell you why I remain optimistic, despite
these developments. First, I believe that
the absence today of a formal regional security framework in East Asia can be
worked around. While the region continues to grow, there is little danger of outright
conflict. In the meantime, the ASEAN Regional Forum, and perhaps-other similar
fora, will evolve and put in place trust-building measures to which all parties
can subscribe. Second, I believe that the
obstacles to regional peace and stability can be managed, given greater empathy
and inter-dependence among the countries concerned. I see three categories of
challenges facing Asia in the decade ahead: domestic, regional and extra-regional. The
first challenge lies in how governments juggle pressures for political and economic
reform. The question of reform is a thorny one, particularly for the governments
concerned. We should not realistically expect countries with long traditions of
authoritarian rule to convert into full-fledged Western-style democracies over-night.
The example of the former Soviet Union has made reformers in Asia wary of proceeding
too quickly on the road to liberalism. For some countries, such as China and Vietnam,
the dilemma seems to be how to liberalize the economy, while maintaining a steady
grip on political power in order to ensure the country’s political stability and
ethnic harmony. With their growing prosperity, these countries may become even
less receptive to prodding by foreign governments on what are arguably domestic
matters. This is not to say that democracy is a hopeless cause. As we have seen
in South Korea, Taiwan and Thailand, affluence, through expanding middle class,
can generate its own pressure for political reform. The
second domestic challenge is the issue of political succession. The death of Kim
IL Sung has left the future of the Korean peninsula an open question. Since North
Korea was not the only tightly-controlled regime in Asia, we can also expect similar
questions of political transition to arise in China and Vietnam, especially in
combination with increasing pressures for structural reform. At
the regional level, danger of another sort lurks. Disputes over territory and
natural resources have the potential to flare up and escalate if left untended.
Dialogue is one way to prevent such conflicts from breaking out. But dialogue
without inter-dependence is likely to produce little more than words. When there
is inter-dependence, grievous conflict is automatically ruled out, for harming
the other is tantamount to harming oneself. The increased economic inter-action
among the Asia-Pacific countries will, therefore, diminish the likelihood
of armed conflict. The disputes themselves may linger, but compromise will tend
to be the order of the day. Last, but certainly
not least, is the extra-regional challenge. The single most influential stabilizing
factor in Asia-Pacific since the Second World War has been the regional presence
of the United States. Like a benevolent big brother, the US made it possible for
its allies in the region to thrive and prosper by engaging in collective defense,
dispensing its aid programmes and granting proportionately greater access to its
market. The strategic rationale for this
generosity disappeared with the end of the Cold War. America’s relations with
its Asian partners have become more businesslike, as Washington attempts to gain
better access to their markets and stave off foreign competition in its own. The
heavy-handed tactics employed, and the loud and harsh words accompanying them,
are replacing the perception of America as a benevolent big brother with an altogether
different image. Uncomfortable as these
tactics make them, Asians generally still welcome America’s engagement in Asia.
The quality of this relationship depends on whether Washington will continue to
follow its policy of strident evangelism towards its Asian partners. There are
occasions that call for this sort of approach, but dealing with friends is not
one of them. Human rights, labour rights, environmental protection, and free trade
are all worthy causes, but surely, they do not necessarily take precedence over
regional peace and stability. Nor can they replace development and national cohesion
and harmony. Very often they demand trade-offs, and priorities must be set. There
is a sense that the United States is more interested in shaping Asia in its own
image than in accepting Asia on its own terms. If the US continues to want its
cake and eat it too, its Asian partners may find it increasingly difficult to
respond. Fortunately, senior US policy-makers are now beginning to recognize this
shortcoming in US policy, and the coming years should see less US rigidity and
righteousness, resulting in improvement in US relations with East Asia. President
Clinton has said that democracies do not make war on one another. I might add
that countries whose economies are inter-dependent and growing in step with one
another also have little reason to wage war. Before we can begin to share the
same values, we must share the same interests. The next decade will be one in
which Asia and the Pacific build these commonalties, through formal cooperative
frameworks and through their own development processes. We may encounter some
speed bumps on the road ahead, but we can look forward to an exciting ride!
Pacific
Regionalism and Global Business Strategies By Mr.
Anand Panyarachun
June 6, 1994 Vice
Chancellor David Smith, Co-Chairman Derek Burney, Distinguished
Participants, Ladies and Gentlemen: This
year marks the tenth anniversary of the founding of the Thailand Development Research
Institute. Over our first decade, the Canadian International Development Agency
has been one of TDRI’s principal supporters. CIDA’s generous assistance has been
instrumental in permitting us to achieve our current status as Thailand’s premier
independent policy research institute. As we now move towards financial independence,
I wish to express our gratitude to Canada for a form of aid that we consider to
have been imaginative, path-breaking and of great importance to Thailand. We
are also grateful for the linkages that this assistance has facilitated with Canadian
policy researchers and advisors, as well as between our two business communities.
The partnership that has developed between the John Deutsch Institute at Queen’s
University, and TDRI has provided Thailand with what will be a long-lasting “window”
on the Canadian policy community. These same linkages will also provide Canada
with an important window on Thailand, and through Thailand, many of the other
emerging regional economies in East and South East Asia. The
distinguished audience and conference participants gathered here this evening
attest to the strength of the relationships that have been developed under CIDA’s
assistance to TDRI and other regional research institutes. I am sure that the
proceedings of the next two days will serve to broaden and further strengthen
these linkages. It is an honour and a
privilege for me to address this Conference on Pacific Trade and Investment:
Options for the 90’s. I don’t think that there has ever been a time in recent
history when we could look to the future with such confidence. This is especially
true for the countries of the Asia Pacific region, which has been widely acknowledged
as tile world’s growth centre for the remainder of this century and beyond. The
experiences of recent years have created a momentum which should be sufficient
to sustain regional growth well into the future. Moreover, the expanding economic
linkages that have been a part of this process have created in the Asia Pacific,
within a period of less than two decades, one of the world’s a most integrated
and dynamic region. It is curious, and to some quite remarkable, that
these monumental developments have occurred without any conscious policy direction
by governments. Indeed, it seems that politics is having a difficult the catching
up to economics, as leaders of the Asia Pacific are now grappling with the need
to find an appropriate political order for the region in the post-cold-war era. I
would like to begin, however, by briefly reviewing recent economic developments
in the Pacific region. I think we are now in general agreement that, for some
the now, it has been primarily market forces that have discovered and exploited
the dynamic commercial opportunities of the Asia Pacific. Accordingly, it is market
forces that have accelerated economic development of Asia Pacific countries, increased
their economic weight in world trade and investment, and driven them at a rapid
pace towards greater economic integration. The governments of the successful countries
in the region, especially those in Southeast Asia, have played a supportive role,
first of all by following prudent macro-economic policies, and secondly by creating
an institutional framework in which markets can operate freely and efficiently,
with minimal distortionary influences from government regulation. The
recent growth experience of Asia Pacific countries has led the rest of the world.
This is especially so for China, East and Southeast Asia. At current growth rates,
these countries could become as large as Western Europe in eleven years. Fifteen
years after that, they would be as large as NAFTA. If purchasing power parity
adjustments were made, the time frame would be shorter still. Similarly,
the share of PECC countries in world trade increased from 35 per cent in
1980 to 42 per cent in 1992. Again, China, East and Southeast Asia accounted for
much of the increase it should be noted as well that the region as a whole also
expanded its trade with the rest of the world in a balanced manner. This is especially
obvious if Japan’s anomalous trade surplus situation is excluded from the calculations.
In other words, the Pacific region remains open to the rest of the world. It
has been the acceleration of intra-Pacific trade, however, which has attracted
the most attention in the 80s and 90s. The share of intra-Asia-Pacific trade in
world totals increased from 19 per cent to 29 per cent between 1980 and 1991.
Putting it another way, nearly 70 per cent of all Asia Pacific trade is with fellow
Pacific nations. In dollar terms, intra-Asia-Pacific trade has already surpassed
intra-EU trade. The dynamism of the emerging
Asia Pacific region is even more remarkable, at least to some, when it is recognized
that it has been basically market-driven, and achieved in the relative absence
of government direction. The World Bank, for instance, explains the phenomenal
economic successes of China, East and Southeast Asia as being due mainly to their
pragmatic and “market friendly policies”. In particular, macro-economic stability,
investment in people, and outward orientation, were the common attributes of their
economic success. Deliberate inter-governmental efforts to promote regional economic
integration are very low in the list of explanations of what has happened. As
I have already mentioned, efforts at formalizing economic integration in A SEAN,
including the recent implementation of the ASEAN Free Trade Area (AFTA), have
lagged far behind economic forces generated by the market. The success of my own
country, Thailand, has been cited as having been attained without “visionary”
leadership A strategically important question,
therefore, can be posed at this point. Past economic successes of Asia Pacific
have clearly been market-driven, export-oriented and individual-country-based,
rather than the result of concerted international or regional coordination, For
the future, therefore, should we not simply pursue these same policies which have
worked so well in the past? Why not take the advice of some APEC members that
APEC remains as simply a consultative body? A grand trade liberalization plan
for APEC, according to this view, is unnecessary, and maybe even inappropriate,
if it were to put at risk or even supersede the new multilateral trade framework
recently established at Marrakesh. While regional trade liberalization on the
scale of that being undertaken in AFTA might be appropriate, grander schemes for
all of APEC, for instance, might be potentially dangerous. Time
consensus that emerges among Asia Pacific leaders on this crucial issue will largely
define the Asia Pacific region for the rest of this century, and weIl into the
next. I am inclined to disagree with these more cautious views about the future
role of APEC. I would urge our leaders to be bolder in hastening the process of
regional economic integration in the Asia Pacific. “Vision” is not really the
issue here anymore, since market forces and past successes have already shown
the way. I think, therefore, that consideration should be given to finding ways
to achieve broader region-wide liberalization. Unlike
past GATT trade rounds, the developing countries in APEC participated actively
in the most recent Uruguay Round of trade talks. In the light of our successes,
I would claim that we now have the confidence and the ability to push APEC into
the fore-front of trade liberalization. By doing so, APEC will lead, rather than
follow, the process of world trade liberalization. Notwithstanding
government decisions, market forces will continue to be the primary driving forces
of Asia Pacific economic integration. The question is really whether governments
will hasten the process and assist market forces to accelerate this trend, or
will remain on the sidelines. While
a “grand design” to liberalize trade and investment would have the greatest impact,
other less conspicuous measures could have considerable effects on regional economic
integration. As businessmen, we all understand the importance of a stable and
predictable economic environment. Thus, region-wide attempts to ensure predictability,
transparency and consistency of commercial and tariff regulations would contribute
towards promoting intra-regional trade and investment. Greater coordination of
and exchange of information about macro-economic policies would also be helpful.
Greater integration of newly emerging economies of Indochina would make a significant
contribution. Let me now turn to the implications
of Asia Pacific economic integration on global business strategies. Globalization
is a fashionable word that means many things to many people. The Canadian communications
guru, Marshall McLuhan, coined the phrase “global village” almost 30 years ago,
to refer to the ways in which modern communications and information technology
would shrink the planet and eliminate many existing barriers to international
transactions of all types. The recent successes of the East and Southeast Asian
economies is one indication of the implications of the forces which he was describing. Globalization
implies a radically different perspective on the way that firms conduct business.
The focus is on a “global market place” rather than on segmented national markets.
The technologies of telecommunications and transportation, combined with many
financial innovations, have made geographical differences a minor inconvenience
in global interactions-be they for commercial, social, or other reasons. Realizing
that it would be only self-defeating and counter-productive to do otherwise, forward-looking
governments are acceding to the forces of globalization by liberalizing their
countries’ trade practices. Globalization
and technical progress often mean also that mass production gives way to low-cost
customization, allowing for a proliferation of high-tech niche industries. While
product innovations will take place at an increasingly rapid pace, imitators will
also be able to “catch-up” and compete for your market more quickly. In these
circumstances, firms need to be dynamic and flexible. Production
processes are also becoming increasingly globalized. Functions such as design,
engineering, component production, and assembly will be able to be located according
to relevant cost factors for each operation. These will not necessarily be in
the same place. These are some of the implications
of “globalization”. From even this brief review, it is apparent that some of these
exotic concepts do not apply so readily to the circumstances of some of the developing
countries of the Asia Pacific. The rapidly growing incomes and increasing liberalization
of these economies -- and I think here particularly of China and Vietnam -- will
mean an expanding market for mass- consumption products. Standardized products
imported into these countries, or produced locally, often by branches of multi-nationals
will still be the predominant pattern of international economic inter-action with
many developing APEC economies. Global markets notwithstanding, the provinces
of China are, to all intents, separate and distinct. The
extraction of natural resources and energy exploitation are other “traditional”
activities of multi-nationals which will be have continued importance in the
future. There is nothing “global” -- at least in the more exotic sense of the
word -- about these activities, which require straight-forward negotiations for
market and investment access. Political stability, trust, and good relations among
States provide the necessary back-drop to the establishment of such commercial
ties. The post-cold-war era provides the best opportunity for countries in the
Asia Pacific to usher in a new order that builds mutual trust and confidence among
nations. The concept of “globalization”
seems more applicable to the emerging class of affluent, sophisticated, urban
East and Southeast Asians, Demand will grow very rapidly in this market for differentiated
“high tech” products, for international communications services, and for new technologies
to deal with pressing urban issues such as transport and environmental management.
Many new markets are emerging here, and there will be intense competition to participate. On
the production side, many of these countries now have the economic sophistication
to move “up the ladder” of comparative advantage, to compete in the production
of more capital and skill-intensive products, and even to participate in product
innovation, design and marketing. In the case of countries like Thailand, this
is now critical in sustaining our recent economic success. As business and investment
continue to migrate in response to new opportunities and to changing comparative
advantage, it is interesting to observe that entrepreneurs and business groups
in countries such as Thailand, Malaysia and Indonesia are now playing a role in
the transfer of investment and new technologies to China and Indochina. These
investors are now sometimes competing directly with multinational arms of Japanese,
North American and European firms. Past
patterns of vertically integrated production relationships seem now to be giving
way to more equal business partnerships, characterized by horizontal inter-dependence.
In other words, economic convergence between developed countries and the NIEs
and emerging NIEs will mean that time latter two groups represent distinct sets
of investment and market opportunities from the economies of China and Indochina. In
addition, I also observe that the rapidly expanding investment needs, in both
the private and public sectors of developing APEC economies, will generate enormous
opportunities for trade, technology transfer and financing services. By their
nature, financial services will be those that are most characteristically “global”
in the sense I discussed earlier. I foresee that the financial services sector,
which has already grown significantly in recent years will continue to be an area
of expanding opportunities in the APEC region. Capital mobility -- especially
in the Asia Pacific -- is linking regional financial markets in an unprecedented
manner. Among other things, this is presenting major challenges to governments
to reform their financial and tax systems. Increasing financial integration will
also have serious implications for the coordination of macro-economic policies
in the Asia Pacific. I would like to conclude
by simply under-scoring the fact that trade and investment opportunities in the
Asia Pacific region will continue to expand rapidly. The trend towards even greater
intra-regional trade and investment will lead to further economic integration,
with or without active government direction. There is much that governments can
do to facilitate and hasten this process, however, I also believe that, in view
of the region’s dynamism and economic size, its leaders should take further initiatives,
at the unilateral and regional levels, in pursuing economic liberalization. This
would further enhance the region’s vast economic potential, to the benefit of
the citizens of each of the region’s economies. In
regard to business strategies, it is clear that a variety of distinct markets
and opportunities exist -- from “traditional” trade and investment possibilities,
to those which need to be looked at from a “global” perspective. There will also
be intense competition to exploit these opportunities. However, the returns will
be equally rewarding. I wish all of you
the very best in your deliberations on these and other important issues over the
next two days. I hope that the fruits of this meeting will lead to further collaboration
among you and other colleagues from the research, policy, and business communities
in the countries of the Asia Pacific. Thank
you.
Implications
of Rapid Economic Growth For Thailand’s Political
Structure
By Mr. Anand Panyarachun
5th International Conference
on Thai Studies
Soas, London
July 5, 1993 Outsiders
looking to Thailand are usually impressed by its economic performance. In the
last three decades Thailand has chalked up economic growth rates that have averaged
in excess of 7 per cent per annum. From an economy once consisting mainly of poor
farmers, a largely Chinese trading class and a few wealthy individuals in Bangkok,
we now have a more diversified economy and a more complex social structure to
match. Those whose last visit to Thailand was in the late 1950s, will see vast
changes in the material fabric of Thai life today. If
you probe deeper and consider the way Thais think about their own society and
the world around them, there is less change to discern. You will, however, sense
considerable anxiety, because Thais have increasingly to square their very rapid
economic changes with the much slower changes in their beliefs and assumptions
about their society and the world. Furthermore,
different groups of people have benefited from economic growth at different rates,
leading to considerable shifts in the focus of economic and financial power. Again,
people’s assumptions about the functioning of the social system need to be adjusted. It
is in the political sphere that many of the anomalies that arise from rapid economic
growth come to a head. Unlike in the economic sphere, we of this generation have
not been left with a healthy legacy from our forefathers. The Absolutist State
of the early Ratanakosin era gave way to benevolent and enlightened absolutism
of Rama IV and Rama V. In their pursuit of modernism these benevolent autocrats
created a Western-style bureaucracy. It was a necessary component of their drive
for modernization, but in the end the bureaucracy turned against its masters and
in 1932 took over the helm of the state, supposedly in the name of the people.
Between 1932 and 1973, the civilian and military bureaucracies jointly held undisputed
control of the country’s economy and polity. The
long dominance of the bureaucracy over the political life of the country has been
detrimental to the development of rational political structures. The Absolutist
State acted paternalistically to raise the welfare of the masses as part of its
ideology. During the era of bureaucratic dominance, a similar emphasis on paternalism
continued. Instead of its being part and parcel of a monarchist ideology, which
emphasizes the loyalty to and the obligations of the King, in the post-1932 world,
the State--an abstract entity--was to be supreme and the fount of paternalism.
Ordinary people competed to obtain a share of the paternalistic largesse, but
they did not have any say on how the State was run, still less on who was to run
it. These prerogatives belonged firmly and squarely to the bureaucracy, particularly
its military wing. In this atmosphere,
it is not surprising that the development of political parties did not progress
very far. For one thing, their lives were often cut short by the frequent coups,
but even when they re-emerged during the infrequent democratic interludes, they
were short of policies, platforms and ideology. They had little money and lacked
good organization. Because they could not aspire to capture State power, they
continued to look at the State as the fount of patronage and encouraged their
voters to believe the same, by promising that they, rather than their rivals,
would be better at extracting that patronage from the State. During
this era, participation in affairs of State was not so much unthinkable as futile.
A culture of dependence on the largesse of an almost alien State took hold among
the non-bureaucratic sections of the population, not least among the businessmen
who wanted to move ahead. However, since
businessmen were the spearheads of Thai economic growth, their relationship with
the State evolved more rapidly and harmoniously than other sections of the population.
From being mere clients of the bureaucratic elite (primarily the military), businessmen
soon forged an alliance with them, and began to use State power to ensure monopolistic
control for themselves and protection for their industries. The
increased pressure of business interests among the bureaucracy soon led to the
erosion of the solid core of organizational unity that characterized the military.
After 1973, the total dominance of the military over the Thai polity in the previous
four decades could no longer be sustained. Extra-bureaucratic influences began
to exert more pressure on the levers of the State. Political parties, however
weak and disorganized, had now become permanent fixtures of government, becoming
among other things conduits of power for provincial business interests. Meanwhile,
on the economic front, radical changes took place in the international economy
in the aftermath of the oil crisis of 1973. Being an export-driven economy, the
need to adjust to the more demanding international environment forced the Thai
government to liberalize its economy, strongly led by its economic managers, commonly
termed the “technocrats”. The continued
growth of the economy also led to a massive expansion of the business sector,
creating in its train a sizable middle class that no longer needed to depend on
government employment. There was also a
discernible shift in the middle classes’ approach to politics. Although many businesses
continued to cut deals with politicians on behalf of their own interests, there
are now increasing numbers who disdain such deals and whose conscience and professional
management have led them to oppose such practices. Instead, these individuals
seek to promote more their class interest, to use an expression now somewhat out
of fashion. The growth in numbers and prestige of trade associations such as the
Federation of Thai Industries, the Board of Trade and so on is testimony to a
different outlook among businessmen. These organizations have become lobbyists
for large-scale legal and regulatory reforms. Associated
with this has been the growing internationalization of the Thai economy, which
demands that Thai businesses and other actors in the economy, not least the government
itself, increasingly conform to standards that are set abroad. These overseas
standards have to be met partly because of the competition in the marketplace.
However, we should not overlook direct pressures through such multilateral mechanisms
as the GATT or the unilateral coercion of the infamous Section 301 of the U.S.
trade law. In their attempts to come to
terms with the Thai State, the progressive sections of the business community
are finding that they are ill-served by the political parties, whose evolution
has been far less rapid than that of the business world. Their attempt to penetrate
to the corridors of power via the political parties have until recently been largely
unsuccessful, mainly because traditional political leaders remained suspicious
of these businessmen, although the events of 1991/1992 have changed that somewhat. Generally,
however, political parties still prefer to deal only with businessmen who have
stuck to the timeworn tradition of seeking special favours for themselves in exchange
for contributions to the parties or to party members. The reason for this preference
is clear. Parties need enormous sums to finance election campaigns, which have
become more and more expensive over the last two decades. Money-politics
has a long historical root. I have alluded to the political culture in which most
Thais, particularly rural Thais, look to the State as an alien power. In this
respect the State is a bit like the spirits and goblins that are such an important
part of Thai beliefs. To be sure, the State, like these extra-terrestrial beings,
has to be placated, but special favours can also be asked of it. In both cases,
there are procedures for obtaining favours, and there are selected individuals
who mediate between the requestor and the alien power. In the old days the mediators
between the State and the individual were the village headmen and the kamnans.
Now, the local Member of Parliament is increasingly assuming that role. While
this view of the Alien State, acting as a patron, is steeped in tradition, money-
politics is a cancerous outgrowth of the tradition. This cancer is on its way
to reaching catastrophic proportions, as it is affecting the economy on which
our political system has been feeding. There are now whole areas of business where
kickbacks are routine. It has been said that Thai industry rests not on “know-how”
but on “know-who”. Another impediment
to the development of clean government in Thailand is the over-developed sense
of gratitude ingrained in the Thai character. If you do me a good turn or do me
a personal favour, I and my family, shall forever remain indebted to you. Payment
in kind -- votes promised and delivered -- is a rule rather than an exception,
particularly in the rural areas. Money-culture
is also a worrisome feature of our society. So long as wealth, irrespective of
how it is derived, is viewed with awe and respect and tends to be synonymous with
power and authority, potential candidates and members of parliament are directly
or indirectly encouraged to go out of their way to amass fortunes. Wealth
commands following and status and is often sought after unscrupulously. Men and
women of integrity and honesty consequently find electoral process and politics
incompatible with their moral ethics and show reluctance to be involved. Corruption
is indeed a fact of life in Thailand today, but it is a fact of life which is
widely abhorred. Thus the military has found in corruption among our elected politicians
the best excuse for coups d’etat since the demise of the Communist threat. It
is of course an excuse, but the excuse has worked because there is a deep thread
of public disaffection with electoral politics and its associated corruption. There
is thus a new label, a new justification for attacking government institutions,
including democratic ones. The watchword is “corruption”. The
metaphor of corruption as cancer suggests that the root cause of corruption arises
from deep within the society, and that its cure will be daunting, perhaps even
unattainable. The current electoral law does not have sufficient safeguards to
deter the influence of money-politics, and the system of multiple-member constituencies
may actually encourage it. Political parties continue to be a euphemism for clans,
and have only very recently begun to attract well-educated and experienced individuals
to go through the electoral process. Under-lying
these problems is the vast social and economic gap between urban and rural Thailand,
which generates a set of attitudes on both sides that do not make for good and
responsible citizenship. Rural Thailand looks to Bangkok as the eternal fountain
of wealth which is to be tapped by their members of parliament, and opts
to elect those candidates whose main qualifications are their ability to
deliver the goods to their home constituencies. Urban Thailand tends to look down
on these representatives who place parochial interests over and above greater
needs of the country. Consequently, while Bangkokians have taken to the streets
to fight (and die) for democracy, they have tended to be quickly disillusioned
by the results of the democratic elections for which they fought. The lack-luster
performances of a large majority of members of parliament have given rise to this
disenchantment. There is, let there be
no doubt about it, a strong current in Thailand, as in Japan and Italy, in favour
of “clean hands” in politics. The central question which awaits an answer is “Who
will bell the cat?”. We do not have the institution of the magistracy that has
been such a powerful instrument in the current revolution in Italy, nor is our
prosecutor’s office as potent as the Japanese one. Consequently,
many among us have always had a hankering for “knights on white horses” to release
us from the thrall of corruption, notwithstanding the fact that many of these
“knights” were themselves notably less than paragons of honesty and integrity. Do
we then have no grounds for hope at all? I believe we have, but the first condition
for hope and for solution is to stop searching for the “quick fix”. Despite a
long tradition of coups and general political instability, I believe that Thai
history has been marked by slow, continuous evolutionary change rather than by
radical moves in political structure or ideology. I therefore expect future changes
to be more in that tradition -- a muddling through, rather than a sudden dawn
of enlightenment. If we put ourselves in
that frame of mind, then I believe there are some grounds for hope. Thailand has
been singularly fortunate among the developing countries for being a relatively
homogeneous country, ethnically and religiously, and with an enlightened and highly
revered monarchy as the focal institution for the nation as a whole. Because there
are no over-riding ethnic, religious or ideological differences among the various
sections of the population, pragmatism is allowed a full play in our approach
to political and economic problems. It
is because of these reasons that the wounds inflicted by the events of May 1992
are being quickly healed. Since then, the
institution of the parliament has emerged considerably strengthened. It appears
that the current government will last through its normal term. In any case, there
is every reason to expect that the current constitutional system will not again
be aborted by another coup d’etat. If so, then a few more successive elections
will ensure a firmer foundation for the full development of political parties
and system in Thailand. The balance of political forces will hopefully shift from
a patronage-based political system toward a more issue-oriented one. If this happens,
politics will begin to attract a different and, I dare to hope, a better kind
of politician into the fray. Finally, the
long period of economic growth that Thailand has been enjoying will begin to yield
political dividends. Thais are now living in urban areas in larger numbers than
ever before. We all know that this rapid urbanization is exacting a high social
toll, but in the urban constituencies, with higher educational content, will be
a force for improvement. There is an urgent need, however, to raise the overall
level of education. These are the sorts
of things I see occurring “naturally” in the normal course of events. That does
not mean that we cannot give history a little nudge. I have already identified
the underlying cause of the Thai political malaise to be the vast social and income
gaps, between the rural and urban populations. Attacking this problem is to me
an essential ingredient in any attempt to improve the political climate of the
country. A two-pronged approach appears
to me to be necessary. At the individual level, improving the rural population’s
access to a higher level of education is an essential first step. While more than
90 per cent of children now attend primary school, attendance at the secondary
level is still low. For the children of today’s farmers to improve their lot in
a more competitive world of the future, a longer period of schooling seems be
a necessary first step. Expanding educational
opportunities without a vibrant economy in rural Thailand will lead to its rapid
de-population-witness what is happening now. The individual rural family’s access
to education must also be complemented by its access to more rural jobs and information. It
is imperative that the industrialization now taking place in Bangkok and its environs
be spread more evenly around the country. If and when this takes place, we can
see an emergence of a rural middle class that can make better and more effective
use of their greater autonomy in managing local affairs and issues. Decentralization
of authority and the national budget to the provincial level would also accelerate
the efficacy of democracy at grass roots. Success
of democracy is also predicated upon well-informed public. The right to be informed
and un-encumbered access to information is a necessary pre-condition for active
public participation in decision-making processes. This trend is becoming increasingly
evident in present - day Thailand. All
in all, therefore, despite a history in which political development lags well
behind the growth of the country’s economy, I am cautiously optimistic that, with
proper management, politics in Thailand will become more participatory and cleaner--and
above all, more transparent and meaningful. When
one looks at Thai history, one can see that the Thai nation has weathered many
storms over the past 700 years. Because of our resolve and fine sense of balance,
we have managed each time to overcome these crises and survived as a national
entity. True, we may be agonizingly slow in coming to a solution, but in the end
we always muddle our way through. I have no reason to believe that history will
not repeat itself!
The
Future is Ours to See Closing Address by H.E. Anand
Panyarachun
At the 42nd PATA Annual Conference
in Honolulu,
Hawaii
May 13, 1993 Distinguished Participants:
Ladies and Gentlemen: (Introduction) In
Thailand, I am known for wearing many hats. Today I have been asked to try on
a new one: to forecast travel trends. As an outsider to the travel industry, I
can only offer a layman’s perspective of what I see taking place. I shall touch
on global as well as regional trends that are relevant to the industry. I shall
look at the tourism situation in Pacific Asia - how it has evolved, what factors
are affecting it, and what the future holds. Within the span
of a few years, it seems, the world has suddenly become a vastly more complex
place. The advent of the so-called New World Order has deluged us with a bewildering
array of plausible scenarios of what the future holds. We now recognize that the
world is being shaped by forces that have grown and evolved independently of ideological
considerations. The currents of change
are a mixture of forces old and new, contrary and complementing. Just as we are
finding our bearings, it seems that everywhere, norms of behaviour and fundamental
axioms are being called into question. Assumptions about how the world works,
in diverse fields ranging from international politics to mathematics are being
challenged by new developments and theories. (The
Attractions of Pacific Asia) Tourism
in Pacific Asia has evolved as well. Pacific Asia has long been a popular destination
for romantics of all persuasions. The early travellers were people with missions
- adventurers, merchants and missionaries, who enthralled their countrymen with
stories of the mysterious East. Adding to the mystique, popular art, novels and
musicals tantalized winter-weary Europeans with their portrayal of life in these
tropical climes. With advances in technology,
Asia came within reach of the masses. Television became the vehicle for arousing
the people’s curiousity about Pacific Asia’s exotic locales. The globalization
of business stimulates travel and its inseparable activity, tourism. The
yen to travel has been made much easier to fulfill. Economies of scale and stiff
competition have made air travel affordable for millions of people. In response
to the growing demand for travel, innovations have been introduced to aircraft
in order to cater to the whims of travellers. Airplanes are getting bigger, more
comfortable and luxurious. Flying has become a more common feature of life. With
commercial aviation opening up the world, the hotel industry naturally followed
suit. Now, not only do chain and independent hotels vie to provide travellers
with all the comforts of home, they are also branching out into the convention
and conference business. This has allowed professionals from around the world
to conduct business in pleasant surroundings. Never has travel been made easier
or more attractive. With these developments,
it was no wonder that Pacific Asia became a top tourist destination. The uniqueness
of the region’s rich cultural heritage, ancient architectural splendours, and
natural beauty, as well as the grace of its people more than lived up to the promises
of the travel brochures. What is more, all this came at a very affordable cost. (The
Impact of Economic Development) At
the same time, countries in the region are becoming more industrialized and developed.
With more leisure time and more disposable income, a new class of travellers within
the region was born: the generic tourists. These are people whose main purpose
when travelling is to shop and visit famous landmarks. These are average working-age
people who pay their own way for a vacation or are rewarded by their employers
with an all-expenses-paid package. The increasing affluence of Pacific Asia means
an increasing number of tourists will be from within the region, and their tastes
will influence the way tourism is conducted, as I shall explain later on. With
industrialization comes not only affluence, but also a host of side-effects that
inevitably affect tourism. Modernization carries a price. The trick is to look
at the price tag before buying. The problems
will be familiar to anyone who has visited mega-cities in Asia and Latin America.
We can dismiss them as growing pains - after all, didn’t England go through the
same ordeal during its industrialization period? - but it may be more useful to
analyze and see what we can do about them. For
many of these mega-cities, rapid growth has outpaced the development of infrastructure.
Infrastructure, which may be quite adequate for the local populace may be stretched
far beyond its capacity by years of double-digit growth. A concurrent boom in
tourism only adds to the strain. The Bangkok
of today, for example, is virtually un-recognizable from the Bangkok of fifty
years ago. As the nation’s booming industrial and business centre, the city is
a magnet for migrant workers from all over the country. Population
growth has created demands on the city’s resources far in excess of the expectations
of its founders. The canals, which once served navigation and drainage purposes,
giving Bangkok its nickname Venice of the East, have been paved over to make way
for more roads. Huge shade trees lining the avenues have been cut down to make
way for more lanes. The temple spires that gave the city’s skyline its distinctive
look have been obscured by a geometric jumble of concrete and steel. Bangkok from
a distance is practically indistinguishable from any other modern metropolis. With
the growth in population and the economy, the relaxed, unhurried lifestyle that
has evolved over the generations is being replaced by the high-stress, fast-paced
tempo of cosmopolitan life. The city’s notorious traffic jams require many of
us to leave home for work before dawn and return late in the evening. It seems
we are working harder and making more money, but we have less time to be with
our families and enjoy ourselves. The environment
is suffering as well. Pollution and destruction of natural resources have reached
alarming proportions. With all these troubles, it would seem tourism would be
the least of our problems. Yet, they are related. The same combination of mis-management
and narrow self-interest that undermines the local quality of life also threatens
the very qualities that make a country appealing to visitors. (Impact
of Economic Growth on Tourism) The
tourism industry needs to take the longer view with respect to these problems.
Tourism is closely linked with development. Many developing countries depend on
the industry for a large part of their income. Tourism can thus be a force to
ensure that development proceeds in a balanced and sustainable manner. The
environment and infrastructure are issues that affect tourism directly. Pollution,
is it land, air, water or noise, should not be allowed to ruin what should be
a positive holiday experience. Despoliation of natural attractions, such as the
littering of national parks and the destruction of coral reefs, is bound to decrease
a country’s tourism value. It will not do to allow the situation to deteriorate
to a point of no return, before taking action. Tourism
would be a major beneficiary of conservation and anti-pollution efforts. It therefore
makes sense for those in the tourism business to be at the forefront of efforts
to fight environmental damage of every kind. This has been slow to happen, for
obvious economic reasons. (The Tourism
Resources Dilemma) There is a dilemma
here, involving something economists call public goods. These are things that,
once provided, can be equally enjoyed by all and cannot be withheld from anyone.
The tourism industry in many developing countries relies to a large extent on
public goods: things like image, air and water quality, infrastructure, and so
forth. Public goods are not always free.
In most cases, the public pays for them through taxes. In the tourism industry,
operators have the greatest stake in preserving the environment, but lack the
economic incentive to do so. Take, for
example, an average-size hotel that is considering treating its waste water before
releasing it into the sea. The equipment and the costs of operation and maintenance
require a substantial investment. There is no guarantee that the hotel’s competitors
will take similar action and bear similar costs. Nor does the hotel’s action result
in perceptible improvements in the sea water quality. In other words, the individual
operator’s marginal utility is so small relative to the cost, and the benefit
of its action so diffuse, that there is no economic incentive for him or her to
take civic-minded action. A unilateral
commitment to environmental conservation means higher costs, which in turn means
either a smaller profit margin or higher prices. Individual business operators
do not want to pay for infrastructural improvements and environmental conservation
if it means reduced competitiveness. Based on the peculiar properties of public
goods, environmental protection is an external cost no one wants to bear. In
the short term, it may be feasible to seek maximum profits without caring about
external costs. In the long run, however, these external costs have to be factored-
in and accounted for. Although the bottom-line
usually determines business and management practices, moral factors must also
be considered. As tourism often has a major impact on the host country, tourism
operators must be aware of their responsibility towards society. They must realize
that they have an ethical obligation to serve to the best of their ability their
fellow citizens as well as their clientele. In these times when tourists are more
ecologically conscious than ever, tourism operators will be amply rewarded for
doing what is right for society. In the
meantime, a higher authority is required to provide the moral stimulus, enforce
collective action and plan incentives to ensure that the burden is shared equitably
among those who would benefit most disproportionately. In
Thailand, the government plays a leading role in both infrastructural improvement
and environmental conservation. Ring roads and expressway systems now under construction,
promise to ease the lives of Bangkok commuters in a few years. The telecommunications
network is being expanded apace. Plans for a new, state-of-the-art international
airport serving Bangkok have been approved. To
encourage environmental conservation, an Environmental Protection Act was recently
passed. Under the Act, monetary, fiscal and tax incentives are provided to promote
private sector participation. The National Environment Board, or NEB, is being
upgraded to a ministerial-level body. Minimum standards are being set to control
pollutants at their source. The NEB is empowered to designate environmentally
protected areas and pollution-controlled areas to facilitate conservation measures
by the government. The first areas to be protected under this provision include
Phuket, Pattaya and Phi Phi Island, some of Thailand’s most popular resorts. The
brunt of the task, however, must fall on the travel industry itself. It is heartening
to note that an environmental consciousness seems to be emerging in the industry
at large. The European Association of Travel Agents has launched the so-called
Blue Flag campaign, under which travel operators in Europe will send tour groups
to only hotels and resorts that meet a certain environmental management standard.
Closer to home, the PATA has a Code of Environment-Friendly Tourism, to which
the Tourism Authority of Thailand subscribed last year. The code requires all
members to set their own environmental standard requirements to promote environmental
awareness among tourism operators. Locally, the environment wave is catching on
as well. By the very nature of tourism,
we must constantly ask ourselves if our efforts are adequate. The travel industry
faces a peculiar situation, a “Catch-22”, if you will. In order to keep attracting
more visitors year after year, a country’s attractions must be preserved and cared
for. Yet, as more visitors flock in, such maintenance becomes more difficult.
A tourism boom attracts investors and support industries, adding to the strain
on local resources. The crux of the dilemma,
as I have mentioned, lies in the economics involved. From a business standpoint,
it does not pay for a business to undertake environment-friendly measures, only
to lose its competitive edge through higher costs. Taking a broader view, however,
efficient and cost-effective environmental conservation, undertaken collectively,
can actually enhance competitiveness vis-a-vis competitor resorts and countries. (Tourism
and Cultural Diffusion) For all our
efforts to minimize the adverse impact of tourism on local life, we can never
entirely dis-engage the two. Whether we like it or not, tourism plays a role in
shaping local life. Unlike any other industry, tourism is about contact with the
unfamiliar. It satisfies that singularly human urge to explore alien settings
first-hand, even if it is just buying souvenirs at a roadside stall. Tourism involves
not only monetary transactions, but also exposure - to different viewpoints and
outlooks, customs and mores - for visitor and host. As a result, both walk away
from the encounter with a change in perspective, no matter how slight. It
is this exposure - this feeling that one is not in Kansas any more - that makes
travel special. I see two major trends that will have an impact on Pacific Asian
tourism in the years ahead. One is the Westernization of Asia, in particular the
newly industrializing countries. The other is the growth of mass tourism, the
invasion of the generic tourists. It is
not difficult to see the Asian “love affair” with the West. Michael Jackson and
Madonna are readily recognized even in restrictive China. Fast-food hamburger
outlets and pizza parlours are staking out territory in practically every Asian
capital. Disneyland Tokyo has proven wildly successful. The reverse flow of tourism
from East to West suggests Asia is not only a destination, but also a source market
of great potential. The popularity of Western
culture and the globalization of business, among others, are potent forces that
are transforming the face of Asian society. This Western influence is changing
the way business is conducted. It is changing consumer habits. In short, it is
changing the way we live. Some call it
cultural imperialism. I call it an inevitable course of development. The gospel
of materialism, preached through glossy television commercials and shows, is pervasive.
It promises to fulfill our cravings for comfort and pleasure, for prestige and
status, without any great effort on our part. Use this product and it instantly
identifies you as a suave individual. The creed of materialism is a great equalizer. Call
it what you will, Westernization or modernization, this phenomenon has the potential
to erode the individuality of cultures. Culture is becoming increasingly homogenized
around the world, with Western culture setting the trend. This may gradually undermine
the very core of tourism. Tourism is one industry that thrives on differentiation.
You don’t fly half-way round the world to see something you already have at home.
You want something different, something that’s not available anywhere else. Disturbingly,
we find travel destinations becoming increasingly like source countries. The
effects of modernization apart, tourism develops its own dynamics that contributes
to this trend. The age of the swashbuckling traveller is past. The proliferation
of generic tourists requires that accommodations be familiar and entertainment
accessible. Travel will become an increasingly sanitized experience, removed from
the reality of the host country’s society. The element of adventure, which implies
some possibility of risk, will be minimized. This
reflects what I call a ‘theme park syndrome.” Theme parks are safe environments
where roller-coaster rides satisfy our craving for excitement; animal and animatronic
shows with their informative voice-overs entertain and educate us; and gift shops
around every bend beckon our wallets. Theme parks give us enough of the unfamiliar
to stimulate our sense of adventure, while providing all the creature comforts
of home. As developing countries seek to
attract tourists, and as generic tourism increases, the qualities that make theme
parks so successful will become more evident. Culture is being tailored and packaged
for the mass market. Indigenous ceremonies are simulated for the benefit of snapshot-happy
tourists. Tourist traps are mushrooming in the unlikeliest corners of the globe.
Simulated adventure will become more attractive. Conservationists
bemoan the commercialization of culture, but this is according to the laws of
the market. The long-term effect of this trend is that we will no longer be able
to recognize the difference between one metropolis and another unless we visit
the tourist attractions. The long-term
survival of the tourism industry depends on maintaining differentiation, not on
promoting homogeneity. Preservation of cultural uniqueness and identity is crucial,
for once homogenized, there is no turning back. From
this angle, we can readily discern the new frontiers of tourism. The splendours
of Angkor Wat, Myanmar (or what was known as Burma) and Southern China, all easily
accessible from Thailand, are some of the unspoiled attractions awaiting the adventurous
traveller. Should the governments ruling them decide to promote tourism, I fear,
they can be quickly ruined by the inevitable rush of generic tourists. Management
and planning, preferably by travel associations such as the PATA, are required
to ensure their enjoyment by future generations. The
fortunes of the travel industry are, of course, also linked to forces within which
it has no control. Global economic downturns can cause a slump in tourism. With
the Cold War over and countries setting up trade blocs and bracing for trade wars,
it is possible that we will have a rough ride up to the 21st century. Worldwide
competition for tourist dollars under such conditions is tougher. it
is likely, however, that tourism in Pacific Asia will emerge relatively unscathed.
The growing volume of Asia-Pacific trade and increasing economic cooperation within
the region will to some extent cushion us from severe shocks. (Conclusion) The
best way to stay competitive is to follow the law of comparative advantage. Make
the most of the resources you already have. Build on the advantages already existing,
rather than attempt to emulate the success of others by starting from scratch.
The successful countries will be those that manage to strike a balance between
private gain and public responsibility, between homogeneity and differentiation. As
the world shapes tourism, so does tourism change the world. It is up to us to
make tourism a force for the common good. The most pressing issues of the day
require us to take a pro-active approach, to ensure that tourism goes hand-in-
hand with sustainable development. This way, the future is not only ours to see,
it is ours to build.
IFCT
Nomura/JAFCO Holdings Co., Ltd. Seminar on Venture
Capital Business
Address by Mr. Anand Panyarachun
in Thailand
April
29, 1993 Distinguished Guests, Ladies and Gentlemen, I
am indeed honoured and pleased to be invited to address this impressive gathering
of entrepreneurs. We are well into what many people refer to as the “Pacific Decade”,
the decade in which economic growth in the Asia Pacific will out-pace that of
any other region in the word. The thrust throughout Asia will be to increase value-added,
export oriented industrialisation, expand technological development, and to massively
improve infrastructure. I sincerely believe that the nucleus of that thrust will
come from entrepreneurs like yourselves. I
would like to begin my address by highlighting a major economic development in
South East Asia. ASEAN At
the ASEAN Summit held in Singapore in January 1992, member-nations endorsed the
formation of an ASEAN Free Trade Area (AFTA). After a decade of buoyant economic
growth, the Governments of the ASEAN nations have boldly stepped into a new era
of regional economic liberalisation and integration. The
vision to attain free trade within ASEAN in 15 years is another “feather in the
cap” for ASEAN and its member countries. Already, ASEAN has been recognised and
respected within global circles as a cohesive economic unit intent on promoting
regional cooperation Now with the creation
of AFTA, this new spirit of economic cooperation will not only raise trade and
investment linkages between member countries, but also strengthen and better insulate
the region against recessions and protectionism in the world market. Furthermore,
the economic development of ASEAN will have far reaching effects on other nations
in the Asia Pacific. Because of its strategic location and vast natural resources,
the region will see increased trade activities with its neighbours, particularly
China and Indochina. I am sure that many opportunities can be created to combine
the respective strengths and resources in the finance and investment areas of
ASEAN and its Asia Pacific neighbours. Thailand,
being a member of this privileged group of economies, is poised to regain its
economic momentum and shift into a higher economic gear. Thailand Thailand
has made a dramatic transition from an agricultural and resource-based economy
into a more export-led economy - one that combines agriculture, agro-industry,
manufacturing and services. After low growth in the early 1980s, Thailand embarked
on a comprehensive transition and structural programme to unlock the vast potentials
of a free enterprise economy, achieving a GDP growth of 6.8 % in 1992 in the midst
of a global economic downturn. This “open
door” policy emphasized the promotion of the private sector role in economic development.
The private sector will continue to lead Thailand’s economic growth in the 1990s.
Privatisation will be the Government’s route for mobilising investment priorities,
particularly the development of new infrastructure. With
the Government taking a secondary role, room is made available for strategic alliances
to undertake to develop, expand, and steer the Thai economy into the Pacific Century. The
Government has adopted rational tax policies to encourage domestic consumption
and investment, and maintain the country’s relative competitiveness. The introduction
of a value-added tax and the reduction of both personal and corporate income tax,
and import tax on capital equipment will boost the level of investments. The
key to Thailand’s continued economic transformation, I believe, will be to implant
regulatory reforms that diminish risks for investors, yet at the same time enhance
the flow of investments from domestic and international sources by making domestic
markets more accessible. This brings me
to comment on the importance of small and medium-sized businesses in the economic
evolution of Thailand. Small and
Medium-Size Enterprises (SME) Small
and medium-size enterprises or businesses are the key elements of economic development.
Contrary to popular belief, it is the SMEs that drive a nation’s economic growth,
not large conglomerates. It can be evidenced from some of the OECD nations, that
emerging small and medium-sized companies provide key support to the vitality
of a nation’s economy I wish to cite the
United States as an example. In the early 1970s, instead of relying on a handful
of multinationals, SMEs were encouraged to participate in the country’s economic
growth. They would share the economic burden, and with it, the economic rewards.
Today, with the systems infrastructure firmly set in place, many SMEs have become
corporate giants, and they would be expected to lead the American economy out
of its recession. Thailand has a diversity
of small and medium-size businesses. From agriculture to manufacturing, tourism
to retailing, Thai entrepreneurs have been the cornerstone of the early development
of these sectors, and have laid the foundation for their continued expansion.
This diversity contrasts with other ASEAN nations, whose focus has been on the
electronics sector. Unfortunately, in the
past, Thai entrepreneurs have lacked the necessary direction to expand their businesses.
This is partly because appropriate guidelines were not formulated to assist Thai
entrepreneurs. Now with the liberalizing of the financial systems and minimising
of bureaucratic processes, corporatisation of businesses has been very much facilitated.
Next, barriers that prevented foreign investments have been removed and joint
ventures encouraged. Finally, Thailand’s international competitiveness has been
greatly improved by the adoption of rational fiscal and monetary policies. Thailand
will continue to experience strong demand for capital in the next five to seven
years in order to fund the country’s rapid economic expansion. Infrastructure
development is a key Government priority - massive sums will be required in the
years ahead. Thailand’s Capital Market Thailand
has historically developed largely shorter-term funding. This is because the capital
market is relatively under-developed and greatly needs to emulate standards set
by leading international markets. The short-term focus of the Thai market will
make it difficult to encourage equity market investment in infrastructure projects,
especially in the near future. As the market matures towards the end of the decade,
the private sector will begin to focus on longer-term capital funding needs. Therefore,
in the medium-term, the foreign investor will be of vital importance to Thailand.
The country’s current levels of domestic savings, are insufficient to satisfy
the massive sums of capital urgently needed for development, particularly infrastructure.
As such, many ventures or projects will need to be funded primarily by foreign
capital sources. Towards the end of the decade, domestic savings will have grown
rapidly and will be directed by the Government through the private sector into
mutual funds, provident funds and insurance companies, which will emerge as significant
sources of capital for the domestic financial markets. There
has been an explosive growth in the number of shares traded on the Stock Exchange
of Thailand (“SET”). Last year alone, 34 companies were listed on the SET. I believe
the emphasis will increasingly shift to quality. Listing procedures will be made
simpler and quicker, but listed companies will be forced to disclose significantly
more information, to strengthen investor protection. Further, the establishment
of Thailand ‘s OTC market will open the door for equity financing to emerging
companies, now that a secondary market similar to NASDAQ in the US will soon be
made available to investors. These measures will more effectively mobilize both
domestic and foreign capital to support strong private sector investment growth. IFCT-NJH In
this respect, I am pleased to learn of the establishment of IFCT NOMURA/JAFCO
HOLDIINGS CO., LTD. in Thailand. This corporation was formed by one of the most
established and dynamic institutions in Thailand, together with Japan’s largest
investment group, to support fast-growing small and medium size businesses, by
offering much needed medium to long term equity funds and corporate alliance advice
and services. On a broader scale, Thailand
will need higher technology, along with greater amounts of capital and skilled
professionals in its next stage of industrial development. The greater need for
technology transfer can be greatly assisted by joint efforts by organisations
such as IFCT-NJH and the private and public sectors, particularly in facilitating
the diffusion of Japanese technology and management skills, as well as the building
up of Thailand’s technology infrastructure and support systems. I
wish IFCT-NJH and its business partners in Thailand every success. I am confident
that their endeavours will prove rewarding, not merely for them alone, but for
Thailand as a whole.
Management
And Society In The Asia of Tomorrow by Mr. Anand Panyarachun
Chairman
of Saha-Union Corp., Ltd.
Delivered at the Asian Institute of Management
International
Conference
Shangri-la’s EDSA Plaza Hotel
Manila, Philippines
February
18, 1993 We are living in a world of momentous, far-reaching
changes. Film devotees among members of
this distinguished audience may be familiar with a recent motion picture called
“Forever Young”. It is a story of a young man frozen in a capsule decades ago
as part of a scientific experiment, who now wakes up to face an unknown and mysterious
world - “a terra incognita”, full of strange objects, customs and life-styles.
A sort of latter-day Rip Van Winkle, one might say. A
student or practitioner of international affairs, similarly frozen and now woken
after some thirty years of slumber, would similarly find himself on a very unfamiliar
terrain indeed, a terrain where many old landmarks have disappeared and have been
replaced by new features, motifs and forms. He
would be faced with a strange, bewildering world.
- A world where the Cold War, a divided Germany, the Soviet Union
and the Soviet Empire have become history.
- A world where the rulers of
Moscow, successors of Lenin and Stalin, speak the same language of freedom and
democracy, market economy and peace as their counterparts in Washington, DC.
-
A world where the United States of America, remains the sole super-power but has
much less influence to shape her own and the international community’s destinies
than before; a world where the achievement of American strategic and ideological
primacy is rendered largely inconsequential, firstly by rapidly growing global
inter-dependence, secondly by the emergence of economics as the issue of paramount
concern, and thirdly, by the emergence of new centres of economic power
and political influence.
- A world where enduring geo-political and ideological
schisms between East and West have given way to shifting, pragmatic alignments
of States; a world where stark disparities between North and South have been obfuscated
as a result of the economic stagnation of many an industrialised nation, and the
successful economic performances of several dynamic economies in the developing
world, particularly in east Asia.
- A world where more and more governments
have begun, to conceive the meaning of the word “security” in a more comprehensive
and constructive manner: that is, not only in terms of strategic and military
requirements, but also in terms of fulfilling their own people’s demands for better
standards of living, improved quality of life and greater participation in decision-making
processes. In terms of addressing some of the broader issues, relevant to the
well being of the international community as a whole, particularly where the questions
of human rights and environmental protection are concerned.
- A world where
the primacy of the concept of “raison d’état”, which places the requirements
of the nation-state before all else, is being visibly challenged by the spread
of the notion of individual rights, that transcend the concerns and interests
of the nation-state.
To be sure,
the Cold War world had been a dangerous one indeed, with the vast arrays of nuclear
weapons, posing an apocalyptic threat to the existence of mankind. I
believe that, during the nearly five decades of its existence, in many ways it
had also been a world of enduring simplicity, a world of seemingly black-and-white
clarity. For, over that lengthy period
of time, there appeared to be clear lines of division and patterns where the questions
of human rights and environmental protection are concerned. Allegiance among protagonists;
clear distinctions, between what was right and what was wrong, between those who
were rich and strong and those who were poor and weak. What the rich and strong
could rightfully do and what the poor and weak could not. There also appeared
to be clear problems to be addressed and un-ambiguous approaches to their resolutions. In
such a context, the task of leadership in both diplomacy and governance, I believe,
was also relatively simple. It was primarily the organisation and application
of political power in accordance with certain sets of priorities and in pursuit
of certain sets of goals. The post-Cold War world, on the other hand, is one of
change and complexity. It is a world characterised
by moral and ideological ambiguities and certainty; by changing norms and values,
attitudes and beliefs: by shifting priorities and allegiances, shifting political
alignments and patterns of power distribution. By an ever-increasing multiplicity
of strategic, political, social and economic demands and requirements, generated
by a variety of sources and pursued by a variety of actors, ranging from nation-States
to NGOs, organised interest groups and “ad hoc" coalitions of individuals. In
the post-Cold War world, the task of leadership in both diplomacy and governance
is one of immense complexity. Organisation and application of power, continues
to be important, for politics is still politics, and in politics, power continues
to be an important source of influence. Where the challenge
is to respond to a wide-ranging set of demands and requirements in a context of
change, uncertainty and ambiguities, the quality of leadership rests on the capacity.
Firstly, to utilise one’s limited resources to address as many issues of concern
as possible. Secondly to reconcile such demands and requirements where they conflict.
Thirdly, to re-organise the use of one’s limited resources and to re-formulate
the existing agenda in such a way, that one’s future capacity to address the issues
of concern and reconcile the conflicts among them is enhanced. At
the present juncture of history, the primary task of leadership is to manage a
complex and sophisticated agenda, taking into full account the diversity of views
and setting correct priorities. It is also to manage in such a way that leads
to a consensus on the vision for the future. In
this era, politics is not the art of the possible as such but, more accurately,
the art of managing the seemingly impossible in the most effective manner! The
conception of leadership, in terms of management, has been popular for some time
in the western world. It has been generally perceived to be only applicable in
the context of western societies’ diplomacy and governance. Certainly
very little has been written or said about the relevance of this concept of leadership
to Asia. I suspect that one cause of this omission is the assumption, held in
many quarters, that Asian societies are traditional, by nature, and in Asian traditions
there is a preference for strong -- or some might even say, authoritarian-- leaderships,
which leave little room for alternative types of leaderships. Another, and I suspect
the more underlying cause, is culture-bound mind-sets: Management is all about
modernity, thus how can Asian societies, most of which have only recently emerged
from the state of political and economic under-development, possibly understand
and benefit from such a modern concept? Diplomats
and businessmen are taught to be realists. As an ex-diplomat working in the business
community, I am very much a realist. Thus I will be the first to admit, that there
are some grains of truth in many westerners’ conclusions regarding the traditional
nature of Asian societies and their affinities to strong leaderships. This is
perhaps most evident in the fact that, while the communist regimes in the former
Soviet Union and eastern Europe have collapsed to be replaced by a variety of
democratic arrangements, communism as a system of governance has still survived
in some parts of Asia. To dwell on traditions
and traditional affinities is to overlook or ignore the essence of many a contemporary
Asian society. The fact is Asia, particularly in its eastern-most stretches, on
the rim of the Pacific Ocean, is the most rapidly changing continent in a world
of momentous and far-reaching changes. Because of the nature and extent of the
changes that have taken place, as well as the complexity that these changes have
brought to Asian societies, it, is my belief that the most necessary and appropriate
concept of leadership for Asia, now and for the foreseeable future, is management
of political, economic and social issues in a balanced manner. Let
me explain: During the last two decades,
and particularly during the last ten years, Asia’s economies have expanded at,
an unprecedented rate, despite the persistence of a number of serious regional
conflicts. During this process, many of
these economies, mostly located on the western Pacific rim, have become, and continue
to be, increasingly diversified, industralised, and integrated with rapidly growing
global systems of trade and investment, banking and finance, communication and
telecommunication, technologies and information. The most notable cases are the
four so-called “Tigers” of East Asia, and some aspiring “Tiger Cubs”. These
changes in turn have transformed, and continue to transform, Asian societies,
with far-reaching implications or consequences for their systems of politics and
governance. As a result of unprecedented
economic expansion and multi-dimensional integration with the various global systems,
Asian societies are becoming increasingly pluralistic. This
pluralism is manifest in terms of the emergence of new social groups, especially
the educated and the middle classes. Of political-cum-economic constituencies,
connected, for example, with agriculture, manufacture and industry, commerce,
banking and finance, or a combination of these. It is also manifest in terms of
multiplicity of issues that are of concern to members of these changing societies,
ranging from questions of international trade, investment and finance, to problems
of prices of agricultural products and quality of land and management of water
resources in various localities. Also as
a result of the processes of growth and integration, educational systems have
been and continue to be significantly improved and expanded, and accesses to domestic
and trans-national sources of ideas and information enhanced in both quantity
and quality. These changes, in turn, serve
to raise the level of political awareness, making such questions as political
rights and economic freedom, personal liberties and community interests, political
participation and accountability, critical issues in the government and politics
of these societies. Heightened political awareness, increases the possibility
of political mobilisation, not only over these fundamental political principles,
but also over specific problems thought to be affecting the well being and the
progress of individuals, groups, communities or societies at large. Ranging from
conditions of work, to environmental protection and access to land and water resources. To
put it plainly, contemporary Asia is characterized by change and complexity. In
this context, the task of leadership in Asia, I believe, is necessarily one of
management: that is, one of managing rapidly changing societies, which are deeply
affected by rapidly changing times and circumstances. Are caught up by rapidly
growing multiplicity of demands, generated by a variety of sources and by a variety
of actors. I would venture to argue even
further that, given the pace and extent of change in Asia, the need for management
as a tool of leadership is much more pressing here than elsewhere in this global
community of ours. In the context of change
and complexity in economic and trade areas, the task of leadership is to manage
the process of integration so that the country benefits more and suffers less
from inter-acting with the outside world. It
is not in question whether one should opt for security or development, “guns or
butter”. For security without development, creates conditions for political and
economic malaise, which can ultimately undermine security. At the same time, development
without security can make the nation and the people prey to external interventions.
In this question the task of leadership is to manage the allocation of scarce
resources to buy sufficient “guns” to deter threats and spend enough on “butter”
for the people. It is not in question whether
one should choose economic growth or environmental protection. Growth without
conservation means sacrificing one’s long-term future for momentary gains and
creating conditions for political, social and economic conflicts and tensions,
which can undermine future growth. Conservation, without growth, is Utopia to
champions of the cause of environmental protection, but calamity to others who
expect, and have the right to expect, improved livelihood. The task of leadership,
therefore, is to manage the process of growth, in such a way that it is ecologically
sustainable. Finally, I believe that it
is no longer in question whether one should opt for economic development or democracy.
The twain must proceed together. Much has
been written and said about the necessity for choice in this question in the context
of Asian societies. Asians, so one argument runs, have no democratic tradition
or democratically oriented political culture. Thus economic development should
be given priority in the short-to-medium term, so that it can give rise to social
and economic conditions more conducive to the development of democracy in the
longer term. Asians, counters another argument, have become so closely integrated
with the outside world and come to share so many political, social and economic
expectations with the outside world, that democracy is the only possible form
of governance which could provide the requisite political and social under-pinnings
for promoting human rights, future material well-being and progress. Both
arguments are prisoners to cultural mind-sets. Economic
development, without democracy, creates, on the part of the regime, a propensity
towards continuation and entrenchment of authoritarianism, which, if not addressed,
could generate grievances, political mobilisation and unrest, and ultimately constraints
on further economic development. Democracy
without economic development is inherently unstable. On the one hand, emphasis
on the exercise of political freedom, without due regard to the question of performance
and responsibilities of governance, could give rise to potentially dangerous irresponsibility
and license. On the other hand, failure to deliver the “economic goods”, failure
to meet expectations of improved livelihood, could only lead to questions regarding
the legitimacy of the system of governance itself, and to conditions which may
finally cause a disillusionment and rejection of that system. The
task of leadership is to manage the allocation of political and economic resources
in such a way that economic development and democratisation can proceed hand in
hand, progressively and steadily steering a middle course and avoiding attaching
too much importance to one at the expense of the other. This
task is by no means an easy one. There is no single blueprint or textbook that
can be applicable to all Asian societies. At minimum, I believe that the task
of management in this question must be discharged in accordance with two fundamental
principles. The first is that the challenge
must be undertaken in an “Asian” way, that is not through borrowing ideas and
experiences indiscriminately from western societies, but through building upon
indigenous cultures and strengths. In particular, this means that the “democratic
revolution” should be promoted in an evolutionary manner, with emphases on consensus-bui1ding,
tolerance, and pragmatism. However, this
first principle is not sufficient in itself. An
evolutionary process of democratisation is necessary, but it. May lead to too
great a stress on the form, rather than the substance, of democracy, thus rendering
the system of governance superficial and ultimately fragile. Consensus-building
is also necessary, but it must not be an end in itself, For it may lead politicians
merely to cater to the demands and requirements - and whims - of their constituencies,
and thus generate political parochialism which has no place in today’s world. Furthermore,
too great an emphasis on consensus building may cause excessive caution and hence
political in action. The second necessary
principle, is that the evolutionary process of democratisation itself must be
managed, so that at critical points the process can be “fine-tuned” to respond
to changing times and circumstances, or can be pushed forward where there are
hesitations and obstructions. This in turn requires the “traditional” qualities
of statesmanship, namely competence, vision, commitment to principles, unquestioned
integrity, courage of conviction, and willingness to make sacrifices, on the parts
of leaders. A democratic regime, to be
sustainable, must be one which represents the main-stream of society, respond
in an effective and tangible manner to the aspirations of the people, and above
all act as the final arbiter of the many diverse and special interest groups. President
Truman wisely put it in simple terms, “The buck stops here”!
A
Vision for Thailand: Toward the Year 2000 A keynote
Address by Mr. Anand Panyarachun
Delivered Extemporaneously at the Opening
of a Seminar
on “Project Management: A Strategic Approach”
AIT
Centre
August 3, 1989 Khunying Thongthip, Dr.
Edger, Mr. Vanderloo, our Friends from the University of Calgary, and Participants: Normally,
when a speaker comes up to the podium and delivers an address, he or she, whatever
the case may be, would normally thank the hosts for having invited him and accorded
the honour to be a guest speaker. Well, I must confess that I cannot honestly
say that I’m too delighted to be here, in a sense that there comes a time in your
life when you try to keep a rather low profile. But with the feminine charm and
the friendly persuasion from Khunying Thongthip, I found it practically impossible
to resist the approach, and as a result, I stand here before you. Now that I am
up here, I cannot help but be reminded of a remark made by Zsa-Zsa Gabor’s sixth
husband, when on the eve of his wedding to Zsa-Zsa Gabor, he was asked by a reporter
how he felt about the wedding the next day. “Well, I think I know what is expected
of me. The problem is how to make it interesting!” You
may have noticed that in recent months, the whole nation of Thailand is in a sort
of euphoric mood. Not a week passes by without someone standing up and saying
that we are going to become a NIC in three years time or five years time. I think
only last week, there was another seminar, and a number of distinguished speakers
emphasized the same theme. They talked about the future of Thailand toward the
year 2000. They listed the problems that we would be facing, but they’re all very
bullish about our country. A couple of years ago, I think that people were still
a little uncertain. The recognition given to Thailand mostly by outsiders, by
foreigners, has helped to convince the Thai people and particularly the government,
that yes, perhaps there is something about this prediction of the future of Thailand.
If you look back at the development in the past two decades, one must admit that
we have come a long way. I still remember the time in the 60’s when we were still
not quite sure whether we would survive internally. We were facing frequent numbers
of coup d’états, military takeovers, and political in-fightings. Externally,
the environment was very uncertain, with the Vietnam War and the communication
of Laos and Kampuchea in the 70’s. So, the periods in the 60’s and 70’s were decades
of grave concern for Thailand. Somehow we managed to survive. We plodded along.
The government, perhaps in its own style, did a few good things intentionally
or otherwise. The economy was diversified. Political stability was gradually -
brought in. The financial stability was, of course, the order of the day. There
was no self-indulgence. The Thais were not particularly prone to creating “white
elephants”. We did not - overspend. Cynically, we might say that, yes, we did
not over-spend because we could not make quick decisions to undertake big projects
in the 70’s or in the early 80’s. As a result, because of that rather fortunate
in-action, we did not build up the debts that many developing countries did in
the early 80’s. We’re now starting on a grand scale: the Eastern Seaboard development,
the National Petrochemical Complex Phase I is coming up. The NPC II is on the
way. The economy of Thailand has been transformed
rather drastically from an agrarian society in the early 50’s into import-substitutions,
into processing, into agro-industry and into light manufacturing. In the 90’s,
we can look forward to much larger projects, more complex projects and considerably
much larger capital-intensive projects. The question is “Are we really convinced
of this future of Thailand?” It’s not for me to answer the question. I have long
believed, that somehow or other, the fact that Thailand has been able to survive
as an independent nation for nearly 800 years, against all odds, against the major
colonial powers, must be due to something that we did right in past centuries.
Perhaps some of the inherent assets that we possess are not even realized by the
Thai people themselves, or otherwise, how could one explain that we have been
able to survive and to prosper moderately for several hundred years. I
happen to believe that in Thailand, within our society, there is a fundamental
strength. You can talk about the importance of the monarchy; you can talk about
the homogeneity of our society. You can talk about the soothing effect and the
tolerance of our religious teachings. You can talk about the absence of racial
strife or religious conflicts. You can talk about the good fortune that we have:
the natural resources, the human resources, the fact that we are not affected
by major natural disasters like earthquakes, cyclones, typhoons, and what-not.
You can talk about a country with a relatively large land area with plenty of
water, with plenty of forests (I beg your pardon!). We can talk about the adaptability
of the Thai people, the pragmatism and the ability to improvise. I think the Thais
have somehow demonstrated these capabilities without having to go through MBA
courses or business schools abroad. The pragmatic approach, the ability of the
Thais to roll with the punches, to adapt to new circumstances and to respond to
the changes that take places everyday. I call it “the improvisation.” Some people
may say “the advocacy”. To me, that is also an asset, because, without having
been colonized, we did not inherit any proven system of a former colonial master.
We built up our own civil service system. We built up our own business system.
We try to build up our own trade union system. We are not bound or constrained
by past practices or past systems. We can afford to be innovative; we can afford
to be a little bit more daring. So it’s a combination of pragmatism and systematic
approach that one has to look for in the future, and the reason is very simple,
because of the rate that Thailand is going. I
still remember a few years ago when there was a down-turn, in the world economy
and all the commodity prices were going down as a whole, and when the global trading
volume expanded less than one percent. Even countries of such sophisticated system
and systematic approach like Singapore, with all the scientists and engineers
and managers that they had, and still have, registered a negative growth in 1984.
That year, Thailand somehow managed a 2.8 % annual growth. That was the year that
the world started to look at Thailand seriously, and began to ask the same question
that I alluded to in the beginning: “What was it that made Thailand “tick”? I
think the Thais had not that reputation of being good planners like the Koreans.
The Thais not be as productive as the Japanese or the Taiwanese. The Thais not
have the reputation for working things out systematically. But somehow we got
through. That was the turning point. Since
then, the prediction that Thailand was going to be “the dark horse” of this decade.
Now the prediction that after the four newly-industrialized economies, Thailand
is going to be the next one. I personally am not too concerned whether we’re going
to be a newly industrialized economy, or not, because after all, what is the yardstick?
Is it per capita income? Is it a percentage share of the manufacturing sector
to the total GDP? Is it the rate of export growth? No, I don’t think figures mean
very much. Winston Churchill once said that there were three kinds of lies, “Lies,
damn lies and statistics”. So I don’t think that the Thai should be so overly
concerned whether to become a NIC or not. I think, rather, we have to, we need
to, create a new scenario, a scenario which will take into account the quality
of life of the people, the more equitable distribution of income among people,
the combination of agriculture and industries, a way to develop a new democratic
system which would suit its own genius. Look around, the four NICS, Taiwan, Hong
Kong, Korea, and Singapore. I had a choice, I would not volunteer to be one of
them. I think in our case, we have a much larger stake. We have assets, which
do not exist, in those four countries. Of course, we have problems, which do not
exist in those four countries either. But problems are created to be solved here
we have a large domestic market, one which is larger than Singapore, Taiwan or
Hong Kong. In Thailand, a food-surplus country, something, which cannot be, claimed
by the other four. It will remain a food-surplus and a food-exporting country.
It is essential that the agricultural sector not be neglected. Now
f or the first time in the region, a “wind of change is blowing”. I’m using the
words of our Prime Minister. Things are moving very rapidly around the world.
It is no longer the free world versus communism. Ideological conflict is gradually
decreasing. Yes, ideological rivalry is still there. The communist system has
a built-in destructive process. It is just not working, it is not functioning
politically and economically, so out of necessity it has to turn to other alternatives.
In recent years, the words most frequently used are “Perestroika” and “Glasnost”.
These two words are becoming fashionable in every communist country. Naturally,
each country has its own problems. The pace of change of those countries towards
a more open society, towards a market-oriented economy is going to be different.
We wish them well, we wish them success. Whatever the case may be, the trend is
irreversible because war is no longer a valid or a viable alternative to peace. Governments,
whatever their systems, whatever their preferences, have now realized that the
most important thing in life for their own survival as a system, is to try to
furnish the needs of their people. I think for the first time in many decades
there is hardly any fighting war going on. I am talking about fighting war in
the classical sense of the word, trying to acquire territory or trying to overthrow
a certain system. Even though areas of conflict are still there, the Middle East,
South Africa, Central America, and a few other places. Now people talk about economics
and development. People talk about consumer goods. People talk about infrastructure.
People talk about industries and factories. So here we have a new environment,
an environment which exists now in 1989 and is likely to remain up to the year
2000 and beyond. One that economics has taken over politics. External environment
is becoming more and more conducive to faster growth, to expanding economy, to
expanding global trade volume, and also to the inter-dependency of all nations. What
about in Thailand? Here again, either by design or otherwise, we have been able
to maintain this political stability, and that political stability is going to
continue in spite of the fact that you will hear more and more constructive criticisms
in parliament or outside parliament. These are part and parcel of the democratic
process. Here, we are moving into a new era, an era which needs a more thorough
preparation than what we had in the past. From now on, we are not going to deal
with industries or with projects of 20 million Baht or 40 million Baht. We are
not going to deal with projects, which employ thousands of people using relatively
cheap, but productive work force. We are not going to deal with projects, which
are unsophisticated. Instead we are going to deal with projects using up thousands
of millions of Baht or tens of thousands of millions of Baht. The question is,
if you are confronted with that kind of situation, and in order to sustain that
kind of development, can we in Thailand afford to make use of only the past practices
and past systems? To me, the answer is “No”, we cannot. I think we have to think
bigger, we have to dream bigger, and we have to prepare ourselves. We have to
prepare ourselves because these large projects need careful preparation, be it
in terms of feasibility study, be it in terms of planning, of execution of the
projects or commissioning of the projects. These projects are not exclusively
tied down to the domestic market, so we also have to know more about the world
outside Thailand. I refer to inter-dependence. That word was used when I was stationed
in New York, in the United Nations, twenty years ago. We were all paying lip-service
to that concept. Inter-dependence is no longer a concept. It is now a reality,
a reality which will be the governing force in future decades. In our region,
with the domestic market of 60 million people, if peace should return to this
area, then you have Vietnam with a population of 70 million people. We have Burma
with 40 million people. We have Laos. We have Kamnpuchea. The location of Thailand
is just right, as the centre for manufacturing as a regional centre for trading
activities, and as a regional centre for service industries because Thailand provides
the gateway to all these countries. I referred
earlier to the transformation of our economy. I have talked about the very rapid
development and modernisation of our country. I have also mentioned that, along
the way, there would be problems. We are all familiar with the problems that we
are now facing and some of the problems that are going to be worse in the next
few years. The inadequacy of the infrastructure, the shortage of technical personnel,
and “what-not”. These problems can be resolved. I’m certain of that. The main
thing is that, with the new economy that we’re going into, there is a need to
prepare ourselves psychologically, because the problems that businessmen or government
people may be facing in the future years will be more complex, will be more involved,
and perhaps need a slightly different approach to tackle them. The name of the
game is management. We in Thailand, while
we must not lose sight of the assets that we have, we must also open up our minds
to new systems. It has to be a combination of the old and the new in the area
of management of our economy, of our finance. We did not do too badly on the management
of our democratic process. We did rather badly, and we’re still doing rather badly,
on the question of management of resources, of natural resources and human resources.
We have not been doing too well in the area of management of the environment,
and waste. We have to learn now, the new are of management of technology. We have
to learn to manage the quality of technology and level of our productivity. We
have to learn to manage the quality of life of our people. In one simple term,
what we have to try to learn is how to manage change.
We’re living now in a very exciting and challenging period. Political developments,
outside and inside Thailand, are moving very fast. The inter-action between politics
and economics will also be an essential feature in the thinking of businessmen
of the future. We have to cope not only with the economic changes, but also with
the changes in the trading systems and trading practices. We also have to cope
with the political changes, economic growth and informatics. Are we in Thailand
sufficiently equipped to take up this opportunity and challenge? Yes, I think
we are. The seminar provides one example of this kind of preparation. It is the
beginning of the process. With vision, commitment, and determination, we the Thais
can rise to the occasion. We can strive to become truly and effectively a part
of this exciting and challenging time. So without further ado, let’s get on with
our immediate task, the beginning of the process, to transform this vision into
a reality. Thank you very much.
Towards
An ASEAN Common Market -
Thailand’s Perception:
The Private Sector View by Mr. Anand Panyarachun
Executive
Chairman of Saha-Union Corp., Ltd.
Putra World Trade Centre, Kuala Lumpur,
Malaysia
October 30, 1986 The title of the talk
assigned to me today is “Thailand’s Perception: The Private Sector View”. In accepting
the honour of representing the Thai private sector, I must, however, forewarn
all of you here, that it is perhaps a little presumption to attempt to speak on
the subject. The Thai private sector, like any other, is an unwieldy group of
disparate interests. It would be foolhardy for anyone to arrogate to himself the
right to speak for the sector as a whole. At best, one can only try to review
the situation objectively, and provide an assessment based on one’s own perception.
It is only within this context, that I stand here before you to speak on the subject
at this conference. Let me first of all
begin by describing how we in the private sector in Thailand feel about ASEAN.
After over twenty years of existence, ASEAN has emerged as a distinct regional
entity. It’s main function, as a regional organization has been to bring, initially,
the five member nations, and now six, to cooperate and work together in several
areas. In this regard, we have been told frequently by our own governments, of
the success we achieved in political cooperation. So much so that some cynics
in Thailand have begun to call ASEAN a one-issue organization. We know that ASEAN
governments, in developing a common position, and operating as a group, have gained
more leverage in dealing with major economic powers on trade and business matters.
This, however, does not mean that we are necessarily successful in our negotiations
with them. What it does mean is that we stand a better chance and, therefore,
this is a preferable option. At the people-to-people
level, we have, through ASEAN, gotten to know one another better. We may or may
not like one another more, but we are no longer strangers to each other. We have
gradually acquired a sense of ASEAN identity - which, I hope, will eventually
lead to a true sense of ASEAN partnership. All
in all, ASEAN has become an integral part of our National policies and thinking.
The fact remains that the cooperation generated by ASEAN, or within the framework
of ASEAN, has been predominantly in the domain of member governments. Inter-governmental
cooperation, multi-lateral or otherwise, has taken the forefront. Private sector
business cooperation, in spite of their past initiatives in formulating the ASEAN
industrial complementation schemes (AICS) and the ASEAN industrial joint ventures
(AIJV), has hardly taken off the ground. The efforts and time expended by the
ASEAN private sector through the ASEANCCI, on these projects have produced only
a few tangible results. ASEAN endeavours
to increase intra-ASEAN trade have focused primarily on providing member states
with preferential access to each other’s markets. The Agreement on ASEAN Preferential
Trading Arrangements (PTA), signed in 1977, has become the basis for the system.
With subsequent adjustments and the adoption of across-the-board tariff reductions
on non-sensitive items the number of products to be traded under the PTA has indeed
become impressive. Because of some loopholes - which I need not elaborate - the
actual economic impact on intra-ASEAN trade has been rather limited. Efforts to
inject some vitality into the PTA continue to be made, but a more radical approach
may be required, to attain a meaningful expansion of intra-ASEAN trade. It
is, therefore, no exaggeration to state here that the Thai private sector, with
the exception of some incorrigible optimists or idealists, of which I am one,
has become frustrated and disenchanted with ASEAN economic cooperation. In
all honesty, if ASEAN capitals had not offered the traditionally friendly hospitality
and a fair degree of extra-curricular incentives, the ASEANCCI meetings in the
last few years or, for that matter, in the future, would attract only the hard-core
idealists and functionaries. I say all
this, not with a view to denigrating ASEAN and its achievements in some areas.
Rather, my objective is to serve notice to my own government and other ASEAN governments,
that time is long overdue for placing strategic planning and action programmed
for ASEAN economic cooperation, above all other forms of inter-regional cooperation.
Something must be done to revive the interests of our private sector. Something
needs to be done to involve the private sector in mapping out the future direction
of ASEAN and in enlisting their active participation in future ASEAN economic
cooperation. Obviously, the path to greater
and more meaningful economic cooperation among ASEAN is still strewn with obstacles,
real and imaginary. Some will be very difficult to surmount. Political will is
required. Where there has been a lack of political will in the past, the present-day
economic necessity may give an impetus to the generation of that political will. The
past few years have not been kind to the ASEAN economies. The rapid growth rate
of National economies, experienced by all ASEAN countries in the sixties and seventies,
is no longer the order of the day. The eighties have witnessed many negative trends,
namely, the plunge in oil price, the slump of commodity prices, agricultural subsidies,
raging protection mood and measures, slow-down of global economy, volatility of
exchange rates, high interest rates and unemployment in industrialized countries.
All these factors, together with external debt burden, have contributed to the
present unhealthy state of ASEAN economies. While
each ASEAN country is adopting and implementing its own National strategy to cope
with the recession - with varying degrees of success; more attention is being
directed at the ASEAN internal market. In the past, ASEAN cooperation, in so far
as it dealt with resource pooling, has evoked relatively positive response from
member countries. However, in terms of market sharing, we have not been equal
to our tasks. Each member state has its own philosophical approach and hang-ups
that need to be taken care of. They must first all agree on the adoption of a
market-oriented approach. Under the present
circumstances, Thailand has adopted an export-led growth strategy. This strategy
pre-supposes three important elements: 1.
Productivity and diversification 2. Competitiveness 3. Investment What
are the implications for such a strategy? As I see it, technical know-how and
foreign capital are needed. Promotion of the free enterprise system must be pursued
through market-forces and price mechanisms. There will be discernable decrease
in governmental protection of inefficient industries and businesses. Competitiveness
of its own industries must be achieved by management control of the production
cost. Improvement of the International division of labour needs to be made within
the region. Tariffs must be gradual reduced. There is also a need to find markets
- one large ASEAN? market (rather than six separate ASEAN markets) to attract
from overseas projects which are capital intensive or require economics of scale
in production. It is perhaps too premature
for me to say right now whether we should aim at an ASEAN common market. The term
implies free movement of goods and factors of production including labour and
capital. Perhaps this could be the ultimate aim of ASEAN. Before proceeding to
such exalted height, we may initially have to aim at a less ambitious and more.
practical objective, namely an ASEAN model of a free trade area which would gradually,
and progressively, reduce and eventually abolish, within a fixed time-frame, tariffs
of all goods of ASEAN origin among member countries. Each party may, however,
have its own separate tariffs vis-a-vis the outside World. Taking
into account the varying stages of development and different nature of ASEAN National
economies and tariff regimes, an ASEAN model, while adhering to the basic principle
underlying the establishment of a free trade area, may not take-off at the same
time for all ASEAN countries. To start with, there may be a nucleus of three or
four members. Then the other member states may opt to accede to the programme,
at a time agreed to be appropriate. The basic agreement and action programme nevertheless
should be as far as possible reached by consensus. It
is often said by potential investors that the lack of an “ASEAN common market”
is the single most disincentive to large-scale foreign investment in the area.
To make our region more attractive to all investors, including ASEAN Nationals,
we therefore need to provide them with a larger ASEAN market. It
is my understanding, that each ASEAN government is in the process of holding consultations
with its private sector. Naturally, the private sector does not and will not have
a uniform position. Its views and observations will merely provide an important
input for the consideration of its government. In the final analysis, it is the
individual member government which will judge the merits and demerits of the case
and adopt its own policy which will serve the overall and long-term interests
of the Member State as well as those of the ASEAN Nations. In
this exercise, the governments will have to take a leading and decisive role in
charting the future course of ASEAN economic cooperation. There must be political
commitment given by all ASEAN governments to a defined future direction. Or else,
ASEAN as a regional organization, will become less and less relevant to the activities
of the ASEAN private sector. In such event, ASEAN is likely to be of peripheral
interest to the private sector and may well pass into oblivion - a fate that I,
for one, am most reluctant to see.
Economic
Development Strategy of ASEAN Countries by Mr. Anand
Panyarachun
Executive Chairman of Saha-Union Corp., Ltd.
Seoul,
Korea
September 12, 1986
I should first of all like to say, how pleased and honoured
I am to be invited to be a speaker at this international seminar, which is held
in connection with the celebration of the 25th anniversary of the founding of
The Federation of Korean Industries (FKI). Korea's
phenomenal progress and extra-ordinary achievements since the end of the Korean
war, earn the admiration of all, and have often inspired countries in the third
world to attempt to emulate the Korean model of economic development. Such attempts
do not necessarily produce the desired results, because the Korean success is
premised, not only upon the government's far-sighted policies and well-orchestrated
measures, but also upon the many attributes of the Korean people. The Korean private
sector, particularly members of the FKI, have shown themselves to be astute and
daring in their corporate planning and strategy. Their enterpreneurial skills
and hard-headed determination provide the corner-stones for the edifice of their
newly industrialised society. It is, therefore,
with great pleasure that I partake in this special event, and join all of you
in this festive occasion of the 25th anniversary of the founding of The FKI. The
subject of my talk to-day is "Economic Development Strategy of ASEAN countries".
As you are all familiar, ASEAN, a regional grouping comprising six nations, with
a total population of 260 million and a total GDP of about US$250 billion, have
up to recent times been doing well together as well as separately. Their performances
in the 60's and 70's may fall short of those of the newly-industrialized countries,
but on an average and relative to the developing countries in the other parts
of the world, their progress has been substantial and consistent. So much so,
that their collective strength has rightfully become a significant component of
the Asia-Pacific growth. In the last couple
of years, however, ASEAN countries which have been primarily resource-based, and
competitive economies, have suffered a severe set-back. Global recession, world-wide
protectionism, drastic and across-the-board depression of commodity prices, and
other factors, have all militated against the expansion of their economies and
rapid growth. Drastic fall of oil prices, collapse of commodity prices, sluggish
trade and increasing foreign debt burden, had such an adverse and immediate impact
on the ASEAN states that their annual economic growth were considerably reduced.
In some cases like Singapore and the Philippines, even negative growth was registered
in 1985. All ASEAN countries have open
economies, with international trade accounting for a high proportion of Gross
National Product (GNP). The total value of the combined exports and imports, to
GNP, varies from 40 per cent in the case of Indonesia, the Philippines and Thailand
to almost 100 per cent for Malaysia and as high as 300 per cent for Singapore. Average
international terms of trade for ASEAN, began to worsen in the mid-70's, but the
deterioration was more pronounced and substantial from 1981 to 1985. From 1976
to 1985, Indonesia, The Philippines and Thailand were the hardest hit in this
area, deteriorating by 20 to 30 per cent. For Malaysia, the extent of terms of
trade deterioration, was more modest at 8.4 per cent, while Singapore suffered
least with its terms of trade declining slightly by 1.1 per cent. As
a consequence of this depressing scenario in the international terms of trade,
real economic growth of all ASEAN countries during the 1981-1985 period (Brunei
is excepted, throughout the address, because of unavailability of data). The Philippines
showed no real growth. , Indonesia slowed down from the average of 7.9 per cent
during 1976-1980 to 4.4 per cent a year during 1981-1985. Thailand's rate came
down from 7.6 per cent to 5.3 per cent a year. Malaysia from 8.6 per cent to 5.8
per cent a year.' Singapore from 8.8 per cent to 5.9 per cent a year. To
counter declines in terms of trade, Singapore and Malaysia adopted expansionary
domestic investment policies, in expectation of maintaining high economic growth
rates, while Indonesia, the Philippines and Thailand, on the other hand, pursued
restrictive monetary and fiscal policies. The
prospects for meaningful economic growth for ASEAN countries for 1986 are not
too good. Indonesia and Malaysia are expected to have a marginal growth. The Philippines,
depending on the continued political stability and success of measures taken so
far, may this year have a small growth. Singapore starts to show signs of recovery
and may come up with a modest positive growth, as against a negative growth of
2 per cent projected early in late 1985. Only Thailand is able to revise its forecast
of 3.5 per cent up to 4.5 per cent growth in 1986. There
are, however, some disturbing signals, which need to be attended to. ASEAN countries,
excepting Singapore, whether adopting expansionary or restrictive investment policies,
failed to mobilize an adequate level of domestic savings to finance their domestic
investment programmes. Their investment outlay far exceeded domestic savings -
pointing to their heavy reliance on external borrowing and foreign debt, to finance
their current account deficits. Rapid increase
of foreign debts and subsequential debt- servicing obligations, have now become
major issues, in varying degree, to be tackled by the ASEAN governments, with
the exception of Brunei and Singapore. It has been suggested that a two pronged
strategy may be adopted for the future. First,
every attempt should be made to keep the level of domestic investment on the same
par as domestic savings. This strategy does not preclude the possibility or even
the desirability, that under certain circumstances and in a given year, governments
may prudently undertake stimulative investment policies, to attain acceptable
levels of growth, income and employment. In the long run, such expansionary policies
should be coupled with effective domestic savings mobilization policies and measures,
so as not to raise further the already critical level of external debts and current
account deficits. Secondly, the private
sector themselves, have to make efforts to restructure their corporate financing,
by reducing debts, and relying more on equity financing, both in the form of corporate
stocks and long-term debentures. Development of capital market and financial instruments,
appear to be urgent tasks. What I have
just related, is not really applicable to Singapore, whose economy is dis-similar
to those of the other ASEAN states. Singapore. has no debt problem. Her national
savings rate, remains one of the highest in the world. She could, and still can,
afford expansionary investment policies. But she is facing a different kind of
problem, of equal seriousness. Since 1980, an increasingly large share of capital
formation has been in the construction and property development. Infrastructure
and housing are essential, and productive forms of capital investment, but there
is a limit to the amount of infrastructure and housing the economy needs. The
high construction investments turned out to be a mis-allocation of resources.
The necessary investments, on the other hand, were not going into productive equipment
and machinery. Such investments in terms of dollar value even declined, when measured
as a proportion of her GDP. In addition,
there continues to be a weakness in domestic demand, caused not only by the slump
in construction but also by a continued high rate of national savings, that cannot
be channelled into productive domestic investments. Since
Singapore's economy overwhelmingly depends upon a healthy international trading
environment, the slow-down in world trade and increased protectionist pressures,
have forced Singapore to revise her past policies, in order to regain competitiveness
in the keenly-contested international trading. Lowering of corporate and personal
income tax, adoption of tax-incentive schemes, reduction of employer contribution
rates to the Central Provident Fund, wage restraints and privatization of government-owned
enterprises, are the major policy changes that have taken place recently. Singapore,
like all other ASEAN countries, will strive to build on her strengths and develop
new advantages. Her expertise in banking and financial services is generally recognised.
While Singapore is already an established production base, she also plans to become
an international total business centre, for manufacturing and services. She has
a comparative advantage in exporting services, which she plans to promote vigourously. In
order to create a conducive business environment, Singapore may also have to engage
in some de-regulation exercises. The regulatory environment is likely to be eased
to encourage greater private sector initiative. Indonesia,
a primarily oil-based economy, was compelled to adopt austerity measures, and
had to re-schedule or scale down many of her ambitious investment projects. She
is not yet “out of the woods,” but she has in the recent past exercised greater
discipline in financial and development management. She plans to conduct a nation-wide
efficiency and austerity movement and further adjust the programmes and plans
for development projects, to the financial resources available. The
government of Indonesia, however, is determined to continue the policies of stimulating
and making domestic industry sound, by providing, among other things, various
tariff concessions on duties for the import of raw materials and intermediary
goods, which are essential for the manufacture of high value-added products. She
will also accelerate her efforts 'to develop non-oil/gas sectors to broaden her
foreign exchange-earnings base. Indonesia's
priorities are as follow: First, to finish
projects currently under construction. The amount of funds to be made available
will be matched by the ability to use them. Second, to supplement the rupiah
funds by obtaining project-aid from abroad. Third, to continue projects
that have the character of establishing equity, and of expanding employment opportunities. Fourth,
to provide funds for the operation and maintenance of projects that have been
completed. At the beginning
of this year, the President of Indonesia proclaimed that in the fiscal year 1986-7,
there would be no new projects. Indonesia
nevertheless expects to see a greater role of the private sector in stimulating
the economy and maintaining the pace of development -- particularly by the banking
sector in the mobilization of funds and in the channelling of those funds to productive
economic activities. The Philippines is
one country that needs all the help she can get. After the traumatic ordeal that
the country and people went through in the last several years, the relative peaceful
transfer of power, engineered last year by the Filipinoes themselves, is a cause
for rejoicing. It is our fervent hope that the present political leadership will
be able to enhance the political and economic stability which can in turn generate
respectable economic growth for the country in the near future. The
Philippine government's economic development programme has two major goals: economic
recovery in the short-term, and sustainable growth in the long-run. To achieve
these goals, the government has opted for an employment-oriented, rural-based
development strategy designed to improve income in the rural areas, where some
70% of the population lives, and thus perk up market demand. One
major concern of the government is to provide a policy environment that is conducive
to agricultural growth and productivity. Towards this end, a number of specific
policies will be pursued, which would include, among others, the encouragement
of crop diversification, improvement of market infrastructure, implementation
of agrarian reform programmes, and expansion of agricultural credit. The government
will also support policies that will promote small-scale and labour-intensive
enterprises in the rural areas. It will, among others, promote the nucleus concept
of developing cottage, small and medium industries; institute a more open-trade
regime that will expose domestic producers to fair foreign competition, and induce
cost-reduction and increased productivity; simplify investment incentives, particularly
on exports, to encourage and facilitate export activity; and encourage foreign
investments in high value added, export-oriented and employment generating activities.
The government will also adopt an expansionary monetary policy, to stimulate economic
activity and a demand-led growth in the short-term and a policy that will promote
and maintain a more stable and efficient financial system in the long-term. The
government will play a limited role in economic activities to allow private business
to become the prime-mover of growth. The scope and coverage of government will,
therefore, be reduced through the abolition, divestment or re-privatization of
government corporations whose activities directly compete with, or are equally
or more efficiently managed by the private sector. In
view of resource constraints and im-balances, Malaysia is pursuing a strategy
of moderate growth with stability - without large scale borrowing as in the past.
Towards this end, concerted efforts will be made to increase domestic savings,
mobilise domestic resources, attract foreign investment and harness the available
resources in the most efficient and productive manner. In
Malaysia's fifth plan, various strategies will be adopted to stimulate growth. The
manufacturing sector has been earmarked to provide the growth impetus. The agricultural
sector will be re-vitalised to increase farm earnings and be a productive source
of employment. Raising of productivity, tax incentives, private sector participation
in economic activities, are all parts of the overall strategy. The
public sector will no longer play a leading role in stimulating growth. Steps
will also be taken to gradually reduce the size and role of public sector in the
management of public enterprises. The private sector is being encouraged to be
more enterprising and resourceful. The government is prepared to de-regulate the
economy in stages, and to promote greater private sector investment, especially
in local food production. The private sector is also induced to participate as
partners, in a Government-sponsored land development scheme. Now
we, come to my own country - Thailand. The new government, which was set up in
August after the general elections, announced a set of policies to the Parliament.
The highlights pertaining to the economic sector are as follow: - Prime consideration is to be given to limitation of resources
and maintenance of fiscal and monetary stability. - Further diversification
of the economy. Restructuring of the tax system to improve business climate. -
Streamlining of fiscal administrative system and monetary system. - Promotion
of the free-enterprise system through market force and price mechanism. In such
promotion, the government's role will be changed, from that of the director or
regulator to that of the promoter or supporter, in providing better facilities
for economic activities, particularly in the export area. - Greater role
of the private sector in national economic development and tourism promotion.
Promotion of labour-generated and resource-based industries. - Promotion
of agricultural productivity, better coordinated strategy for production and marketing
of agricultural and agro-based products. - Science and technology will have
a more prominent role in the national development. - Development of human
resources. - Rationalization of law and regulations governing investment
promotion. - Streamlining of State enterprises by more business-like management
or by privatization. - Development of the capital market. - Furthermore,
the Thai government also plans to revitalize the country's hydrocarbon exploration
and production, which has slowed down, because of low oil prices and uncertain
outlook. This is in line with the government's energy policy, of placing priority
on the lessening of dependence on imported energy, as well as on the development
of indigeneous energy resources. I
have so far, tried to deal with ASEAN on a country by country basis. While the
problems and challenges faced by each nation are not exactly the same, the responses
would therefore differ, both in substance and degree, from one country to another.
Yet the following common patterns may emerge.
1. All ASEAN countries need to adjust their mentality and expectation to a
future of slower growth than that of the 60's and 70's. 2. Their expansionary
economic policy to counter recession will be selective, circumspect and flexible,
tempered by the limited public funds. 3. Their adoption of export-oriented
policy will force them to be highly competitive in the world market. Tax reform
and restructuring, market infrastructure and export facilities, will be high on
their agenda for cost reduction. 4. Their commitment to a free and fair
international trading system will be put severe test. Their clamour for greater
access to major foreign markets, will be answered by an equally earnest call for
ASEAN countries to be less protectionist themselves. 5. Unemployment and
under-employment problems continue to be serious. Labour-generated and resource-based
investments are essential. 6. Private sectors are being called upon to be
engines of growth. Here lies the opportunity to emulate our friends in Korea,
provided that the ASEAN governments are prepared to introduce concrete 'and practical
measures to make business environment conducive to investment, export and other
economic activities. 7. The governments' interventionist and regulating
role will be reduced. 8. Agricultural production and productivity, with
better marketing techniques and strategy will receive priority attention. 9.
Rural development is to be accelerated. 10. Defence and national security
requirements, need to be placed in the context of overall national objectives
of measured growth and controlled expenditures. The
need for all ASEAN countries to attract foreign investments and have better access
to foreign markets cannot be over-emphasised. Up to now, we have been acustomed
to depending on the markets of industrial nations, particularly the United States
and EC countries. Japan, which has been relatively a closed country, is being
pressed by the United State and European Economic Community, as well as by the
recent substantial appreciation of their yen currency to seek goods and services
from ASEAN. At the same time, we also want to promote a two-way trade with your
country. In this respect, Korea should embark on a new set of measures to open
up your market to ASEAN- manufactured and agricultural products. Larger Korean
economic presence in our countries is also welcomed and encouraged. I
should now like to touch upon the future direction of ASEAN from the regional
point of view. It is true that even though
ASEAN cooperation in general, and in the political area in particular, has been
more than satisfactory, its achievement in the economic cooperative undertakings
has been rather limited. While all ASEAN countries were enjoying a rapid and high
growth in the past two decades, the need to promote intra-ASEAN trade and investment
did not appear to be too urgent. The general slow-down of our economies and unfavourable
economic conditions in the industrialized world, had the effect of changing our
fundamental perception and vision. What was then unthinkable and unrealistic,
now becomes a reachable and imperative objective. Soul-searching
exercise is being conducted in all ASEAN capitals The starting point is that the
present arrangements in ASEAN economy cooperation are not adequate, and more far-reaching
programmes, with proper time-frame, are required to enlarge the "ASEAN market",
so as to stimulate internal growth of ASEAN member States and provide an additional
and important incentive for foreign investments in the ASEAN region. Preparatory
work for the next ASEAN summit to be held in the Philippines in July 1987 appears
to be moving in the direction of gradually and substantially reducing tariffs
among ASEAN States, so as to create an ASEAN free-trade area before the end of
the century. Whether a relatively free-trade
area or a rudimentary form of a common market will emerge in a blueprint from
the summit, remains to be seen. The prospects for such a reality were never better.
The momentum is there. The question is whether the ASEAN government, and private
sector leaders have the fore-sight and the will, to embark on such a cooperative
venture which, based on the principles of free-trade and competition, comparative
advantage, international division of labour and economies of scales, will in the
long run serve the interests of ASEAN countries individually, as well ASEAN as
a regional organization. My own personal
view is that such a programme of action for trade liberalisation, to be taken
and completed within a period of 10 to 15 years, is likely to be the future direction,
of ASEAN. I would, therefore, invite my friends in the FKI to start thinking and
planning for a possible future Korean role in the deeper ASEAN economic cooperation
and larger ASEAN market.
ASEAN
and Its Future Keynote Address Given by
Mr.
Anand Panyarachun
Executive Chairman of Saha-Union Corp., Ltd.
at
the International Conference on the Role of Private Enterprise in Intra-ASEAN
Trade and Investment,
Chiang Inn Hotel, Chiangmai
January
16, 1986 I should, first of all, like to express my deep
appreciation to the organizers of this international conference, Chiang Mai University
and the Asia Foundation, for their wisdom and generosity in convening this timely
and important meeting. The fact that this conference has been able to attract
many distinguished participants, both from public and private sectors, from all
six member countries of ASEAN, is a testimony to the increasing awareness of the
central role that ASEAN can play in the national and regional affairs. Obviously,
an invitation to spend a few days in Chiang Mai, especially during the balmy days
of January, is a temptation that few people can afford to resist. For me, I am
very pleased and flattered to have been asked to deliver a few remarks at the
opening of the Conference. In all ASEAN
countries, private sectors are often referred to as “engines of growth”. As in
all developing countries, ASEAN governments do have varying degrees of involvement
and participation in the economic activities of their countries. By and large,
ASEAN member States follow and believe in a system of free enterprise, and have
essentially a market economy. On that basis, the role of private enterprise, in
intra-ASEAN trade and investment is an indispensable one. In this connection,
I should like to commend the Department of Economics of Chiang Mai University
for their initiative in selecting the topic. As
one who at one time was directly involved in the ASEAN matters on the governmental
level and who, for the past seven years, has been closely associated with the
workings of ASEAN on the private sector side, I naturally maintain my interest
in ASEAN, its development and its future. As the great Chinese philosopher, Confucius,
said, centuries ago, “Prediction is difficult ... especially if it is about the
future”. Acting on that advice, it would be foolhardy on my part to attempt to
predict -- let alone to predict about the future of ASEAN. My present exercise
is merely to try to paint what I hope to be the future scenario of ASEAN. There
is no need for me to go into the history of ASEAN -- the motivations which led
to its formation in Bangkok in 1967, the first decade of its existence as a regional
mechanism for getting to know one another, dispelling mis-trust and mis-understanding,
pursuing modest forms of cooperation, and laying the ground-work for wider and
more significant measures for economic and political cooperation. Then came the
regional political crisis in 1975 when South Vietnam fell, and the dominoes in
the Indo-Chinese peninsular fell one by one. In response to that critical situation,
which could have far-reaching implications for the independence and territorial
integrity of the ASEAN member nations, the ASEAN political leaders rallied together
and convened the first ever ASEAN Summit at Bali in February 1976. The meeting
of the Heads of Governments, prompted by political factors, turned a new chapter
for ASEAN cooperation in trade and industry. Out of the summit meeting, there
emerged the Declaration of ASEAN Concord and other agreements, which reflected
a renewed determination of the then five ASEAN governments to embark on more meaningful
forms of regional cooperation. First came
the AIPs - ASEAN. Investment Projects - undertaken at the government level. Then,
the ASEAN private sectors, spear-headed by the ASEAN Chambers of Commerce arid
Industry, ACCI, were the prime mover in launching ASEAN Industrial Complementation
Scheme (AIC) in 1981 and ASEAN Industrial Joint Ventures (AIJV) in 1982. The private-sector
modalities initially raised high hopes in the ASEAN business circles, but since
then have encountered many difficulties and impediments. So much so that industrial
cooperation on the private sector side has a rough going not dissimilar to the
AlPs which fall into the governmental domain. On
the intra-ASEAN trade, the story is not too bright either. The ASEAN Preferential
Trading Arrangement is a sound conceptual framework, but when put into practice,
national interests invariably dominated the process of negotiations. Regional
interests are usually accorded priority, only if they coincide with or promote
national interests. Economic cooperation has greater possibility when measures
pertain to pooling of resources, but ASEAN governments up to now have not demonstrated
their political will to share the markets. Clearly, financial restraint is a major
hurdle. So long as governments place heavy reliance on import tariffs as a major
source of revenue, any attempt to reduce the income from that source, is bound
to be resisted strenuously by the Ministries of Finance. ASEAN
governments and, indirectly, their private sectors’ desire to protect their industrial
base and their markets, also contribute to the slow progress in the regional economic
cooperation. Having just given you a not
too cheerful side of ASEAN, I should be remiss in my duty if I were not to portray
the positive developments of ASEAN as a regional body. To start with, the formation
of ASEAN in 1967, in the midst of intra-area rivalries, distrust and ominous aspirations,
was already an achievement in itself. Against
the 70’s troubling background the creation and evolution of ASEAN has provided
a focus for stability in the region, and a bulwark for the preservation of international
law and order. Its role in the region is vital, and generally recognized as a
regional device for peace, progress and prosperity for individual member States,
as well as for the area as a whole. What
I should, however, like to raise at this meeting, pertains more to the policies
and directions which, if left blurred and undefined, would unavoidably impede
the pace of progress of ASEAN regional cooperation, and might even stunt the normal
growth of ASEAN, to such an extent that ASEAN would become less relevant to the
critical issues of the “nineteen-eighties”. The
first question which, in my view, needs to be clarified, is how do governments
in ASEAN countries in 1986 envisage the future of ASEAN. Is ASEAN, a regional
organization set up in Bangkok in 1967, to remain as a collective vehicle for
regional cooperation in all fields and for all purposes, deserving more or less
equal attention and priority? Is it moving, systematically or otherwise, in the
direction of horizontal growth - that is all round expansion of cooperation in
general? Or is it about to focus itself on some specific areas, which should have
priority of interest and consideration? I believe that while enlargement of ASEAN
cooperation, in general, was necessary and desirable in the initial stage, the
time has now come for governments to place special emphases on two particular
areas, namely economics and politics. On that basis, member governments must be
prepared to give priority attention and resources to the economic cooperation
which has been lagging far behind the ASEAN political cohesion. Closer and broader
cooperation in the political and economic fields would strengthen national and
regional resilience and deepen the bonds of friendship among ASEAN nations. In-so-far
as political cooperation is concerned, it is generally recognised that ASEAN has
made long strides in this direction. The evolutionary process of consultation,
coordination and eventually harmonization of positions on international, political
and security questions has gained for ASEAN an enviable position in international
conferences, and has made ASEAN an important factor for peace and stability in
the region. The psychological and historical impediments to close cooperation
in the political area have been either removed or set aside. This is another success
story of ASEAN. However, in looking to
the future, I cannot help but feel that the ultimate objectives of “peace, progress
and prosperity” in the entire region and the creation of the Zone of Peace, Freedom
and Neutrality in Southeast Asia prove to be quite elusive. Our success so far,
in the political realm, has not brought ASEAN much closer to the goals we set
in the Bangkok Declaration and other subsequent declarations of intent. ASEAN
governments should continue to re-examine their perspectives of the regional scene
and review their positions as to whether the present trend is in fact contributing
to the achievement of our long-term objectives. One
main stumbling block impeding the progress towards the realization of peace in
Southeast Asia, is the question of Kampuchea. In this respect, while ASEAN policy
and measures in the past have generated close and effective political cooperation,
which inevitably redounds to the credit of ASEAN, it should be realized that our
successes in the United Nations and other international gatherings have a limited
scope. Amore comprehensive strategy is required, to set in motion a process for
negotiation, for the political settlement acceptable to all parties concerned. It
is, therefore, my view that ASEAN governments, individually and collectively,
should persist in and intensify their search for a political solution to the Kampuchean
problem by exploring all possible avenues and modalities which would realistically
and effectively lead to, the early attainment of ASEAN’s basic objectives. The
present stalemate caused by the intransigent stand of Vietnam lessens the possibility
of creating conditions conducive to the organization of peace and stability in
the area, which is a pre-requisite to the eventual establishment of the Zone of
Peace, Freedom and Neutrality (ZOPFAN). ASEAN
commitment to ZOPFAN needs no re-affirmation and yet, because of other pre-occupations
in the region, efforts to promote the concept and gain its acceptance within and
outside the region have slackened, and the momentum was lost in the process. I
believe that renewed efforts should be made to bring about greater understanding
for ZOPFAN in ASEAN countries, as well as with other powers which are in a position
to contribute to the establishment of ZOPFAN. Political
and all other forms of cooperation have important roles to play in facilitating
the orderly development of effective and meaningful economic cooperation. The
slow progress made in this area is due to the differing perceptions of national
interests, and not sufficiently high priority given by member countries to ASEAN
economic cooperation. Economic nationalism plays a dominant role in the formulation
of national policies. This in-grained attitude of governments cannot be easily
swept aside, but must somehow be adjusted. Economic cooperation, whether in the
trade or industrial sectors, would entail short-term and long-term losses and
gains for each member. The criteria, which should govern any ASEAN arrangement
of economic cooperation should, therefore, be as follows: 1.
Benefits to participating member countries should exceed the costs. 2.
Member countries, in participating in any ASEAN cooperative arrangement, would
gain more economic benefits through such participation, than they would have been
able to obtain through their own individual national programme. In
view of the fact that all six members of ASEAN, which now includes Brunei, have
essentially private enterprise systems. It follows that ASEAN efforts to achieve
effective and meaningful economic cooperation should be directed towards setting
up a business-orientated framework, and ground rules which would enable the ASEAN
private sectors to translate economic cooperation intentions into actual business
cooperative ventures. Putting aside the
question of political cooperation, which appears to be moving on course, we are
now left with one key area of concern. That is ASEAN economic cooperation. It
assumes increasing importance in the light of current economic performances of
member states and current international economic trends. The wholesale slump of
commodity prices, debt problem, modern technology and world-wide protectionism
measures and threats, have all combined forces, to place in jeopardy our national
economies and stability, as well as our progress towards full democracy. The
regional political crisis in 1975, led to the first ASEAN summit in Bali in 1976,
which reaffirmed our political commitment to ASEAN, and opened the way for concrete
actions on ASEAN economic cooperation. Is it too much to hope for, that the sluggish
economic outlook for 1986 may spur member governments into holding another summit
meeting in the course of the year? -- A working forum which can renew member States’
political will and spell out their common political commitment, to widen the “ASEAN
market” in order to promote the establishment or enlargement of industrial enterprises
in any ASEAN country for intra-ASEAN trade, as well as for export to other nations.
The political commitment, given jointly by the heads of governments of member
States should, in my view, lay down political guidelines and framework in which
ASEAN economic cooperation would operate. The
widening of the market, which would attract larger foreign investment into the
ASEAN area, cannot obviously be a comprehensive one, but may be applied on a sector-by-sector
or product-by-product basis - qualified by a realistic time frame and workable
procedures. Such specific guidelines could be established at the highest-level
political meeting, and endorsed by responsible national bodies, government officials
and national delegations. As a result, those who have to draw up ASEAN agreements,
in the direction set by their superiors, will not feel vulnerable to any charges
of sacrificing their national interests. There will also be instilled a sense
of regionalism -- a sense of ASEAN identity, which will forge closer relations
among ASEAN members. The adoption of this
strategy, will compel member-States to take ASEAN cooperation into full account
as an important factor in their national development policies and planning. This
will not only benefit cooperation in trade and industry, but will enhance further
cooperative measures in social and cultural areas, as well as in science and technology. Needless
to say, the entire ASEAN organizational structure will have to respond to, and
be compatible with, the new policy frame-work further the ASEAN Secretariat may
usefully have greater input into the ASEAN decision-making process. ASEAN
in its 18 years of existence has more than adequately served the member- nations.
It is a regional grouping that has proved its worth. It has a vast potential,
which is not yet fully explored and exploited. With more determination and greater
vision, ASEAN can be developed into a more dynamic regional organization. It is
high time we pledged our political commitment to meaningful and wider economic
cooperation. In this joint venture between government and industry, the ASEAN
private enterprises, I am confident, will not be found wanting.
Issues
Facing the Pacific Cooperation by Mr. Anand Panyarachun
Vice-Chairman
of Saha-Union Corp., Ltd.
at the International Symposium on
“The
Outlook of the Pacific Economic Community Concept”
Tokyo, March 15,
1985 (Organized by The Japan Member Committee of the Pacific
Basin Economic Council) All of you who
are present here to day need no sermon or enlightenment, on the positive aspects
of Pacific cooperation. Rapid economic growth around the Pacific rim, and its
increasing share of global trade, have rightly caught the attention of the world,
and convinced many people that the 21st century would in fact be the “Pacific
Century”. It is, therefore, not my intention to preach to the converts, but rather
to remind and to raise with you, many of the issues and problems which can retard
the pace of the development in the direction that we all desire. “Pacific
cooperation” is a slogan, which has been bandied about in the last two decades.
Admittedly, it is a term which, like motherhood, nobody “can vote against” and
is so general and innocuous that each one of us finds no difficulty in accepting
the idea. Only when we begin to examine
the term do we find that discrepancies arise - resulting in differences in concept,
approaches and perspectives. Yet, in spite of the painstakingly slow process of
crystallization of the concept, a measure of cooperation in the Pacific area already
exists. Through some existing international organizations, forums and panels,
certain progress, in limited areas and scope, is being made. The question, therefore,
is not whether there shall, or shall not, being Pacific cooperation, but how to
find ways and means of maximizing the potential and promises of the Pacific century. Undoubtedly,
there is already increasing inter-action among the nations of the Pacific, of
which some are instances of cooperation. A multilateral effort, on a scale that
encompasses the length and breadth of the Pacific Ocean, is a phenomenon whose
time has not yet come. So, to talk about cooperation among all States of the entire
Pacific region, is not only unrealistic, but would also be a mis-direction of
our approach and mis-application of our efforts. A
State only wants to “cooperate”, if its national interest is served by such cooperation.
Even in the absence of clear-cut advantage to its national interest, that State
may be prepared to give the idea the benefit of the doubt, if it can be convinced
of the desirability of joining “the club”. That desirability may derive from its
sense of belonging, not in geographical terms though, to the area in which “the
club” is formed, or the “cooperation” is to be devised. Such
desirability existed, when ASEAN (Association of Southeast Asian Nations) was
formed in Bangkok in 1967. There was already an initial sense of belonging in
Southeast Asia and growing consciousness of a “community of interests”. Such was
also the case, when the European Economic Community was founded in 1951. The question
we should ask ourselves now is whether this sense of belonging in the Pacific,
is so widely prevalent, as to assure the desirable degree of cooperation. My own
answer is “not yet”. It is to be recalled
that the post-war era of Pacific Asia was one of political turmoil – nation-building
and its attendant problems before and after independence - and linkages between
those nations were only forged one or two decades after 1945. In contrast, a greater
sense of community long existed in Europe, and the War was only an interregnum.
The post-War period in Europe was merely one of economic reconstruction, to restore
the previous linkages temporarily broken. The
Pacific, on the other hand, denotes a much vaster geographical area, where homogeneity
is an exception, rather than a rule. It consists of several regions or sub-regions
in which many societies do not share a common history or common roots and traditions.
Moreover, they are diverse in their views and outlooks, and have different levels
of political, economic and social development. The
notion of a Pacific identity is still lacking in the area, and this may prove
to be a major impediment to the fostering of the growth and enthusiastic acceptance
of the concept. Government Statements, policies and actions are important educational
tools to change the environment and adjust the people’s attitude. On this score,
growing protectionist measures, restricted market access, and more nationalistic
economic policies do not auger well for the future. Clear and positive signals
from countries concerned, particularly from the industrialized States, are the
pre-requisite to the implementation of the Pacific cooperation concept.
In my view, our efforts should be directed primarily at the core members of the
group, which inevitably should include the six ASEAN States. This approach is
by no means designed to give “The Pacific club” a sense of exclusivity. The selective
approach is based entirely on the practicality rationale. With such diverse interests,
national priorities, regional preferences not to mention varying levels of development
and trade sophistications -- it is well-nigh impossible to identify common aspirations
and objectives in a full-fledged group. From the practical point of view, preliminary
discussions and consensus would be more easily held and attained in a smaller
group of key countries, on both sides of the development fence, leaving a way
open for others to comment and suggest amendments to be taken into account in
the final form. There is one caveat here,
however, just because a State is geographically located in the Pacific area, or
around the Pacific rim, does not automatically mean that the State must at all
costs aspire to or be included in the framework of Pacific cooperation. Geographical
identity should not precede the national interests of the State. Nor should it
prevail over the over-riding interests of the Pacific-group as a whole. I
have so far dwelled on the subject of “The Pacific”. The crucial problem is whether
there is a meeting of minds on the term “cooperation”. Are we meaning the same
thing when we refer to “cooperation”? It is easy to say: “let us cooperate” but
“cooperate to achieve what, and in what manner?” In short, under what terms? In
any cooperative arrangement with a super-power - and in this case both Japan and
the US are economic super-powers, smaller nations simply cannot have an equal
role, or equal say, on the subject matter. Hence, uneasiness and reluctance on
their part to embark on this venture, on a negotiating basis. At
this juncture, it may be useful to recollect the ideas and proposals that have
been used in the past as “trial balloons”. The concept of Asian-Pacific economic
cooperation originated in the mid-1960s with the stimulus coming primarily from
Japan. It owes its genesis to:
a) the rapid economic development of countries in Northeast
and Southeast Asia. b)
the desire to create a new growth centre in the world economy.
c) the calls being made upon Japan to undertake greater responsibilities
for the security and economic development of the Asia Pacific region. The
Japanese, along with the Australians and the New Zealanders, have been deeply
conscious that they alone, are neither fitted historically nor endowed financially
to meet the security and economic needs of the Pacific, in general, and Southeast
Asia in particular. Businessmen in Japan
have been in the fore-front in formulating ideas, in regard to Asia-Pacific sphere
of cooperation. The Pacific Basin Economic Council (PBEC) was thus founded in
May 1967 by business leaders from Japan, Australia, New Zealand, Canada and the
United States. The organization, however, started off on the wrong foot in so
far as it included only industrialized countries of “The North”. This glaring
lack of “cooperation” with the less developing countries in the Pacific region,
tarnished the image of PBEC, and portrayed it as an example of self-centered interest
on the part of the developed countries. Efforts, however, are studiously and conscientiously
being made to rectify the short-coming. Discussions
at businessmen’s level have also promoted parallel discussions among the academics.
In 1968, the first Pacific Trade and Development Conference was held in Tokyo
and considered the ideas of Professor Kiyoshi Kojima of Hitotsubashi University,
for achieving closer economic cooperation in the region. Central to Professor
Kajima’s ideas was his proposal for a Pacific free-trade area. Analysis of trade
flows indicated, however, that Japan would benefit more than any other country
from a Pacific free-trade area. The proposition, therefore, did not gain much
ground and was regarded as premature. Another
proposal advanced at the first Pacific Trade and Development was for an Organization
for Pacific Trade and Development (OPTAD), modelled on the OECD. The proposed
OPTAD was to have provided a forum for the discussion of trade and development
issues, and the promotion of economic integration in the Asia-Pacific region.
Issues relating to membership, organizational structure and functions of such
an inter-governmental body were left unresolved. During
the time Mr. Ohira was Prime Minister of Japan in December 1978, he together with
Dr.Okita, who subsequently became his Foreign Minister, also advocated the concept
of the Pacific Community. Studies, discussions, ensued, but the “community” concept
was not readily acceptable. The reason was the absence of a sense of community
within the area. The State of mind was not there, and the common interests were
not yet perceived. The Korean proposal
for a Pacific Summit Conference, received polite, but lukewarm, interest. It was
envisaged as a scheme with political over-tones and unlikely to achieve anything
substantive. What lessons do we learn from
all these past endeavours? From each of the experiences I have related, I believe
that we can draw the following lessons. Lesson
I: Any system, governmental or private, for Pacific cooperation, must not be seen
to be exclusive or selective, only among those with “developed” status. Any attempt
to forge the cooperation should as far as possible involve the potential States,
both developed and less developed, from the very beginning. Lesson
II: While cooperation is a two-way street, no scheme for Pacific cooperation is
viable unless and until the “South” of the Pacific is convinced that it stands
to gain as much as ”The North” in such a cooperative plan. Lesson
III: Any proposal, which leads to the creation of an organizational structure
with wide authority, while the question of membership remain un-resolved, is too
premature. Lesson IV: A sense of community,
particularly for an area as vast as the Pacific, cannot be imposed or directed
from the top. Much ground-work needs to be done, and due recognition given, to
the heterogenous nature of the region. Lesson
V: Any scheme which tends to give the impression of being politically inspired
or security-oriented is least likely to be acceptable. On
the basis of these lessons, I venture to suggest the following approach: 1.
Don’t be too ambitious. Japanese political leaders were on the right track when
they decided to shelve over-ambitious plans for Pacific cooperation. The ideas
of Pacific free-trade area, OPTAD, Pacific Economic Community are simply not practical
for the 1980s and 1990s. Their turn may yet come in the 21st century. 2.
Be pragmatic and adopt a step-by-step and sector-by-sector approach. We should
concentrate on areas, which are the least controversial and most conducive, to
cooperation. Such selective approach would bring about harmony and gradually promote
the spirit of cooperation among the participants. In the process, constant fear
by less developed countries of being dominated or pressured, would lessen and
we in “The South” would gain self-confidence in dealing with our big brothers
on more difficult and complex issues. 3.
The United States and Japan, and to a lesser degree Australia, New Zealand and
Canada, need to pursue policies, and adopt measures, which give clear signals
to ASEAN and others in the area, that their actions correspond to the words they
repeatedly utter. In the present circumstances, their increasing tendency and
more subtle methods, to restrict their markets and indirectly to stifle our economy,
is viewed by ASEAN with grave concern and has a most serious negative impact on
the evolution of the Pacific cooperation concept. 4.
If ASEAN is regarded as an essential element of Pacific cooperation, as it is
generally recognized, ASEAN should be given better opportunity in terms of trade
and development to be able to sustain their growth and organize themselves into
a more cohesive economic grouping. Strengthening of ASEAN in the economic and
trade area would help to accelerate the realization of Pacific cooperation. ASEAN
with its inner strength and greater confidence, would be your better and more
effective partner than it can be at present. For
the advocates of The Pacific Cooperation, the future has begun! For us in Southeast
Asia-ASEAN, we would like to share the blessings and the benefits of the future
- provided we also have clear perceptions as to where the future is taking us!
Multi-National
Corporations in Thailand An investor's point of view
By
Mr. Anand Panyarachun
Vice Chairman of Saha-Union Corp., Ltd.
at
Asia Pattaya Hotel
July 7, 1984 "Multi-national
Corporations" (MNCs) is one of those subject matters which in recent decades brought
about sharply-divided opinions among governments, planners and board-rooms. This
division often pitted the industrialized countries against the impoverished, and
developing nations, because their political system and economic orientation were
not compatible with one another. Initially, this was not an unexpected or surprising
phenomenon. After all, MNCs in the “fifties” and “sixties” invariably originated
in, and operated from the affluent and market-economy countries. Since these powers
were perceived by their ex-colonies, which only recently gained their independence,
and had yet to develop their own political and economic order, as masters of exploitation,
so were the MNCs based in these developed countries. With
such political over-tone and simplistic assessment, a large majority of the Third
World countries, encouraged and abetted by centrally-planned economy representatives,
became severely critical of the role and purpose of Western multi-national corporations.
At the same time, some of these multi-nationals, driven excessively by profit-motive
and un-restrained by any sense of social responsibility, did in-deed pursue a
course of blatant exploitation and even adopt some corruptive practices, which
lent further credence to the already-prejudiced views of the members of the Third
World. The “sixties” and early “seventies”
were then a difficult period for rational and objective discussions on MNCs. The
North-South dialogue became a forum for polemics and rhetoric. Each side was trying
to make and score a point. The spirit of cooperation and mutual understanding
was lacking, and multi nationals were easy victims of confrontation and economic
nationalism. What went by the wayside was the contribution that MNCs could make
to national development of the receiving countries, if their role and responsibility
were to be defined, and terms of entry worked out between them. There
were, however, some countries, unfettered by narrow nationalism and political
bias, which owed the original success of their semi-industrialized economies,
to the massive inflow of multi-national ventures. This group of countries, led
by the economic "Gang of Four" as they are known - Hong Kong, Singapore, South
Korea and Taiwan, concentrated on exchange-earning export- oriented industries
of textiles and electronics. Their elevation to the category of "New Industrializing
Countries (NICs)" has, therefore, placed the role of MNCs in a more balanced perspective. Infusion
of foreign capital, either direct or in the form of joint ventures, has been viewed
by these countries as an important source of much-needed finance. Furthermore,
because of their capability to provide technology and know-how, MNCs have thus
been regarded as major vehicles for transfer of technology. Foreign
capital's contribution to growth assumes that those industries that are being
financed, act as catalysts for growth, in other sectors of the economy. In poorer
countries, however, MNCs may not be the ideal source of finance or technology.
Technology may be cheaper elsewhere-and may not necessarily be appropriate, that
is, not easily adapted and assimilated locally. It
is hence the prerogative of each country to be selective, and to determine for
itself the advantages and disadvantages of inviting MNCs, be they from the West
or the East, to set up their business. Thailand - free from Western colonialism,
did not feel inhibited in trying to attract the interests of multi-nationals.
Our success in this area is, however, limited and not one of which to be proud!
There are a variety of reasons for such short-coming, many of which are real and
internal and others - bureaucratic and artificially-created. When we look back
to the “fifties”, we know that both South Korea and Taiwan (and even Singapore)
were way behind us in the manufacturing sector. Yet, not only were they able to
catch up with us, but in 1984 they are so far ahead of Thailand that it is practically
impossible to keep pace with them. The
Role of Multi-national Corporations (MNCS) as perceived by foreign investors I.
Multi-national Corporations' prime interest is in carrying on a viable business
operation over time, while earning satisfactory returns on their investment. Profits,
of course, are essential to provide some of the funds for future reinvestment
and for distribution of dividends to shareholders. However, MNCs are not in business
in Thailand, or any country, to earn quick returns, recover their capital and
then withdraw. On the contrary, when an MNC embarks on a new venture or makes
new investments for expansion and modernization, it intends to remain in that
country for an indefinitely long period -- for as long as successful operations
can be carried out. II. MNCs
invest abroad-generally in response to attractive opportunities, and Thailand
with its relatively stable political environment, strong economic performance
and growing domestic markets has attracted great interest. Thailand's abundant
natural resources have attracted sizeable investments in the exploration for oil
and gas and minerals development, such as tin mining. Competitive-cost conditions,
proximity to low-cost material inputs, availability of appropriate labour, a growing
domestic demand, and foreign barriers to import, have spurred foreign investment
in other areas such as manufacturing.
In responding to these competitive factors, it is important to note that MNCs
do not cause shifts in international trade competitiveness among nations, but
are responding to shifts which are already taking place. MNCs have an extraordinary
capacity to take risks and mobilize resources, on a scale that is difficult or
impractical for many national companies. In doing so, MNCs are promoting international
specialization in production among nations and increasing the benefits of international
trade to both importing and exporting nations by helping to raise overall living
standards. III. When considering investments,
MNCs are concerned that the basic "rules of the game" affecting foreign investment
will remain relatively stable or predictable over time. MNCs also want a fair
shake, a chance to compete fairly without policies which discriminate against
them or favour local companies. Changes in tax/fiscal regimes, import/export quotas,
controls on prices and profit repatriation as well as enforced sell-outs and expropriation,
are viewed negatively by MNCs. The right
of governments to adopt such policies is not disputed; however, such policies
often can disrupt the adjustment of an economy to current circumstances, rather
than furthering it. The MNCs cannot demand that relationships remain utterly unchanged
and MNCs must recognize the need for reasonable regulation; they must respond
flexibly to demands for new arrangements, and demonstrate that they too can make
sacrifices required for the common good. Host countries should ensure that new
rules and regulations are not arbitrary, and that they are likely to accomplish
the goals intended; that they allow the investment to obtain a return commensurate
with the risk taken; and that they are coordinated among the various government
agencies. IV. MNCs also have obligations.
MNCs generally see their most important responsibility as producing a high quality
product or service efficiently, at a competitive price, so to earn a profit. Profits
are not just a motive, but a standard of efficiency, in a competitive industry
and an essential condition for staying in business, thus enabling the MNC to provide
continued economic benefit to workers, consumers and host-governments alike. It
also goes without saying that in all of their business dealings, MNCs must abide
by the letter and spirit of all national laws. In these days of instant communication,
if a multi-national catches the headlines in one country, the news is quickly
flashed around the world (be that news good or bad). Thus MNCs cannot risk misbehaviour
as it could ruin their international as well as local reputation. Many MNCs have,
therefore, adopted strict and explicit policies, that demand the highest ethical
behaviour of its employees. As a result, practices unofficially yet commonly followed
in Thailand, often cause delays and inefficiencies in operations. A
second level of corporate responsibility lies in a sensitivity and responsiveness
to the indirect impact of business operations on the society-at-large. The operations
of MNCs must be consistent with national goals. Promoting economic growth, improving
the standard of living, reducing social inequalities, increasing employment and
expanding technical capabilities are but a few of the fundamental objectives of
government. MNCs generally accept these responsibilities and advance national
goals not simply because it is the right thing to do, but because such behaviour
promotes their successful long-term operation in the host country. Among
the most common ways in which MNCs have a positive indirect impact, is by training
nationals in technical/managerial skills, the introduction of more advanced technology
and environmental conservation. i) It is
the policy of some MNCs to train nationals to manage their affiliates worldwide.
Extensive training courses are offered both in Thailand and abroad, for Thai employees,
and rotational assignments overseas are provided for high potential employees. ii)
The size and resources of MNCs make them a prime agent in transferring and introducing
new technology across boarders. R&D programmes are costly, and the financial
capabilities and operating scope of MNCs allow support of the necessary effort. iii)
Protection of the environment is of great importance to MNCs, and energetic efforts
are continually made to improve their products and their manufacturing process. MNCs
also generally accept a third level of responsibility for the general well- being
of the society in which they live and work. MNCs provide financial and technical
support for programmes in health and education, community development and promotion
of national cultural activities. Such efforts reflect an awareness on the part
of the MNCs, that future operations will be affected by the broader social environment
of the country in which they operate, and it is in their interest to improve this
environment. V. Criticisms against MNCs i)
The large size of MNCs has been cited as evidence of power over national economies.
Because of their vast assets and geographic scope, MNCs are sometimes viewed as
immune from control by national governments and have been accused of bringing
about the rise and fall of currencies, impeding the development of local industry,
etc. MNCs typically make large investments
which can pay off only over long periods of time. Under-handed activities may
suffice to grab a quick profit; but will almost invariably hurt the good relationships
upon which long-term health depends. Most wealth is tied up in fixed assets which
are a hostage to good behaviour. Governments have established tax systems under
which MNCs must operate; they collect data on financial and operating results,
and they control operations through regulations and permits. MNC success does
not reflect an ability to avoid control; on the contrary, MNCs owe their long-term
success to their ability to adapt to national requirements and goals. An example
of this locally, is Thailand's interest to have local participation in multi-national
subsidiaries, resulting in a heavy influx of joint venture operations. ii)
MNCs are viewed as a potentially disruptive influence, particularly in developing
countries. The introduction of labour-saving technology when there is unemployment,
paying wages in excess of the going rate, increasing local incomes, which lead
to increased consumption of imports, the remittance of dividends and burdening
limited infrastructure are examples of such claims. These
situations do sometimes occur; however, they are not necessarily adverse to the
country. In aggregate, the benefits to the host country of direct and indirect
increases in employment, economic growth and overall balance of payments benefit,
often outweigh any individual negative impact. It is important, however, to keep
host governments informed about plans and to work out cooperative solutions when
problems do arise. iii) There is often
a concern over the division of benefits between MNC and the host country. This
issue is evident in Thailand very clearly in the government's negotiations for
price and equity participation, in the development of up-stream petroleum ventures.
Much of this concern is based upon the belief that there is a fixed amount of
benefit from foreign investments, although some benefits such as knowledge/skills
acquired by the labour force and subsidiary investment impetus are difficult to
quantify; and that one party can gain only at the expense of the other. As there
is no such fixed limit of benefits, the restrictive measures intended to increase
benefits to the country, are likely to have the effect of reducing such benefits
by discouraging foreign investment. MNCs are most likely to make their greatest
contribution where government policies are well established, predictable and non-discriminatory. iv)
It is often argued that MNCs prevent the growth of locally-owned enterprises by
aggressive and unfair competition. MNCs global operations do provide some advantages
in terms of operating flexibility and diverse sources of supply. However, many
governments have given special privileges such as tax incentives, exclusive dealing
rights and outright subsidies to national or state owned firms. What
do we, the Thai investors, look for in MNCs? i)
Mutual Benefits -- This is essential for any type of long-term relationship -
be it between individuals or organizations. Of course, we all have different ideas
as to what benefits we seek. Some look for sizeable dividends; others want to
reduce risk through diversification. If the benefits sought by the parties involved
differ too much, it is likely one or all will be dissatisfied. So, before thinking
about the specifics of an investment, the investor must have a general goal he
can look to for direction. I hope that
the Thai government, and we in the Thai business community, would always keep
this in mind. So that, when an investment is proposed, the first question asked
is: "Will this yield the benefits I desire?". The second question: "Does it yield
benefits desired by the other party?". If either answer is "no", or even "maybe",
chances for long-run commitment, enthusiasm and satisfaction diminish. In
so-far-as joint public/private sector projects are concerned, there is always
a possibility that the objectives and interests of the partners are not parallel
and such joint ventures may find it very difficult to operate. In that event and
in non-strategic sector, a 100% private venture with Government exercising all
the necessary controls through permits, taxation etc. may turn out to be the most
practicable mode of enterprise. ii) Value-Added
Product -- Thailand has long been a major food grain supplier to the world.
The importance of this grows, as grain exports of other countries decline. Our
major exports are rice, tapioca and corn -- typically in an un-processed form.
On the other hand, Thailand has relied on imports of processed consumer goods
to improve the standard of living. This is a common situation among developing
nations. Thailand's development is no longer
in the infant stage. Rather, we are now right in the middle of industrialization.
The Thai Government has urged the private sector to expand and modernize the country's
industrial base. The Board of Investment provides incentives to attract this kind
of investment. Most importantly, investors have responded by putting up their
capital. So value-added is no longer a good idea to which people pay lip service.
It is a good idea that is being put into practice more and more every day. Yet,
this is not to say there haven't been problems along the way. Nothing worthwhile
is ever trouble-free. Often value-added projects require imports of various raw
materials not available locally. Here investors face import duties imposed by
the government to alleviate trade deficits or protect a related industry. To avoid
these risks, Thai investors have become more interested in manufacturing products
which use locally abundant agricultural products as material inputs. Examples
are canned products, both fruits and sea food. An ideal but not yet fulfilled
example of high value added product using simple. agricultural raw material is
"chemo-papain", a pharmaceutical substance derived from papaya latex. iii)
Transfer of Technical Know-How -- Thai investors want to learn better ways
of doing things. We are interested in the latest production technologies, computer
systems and management practices. To obtain this knowledge, we look to the multi-national
corporations who are in the fore-front with modern techniques. Traditionally,
technical transfer has meant management training of staff. But now as one finds
more Thais, and fewer expatriates, in management positions, this type of transfer
has acquired a low priority. Instead, Thai investors now look for better and cheaper
methods of production. Of course, not all new processes and methods will be adopted
immediately; many are more advanced than Thailand needs, in its present stage
of development. As we continue along the development path, more and more of these
innovations will be added. It is from the multi-nationals where Thai investors
will expect guidance to come. As Thailand
strives toward full industrialization, it is clear that progress in the agricultural
sector is of paramount importance. Although our country is rich in resources,
there is great opportunity to increase production yields. For some crops, tenfold
increases are not un-realistic. Technical transfer is needed in areas such as
genetic engineering and breeding, as well as new techniques for planting, harvesting,
and applications of fertilizer, herbicides and insecticides. Besides
production, technical transfer is necessary for the manufacturing, processing
and the marketing of the products. Appropriate technical “know-how” in processing,
is crucial to the concept of "low cost/high quality". Thai investors are skeptical
about the reliability of the claimed “know-how”. Therefore, we are usually seeking
for the processing technical know-how that has been proved successful elsewhere
at the commercial scale-as opposed to just the laboratory level. Regarding
marketing, the effective know-how of marketing management is needed for corporate
survival in this immensely competitive world. Most Thai investors are very reluctant
to enter into a joint-venture project which has no pre-arranged or contracted
market. Thus, MNCs that are themselves the world's major distributors or users
of the proposed product are the main attractions of the Thai investors. iv)
Broadening the Industrial, Commercial and Finance Base Thailand
has great opportunities to expand in these areas. To start toward this, we would
like to see the multi-nationals already here, increase their investment profile.
Those involved just in trading might progress to assembly. Those now doing assembly
could move to manufacturing. To get this type of commitment, the Thai Government
ought to provide an effective tele-communications system, a fair tax structure,
workable immigration laws and reasonable foreign exchange control regulations. However,
MNCs can help to broaden the business base in Thailand by making greater use of
Thai commercial banking facilities. For example, in addition to being a source
of short-term funds, Thai banks could be involved in exchange transactions as
well as participate in major long-term loan syndicates. v)
Compatibility with the Thai National Development Goals Thai
investors naturally feel attached to the goals laid out in the National Development
Plan. Not only is this good for the country, it is also good for the investor,
as attractive incentives are offered along the way. As such, the National Development
Plan does not require sacrifice from investors. However, it does require commitment
to the long-term well-being and prosperity of the nation. As
companies operating in Thailand, MNCs are expected to join in, and work to achieve,
the National Development goals. Important means to do this are: 1)
concentration on value-added projects; 2)
transfer of technical “know-how”; and 3)
expansion of the industrial base in Thailand. It should also be noted that this
might be best done in the abundant field of Thai agricultural products, on which
the country's economy is based. The growing
strength of the Thai economy, and the country's continuing political and financial
stability, are considered to be major incentives to increased foreign investment
in the economy, while bureaucratic red tape, cumbersome customs clearance procedures,
slow decision-making, ambiguous tax laws, exchange control problems, lack of adequate
patent/copyright protection and limits on levels of foreign ownership and ability
to establish branch operations serve as major dis-incentives. The
main task that lies ahead of Thailand is not so much in offering new incentives
or more attractive terms, but in removing disincentives to investment.
I respectfully suggest that this be placed on the future agenda of the committee
of Economic Ministers and the Joint Public-Private Sectors Committee. A comprehensive
review of the entire question is in order, and deserves priority attention and
remedial actions. Let's get on with the job of putting our house in order -- and
the rest should take care of itself. In
this fast-shrinking but highly competitive world, where technologies used in the
development of products, processes, and software are no longer the exclusive domain
of one country, every multi-national to-day -- and that also applies to a Brazilian,
Korean, Indian, Malaysian and Mexican, is obliged to develop a global manufacturing
and marketing strategy. The concept of national markets is rapidly disappearing.
There are now world markets of which advantage can be taken. The importance of
exports to every major economy of the world to-day, is greater than anything else
we have seen previously. Governments all
over the world have changed their basic attitude towards MNCs, and are assiduously
courting them. We in Thailand cannot afford to sit back and feel complacent about
the matter, or else we shall miss the boat once again. The
paper that I presented to-day is not intended to be a criticism of the past and
the present, but rather “food for thought” for the future. That Thailand has not
been doing too badly is generally accepted. The question we should ponder over,
is whether and how we can do better in order to reach our full potential.
Speech
Archives in English Section
11: Mr.Anand Panyaradhun and the Press
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Towards
Recovery: A Time of Renewal and Partnership Speech
by H.E. Mr. Anand Panyarachun
Former Prime Minister of Thailand
at a Joint
Meeting of the U.S.-Thai
and the Thai-U.S. Business Council
The Shangri-La
Hotel
December 2, 1998
It is a great pleasure and honor for
me to have the opportunity to address this joint meeting of the Thai-U.S. and
U.S.-Thai Business Council. Looking around the room, I am delighted to be amongst
friends and colleagues, for, if anything, it reminds us of the important role
of the Council, or to be more precise, the two councils, have played in serving
as a bridge linking not only our business communities but the peoples of our two
countries in ever stronger ties of friendship and partnership.
Of course,
these days the word partnership has become an all-too-familiar cliche-used and
abused so frequently that it has come to have a hollow meaning. But I believe
that for our two countries, although very much different in terms of history,
size, power and level of development, our partnership has been one of the most
enduring legacies of our long-standing relationship. Certainly, it is not
difficult to recall the many instances in the past in which our two countries
have gone through thick and thin together, be it the Korean war, the Vietnam conflict
and even our small but all-important role in the Gulf War. More recently, we have
worked to bring peace, stability and freedom back to Cambodia and to strengthen
the foundation of a peaceful, stable and prosperous regional order in Southeast
Asia and in Asia and the Pacific as a whole. And, importantly, we both share a
commitment to the cause of democracy, free enterprise and economic liberalization. Indeed,
our partnership has been subjected to the test of both good times and bad times.
And so I, for one, see the current economic crisis we are going through not only
as a challenge but, moreover, as an opportunity for our two countries to reinvigorate
our partnership - not only to make it stronger but also to make it relevant to
the demands of changing times in which nations and economics are interacting and
integrating ever more closely. No doubt, only those who are foolhardy would
still cling to the notion that this is an Asian or East Asian economic crisis.
Its implications for the global economy is all too evident. Its impact has certainly
gone beyond the realm of economics, as we all have witnessed from the events that
have transpired whether in this region or beyond. Already, much has been
said and much has been written about the crisis. I am sure that we will have to
leave it to historians and economists to have the final say. I am also sure that
all of you have already been bombarded with the latest facts and figures regarding
current economic developments in Thailand and in the region. With so much information
and literature available, it is not easy to distinguish between real analyses
and mere conjectures, and between myths and realities. To be sure, the crisis
is a complex phenomenon in which many diverse factors come into play and certainly
does not lend itself to sweeping generalizations. Some have cast the blame on
too rapid economic liberalization. Others have pointed an accusing finger at the
problem of so-called crony capitalism. While many others have placed the responsibility
on rogue financial traders and the volatile global financial markets. Perhaps
there are elements of truth to all these points of view. But the plain and
simple truth of the matter is that if we want to move towards the path of achieving
recovery as early as possible, then it is incumbent upon us to start out from
the premise that we have no one to blame but ourselves. I am certainly no
expert and have no theory to advance. But I do believe that if there is one common
factor, one common thread that runs throughout this yet unfolding drama, it is
the sense of complacency on the part of all of us. That is why what at first originated
a few years back as a financial crisis has turned into a crisis of confidence.
The fact of the matter is that most of us were under the illusion that somehow
and some way the crisis would work itself out or that somehow or some way we could
remain an island of prosperity in a sea of turmoil. Obviously, that is far
from the realities we are confronted with -- the realities of globalization and
the realities of our interdependence. For us in Thailand, if anything good
has come out of this crisis, it is the fact that it has woken us up to the realities
of the challenges facing us, the realities of what needs to be done, particularly
the reforms that should have been taken some time ago but were not taken because
we all had become too complacent and too self-indulgent. So I believe that waking
up to the harsh realities that we are faced with is the first and most crucial
step towards recovery. It is for this reason that Thailand's financial crisis,
as many have observed, is a blessing in disguise. Its greatest blessing, I believe,
is that it has compelled us to become more introspective. Now that we have leaned
first-hand the realities of the global market, we should be able to muster the
will and the determination to correct the weaknesses in our system that were left
untended during our high-growth days. If I were to put it simply, our economic,
political and social institutions failed to keep up with the rapid pace of our
economic development. Our development became lopsided as extravagance and unbridled
spending spree took precedent over good and solid management, high growth became
more important than equitable income distribution and quick profits became the
over-riding concern rather than sustainability. The path towards early and
sustained recovery will depend on how successful we are in seizing the opportunity
presented by the crisis to undertake real and meaningful reforms and restructuring
not only in our ailing financial sector but, no less importantly, in the way we
manage our economy and in the way we conduct our politics. Indeed, one does not
have to be an expert to realize that our economic downfall was not simply due
to the failure of our financial sector, but also due to the failure of our economic
management and the failure of those in power to provide the anchor of good governance
that was sorely needed when signs of the coming crisis began appearing. In
saying this, it is not my intention to criticize anyone or any party because,
as I noted earlier, all of us are to be blamed in one way or another. Now is the
time for all of us to rally together in order to move forward in the process of
reform and renewal. Let me at this juncture emphasize that I hold no government
position and certainly cannot speak on its behalf, officially or unofficially.
And perhaps it is still too early to pass judgment or draw any definitive conclusion
on the record of this government. I believe that the present administration should
be given credit for making an earnest and determined effort to push for and put
in place a process of reform and restructuring in our economic, political and
social structures that I very much hope will last beyond its life-time. I
am sure that most of you are already familiar with the specific measures that
have been taken to date, some of which have actually gone beyond what has been
prescribed by the IMF. They include, as you well know, the early adoption of a
fiscal austerity and discipline, the closing down of insolvent financial companies
and banks, allowing foreign investors to hold majority shares in banks and finance
companies, the strengthening of prudential supervision of the financial sector,
increasing transparency in the way our banks and financial firms are run and the
forthcoming revision of cumbersome and outdated bankruptcy and foreclosure law
in order to bring them in line with international practices and facilitate investments
in Thailand, both local and foreign. We, in addition, have to make changes
to the so-called Alien Business Law whereby a much greater range of businesses
and occupations will be open to foreigners and foreign investment. On top of this,
we have also relaxed restriction on foreign ownership of land and condominium
units in Thailand. Some of these reforms are of course still subject to
approval by the Thai parliament and undoubtedly you can expect some of the specific
points to be discussed and debated vigorously. That is to be expected in a democracy.
To me what is significant in these reform measures, above and beyond the specifics,
is the fact that underlying them is our commitment to an open economy and to continuing
economic liberalization, but of course with greater discipline and closer supervision
this time. Of no less significance is that the fact that these reforms, to one
degree or another, are meant to build into our system the concept of good corporate
governance, greater transparency and accountability with a view to raising the
standard by which business activities are conducted in Thailand. Reforms
of our financial and corporate sector are only part of the answer. The other side
of the same coin is the need for political reform. We aspire to promote good governance
within the public and private sectors at one level, and their relationship and
interaction with the public at another level. To this end, I am glad to note that
the political reform is very much part and parcel of the process of recovery and
self-renewal that we are undergoing. I am also pleased to note that last
year we passed a new constitution that, for the first time in Thai history, was
drafted with the full participation of the public. As someone who played a part
in the drafting process, I hold out considerable hopes for this constitution.
I like to think that over time, it will transform Thailand into an open, democratic
society, where transparency and accountability are the norm rather than the exception.
I like to think that the provisions of the constitution will ensure that human
rights and civil liberties are better protected and enforced. I like to think
that the changes the constitution makes in the electoral process will reduce money
politics and corruption, and that the check and balances it provides will result
in greater accountability on the part of politicians. Of course the constitution
is not a panacea that will cure all of society's ills overnight. All sectors of
society must embrace the ideals behind it before it can make a difference. But
we have truly made a major step forwards. In the midst of such a crisis,
as we become engrossed and immersed in all the figures and statistics, there is
the danger that we can lose sight of the fact that development is not about growth
per se. For in the final analysis, development is all about raising the quality
of life of our peoples, promoting social justice and total human development.
And so our path to recovery must also be centered on the people by ensuring that
adequate social safety nets are in place to cushion the social impact of the crisis
and ensuring that we continue to invest in our human resources -- our most precious
asset. Investment in our people is indeed an investment in our own future. Therefore,
I find it most gratifying that this government has placed the issue of social
safety nets and human security on the top of its recovery program. What
then are the prospects ahead? I have no crystal ball that would enable me to project
into the future. But I like to think that we are able to learn from our past mistakes,
if we can stay the course of reforms that embraces all segments and aspects of
the Thai society in a process of renewal, then, I have every confidence that the
path to recovery is within our reach. Already, there are signs, however,
faint, that the Thai economy is bottoming out and growth, however small, can hopefully
return by the end of next year. It is all the more necessary for us to move forward
with greater vigor and determination, recognizing that the path ahead will bring
more pains and require larger sacrifices, for sure. I still firmly believe that
our relative success in the past was not simply due to luck. We were able to do
the right things and make the right choices, though in the end we became a victim
of our own success. Much will indeed depend on the choices we make in the days
and months ahead. Our economic fundamentals remain strong, especially our agricultural
sector and agro-based industry, as well as our tourism industry. Our people are
hard working and our continued investment in our human resources will ensure that
our workforce is equipped with the skills and training needed for us to remain
competitive. Moreover, the Thai society has always been marked by a sense
of resiliency and underlying stability. Our reforms reflect our irreversible commitment
to an open economy and economic liberalization. Our geographical location makes
us a key player and a key link in the widening network of regional and sub-regional
economic activities and cooperation. As we move on the road to recovery,
what is most essential is maintaining faith in ourselves and in our ability to
bring about the needed reform and renewal. We also need the confidence and
the support of our friends and partners especially our long-standing friend, the
United States of America. If Thailand can succeed in our economic and political
reforms, we can indeed inspire others that open economy and open societies are
the surest path towards recovery. Perhaps, Thailand might not return to
the days of double-digit high growth of the past. That in itself should not be
our goal. The goal of our recovery strategy should be one of sustainable development--sustainable
in terms of income distribution and full development of the human potential, in
terms of good governance in both the corporate and public sector and in terms
of protecting our natural resources and the environment for our posterity. To
this end, reform, renewal and partnership lie at the heart of the path to our
recovery from the crisis. Provided we make the correct choices, we hope to emerge
not only stronger and healthier but a little bit wiser as well.
Thailand
and the United States -
Old Friends Seeking a New Relationship
by Mr. Anand Panyarachun
The Inaugural Phillips Initiative Address
University of North Carolina, Chapel Hill
April 6, 1995 It is a
great honor to be at the University of North Carolina to speak at the inaugural
Phillips Initiative Symposium, particularly because it gives me the opportunity
to look at the future of the relations between Thailand and the United States. It
was almost exactly 200 years ago, I am told that the first student came to Chapel
Hill to study at this, the first public university in the United States. This
student, one Hinton James, was two weeks late for the official opening because
he walked the entire distance from Wilmington. It is a sign of the immense changes
in the world that I have been able to come from the other side of the globe in
far less time than Hinton James took to come from Wilmington. But of course I
did not have to walk. Still, it was a long journey for me, and one that
I would not have undertaken without good cause. The Phillips Initiative
is a generous and imaginative effort on the part of Mr. "Phil" Phillips,
who serves with me on the board of the Asian Institute of Technology, to help
shift that relationship to a new level. The focus of the Initiative on relationships
between universities is, I believe, a perceptive one. As we head into the next
century it will be our ability to learn and to teach, that will determine whether
our increasingly close-knit world society will survive the changes that are coming
at us with bewildering speed. I would like to spend a few moments talking
with you about some of the implications of these changes for our countries, once
so far apart, but now separated by much less a journey than traveled by the first
student at this great university. In that year of 1795 both our countries
were building anew after difficult wars of independence. The United States had
freed itself from Britain. Thailand, then known as Siam, had just driven out the
Burmese army after years of invasion and occupation. These struggles demonstrated
the fierce desire of both our peoples to be independent. Over the years,
this common desire for independence has brought together our very different countries
as allies, trading partners and friends. When the tide of European colonialism
rolled over Southeast Asia in the 17th, 18th and 19th centuries, Thailand was
the only country in the region to remain independent. Thailand and the United
States had occasional contact, but it was not until 1833 that the first formal
Treaty of Amity and Commerce was signed. So friendship, from the early days, was
based on mutual commercial interest rather than politics or international security.
Not, I would argue, a bad way to start. Our relations developed slowly over
the next several decades, and travel between our countries still meant weeks of
hardship. Following World War II, however, we faced together the challenges of
what was called "The Cold War". Sadly, in Asia, it was a very
hot war. First there was Korea and then Vietnam. In both conflicts, Thai troops
fought alongside Americans. The war in Vietnam not only brought 50,00 American
servicemen to Thailand, it joined our countries as allies in a confusing conflict
that is still debated in both countries. Now, however, the region and the
United States, are moving to a new era of peaceful cooperation and partnership.
Vietnam, Laos and Cambodia, once threats to Thailand and to other U.S. allies
in the region, are actively seeking trade, investment and friendship. Where Thailand
was once the front-line state against Indochina, it is now the doorway to these
countries, as they try to reform their economies and build a vibrant private sector. This
regional change is the first reason that it is time to find a new model for Thailand's
old and friendly relationship with the United States. Under external threat, Thailand
relied on the United States for training, equipment, material support and emergency
help. That relationship has changed. Without that threat, Thailand continues to
cooperate with the United States. There are annual joint military exercises. The
security relationship is, however, no longer a dependent relationship. Thailand
pays for its own security and determines its own policies. The second reason
is economic development. In this area too, Thailand has changed beyond recognition.
When I first served as Ambassador to the United States in the 1970s, our major
exports included rice, tin and rubber. Now they comprise computers, hard disk
drives, chemicals, integrated circuits, jewelry and other manufactured goods. I
was pleased and proud during my two terms as Prime Minister to be able to enact
a great deal of new legislation that improved the tax structure, that liberalized
the financial sector and trading regime, that provided for better protection of
the environment and that opened much more of the government decision-making process
to outside scrutiny. Although my government was able to push these reforms further
and faster than other governments, many of these improvements were already under
development by my predecessors. Nearly all of them have been supported by my successor. So,
for businessmen, there is great stability behind the headlines in Thailand. The
current elected government is currently well into its third year in power. More
important for the underlying stability of the nation, His Majesty King Bhumibol
Adulyadej, will soon complete his 50th year on the throne. His Majesty has provided
not only a deeply stabilizing influence, but a marvelous model of concern for
the poor and for the general well being of the nation. Policy stability,
national unity and strong foreign investment have combined with our highly trainable
work force to spark rapid economic growth. The pace of this growth accelerated
in the mid-eighties, and has now averaged about 10% for the past seven years.
GDP growth continues this year at about 8.5% per year, with export growth above
20%. This has transformed the business scene. Where once we had only small
trading firms dealing in basic commodities, we now have major companies, including
some Thai-based multinationals. The CP Group, which once sold seeds from
a shophouse, is now a $4 billion a year company that has operations in Europe
and the United States. CP is the largest single foreign investor in China with
operations in 23 provinces that stretch from feed mills and aquaculture to motorcycle
manufacture, tele-communications and satellites. Bangkok Bank has become
the largest bank in Southeast Asia. The Shinawatra Group, has expanded from
computers to cable television to telecommunications. It has launched the first
two Thai-owned satellites. The Siam Cement Company has diversified its original
base in construction materials to produce more than 20,000 different products,
including petrochemicals, auto parts, machinery and paper. It is Thailand's oldest
and largest industrial company. These companies are not rare exceptions.
More and more Thai companies are reaching the point where they are major players
on both the national and regional level. These companies provide opportunities
for American firms to find strong partners in Thailand and in the region. The
private sector and the hundreds of successful foreign-Thai joint ventures have
provided the dynamism that continues to drive economic development. With that
success, of course, comes even greater responsibility. The private sector must
help find ways to address key problems such as education, environment and infrastructure,
if for no other reason than to provide the basis for sustainable business development.
So the private sector must play a major role in the new development relationship
with the United States. Thai culture is old and strong, but its origins
lie in situations in which it was important for leaders to bind their people to
them with benefits in return for loyalty. So Thai society was held together by
relationships of patron and client. That also became the model for the relationship
between the United States and Thailand for much of our modern history. In security,
in international politics, in trade and investment, the United States was the
patron and Thailand was the client. Much that was good and beneficial to
both came out of that relationship. The United States, through the U.S. Agency
for International Development, spent more than $1 billion on infrastructure, technology
transfer and training in Thailand. Some of that was useful, some was wasted. Given
the changes that have taken place, however, the patron-client relationship, the
donor-recipient relationship is no longer appropriate or beneficial for either
country. It has already begun to change, USAID will close its doors in Thailand
in a few months. We should not regret this. We should welcome the change, but
we should not abandon decades of cooperation. We must not overlook continuing
development needs. The challenge is to move on and find a new model for our relationship. Much
progress has already been made, particularly in business. Having worked in the
private sector now for more than 15 years, it is clear to me that this is the
most important area of our relationship. Two-way trade between the United States
and Thailand last year grew 23% to more than $15 billion. Thailand still has a
trade surplus with the United States, but last year Thai imports of American goods
grew by nearly 30% and the gap is narrowing. The United States is still Thailand's
leading market. There are lots of reasons for Americans to do business in
Thailand. We have been prudent and conservative managers of our finances. Our
currency has been stable relative to the dollar. We have been careful to spend
within our means. In fact, the government has run a cash surplus for the past
seven years. Thailand is opening up new opportunities for the private sector.
We have begun to privatize the electric power industry where demand growth of
up to 14% per year is expected. (I know officials from the North Carolina company
Duke Power were in Thailand only a couple of weeks ago). We are liberalizing our
financial sector, offering new bank licenses and providing offshore banking opportunities.
The fast-growing stock market and the newly developed debt market need American
financial skills and services. Thailand can provide American businesses
with a gateway into Indochina. Thailand is also a key member of the Association
of Southeast Asian Nations - a market of 350 million people with more than $450
billion in GNP. As road and rail links are built, Thailand will provide land access
into Southern China. Cultural kinship has already given Thai businesses a head
start in the booming China market. Operations in Thailand provide American companies
with a base for expansion into China as well as the rest of the region. Thailand
is happy to do business with people from all countries, but Americans enjoy a
special advantage. Under the 1966 Treaty of Amity and Economic Relations, U.S.
investors are exempt from many of the restrictions imposed on others. Americans,
for example, can hold 100% of their Thai companies while other nationalities are
restricted to 49%. Despite the recent surge in Asian investment in Thailand,
the United States still accounts for about 20% of all foreign investment. Although
North Carolina businesses may not be widely known in Thailand, it is interesting
to note that the current president of the American Chamber of Commerce in Thailand
is from North Carolina, and so were his two predecessors. I am told there are
a growing number of businesses and investments that carry the good North Carolina
name of Kenan. I am sure the hi-tech industries of North Carolina, such as those
at the Research Triangle Part, will find ready markets and capable partners in
Southeast Asia. The rapid economic growth of Thailand, however, does not
mean we no longer need American development cooperation. In fact, rapid industrialization
has actually increased needs in those critical areas I mentioned earlier: infrastructure,
education and the environment. Industrial development has driven up incomes,
but industrial waste now threatens the rivers and canals which irrigate the fertile
fields that make Thailand the world's leading exporter of rice. Hazardous wastes
and municipal garbage create health problems for all, but particularly for the
urban poor. Air pollution in Bangkok is another threat to health. None of
these problems are unique to Thailand. Many have already been addressed in the
United States. So you can provide some of the technology and expertise we need.
But we do not need it on the basis of handouts. Our rising incomes and our
rising pollution problems create potentially lucrative new markets for U.S. environmental
products and services. The barriers of distance, language, culture, law and simple
unfamiliarity, however, sometimes prevent needed linkages from being made. As
chairman of the Kenan Institute of Asia, I am pleased that the Kenan Institute
is working to overcome those barriers through management of the U.S.-Thailand
Development Partnership. And it is doing this in a way that provides a new model
for foreign cooperation, not foreign aid. The differences between this new
"Partnership model" and the old "handout model" are clear. At
the Partnership, an experienced staff of bilingual Thais and Americans work to
develop and communicate needed information on markets and technology. They use
business skills to create partnerships that focus on a public need, but have private
sector mechanisms to keep them going. Funds are available, but they are
only provided if the Thai and the American companies share the costs. This reduces
the burdens of oversight because the parties involved are using their own money.
It simplifies project development because few dead-end projects can ever get started.
It provides for long-term sustainability by meeting market needs and making profits.
Perhaps most important, there is a mutual benefit. Thailand gets proven
technology and U.S. company get quality business partners and a fast-growing market.
The relationship is therefore no longer one of donor and recipient. It is not
patron-client. It is a relationship of equals. It is a business relationship that
directly benefits Americans - be it business firms or labor force. There
are also opportunities for mutually beneficial cooperation on infrastructure.
The Kenan Institute is working with the Thai private sector and government to
create a new kind of infrastructure for 21st century manufacturing and logistics:
the Global Transpark. This idea, developed by Kanan Institute's Jack Kasarda,
has caught the attention of businessmen and planners who see the need for overcoming
infrastructure bottlenecks as the demand increases for speed to world markets. With
the rapid economic development, Thailand also faces the need for more education
at all levels. Our education has historically been geared to producing the governing
elite. Now the needs of our growing economy is for engineers, technicians, doctors
and managers. We need to move towards the admirable concentration of educated
brain power that the Raleigh Durham area has achieved. It may be some time before
we have 25% of our work force with university degrees as you do in this area,
but we must move in that direction. Here too, there is a mutual advantage
in working together. As Dean Paul Fulton often says, business must be international.
That means that top business schools such as the Kenan-Flagler School, must provide
an international education. With huge markets developing in Asia, your graduates
need to learn our ways of doing business, just as our young managers need to master
the tools and techniques developed in the United States. Several Kenan programs
address these needs: ท The CitiBank International Fellowship Program brings
top Asian scholars to the Kenan Institute each year to carry out advanced research. ท
The Kenan-Flagler Business School is recruiting more top students from Thailand.
I understand there are at least 13 Thais here now. ท The MBA summer internship
program brings about 20 students to work in Thai businesses each year. ท
An executive education program has started. I was pleased to open the first pilot
Kenan program in executive education in Thailand just last month. The program
was an intensive course in the strategy of transnational technology cooperation.
With some seed funds from the Phillips Initiative, the program brought together
the University of North Carolina, the Asian Institute of Technology, and Thammasat
University, Thailand's second-oldest university. It was an important step towards
expanded university-to-university cooperation that focuses on the real needs of
business. There is much more that can be done and should be done. But it
must be done on the new model of cooperation, not donation; of sustainable activities,
not quick fixes. We need to harness the private sector to the work of solving
public problems. The creation of this new "Partnership model"
of international cooperation will benefit the new relationship between Thailand
and the United States. It goes even beyond that. The United States needs to find
ways to help world development and help itself at the same time. There are many
countries, particularly in East Asia, where the dynamism of the private sector
offers the potential for far greater effect through the Partnership model than
could ever be achieved through the traditional model of foreign aid. There
is little doubt, the next century will be the Pacific Century, but it is not enough
to trumpet the changes so clearly coming. There are still barriers of culture,
history and understanding that must be overcome. There is much that can go wrong.
But there is also a lot we, here in this room, can do to build the kind of relationships
that serve the needs of all the Pacific countries. We, in Thailand, look
forward to developing this new mutually beneficial relationship, working closely
with American universities, government, businesses and the American people. Together,
I believe we can make a difference that will benefit all of us.
Remarks
by Mr. Anand Panyarachun
at The First Meeting of the Thai-U.S. Leadership
Council
Bangkok, Thailand
March 7, 1993
Mr. Chairman, Distinguished
Participants, Ladies and Gentlemen
I am honoured to have this opportunity
to address the first meeting of the Thai-U.S. Leadership Council. It is gratifying
to see so many dear friends and make my acquaintance with distinguished experts
and opinion leaders on the subject of Thai-U.S. relations. The Thai-U.S.
Leadership Council is meeting at a most opportune time. Thai-U.S. relations stand
at an important juncture. The basis of our relations have evolved from security
considerations into a complex tapestry in which trade and investment figure most
prominently. The trend in our bilateral relationship is by no means unique.
Unprecedented successes in economic development have transformed Southeast Asia
- and the Asia Pacific region in general - into one of the most dynamic regions
in the world. Lured by exceptional opportunities and profit, trans-pacific trade
and investment has grown spectacularly. In fact, your trade across the Pacific
is now almost 40 percent larger than trade with Western Europe. It would not be
an exaggeration to say that the Asia Pacific region will be the world's fastest
growth center well into the 21st century. Precisely because of this remarkable
growth, I cannot help but be struck that U.S. policy towards Southeast Asia over
the past five years is one of "benign neglect". In the rest of the world,
momentous changes have compelled U.S. attention, including the break up the Soviet
Union and Eastern Europe along with the crises in the Persian Gulf and Africa.
Perhaps in its preoccupation with these important challenges the U.S. may have
been too distracted to notice and take advantage of the fact that Southeast Asia
has been growing quietly but rapidly towards prosperity and political stability.
For whatever reason, it appears that Southeast Asia has been put on the backburner
of U.S. foreign policy, and under servedly so.
The new Administration
of President Clinton, elected on a platform of change, has articulated many new
policy initiatives. President Clinton has emphasized his strong belief in democracy
and human rights which will accordingly become an important component in the Administration's
foreign policy. More recently, President Clinton presented his international economic
policy, encapsulated in a five-point plan. He must be praised for emphasizing
domestic economic reforms and priorities as a primary means for reviving U.S.
economy and its competitiveness, and for arguing against a retreat into protectionism.
President
Clinton made clear that trade is a priority element of American security. He called
on trading partners not to expect something for nothing, and insisted that U.S.
trade laws be strictly enforced. These policy initiatives raise worrisome
questions. President Clinton's pledge to support democracy is welcome, but there
is a fine line between support and intrusion. Is the U.S. about to move on the
path of self-appointed righteousness? It would appear that the U.S. will be less
hesitant to impose its own standards and models in the area of democracy, human
rights or the proper conduct of trade policy. There also seems to be a greater
willingness on the part of the U.S. to dictate, coerce and take unilateral actions.
I question the appropriateness and wisdom of policy based on these presumptions. There
is no doubt that trade and economic interests assume greater importance in the
post-cold war era. Yet, the interests of nations and their relations cannot be
defined by trade alone. Other dimensions of a relationship cannot be ignored.
National interest is multi-dimensional and trade must surely be but one important
part of the total package. I have said earlier that Southeast Asia and the
wider Asia Pacific region's dynamism and growth potential will make it more important
to America economically. The continued presence of the United States in this region
with greater emphasis placed on economic matters is welcomed and in keeping with
global changes. Yet, America should be careful. Its trade problems with
this region - by its own admission - is partly caused by the U.S.'s economic shortcomings
at home. If we wish to apportion blame, then clearly the U.S. cannot afford to
cast the first stone. Moreover, the region is undergoing an economic and
political transformation for the better. We are making progress, and this should
be allowed to occur at a pace that we in the region consider appropriate and feasible.
I strongly question the wisdom and effectiveness of an U.S. policy that would
try to dictate the pace of change from the outside. In the same manner, trade
issues must be viewed as a part of the total relationship and in the context of
broad mutual interests. In fact, as the world grows more interdependent
and the U.S. faces a relative decline in its economic standing, the appropriate
policy would be partnership and consensus rather than dominance and unilateralism.
Indeed, there is much that the U.S. can do with this part of the world in a way
that would encourage current trends and promote common interests. To do
this, the U.S. must first re-focus its attention on the region and recognize it
as an entity which has its own needs and constraints. Bearing this in mind, the
U.S. may wish to define its overall interest and map out a strategy to strengthen
its presence in Southeast Asia, a region that the U.S. readily admits to being
behind other economic powers. In particular, U.S. exports and investment
in Thailand lag behind other countries. The U.S. government and business community
must ask themselves several related questions. First, does the U.S. have a comprehensive
plan of action to enhance her presence and competitiveness in Thailand and Southeast
Asia? Second, does she have a clearly defined strategy to exploit growing commercial
opportunities in Thailand and in Thailand's neighbouring countries". What
about possibilities for working WITH Thailand in third markets? Moreover,
I am sure that an overture by the U.S. side would receive enthusiastic response
from its Thai counterparts. It is time to put an end to the narrow and legalistic
focus on issues that divide, and concentrate anew on those that bring our two
countries closer together. Deliberate "activism" in Thai-U.S.
relations to promote mutual interests is timely, worthwhile and necessary. Surely
a market that has been growing and will continue to grow at the rate of about
8 percent per year should not be ignored. Yet, apart from a call by USTR over
a decade ago for an ASEAN-U.S. Free Trade Area which was overshadowed by the Uruguay
Round, the U.S. has still to formulate her policy agenda - or a "vision"
- for its economic relations with the region for the remaining years of this century
and beyond. The time seems right for new styles, new approaches, new initiatives
and plans of action. Such activism need not be confined at the bilateral
level. Many worthwhile initiatives can be undertaken with ASEAN countries now
well on their way to the creation of a free trade area. Moreover, a forum, where
new "activist" ideas can be explored, already exist. I am referring
to the ASEAN-U.S. dialogue which will soon meet in Brunei Darussalam. I
have long been a supporter of the Asia Pacific Economic Cooperation or APEC, while
in the private sector and in government. In line with the new "activist"
approach and especially with the U.S. as the Chairman of APEC, the new U.S. Administration
should find it beneficial to work urgently with other APEC member countries to
further develop this potentially beneficial regional organization. After all,
APEC comprise an area of immense potential, which already accounts for more than
half of the world's GNP. I have not dwelled on security issues, apart from
saying that tensions have eased both globally and regionally. There is no doubt
that conflict remains in the region. The United Nations is having difficulty implementing
the Paris peace accords on Cambodia and durable peace in that unfortunate land
still seems elusive. As one of the most extensive and costly United Nations
operations, UNTAC's performance will have a far-reaching impact on the prospects
of peace and development through cooperation in our region. In the emerging new
world order, an expanded United Nations is expected to play an important role
in the resolution of conflict. The United Nations and other countries, including
the U.S., should therefore redouble their efforts to bring peace to Kampuchea,
although agreement and trust among the Kampuchean factions are also fundamental.
The South China Sea is another pending issue for the region which will
require delicate handling by the parties concerned. In view of this and other
regional security concerns, there have been calls for the establishment of some
sort of regional security framework. Further calls have also been made for the
U.S. to maintain and reshape its presence in the region. I subscribe to these
ideas and to the notion that active U.S. presence in broader terms will indeed
be a stablizing influence in the region. As Prime Minister of Thailand, I also
suggested last year that APEC may well be a useful regional framework for the
discussion of non-economic issues. I would like to conclude by wishing
the Thai-U.S. Leadership Council every success in its important endeavour to further
improve and enhance Thai-U.S. relations. We live in exciting times of rapid political
and technological changes. These changes have opened up a new era, where durable
peace and economic prosperity lie within our grasps. I am hopeful that, with the
help of the Leadership Council, Thailand and the U.S. will develop a broad-based
partnership that will play an active and positive part in fulfilling the promise
of peace and prosperity in the new world order.
Keynote
Address
by Mr. Anand Panyarachun
Executive Chairman of Saha-Union Corp.,
Ltd.
on "The United States and Asia; Changing Perceptions"
Hilton
Hotel, Bangkok
July 11, 1985
Asia, in its historical past,
was often perceived by the United States as a land of mystery and inscrutability,
while the United States in turn was invariably perceived as a new world and a
land of hope and opportunities. These historical perceptions still hold true to
a certain extent, but new factors - political, security and economic, have come
into play and have gradually and perceptibly altered the thinking on both sides
of the Pacific.
The immediate post World War II period and the entire Fifties
and Sixties were a straightforward scenario - the good guys versus the bad guys,
good versus evil, democracy versus communism, allies against foes. In a way, it
was a simplistic attitude and concept. The United States was regarded as
an omnipotent, omnipresent and omniscient power. Their stance in the Korean peninsular
confirmed this impression. Those Asian countries that felt threatened by the aggressive
communist forces gravitated towards the American orbit. Their natural fear, fueled
by the American evangelical zeal and single-minded purpose, governed their policies
and actions which appeared to be subservient to the leader of the Free World,
so much so that the unequal partnership was seen as a patron-client relationship. At
the same time, the Asian communists, inspired by their own intense nationalism
and ideology and fortified and supported by their allies and friends in the Third
World, engaged in a war of attrition. They proved to be invincible on the battle-field
and so adept in turning around the public opinion in the United States. Eventually,
Asian allies of the United States were portrayed as corrupt and decadent military
oligarchies who were more interested in preserving their privileged status rather
than defending their homeland and national interests. The seventies turned
out to be the watershed period, beginning with the seating of the People's Republic
of China in the United Nations in 1971. The United States' military withdrawal
from Southeast Asia, culminating in the communist victory by default in South
Vietnam and subsequent communist dominance in Laos and Kampuchea, the emergence
of the revitalised ASEAN, the growing economic power and stability of the Asian
newly-industrialized countries (NICs), the Vietnamese invasion of Kampuchea, China's
moderating role and stabilizing factor in the maintenance of peace and security
in the region, incipient formation of triangular strategic cooperation between
China, Japan and the United States all contributed to the fundamental changes
of the geopolitical picture of Pacific Asia. China is no longer seen as
an Asian bully. The United States retreats from its "world policeman"
role. Japan is showing signs of readiness to assume its proper role as a responsible
major Asian power, both in economic and political-security areas. NICs are fast
catching up with Japan in their pursuit of economic goals. The Korean situation,
in spite of occasional erratic and violent manifestations of North Korea, remains
relatively calm - particularly in view of the apparent desire of China, Japan,
the Soviet Union and the United States to maintain the present uneasy truce and
even to work for the reduction of tension and eventual normalization. The successful
outcome of the latest round of the Red-Cross talks between the two Koreans should,
however, be balanced by the North Korean's recent pro-Soviet tilt. The ASEAN
political harmony and cohesion have also been important factors not only in regional
politics but also in the international arena. The national and regional resiliency
of the ASEAN nations, buttressed by their fast-growing economies and political
maturity, help to strengthen their self-confidence in dealing with their adversaries.
That Asia-Pacific is the fastest growing region in the world is generally recognized,
and the world's attention is focussed on this area as a landmark for the Pacific
Century. The United States, stunned by its dismal failure in Vietnam, disparaged
by its allies, disenchanted with Southeast Asia and facing its own internal trauma
was, in the Seventies, turning its back on Asia. That was not for long. Common
sense finally prevailed and the United States was determined to play a constructive
and more realistic role in Asia. Learning from past lessons, the United States
appears to tread more cautiously. Knowing its limitations, it is no longer acting
like a bull charging into a China shop, upsetting everything. While it is prepared
to counter the growing Soviet military presence in the area with its military
might, the United States is also espousing a more balanced perception of its own
and its allies' strategic interests and is more inclined to use diplomatic and
economic tools to attain its objectives. The Vietnam syndrome is still there,
but it is no longer one which exclusively dictates the United States' policy in
this region. The United States, having adjusted its role in Asia and being
more conscious of the limitations of its power and resources, is now inclined
to adopt a more realistic, balanced and multi-faceted policy. The Asian nations,
in particular the ASEAN countries, have also broadened their perceptions of national
security and well being. Their perspectives of the regional scene take on a longer-term
character. Their close and cordial relations with the United States are no more
focussed only on security issues. They indeed have expanded into the vital areas
of trade, investment economics, and science and technology. The cooperative spirit,
long cherished by both sides, is still the order of the day. But inevitably, frictions
and disagreements do set in, especially in the trade and related fields. That
is, however, not a discouraging sign, but a mere reflection of an increasingly
multi-dimensional relationship. Indeed, the present intercourse is healthier and
the relations become more mature and substantive. The dialogue has become relatively
a two-sided affair. At the same time, the United States, burdened by the
huge trade and budget deficits, the over-valued dollar and Japan's closed economy,
is starting to behave in a defensive and short-sighted manner. Its strong protectionist
mood and a series of restrictive measures relating to some export products of
developing countries in Asia severely undermine its traditional role and image
as champion of free trade. Declarations by the President and statements by Cabinet
members begin to sound unconvincing. The draft on Textile and Apparel Act 1985,
or the so-called Jenkins Bill, sponsored by a substantial number of Senators and
Congressmen and wisely opposed by the Administration, threatens to disrupt international
trade in textiles and gravely endangers the economies of so many Asian nations. Such
actions, actual or contemplated, have added new sources of tension to American-Asian
relations and partnership. Its use of power is put to question - whether it has
displayed its preference for short-term gains over long-term interests. Whereas
the United States was once seen, unfairly in my view, as a failure in its use
of military power in Southeast Asia, let us hope that in its wisdom it will not
be perceived once again as a failure in the indiscriminate use of its economic
power. Whether such perception by Asians is fair or not is debatable but for practical
purposes it is irrelevant for our present exercise.
Acceptance Speech by Anand Panyarachun
Distinguished ASEAN Lifetime Achievement Award 2019
Forum Gala Dinner | ASEAN Community Leadership and Partnership Forum
23 June 2019, Bangkok
Your Excellency, Dr. Thongloun Sisoulith, Prime Minister of the Lao People’s Democratic Republic, Tan Sri Michael Yeoh, Dr. Kriangsak Charoenwongsak, Distinguished delegates, Ladies and gentlemen, I am pleased, honoured and humbled to accept this Lifetime Achievement Award and to join past distinguished recipients whom I have long admired and respected. I thank the organizers who nominated and selected me for this prestigious Award. I also express my appreciation to all those who supported me during the course of my career in Government, the private sector and civil society. Let me also acknowledge the support received from my family, namely my dear wife, who unfortunately cannot be here today due to her health condition and my two daughters, who are present tonight. When you receive a lifetime achievement Award like this, it makes you reflect on your career – in my case as a diplomat, businessman and former Head of Government. I started my career in the Thai Foreign Service in 1955. When ASEAN was established in 1967, I was serving as Ambassador and Acting Permanent Representative to the United Nations in New York. I recall vividly the pride and excitement that all of us had when ASEAN emerged as an indigenous grouping to promote regional unity and prosperity in Southeast Asia. It was “no mean achievement” – considering the multitude of critical security concerns preceding the founding of ASEAN. “Konfrontasi”, the Sabah issue, the rampant communist threat, and internal instability were at the forefront of our minds. Newly–independent states jealously guarded their sovereign rights. Suspicion and mistrust prevailed. Even more serious was the lack of knowledge and understanding of one another in the region. Western colonialism had had such a deleterious effect on the mindset of the colonials; they knew and understood their colonial rulers much more than their own neighbours. Dr. Thanat Khoman, the then Foreign Minister of Thailand, the only country in the region not to have been colonized, was well aware of this anomaly. He was determined to address it, inspiring the concept of regional organization. Together with his counterparts - Narciso R. Ramos of the Philippines, Adam Malik of Indonesia, Tun Abdul Razak of Malaysia and S. Rajaratnam of Singapore, they worked assiduously to develop a common regional agenda to address our shared interests. The five foreign ministers specifically refrained from any reference to security and military aspects in the ASEAN Declaration. The focus was on economic, social and cultural cooperation. Yet deep down in their hearts, they were aware that political stability and security deriving from non-military cooperation would serve as a safety valve against any possible hostility among member states. The leaders had a vision of turning Southeast Asia into a community of peace, progress and prosperity. Moved by the pioneering spirit of the ASEAN Declaration, foreign ministries of the five members began to coalesce. In New York, where I was posted until 1975, the Permanent Representatives to the United Nations initiated the ASEAN group which met regularly to discuss issues and coordinate positions. ASEAN was operating as a regional grouping with a strong unified voice, becoming a force to be reckoned with in the international community. I returned to Bangkok in 1976 and assumed the duties of Permanent Secretary at the Thai Foreign Ministry. While the tenure was short-lived, there was ample opportunity for me to deepen my understanding of the ASEAN spirit and collective will. Some of you may be aware that as a result of my role in negotiating the removal of American military bases in Thailand, I was accused by military elements in the country of having Communist leanings. I was fully exonerated of those trumped-up charges and left Thailand for Bonn in 1977 to serve as Ambassador to the Federal Republic of Germany. In Bonn, it was the turn of the Federal Republic of Germany to assume Chairmanship of the European Union (EU). There began a process to negotiate and complete a draft agreement of cooperation between the EU and ASEAN. We, the ASEAN Ambassadors in Bonn, under my Chairmanship, met as a group to negotiate and finalize the draft of the political section of the agreement with our German counterparts. The Agreement on cooperation between the EU and ASEAN was subsequently adopted at the EU/ASEAN Foreign Ministers meeting in Brussels. That was my last piece of work before I resigned from the Foreign Ministry in 1978. I was then completely disillusioned with politics in Thailand. I made sure that in my second career in the business world, I would have the least to do with the establishment and the “powers that be”. But fate had a different idea. It was Thailand’s turn to become Chairman of the ASEAN Chamber of Commerce and Industry, and I was designated to represent Thailand in that capacity. I was appointed subsequently in 1984 to chair a Task Force comprising representatives of government, the private sector and academia with a mandate to chart a new direction to intensify regional economic cooperation. By then, Brunei Darussalam had joined ASEAN as its sixth member. We worked hard to fulfil our mandate and produced a report containing a set of recommendations focusing on the establishment of an ASEAN Free Trade Area (AFTA) whereby the flow of goods among ASEAN countries, within a set time period, would not be subject to tariff or non-tariff barriers. The report of the Task Force was presented to and adopted by ASEAN in 1986. However, due to internal politics in some countries and lack of political will, the recommendations were not implemented. In the late 1980s, as a result of geopolitical circumstances, the winds of change were generating greater political cooperation among ASEAN members. There was a stronger sense of cohesion and common purpose to address regional challenges. So when I was appointed Prime Minister of Thailand in 1991, I saw that the opportunity was ripe to revive the AFTA concept of a free trade zone. My intention was to bring it to fruition. I formed an inter-ministerial team comprising Ministers of Finance, Foreign Affairs and Commerce and a representative of the private sector to work on a plan of action. We mapped out a strategy to persuade member governments to agree on a common path. We held a series of working sessions throughout the ASEAN region. And I personally held consultations with the other Heads of Governments in order to reach a consensus. Once President Suharto, whose initial reaction was lukewarm, progressively moved over to our way of thinking, the Thai Government was ready to present its proposal to the ASEAN Summit in Singapore. AFTA was formally approved on 28 January 1992 at the fourth ASEAN Summit in Singapore. ASEAN was upgrading itself to a higher level of political and economic cooperation. The role that Thailand played, with strong support from other Member States, in reaching this historic milestone for ASEAN, is etched on my heart. I am grateful to have had the opportunity to serve the people of our region in that capacity. Let me, at this juncture, pay tribute to the five Founding Fathers of ASEAN who were instrumental in establishing, in my mind, the most successful intergovernmental organization in the developing world. Ladies and gentlemen, Much has changed in the world since that time. ASEAN is a much more inclusive and powerful grouping, with the addition of Vietnam (1995), Lao PDR (1997), Myanmar (1997) and Cambodia (1999) as members. ASEAN is a much more outward-looking organization, interfacing with major powers, dialoguing with other regional groups and establishing networks across Asia and the world over. With its 10 Member States, ASEAN represents the world’s third largest market and one of the world’s largest economies. The establishment of the ASEAN Economic Community in 2015 was a major achievement, envisioning ASEAN as a single market and production base. Yet regional economic integration has its many challenges. We see that progress has been somewhat slow in certain areas due to the lack of a common regulatory framework and the great diversity of the ten Member States. With what appears to be the retreat of the United States from the region, and the emergence of China as a dominant presence, ASEAN also faces the challenge of balancing the two major powers to safeguard its own interests. And there is, of course, the issue of human rights. While some member countries are making efforts to address the wide range of human rights issues, others are still finding it a challenge to move forward. Therefore, the need for bold leadership of ASEAN has never been greater, given the pace of change in the global, political, economic and social environments. We need a new generation of leaders who can match the wisdom, foresight, vision and political will of the five Founding Fathers of ASEAN. Let us hope that such leaders will emerge and wish them every success in rising to the challenge. I thank you.
Address by Anand Panyarachun
On the launching of the King of Thailand in World Focus
23 August 2007 at the Oriental, Bangkok
Madame President, Ladies and Gentlemen,
I am pleased to be invited to attend this evening’s function for the launching of the second edition of “The King of Thailand in World Focus” and to speak at this event.
Many of you present here tonight had first hand association with the making of the first edition. The book was published in 1988 as a tribute to His Majesty King Bhumibol Adulyadej on the occasion of His Majesty’s sixtieth Birthday Anniversary, Fifth Cycle in the Thai context, as well as on his becoming the longest reigning monarch in Thai history.
I should like to join my compatriots in expressing our deep appreciation to the Foreign Correspondents Club of Thailand (FCCT) and its members for having taken this worthwhile initiative twenty years ago. Much work and enthusiastic efforts have gone into the production of the book, which in the words of Denis Gray, Editor-in-Chief, “was conceived out of a genuine respect” for the King and yet “intended as a meaningful record of the man and his times rather than merely as a laudatory exercise”. This caveat does in no way inhibit the editors in naming him “Thailand’s Renaissance King”.
Obviously, the first edition was well-received by the public and was an instant success. So much so that when the time comes around to celebrate the King’s 80th Birthday Anniversary on 5 December this year and to give proper recognition to his being the world’s longest reigning living monarch, the FCCT decided to repeat the exercise by issuing the second edition to commemorate both milestones achieved by our beloved King.
The second edition, which is now before you, keeps intact the format used in the first edition, containing nine chapters of slightly changed headings to correspond with the ninth reign of the Chakri dynasty.
While the contents retain basically all the original text of the first edition, the present edition continues to be a collection of articles and images by foreign journalists and photographers up to the end of 2006, thus including the nation-wide historic celebrations last year of the 60th anniversary of the monarch’s accession to the throne and the military intervention in September 2006.
More research was done to provide a larger input, both textual and photographic, into the current publication. The outcome resulted in 80 new articles and 240 more images from a wider selection of sources outside the FCCT circles.
In spite of some limitations arising out of traditions, local sensitivities and respect, the book is indeed a most comprehensive foreign journalistic documentary on the King.
Journalism, according to one popular definition, is the first draft of history, written in the blurred rush of events. Its tendency to be dramatic and insightful, therefore, cannot be overlooked. Human errors committed unwittingly or otherwise under deadline pressure are bound to crop up. Be that as it may, the King’s profile as reflected in this book portrays a man of many talents and human qualities who for sixty odd years has unfailingly served his country and people to the best of his ability.
Ladies and Gentlemen,
His Majesty began learning his constitutional craft in 1946 at the University of Lausanne, Switzerland, where he changed his specialization from science to law and political science. This academic study was merely a primer – at best a theoretical course.
To understand the present-day Thai monarchy, one needs to go back to the founding of the first central Thai state, Sukhothai, in the thirteenth century. The pioneers of independence chose to elevate the wisest and most capable among them to be King. The King, having been entrusted with the task not out of any divine right, but by the consent of his peers, had an inherent obligation to rule the country “with righteousness”, not for the glory of himself or his family, but “for the benefit and happiness” of the people in his trust.
In his Oath of Accession to the Throne in 1946, as his ancestors had done, His Majesty King Bhumibol Adulyadej pledged to “reign with righteousness for the benefit and happiness of the Siamese people”. In his sixty-year reign, His Majesty has not deviated from that pledge and has indeed earned the love, admiration, and trust of his people in a manner that cannot be fully comprehended by foreigners.
The significance of his reign relates to three main themes: the well-being of his subjects, the security and stability of his nation, and national unity.
In the first four decades of his reign, the King travelled to every nook and corner of the country, meeting with the people, especially farmers and the poor in rural and remote areas as well as the hill tribes. Gathering information, personally assessing the farming and agricultural areas, experimenting his new concepts and applying appropriate technology at his palace ground in Bangkok, His Majesty began a series of Royally-initiated projects.
His over three thousand projects to date deal with such areas as irrigation, water-resources management, forest and fishery conservation, soil erosion and improvement, crop-substitution, reafforestation, land development, rural and community development, primary health care, eradication of leprosy, education, flood control, urban traffic and environmental protection. His wide-ranging interests, combined with his self-acquired technical knowledge and pragmatic approach based on local culture and wisdom, have enabled the poor, the underprivileged and the disenfranchised to lead a more hopeful and constructive life, thereby strengthening the social fabric of our society and fortifying our national cohesion and identity.
In recent years, the King’s Sufficiency Economy Philosophy has gained larger acceptance and more widespread application. It has also been adopted by the United Nations Development Programme.
His work in these development areas stems from his conviction that the well-being of the people is tantamount to the well-being of their sovereign. The two are inseparable and inter-related.
His concern for the security and stability of the Thai nation is reflected in the innumerable trips and lengthy visits that he, Her Majesty the Queen and other members of the Royal family, have made to the sensitive areas of the country which were confronted with communist insurgency movements or separatist, ethnic and religious-inspired bands of rebels and bandits. Their frequent visits were a morale booster to the populace. His Majesty’s royal projects to uplift the living conditions of the people in those areas underline his own personal commitment and dedication to the people. His Majesty has proven by his deeds that he has an overriding interest in his subjects.
I have so far dwelled on the varied activities that His Majesty initiated, developed and implemented. These activities do not normally fall within the domain of a constitutional monarch. But the fact that His Majesty has persevered in these activities for the long-lasting benefit of the Thai people has very much endeared him to his subjects --- so much so that the Thais, in general, willingly and unreservedly accord our Sovereign the confidence and trust that no other monarch in our history, or for that matter any other monarch in the world, has ever enjoyed. The King has, in the process, gained the “reserve powers” which have been put to good use, whenever circumstances require.
As I stated previously, the King embarked early in his reign on a journey to know his people and, in the process, allowed them to get close to and know him. At the same time, he used his time wisely to accumulate “constitutional” experience. His Majesty has been through 16 constitutions, 18 coups d’etat, and twenty-four prime ministers. He has an acute grasp of constitutional rule yet he remains detached from politics, playing a non-partisan role in the country’s political process and development.
As a constitutional monarch, however, the King possesses three discretionary powers : “the right to be consulted, the right to encourage and the right to warn”. Under normal circumstances, he exercises these prerogatives through private audiences he grants to the prime minister of the day. What transpires during these meetings remain private and confidential, and even after statutory silent period, parts of the consultations may never be known.
In a constitutional monarchy, the King does have formal powers and responsibilities under constitutional provisions. In exercising this function, he is ever conscious of his non-political role. All bills approved by the National Assembly are to be presented to the King for signature. This is not just a formality, as the King retains discretionary power to withhold his assent temporarily. In private consultations with the prime minister, the King’s observations, be they “encouraging” or “warning”, provide an important input for the head of government to reevaluate the government’s position and direction. His Majesty’s response to the issues raised by the prime minister is consistently advisory in nature and non-judgmental in politics. He adheres strictly to the letter and spirit of the constitution.
His remarks, whether made privately or publicly, are circumspect and often couched in discreet and indirect terms. So while they are listened to with great attention, there is no guarantee that His Majesty’s thinking is heard and properly understood.
The King has also been through a few crises in our political history. His non-partisan handling of the events produced results which in turn brought about tranquility and normality to the Kingdom.
Without His Majesty’s guiding hand, we would not be where we are today – a nation which has invariably demonstrated its inner strength, political resilience, social harmony and economic dynamism – a trait which has enabled the Thais to survive many a threat and misfortune in their long history.
The course of modern Thai political history will run smoothly and peacefully if and when the Thai political system pursues the “middle path” and a right balance is achieved between freedom and stability. His Majesty’s adoption of the balanced approach during his sixty-year reign serves as an inspiration for the governance of Thailand.
Incidentally, our King, as implied in his public address a few years ago, does not see himself as infallible --- a king who can do no wrong in the ordinary sense of the word. The King is not above criticism. In fact he welcomes critical comments based on facts and objectivity. The current legal constraint is not taken literally by him. He personally never made use or took advantage of this legal recourse to silence critics. Nor is he by royal convention in a position to answer or respond to these critics. He is unperturbed and proceeds to give royal pardon to those who are convicted.
The reverence and loyalty that the Thai people hold for His Majesty is in my view the reason for the existence of such law.
To the people in general, the Thai monarchy is not an abstract or irrelevant concept, but a responsive, caring and indispensable institution that is an integral part of their lives. His Majesty is seen by his subjects as “the People’s King”.
Ladies and Gentlemen,
The second edition of “the King of Thailand in World Focus” offers a foreign perspective of the King’s life whereas I attempt tonight to present a Thai perspective of our King and his multifarious activities. They are not mutually exclusive and in many respects are even complementary.
I offer my thanks to the FCCT and the numerous individuals who produced this important book. They are friends of Thailand and make every effort to understand our Monarchy and the very special bond between our King and the Thai people.
The 50th anniversary of the FCCT in 2006 must be recognized as a significant landmark of the foreign media community in Thailand. My congratulations and best wishes go to all of you the good work done in the fifty-year span and also for this splendid book which, among other things, will serve to strengthen the ties of friendship between the FCCT and Thailand.
Thank you.
Amartya Sen Lecture Series on Sustainable Development
In association with the
Cambridge Society, Oxford Society and Harvard Club, of Belgium
Public Lecture on
Sustainable Democracy
By Anand Panyarachun
Former Prime Minister of Thailand
Brussels, 24 June 2008
Professor Amartya Sen,
Mr. Marc Bihain of the ING Bank,
Mr. Willem Van Der Geest,
Distinguished Guests,
Ladies and Gentlemen,
It is a privilege to share with you some observations on sustainable democracy in a lecture series bearing the name of a great philosopher, thinker and a Nobel Laureate for economics. He won further plaudits for his work a few years ago as co-chair of the United Nations Panel on Human Security. Professor Sen has inspired us all with his seminal contributions that, among others, have given new meaning to the ethical dimensions of the pressing economic and social challenges of our times. One of Professor Sen’s most influential contributions is the concept of capability which places human freedom in the centre of the discourse on development. On democracy, Professor Sen has observed that, “No substantial famine has ever occurred in any independent and democratic country with a relatively free press.” Today, when the profit motive often prevails over considerations of justice, equity and rights, Professor Sen’s message on development, linking it with human freedom, democracy and a free press, is refreshing indeed. With the end of the Cold War, Francis Fukuyama suggested that the end of history was upon us. Yet over a decade and a half later, the triumph of democracy has been less than absolute. Some countries have turned away from a liberal brand of democracy and embraced a more authoritarian one. A number of governments continue to be quite successful in keeping their political systems democracy-free while delivering the economic goods to their citizens. At the same time, some countries that have democratic systems seem to be struggling with issues of accountability and governance. At first glance, this is somewhat surprising. Surely, democracy, with its obvious virtues, should have had no difficulty in taking root around the world. Yet for many countries, “government of the people, by the people and for the people” remains a tantalizing, elusive ideal. The primary cause is in the struggle between those who govern and those who are governed. Aristotle proclaimed that, “If liberty and equality, as is thought by some, are chiefly to be found in democracy, they will be best attained when all persons alike share in the government to the utmost.” In our own times, we face compelling questions:
- Why does democracy seem so fragile?
- What elements are required for a country to reach the threshold necessary to sustain democracy?
Let me share some insights from my experience as a prime minister committed to building democracy in Thailand, including through drafting a people’s constitution. In doing so, I shall first turn to Mahatma Gandhi who articulated the organic nature of democracy, “The spirit of democracy cannot be imposed from without. It has to come from within.” Indeed, people have to want democracy. In most of Europe, the evolution of democracy was slow and non-linear. European history is a chronicle of civil wars, revolutions and dictatorships. Yet democracy took root and today no rival political system challenges it in Europe. If we take universal suffrage as the key event in western democracy, we find that the broad, inclusive participation of all citizens is little more than a hundred years old. In the course of political natural selection, we all adapt to new technologies, as well as problems such as climate change and natural disasters. Over time, a democratic system is best able to adapt in the evolutionary process if its basic pillars are strong enough. A contemporary metaphor for democracy is that of a software algorithm that produces the best possible political outcomes for any society. The intellectual code for this political software stretches back centuries, with Britain’s Magna Carta of 1215 as a convenient starting point. There is an implicit premise that democracy is inherently better, more stable, rational, beneficial and legitimate than other forms of government. Winston Churchill aptly states that, “No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except all those others that have been tried from time to time.” The political process must be viewed along with the level of development. As development is uneven, so too is the state of democracy. Democracy and development are two sides of the same coin. In my experience, there are a minimal number of pillars or key algorithmic modules that are needed to support the infrastructure needed for democracy. If you wish to build a bridge, there are principles of engineering that must be followed. Democracy, unlike bridge building, isn’t just science; it is also the art of the possible.
Education and Knowledge Sharing
Democracy starts with the wisdom of the voting public, however that wisdom is acquired. By that I mean a voting public that understands the issues it must deal with and the options it has. The voting public must also understand its responsibilities in a democracy and have access to the means to exercise choice in the democratic process.
The heart of democracy beats only with the participation of all citizens in exercising their rights --- first to raise for inclusion in the political agenda issues of concern to them and second to choose those whom they feel would best address their concerns in the political process.
In addition to responsible citizenship through participation in voting, democracy requires that citizens be well-informed of the issues that their communities and societies face in an increasingly globalizing and interconnected world.
A struggle in many developing countries is to channel resources to make education more relevant to the tasks of daily life, to change the emphasis from rote memorization to creativity and independent thinking and to extend the reach of education programmes, especially to girls and women in poverty. I am pleased to note the silver lining of progress in gender equality in the promotion of universal education. Such progress augurs well for creating the critical mass of informed voters needed to fuel democratic processes.
Asia has the distinction of being a region that has produced a significant number of democratically-elected women Heads of Government and State. An encouraging development in recent years is South Asia’s efforts to ensure gender parity in the democratic process, with the requirement that a significant proportion of all elected functionaries must be women. We must now accelerate region-wide the advancement of girls and women for wider grass-root participation.
Education and the sharing of knowledge as a public good are important means of supporting the process for a strong countervailing force, to deter those who govern from abusing power.
In Asia as in the West, democracy is won not just through the ballot box. The real struggle is fought out on the streets by students, farmers, workers and other ordinary citizens who come out en masse to express their dissatisfaction. It was in Asia that Mahatma Gandhi crafted non-violence as a movement for political change. Subsequently, there have been street protests over the course of five decades in the Republic of Korea, and people’s power has swept across Indonesia, the Philippines, Thailand, as well as other countries. The flame of democracy also continues to burn brightly in South Asia, which has the largest and most active voter populations.
For democracy to live, citizens must resist the temptation of being complacent. Each community, workplace and school needs programmes for promoting grass-root democracy. An apathetic electorate is easy prey for any organized group to seize power by force or fraud, giving rise to totalitarianism.
In much of Asia where harmony is a core value and conflict avoidance a first response, our challenge is to embrace criticism, the weighing of pros and cons and disagreement, as part of the maturation of the democratic process in the Asian context.
Pillars of Democracy
In my view, there are seven main pillars of the architecture of democracy, namely, elections, political tolerance, the rule of law, freedom of expression, accountability and transparency, decentralization and civil society.
Elections
First, free and fair elections lend legitimacy to democracy by preventing one person or a small group in society from imposing certain vested interests on the general population. No one person or group should exercise a monopoly of power over the election process.
Political parties constitute a major instrument of constitutional democracy in which fundamental norms govern the political community and determine relations between the legislature, the people and the interactions among the centres of power. In a democracy, political parties can be formed and can campaign without intimidation. Some countries require political parties to have a minimum level of popular support before they can participate in elections. All political parties must also have access to a free media and other means to broadcast their election manifestos. The electoral process is supervised, monitored and carried out by a neutral body, often an election commission.
However, elections may be rigged and votes bought. Politicians who only appear in their constituencies to enhance their patronage power, to be photographed and filmed distributing largesse are sadly a familiar phenomenon in many countries.
A political establishment that ceases to reflect the aspirations of the citizens loses its political legitimacy. Once that happens, the political establishment could call for new elections. However, it may instead resort to the use of force, fear and intimidation to cling to power. And elections may be suspended or subverted.
Although elections are necessary and may be the most visible aspect of a democracy, there are many examples of the manipulation of election processes to aid and abet autocracy and tyranny. In themselves, elections do not suffice to ensure democracy.
Political Tolerance
The second pillar is political tolerance. Free and fair elections do not give a mandate to oppress or sideline those who have voted against the government. It also does not mean that the majority have the right to rob the minority of its civil liberties, rights, property or life. Tolerance is required for democracy to be sustained over the long run. If minority groups do not benefit equitably from the election process, there can be no peace. That absence of peace would make a mockery of efforts to be democratic.
In many countries, there are examples of rewards being given only for those voters who supported the ruling party, with neglect or punishment for those who voted for the opposition. The distribution of food, water supplies and development resources has been used as a weapon of control to win elections.
Post-election politics can be punitive on the losers. This happens when the elected government views the minority’s participation in government as an obstacle, rather than finding a way to include the opposition in reasoned debate and, where appropriate, incorporate opposition positions into government policy.
Tolerance has to do with acceptance of diversity in society. It begins with the way children and young people are brought up. If we teach the young to believe in the principle of winner takes all, we impede the development of democracy. Instead, young people must learn that in an election what the winner earns is an on-going duty to strike a balanced consensus in society. Striking that balance is an art. .
Rule of Law
The third pillar of democracy is the rule of law. There has been much debate on the meaning of this. What is clear, though, is the close connection between the rule of law and democracy.
When the political process is subject to laws and a regulatory framework, it enables citizens to judge the lawfulness of the government. They can find answers to some key questions:
- Does the government govern according to the law or does it take the position that it is exempt from some inconvenient rules?
- Are procedures of government stable and within the law or does government act in an arbitrary fashion, arresting people who challenge its policies and depriving them of their liberty without due process?
I mentioned in my opening remarks the importance of the Magna Carta. That historical document enshrined due process of law. Habeas Corpus is one of the most cherished concepts contained in the Magna Carta. Habeas Corpus prevents arbitrary arrest, imprisonment and execution, by requiring such government action to be justified under law and ensuring the right to due process of the person detained. A political class, which accepts that official actions must comply with the law, is more likely to embrace democracy. Proper application of the rule of law puts a brake on any attempt to destroy liberty, seize property, or violate human rights. It also means that such rules apply across the board to all citizens.
When application of the rule of law is weak, corruption flourishes. Bribery, kickbacks, bid rigging, policy favours for family and cronies are well known in many countries. In these situations, those who seek enforcement of the law may face intimidation or reprisal.
Democracy becomes dysfunctional when the bureaucracy, the judiciary, the legislature, the private sector, the police and the military all use their power to enrich themselves and advance their own interests at the expense of civil society. Laws notwithstanding, corruption undermines the rule of law.
Judicial neutrality is a key premise of the rule of law. If judges apply one set of rules for those with wealth and influence and another set of rules for those without these assets, the entire political and judicial system falls into disrepute, eroding public trust in government institutions to deliver justice.
The rule of law is rooted in a system of moral values. In South Africa, for decades, the rule of law existed within an apartheid system. The law was based on the colour of one’s skin. In a properly balanced political and legal system that protects the rights of citizens, those with a particular skin colour cannot use it to obstruct justice. Justice and equality are directly linked with the sustainability of democracy. Generally, once the rule of law is compromised, a regime, despite what it may otherwise profess, slips on its democratic credentials and loses its legitimacy.
The rule of law also has a final function. In a constitutional democracy like Thailand, the constitution defines the institutional arrangements that govern in a democracy. Democracy works best when its institutions and officials operate in a system with checks and balances. The rule of law defines the limits to political interference in decision-making processes. With the rule of law, the system is owned in common by all citizens who are subject to the same laws; those governing do not “own” the system.
To ensure the functioning of the rule of law, it is vital that the integrity and independence of the judiciary and the entire justice system are not subject to undue influence and illegal intervention.
Freedom of Expression
The fourth pillar that sustains democracy is freedom of expression. What people in civil society are allowed to say, print, distribute and discuss is indicative of the democratic nature of a political system. A free press is a measure of the freedom of expression in a society. An Internet that is untrammeled by state control is another.
Few governments, democratic or otherwise, have a genuinely easy relationship with a free press. Yet, despite all its shortcomings, a free press, supported by open Internet access, is indispensable to keeping the public well informed as part of a functioning democracy. Even in an established democracy, government may seek to manipulate a free press into serving its own ends. Governments often conduct spin campaigns, to advance their agenda and dilute the power of independent media.
New technology is unleashing powerful new forces through quantum expansion of information dissemination and space for public discourse. The Internet has revolutionized participation in political debate and action and fostered the formation of e-communities. Mobile phones serve as critical means of facilitating rapid communication.
In countries with authoritarian practices, freedom of information is high on the government’s danger list. Such freedom, as represented by the new media, is a few clicks away on websites such as YouTube and on numerous subject-specific blogs. These new forces have made it much harder for governments to control the flow of information.
The fact remains that even democratically-elected governments will go to great lengths to manipulate public opinion whether on TV, in the print media or the Internet. State influence and control over the flow of information should give us pause. The trappings of democracy may appear healthy, but if freedom of information and press freedom are hollowed out, then democracy is compromised. Constant public vigilance remains instrumental in performing a check-and-balance role. This is not always easy, as the law in many developing democracies is neither supportive of freedom of information nor does it favour the press.
Freedom of expression was thought important enough to place in the Universal Declaration of Human Rights. Article 19 of the Universal Declaration on Human Rights provides, “Everyone has the right to freedom of opinion and expression; the right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media regardless of frontiers.”
Unless citizens have the right to express themselves in the political process, no government can be made accountable for its actions. However, no democracy has absolute freedom of speech.
The key is to balance national and societal interests to create and maintain the level of discussion required for participation in democracy to be meaningful, while drawing lines that take into account a country’s history and cultural milieu. Each country places its own limitations on freedom of expression. What matters is that those limitations are not misused by political forces to limit public scrutiny of policies and actions that impact on the integrity of public goods. For example, if criminal libel laws effectively thwart whistle blowing on irregularities or corruption, democracy is diminished.
Democracy is about multiple voices. These may be contradictory; some may be more informed than others, while others may be personal opinion, gossip or speculation. That is a marketplace of ideas. As in all marketplaces, not everything is of equal value. So long as our institutions enable people to understand how to assess ideas in this marketplace, selecting the rigorous and rejecting the shoddy, democracy is not only sustained, it thrives.
With the Internet, globalization and mass communications, the marketplace of ideas draws from far beyond the borders of any single democracy. While such a marketplace can no longer be easily crafted and controlled by government, no single government can feel quite comfortable in invoking the means to silence dissent or whistle-blowers.
Accountability and Transparency
The fifth pillar of democracy is accountability and transparency. This means that institutions of government and individuals in those institutions must be held accountable for their actions. A government must be accountable to the people who elected it into power. Furthermore, it must be accountable to an independent judiciary or other impartial institutions established to check government action. Be it agricultural policy, fuel pricing or health care services, decisions must not advance the agendas of vested interest groups over the public interest.
Accountability and transparency essentially have the same purpose: to protect citizens against misguided policies or decisions that enrich a few at the expense of the many. When these two guardian angels are compromised, it is an alarm that good governance is at risk, and the democratic process has stalled.
Decentralization
The sixth pillar rests on local or provincial political empowerment. The closer the government is to the people governed, the more responsive the government is likely to be. At the same time, for decentralized democracy to work, there must also be a decentralization of funding, material and human resources and institutional capability.
Decentralization of the political process is another way to curb the concentration of power and influence exercised by political forces. Citizens become more aware, interested and willing to participate in democracy when they see their officials as neighbours and what is at stake as something close to home.
It is at the local level that we see the best example of how democracy is connected with the daily lives of citizens. The physical proximity of the neighbourhood has the same benefits as the online community of practice in a knowledge economy: people with common interests and shared values express and exchange views and insights, influencing one another. Citizens’ right of assembly and participation at the local level nurture the longevity of democracy in a society.
The creation of political parties at the local level facilitates the building of a representative democracy. Local participation by voters and candidates drawn from the same district or province gives credibility and legitimacy to the democratic process. The local administration becomes a training ground for future national leaders.
Civil Society
Civil society is the vital seventh pillar. An active civil society begins its engagement at the grassroots. Community forums, clubs, issue-focused activist groups, charities, cooperatives, unions, think tanks and associations fit under the broad umbrella of civil society. These groups are the participatory vehicles for sustaining grass-root democracy. There is a strong degree of volunteerism, shared interest and common values around which information is gathered, analyzed, views formed and advocacy pursued.
The health of a democracy may be measured by the authenticity of its civil society and the extent of citizen participation in public policy making. Civil society provides an important source of information for intelligent debate on matters of public interest. Civil society also provides a mechanism whereby the collective views of citizens can shape and influence government policy. By bringing into the public domain arguments and information as a context for examining policy, a democratic government is forced to present counterarguments or to modify its position. Such exchange is healthy for democracy. Finally, it is clear that when the deliberative process within a political system accepts the role played by civil society, it also implicitly agrees that citizens have a role to play in checking government decision-making. A vibrant civil society thus makes for more thorough decision-making in a democracy.
In many countries, there is a history of political patronage. The head of a political entity builds up a personal following whose loyalty is to the individual rather than to a political party or creed. When that happens, democracy cannot be easily sustained.
Leadership Qualities
The pillars of democracy that I’ve outlined above are necessary but insufficient without leaders to build and maintain the pillars of democracy.
They qualities of leadership for sustainable democracy are to be found in those who act in an honest, transparent and accountable manner. They are consensus builders, open-minded and fair. They are committed to justice and to advancing the public interest. And they are tolerant of opposing positions. Of course, it is often said that democracy is a messy way of governing and that the human condition is flawed. There is truth in both statements. But in admitting our limitations, let us strive to avoid the mistakes of the past and look forward to a new generation of leaders who can build on the lessons of the struggles of ordinary citizens for democracy.
SUMMARY
I’ve shared my observations of pillars that hold up the architecture for sustaining democracy.
To foster a sustainable democracy, a nation must focus its efforts on building a system that empowers people not only through the right to vote, but also through norms, institutions and values that support that right and make it meaningful.
What will sustain democracy is the shared realization that although democracy is far from perfect, the alternatives are even further from perfection. Some societies come to this realization sooner, others later. Some are experimenting to see if only parts of democracy, such as good governance and accountability, can be enjoyed without the burden of full-fledged democracy.
I wish them well. As long as they demonstrate a commitment to the larger welfare and well-being of the people and deliver public services, the majority of their people may well be content with the status quo and not protest.
One point in their favour in some fledgling democracies may be a sense of disappointment with representative democracy. Elected officials, instead of serving and protecting the public interest, serve their own interests and those of their cronies. They arrogate the right to dictate in the name of the majority, while riding roughshod over the minority. They become “the public” and are no longer “representatives”.
For the past three decades or so, there has been a trend towards more direct, participatory democracy. In established democracies, this may be an incremental change. However, going from autocracy to mass participatory democracy is a big leap.
What is important is that the seeds of democracy must be homegrown, for it to be accepted and to function. Each society must work out its own contradictions, its own competing priorities.
Experience everywhere highlights the fragility of democracy. Even when seemingly well established, democracy can be subject to tampering, especially in times of crisis. I do not believe there is a democracy so strong that it is invulnerable to the greed and ambitions of men. To nurture and sustain democracy, its beneficiaries must also serve as its guardians; the common people must be ever vigilant and wise. For most of humanity, history has not ended. The struggle for and against democracy will continue far into the night.
Keynote
Address
“Weaving the Region with Education” By
Mr.
Anand Panyarachun
Chairman of the Board of Trustees,
Asian Institute of
Technology
and
Former Prime Minister of Thailand
At the
Seminar on
Asia-Europe Cooperation on Applications of Information
Technology to Human
Resources Development in the Mekong
Sub-Region: Challenges and Opportunities
Date
9 October, 2001
Ladies and Gentlemen, It is an honor
for me to be invited to present the keynote address to this distinguished assembly
of information technology experts and educators from Europe and Asia gathered
here for a seminar on the “Applications of Information Technology to Human Resources
Development in the Mekong Sub-Region: Challenges and Opportunities”. Highly
developed human resources means greater political, social and environmental awareness
in society. To this end I am hopeful that this ASEM initiative signals the start
of a worthy international collaboration aimed at addressing the region’s most
vital resource for sustainable development; namely that of human resources.
This seminar brings together two prominent components for ensuring sustainable
growth: education and information technology. We are all aware that education
is the key for social and economic development for any society or country; education
is a means for the sustainable development of the entire region. Today,
it is widely acknowledged that Information and Communications Technology has brought
about changes in the global economy and society as a whole. We have seen the great
benefits of information technology in reducing poverty and improvement in the
livelihood of people throughout the world. Health care personnel in Cambodia can
send their patients’ records to seek medical advice from experts in the US. Exchanges
of valuable and previously untapped indigenous knowledge flourishes through the
widespread use of information technology. With e-commerce, merchants in Laos’
Vientiane’s morning market can sell their crafts over the Internet. Karen children
from refugee camps are able to exchange e-mails with Australian children of the
same age. The entire globe is now covered with tightly but unevenly knitted information
threads enhancing the speed and the sphere of influences of these global changes.
Changes that are taking place in one place of the world can trigger effects in
the entire global community at a much faster pace than mankind has ever experienced
before. Infectious information can spread to the far ends of the globe at an alarming
speed, thus information technology can also put a society at risk as well. As
we move into the era of information, we are confronted with rapid changes; we
must continuously and actively respond to both positive and negative changes taking
place around us with well-prepared and adaptive human resources. Strong emphasis
on the moral component of education must be adhered to, more so than ever before,
to develop socially responsible citizens. We must proactively review and renew
our educational system; education is now without national or regional barriers
or boundaries. Nevertheless, by opening up or expanding our horizon, valuable
assets of traditional methods of education must be carefully identified, preserved
and definitely not overlooked. Along with any technological development,
information technology cannot escape from the vicious circle where the already
existing income disparity means that some are more digitally connected while the
majority of the world population are not, and this in turn widens the income gap.
However, information technology, being lightweight and easily deployed has a comparative
advantage over the other past technological developments. With appropriate investments
and innovative ideas, information technology can help economies to leapfrog. For
example, by embracing the concept of an information technology society, Singapore
has made rapid progress over the past decade and became one of the economic leaders
of the world. Information technology innovation and development is a fast track
process. Tapping into this positive aspect of information technology,
I am happy to note that this seminar will closely examine the use of information
technology as an educational tool to help speed up human resources development
with a focus on the Greater Mekong Subregion. Over these past few years, we have
witnessed a large number of projects and initiatives addressing this promising
field of IT application from various organizations whether they be government
or private sector. Many new international initiatives, the so-called ‘virtual’
institutions, are taking place and new forms of education providers with new business
concepts are taking shape. Education is not just going through a reform, but in
fact, a revolution where the entire process of learning, achievements and values
will take on new forms. The Greater Mekong Subregion comprises six
countries which, on the average, are on the low end of any information technology
indices. To weave through the region with education means to adopt information
and communications technology. I am aware that this is a challenging task where
(1) One has to face the challenges to overcome the technological barrier
to provide education anywhere anytime for those who barely have any access to
information and communications technology. This is due to the lack of infrastructure
and low user readiness. (2) Another challenge is to overcome social,
cultural, economic, administrative and political barriers. It is, by far, a bigger
challenge to foster trust and understanding and form strong partnerships to make
the best use of information technology. An international
effort, facilitated by an international body like ASEM, would be fundamental to
overcome these challenges; it is no longer a task which can be undertaken single-handedly
in this Internet era or the Information Age. Any proposed change or reform imposed
from the outside with no counterpart within the local community is bound to fail.
A strong network or partnership with active local change agents is the key to
the success of such endeavors. Networking of institutions and organizations
will become increasingly important to sustain the rapid development and subsequent
changes brought about by this new age. A significant outcome of this seminar would
be to cooperate towards addressing the issues faced by the Mekong Sub-region to
subsequently help spread the woven information thread more evenly. I
am aware that these are not small challenges, and that this meeting marks the
beginning of your deliberations, not the end. I would in particular like to request
my institute, the Asian Institute of Technology, to bring forward its linkages
and international networking capabilities to ensure the success of all follow
up activities of this initiative. I would like to express the wish that this deliberation
will lead to concrete and feasible proposals of actions appropriate to the needs
of the Mekong Sub-region. I look forward to observing your successes
and to the resulting progress in social and economic development of the region
amid improved trust and understanding amongst our peoples. I wish
you all good luck as you tackle these intriguing and rewarding challenges.
Message from
Anand
Panyarachun
Chairman of Transparency Thailand
First published
in Transparency Thailand Newsletter
Year 3 Volume 1, June 2001 Corruption
is a serious problem with detrimental effect on Thai society. Alarmingly, corruption
has seeped and crept its way into all regions and all segments of Thai society.
Corruption multiplies and exacerbates political, social and economic problems
of the nation in the worst way. Corruption
invariably has a negative impact on the lives of everyone in society, irrespective
of who they are, rich or poor, good or bad, honest or dishonest. Corruption implies
injustice because in the corruption process, someone is unavoidably being taken
advantage of. Good management in the public or private sector is inevitably distorted
when corruption takes place. The nation as a whole loses on revenue collection.
The taxpayers have to bear the cost of corruption in one way or another, either
directly or indirectly. Worse yet, corruption brings forth a pervasive sense of
uncertainty among members of a society where goodwill and mutual trust no longer
exist. When regard and respect for law and regulations dwindle among the citizenry,
divisiveness and conflicts in a society would inevitably ensue. As such, society
is weakened. A troubled society will have little potentials for development. Its
people will find happiness and quality of life wanting. Even
though corruption has plagued Thai society for many decades, we have yet to find
a way to curb or control it. Perhaps we have not tackled it in a systematic fashion
and in a holistic manner. Efforts to deal with corruption in the past may have
been segmented, uncoordinated and preoccupied with fighting but not preventing
corruption. Much needs to be done in terms of preventing corruption especially
in terms of its root causes from Thai culture and the value structure. Corruption
is deeply intertwined with values that relate to ethical and moral standards upon
which social actions are predicated. We witness today changes in social values
due to fierce economic competitions in society and the concomitant increase in
consumerism which depicts money as supreme. Like an invincible god, money has
been recognized as the basis of power, prestige and fame, resulting in seeing
riches as an end in itself. We have come to lose the ability to judge right from
wrong, good from bad, and desirable behaviors from undesirable behaviors. If and
when a society decides that corruption is "a way of life" and an inalienable component
of its culture, that society is, without a shadow of doubt, doomed because degeneration
and decay will surely set in. To
solve the problem of corruption in society, a multi-pronged effort needs to be
initiated. Values and ethics not amenable to corruption must be dealt with. It
is crucial to have social and other mechanisms that will render corruption a very
difficult and risky business. Also, strong social sanctions against corruption
are absolutely vital. Transparency
Thailand is committed to foster a new conscience among Thai people that will not
tolerate or accept corrupt practices but will fight corruption with determination,
patience, devotion and with the collaboration from different segments of Thai
society. Anand Panyarachun
Closing
Speech for Thailand Innovation Day, The Honourable
Anand Panyarachun,
Former Prime Minister of Thailand
Bangkok,
June 11, 2001 Mr. Chairman, Vice President Mr. Kassum,
Distinguished guests and innovators, I am honored to provide a few comments in
recognition of this event, and in particular the Finalists who have come to has
share their ideas with us. Now, I know this group of guests and finalists are
anxious to find out who has won, so my remarks will be brief. Our
grandchildren are the true IT generation. It is my hope is that the end of the
last century will be remembered not as a period of economic crisis, but as a period
in which we determined, once and for all, to unite as a nation to address human
rights, the equitable distribution of income, and a reform of governance that
puts true power in the hands of ordinary people and enshrines the reform in our
Constitution. Our Constitution is a revolutionary document
because it empowers people with real tools of governance - rights, accountability
and representation - in ways unimagined in the 15 Thai constitutions that failed
before it. The difference between this constitution and the previous trail, is
the participation of people, rather than vested interests, as its true architects.
Armed with that experience and document, we enter the Century of Knowledge. The
Era of Innovation. Ladies and gentlemen, we have seen the great
benefits of the technological change in reducing poverty throughout the world.
Children in Brazil are learning about democracy through computers, African artisans
are selling their crafts over the Internet, and health care is delivered more
efficiently in India through handheld devices carried by rural health providers.
Citizens throughout the world are conducting government services online, and corporations
are conducting shareholder voting through Internet. We have seen businesses become
more competitive, reacting more quickly to create new and innovative products
in response to the market. Ideas are the currency of the day. Now
Thais are known for many fine qualities, but speedy technological innovation has
not been high on the list. We still have some ways to go in terms of education,
awareness, and access of all of our citizens to basic telephone service. But we
have started on the path, led by the example of Her Royal Highness Princess Maha
Chakri Sirindthorn, who has empowered many underprivileged communities and schools
with access to information technology. Seeing how many proposals have appeared
in such a short time, it is clear that Her Highness' efforts have raised awareness,
and that perhaps our reputation in the field of innovation will be changing soon. The
potential benefits of information technology in networking in people, in providing
economic opportunity, in sharing knowledge more rapidly, in documenting local
wisdom, and in providing basic services, are amply demonstrated by our Finalists.
Our rural people, who outnumber our urban people by far, lack these tools move
than our city - dwellers. Yet for every 10 Internet users in Thailand, only one
is rural. Such is the way of the market, and this is way we must take action on
the digital divide Information technology has its risks as
well. Many in our society fear the possibility of unintended consequences of the
wrong type of information reaching our rural communities, which are the cornerstone
of our society. This view is based on the assumption that the rural community
is closer to an ideal, and it must be protected form change. But we all know that
the change is inevitable. In Buddhist philosophy there is a saying, “All things
are in flux and nothing is permanent.” Like other problems we have faced in the
past, we will confront the challenge not by turning our backs, but by engaging
confidently, openly, and as a community, to ensure that change in a way that is
consistent with our ideals. To me, Innovation Day represents an important step
forward, because it demonstrates that people form all walks of life are able to
harness the power of information and networking for positive change. To improve
the quality of life in the rural community, to provide the right type of information
“content” that does not exploit but empowers. I am pleased that the Government
also recognizes this imperative, and that the World Bank is supporting the Government's
efforts. Through our Constitution we have determined that our
democracy and society will survive, and thrive, bused on the pillars of knowledge,
good governance, and the empowerment of people. I am pleased to say that we are
entering the Century of Knowledge determined to build our information infrastructure
on the same foundation. We will shortly
name a selection of winners form this group of community innovators, and one such
prize will be given to the Finalist whose proposal best embodies the virtues of
good governance and empowerment of citizens using information technology. I would
like to thank the American Corporations in Thailand (ACT) for donating this gift
in my name. Let me repeat the message of Vice President Kassum this morning. All
of the Finalists are winners, and in fact, Thailand is the real winner. Congratulations
to all of the finalists who have shared their ideas openly, which are increasingly
our most valuable asset. Without further
ado, I would like announce the winner of the Anand Panyarachun Prize for Rural
IT Innovation.
Recovery
still four, five years away: ex-PM Anand Published on
Oct 13, 2001 Former prime minister Anand Panyarachun predicted yesterday
it would take four or five more years for Thailand to fully recover from the economic
crisis, and advised the political leadership to "balance hope and vision with
reality". Giving a speech on "Thailand in Anand's Opinion" at a charity
dinner organised by the alumni association of the National Defence College, the
former prime minister expressed mixed feelings about the progress of the country's
political reform and called on the nation to quickly pull itself together to cope
with a gloomy economic outlook. The government, in particular, must "do
more homework, listen more and pay less attention to vested interests," he said. Anand
voiced concern about over-capacity in several Thai industries, the liquidity trap
in the banking sector, and inadequate debt restructuring of financial institutions.
"Our debt restructuring is not debt restructuring as such. It's more of debt rescheduling
in most cases," he said. The over-capacity will weaken Thailand's competitiveness
"at a time when international competition has been heating up every minute." Several
industrial sectors such as steel and paper require restructuring to reduce excess
capacity, Anand said, noting that while Japan has two major steel manufacturers,
Thailand has about 30. "Without rationalisation, the survival chances of
some of our industries are slim," he said. Reiterating that he was only
expressing his opinion and did not have complete economic data, Anand predicted
that with the global economic slowdown and fall-out from the terrorist attacks
on the United States, it would take four or five more years for Thailand to recover
from the current economic crisis. To get Thailand out of the crisis, "it's
not wrong [for political leaders] to have hope and vision", Anand said. "But reality
must be always weighed against them, or any vision can easily turn into a daydream." On
political reform, Anand hailed three major phenomena which have taken place since
the 1992 pro-democracy uprising - the drastically reduced role of the military
in politics, democratic changes of government and ever-increasing public willingness
to get involved in the political process. "But while soldiers have left
politics, have they left vested business interests? And while politicians surrendered
to the 1997 Consti-tution, they haven't changed their thinking. The selection
process for members of key constitutional independent bodies still provides loopholes
for unscrupulous things to happen," he said. Anand stressed the importance
of a free media and deplored the fact that the military and the state are still
controlling major media outlets. Tulsathit Taptim THE
NATION
Opinion Editorial “A Shared Future”
by
Anand Panyarachun
I have always believed that the true test of character is one’s ability to handle and overcome adversity. In the aftermath of the tragic incidents of the past week, Thailand has the opportunity to prove to itself and the world, the strength of its national character and its commitment to pursuing justice, promoting national reconciliation, and building a socially inclusive society. As a nation, we have been embroiled in the vortex of chaos and confusion. It is time for us to collectively take a deep breadth and regain our sense of balance and proportion. The traditional Thai values of tolerance, moderation and compassion, which are intrinsic elements of our national culture, need to be stressed and promoted. The senseless finger pointing and “blame game”, a popular pastime now, should cease. Harbouring negative emotions, anger and hatred is destructive. We must rise above it and pursue the truth, and nothing less. Independent and credible investigations of the recent events along with due process must be the order of the day. An accelerated course of action is needed to ensure national reconciliation and the fostering of sustainable peace. We need to engage in a process of dialogue, which recognizes and respects the differences, interests and values of all concerned parties. True acknowledgement and contrition by all sides will pave the way to forgiveness, which is the key to healing the hearts and minds of all Thais. We must urgently close the deep and widening social divide through addressing structural poverty, social exclusion and inequality. Whatever view one may hold about the recent events, the grievances expressed by many of the demonstrators are valid. We need to have in place a comprehensive range of measures to tackle the following key challenges: (1) disparities in distribution; (2) deprivation of capabilities; and (3) inequalities in access and opportunities. Unless we acknowledge and address these grievances, the deep wounds from this violent episode in our history will continue to fester, creating a widening chasm of estrangement, which will likely lead to further upheavals and violence. Our country has witnessed, albeit at a great cost, the political awakening of the people at a critical juncture in Thailand’s development. In hindsight, we may see the empowerment of the rural and impoverished sectors of our electorate as a critical and necessary step for the development of Thailand’s democratic system. It is imperative that we recognize the legitimate concerns and voices of these social groups in our electoral and other decision-making processes. As a nation, we have reached the “point of no return.” Change is inevitable. We all have a stake in the future of our nation and need to contribute meaningfully to the process. Let us transform this crisis into an opportunity to build a political consensus for a people’s agenda that will ensure a more inclusive and equitable society as well as a shared future for all Thais.
Bangkok Post Newspaper & The Nation Newspaper, May 25, 2010
Sufficiency
in the Age of Globalization TRANSLATION
of a speech by H.E. Mr. Anand Panyarachun, Chairman of the Council of Trustees
of the Thailand Environment Institute, and Chair of the National Economic and
Social Advisory Council. The speech was presented in Thai at the seminar "Sufficiency
in the Age of Globalization", held at the United Nations Conference Center, Bangkok,
November 21, 2001. Sustainable
development has been an item of discussion both in an international and in a national
arena for more than a decade. On an international level, one of the basic principles
that have emerged, relating to sustainable development, is the beneficial relationship
between development and environmental conservation. In other words, the realization
that these two issues actually can be achieved simultaneously is replacing the
view that they are extreme opposites with development gained at the expense of
the environment, or with environmental conservation measures seen as preventing
development Ever since its origin,
civilization has seen a continued process of change, adjustment and development.
The human brain is able to plan and invent new ways and new technologies to support
this continued development. However, it is extremely important that this is done
in a responsible manner. During the
past 100 years of intellectual inventions, only very limited attention has been
paid to environmental issues. This is due to the fact that all societies are mainly
focusing on prosperity through economic growth and increased national revenue.
About thirty to forty years ago, a change came about with the initiation of earnest
discussions about the continued direct and indirect negative impact on the environment
by business and industrial ventures, such as for example oil or petroleum companies. Currently
the problem is becoming increasingly complicated along with increasingly excessive
consumption patterns and the competitive environment of today's society. There
is competition for development and competition for superior power. The latter
kind of competition leads to a struggle for survival, efforts to escape from vulnerable
positions away from the pressures of unfair and unethical competition, where advantages
are taken by those who possess more power. This
unrestrained society of the world instigates conflicts which destroys the lives
of human beings, the ecology, and our cultural heritage, with unprecedented power
and speed. If we allow humanity to continue on this path of destruction as at
present, it is a waste of time to gather to discuss the issue of "sustainability".
The number of Earth Summits convened, or Agendas adopted, is immaterial. Maybe
the world won't last until our tenth conference. However,
I am confident that Thailand can survive the impact of the current globalization
surge, by standing firm on the ground and by entering into the process of sustainable
development with determination. To succeed, we must act today. Without denying
or avoiding the responsibility incumbent upon us as a member of the world's society,
we need to step aside from the stream of violence, competitiveness, and the unrestrained
society of the world, and search for alliances. The
discipline of the Thai society is not different from that of the rest of the world.
This is the nature of people living together at different social levels. Looking
into a smaller scale of society, such as a family, it also consists of many differences,
but it can still encompass happiness. Therefore, a happy and peaceful society
stems from respect for each other and from sufficient development. The sustainable
development process in different societies may require different levels of sufficiency,
depending on the way of life and the resource integration of each society. This
is not only in terms of monetary resources, but also including natural, human,
intellectual and cultural resources In
the past we did not assess these resources correctly, and mismanaged vital resources
by opting for instant prosperity without considering sustainability aspects. We
need now to review lessons learnt and look forward. Globalization, by definition,
reduces diversity. Sufficient development, however, is related to the environment,
which means both commonness and diversity. The
world's environment is united in dependency as well as in diversity. To improve
the national economic growth, for instance, we must pay attention to our social
systems, including ecology, culture, and ethics, and maintain an environmental
balance. The future of Thailand's development must begin with self-assessment,
knowing more about our own resources, and it needs to proceed along an environmental
friendly path. We need to switch the development target of Thailand from prosperity
to sustainability. To attain economic stability, from a local grassroots level
though to a national level, including psychological, cultural, political and ecological
stability, this must originate from individuals within our society. Changes
so far have been marginal. There may have been a few central changes as well,
but not yet sustainable. Independent actors, such as NGOs, therefore, must operate
with determination and collaboration to motivate a change towards sustainable
development, as mentioned above, in an environmentally friendly manner. Finally,
we can hardly expect to achieve social stability, happiness, and peace, without
paying serious attention to the process of national development and without knowing
our responsibilities of social participation as a whole. On the other hand, public
authorities must also listen to the people's opinions to ensure their effective
participation in the development process. I invite participation. Working together,
we will achieve our goals.
Keynote
address by
HE Mr Anand Panyarachun
Former
Prime Minister of Thailand
Open Forum on HIV/AIDS
Monday 26
November 2001
0830 to 1200 hours
Holiday Garden Hotel
Huay
Kaew, Chiang Mai Excellencies, Representatives form civil
society, Ladies and gentlemen I am very
pleased to be here this morning. I should like to commend the Christian Conference
of Asia (CCA) as well as the Church of Christ in Thailand Aids Ministry (CAM)
for convening this timely forum on religious responses to the HIV/AIDS epidemic. As
one of the greatest development challenges of our times, fighting HIV/AIDS is
an issue I am personally committed to. I assumed
leadership of Thailand at a time when the deadly epidemic was running rampant
in the country. There were 143,000 new infections in 1991 alone. At that time,
it was predicted that over the next 20 years, up to 10 per cent of Thais would
die form AIDS. This was a time when we had
to accept that the epidemic existed in Thailand and was not going away. HIV/AIDS
was threatening the whole country, and had spread to all sections of Thai society. Our
response in Thailand at that time, some ten years ago in 1991, was the mounting
of a nation-wide HIV/AIDS prevention programme. We accepted that traditional and
punitive public health measures to combat the disease so far had not worked.
We recognised that tough and bold decisions were needed if the spread of the disease
was to be curbed. And we that only leadership – at the highest political
level – could make a difference in the fight against HIV/AIDS at the national
scale. Looking back. I am proud to have been
part of Thailand’s achievements as the first Asian country to recognise the severity
of AIDS, and give the issue priority on the national agenda. Recent findings validate
the approach that we took in the early 1990s. They show that: Ladies
and gentlemen, The success we have had in
fighting the epidemic in Thailand by no means suggests that the struggle is over.
A hard reality remains: Today, Thailand still has the third highest
adult HIV prevalence rate in Asia, at 1.85%. Cambodia has the highest adult HIV
prevalence rate at 2.77%, followed by Myanmar at 1.99%. We
need to recognise the successes in the fight against HIV/AIDS so far, and to scale
these efforts up further, within Thailand and in the Asia-Pacific region. What
have we learned? We have learned that the
HIV/AIDS epidemic is far beyond the scope of the health sector alone. That
HIV/AIDS is a development challenge with an impact not only on individuals and
families, but the wider social structure, economy and human security of countries. We
have learned that the HIV/AIDS epidemic requires a multi-sectoral response.
In Thailand’s response we have involved all sections of Thai society, including
NGOs, businesses, local leaders and people living with HIV/AIDS. This is in recognition
of the important role civil society – including religious institutions
– play in combating the epidemic. We have
learned that HIV/AIDS also required a multi-level response, within the
government and local authorities. During my term as Head of the Thai Government,
I gave clear directives to each government ministry to formulate individual plans
and budget. I also requested our governors and province to develop provincial
AIDS plans. We have learned that the highest
political leadership is needed to effectively combat HIV – AIDS. During my
term, I established, and chaired, the National AIDS Prevention and Control Committee,
in the office of the Prime Minister. This body became the co-ordinating body for
national AIDS planning and public education. We
have learned that combating HIV/AIDS requires drastic increases in the government
budget with no time to wait for foreign donors to arrive. The Thai government
has also recognised the importance of allocating funds to NGOs and community-based
organisations. In 1992, we allocated 480,000 U.S. dollars to them. In 1996, the
amount increased to 3.2 million U.S. dollars. We
have learned the necessity of educating the whole Thai society, not just
groups at higher risk. We are fighting for radical change in perception and behavioural
response within Thai society. Perhaps most
importantly, we have learned that we can admit, accept and speak openly
about the fact that the HIV/AIDS epidemic is driven my socio-cultural practices,
and that these occur at a large scale in our country. These include: In
many parts of the Asia-Pacific region this has not yet been learnt. Ladies
and gentlemen, During the coming days, you
will have the opportunity to reflect and consider the large role that spirituality
and religious communities play in the prevention, care and support for people
living with HIV/AIDS and their families. In
his speech to the Sixth International Congress on AIDS in Asia and the Pacific,
Peter Piot, the Executive Director of UNAIDS described a path in the fight against
HIV/AIDS where we finally match the scale of the epidemic with the scale of
our response. He described a path where
the fight against AIDS is truly embraced in every field of social action -- by
politicians, unions and businesses -- but also in the churches, mosques and
temples. This is a path where we abandon
the debate between prevention versus care. Instead, we realise that our common
humanity needs both. This is explicitly recognized in the UNGASS declaration
of commitment adopted in New York in June this year. Religious
communities have come a long way in realising this reality. Across the different
religions we see increasing examples of the leadership role religious institutions
play in providing HIV/AIDS prevention, care and support in a holistic manner. With
the central role religion plays in teaching us how to cope with birth, diseases,
ageing and death, religious communities play a unique role in the fight against
HIV/AIDS, in particular at the community level: In Thailand, Buddhist
monks in Mae Chan have decided to mobilise the religious sector for HIV/AIDS prevention,
care and support, after witnessing the devastation of their own families, relatives
and friends. Ladies
and gentlemen, HIV/AIDS is having a profound
impact, bringing out the best and the worst in us. We
have learned that the epidemic triggers the best when we work together in solidarity
to combat denial, and to mobilise efforts of prevention and care and support to
people living with HIV/AIDS. It brings out the worst when individuals are stigmatised
and ostracised by their loved ones, their family and their communities, and discriminated
against individually and institutionally. We
all have an important role to play. Let us benefit form what we have learned so
far, and continue our fight against HIV/AIDS. Thank
you.
“Peace and Conflict
Resolution in the Globalization Era” By
H.E.
Mr. Anand Panyarachun
Former Prime Minister of Thailand
At the 94th Annual Rotary international
Convention
Brisbane, Australia, 2 June 2003 Introduction
Distinguished
Rotarians,
Ladies and Gentlemen, It is always a
great pleasure to attend a Rotary function, though the ones I have attended in
the past tended to be somewhat smaller. I would like to thank Rotary International,
not only for inviting me to speak, but also for promoting friendship and understanding
from the local level up to the international level. In particular, I would like
to congratulate President Bhichai Rattakul for inspiring us to sow the seeds of
love in a time when it seems love is needed more than ever. President Bhichai, as most of you
know, is a very kind man. It is therefore quite in character for him to presume
I am knowledgeable enough to speak on peace and conflict resolution. As you will
recall, during the Cold War some of the best minds were put to work on the subject.
Yet they failed utterly in predicting how and when the Cold War would be resolved.
When even the experts get it wrong, then it’s doubly daunting for a non-expert.
But I find it strangely comforting, because even if what I say falls far wide
of the mark, I will still be in good company. The challenges to peace today are
infinitely more complex than those that shaped the world until just over a decade
ago. The Cold War era was defined by
two superpowers with a single super-agenda that overshadowed – indeed overwhelmed
– everything else. The globalization era, on the other hand, has seen an explosion
in the number of actors – corporations, non-governmental organizations, pension
funds, even individuals – that can affect peace and stability. Whereas the Cold War had a constraining
effect on such actors, globalization has had a liberating, empowering effect.
Ever cheaper technology has allowed a growing number of actors to pursue a growing
number of competing agendas, including taking on opponents with vastly superior
resources. Cause and effect are becoming ever less linear, as developments in
one area impinge on seemingly unrelated areas. Does this growing complexity decrease
or increase the risk of conflict? The answer seems to be mixed. On the one hand,
we no longer live under the threat of global annihilation. Complex interdependence
has made us more sensitive to the needs of others, because often our happiness
depends on theirs. On the other hand, localized conflicts seem to have become
more numerous, as long-buried or suppressed agendas re-emerge and clash with one
another. Tensions between states, of course, remain an ever present source of
conflict. But what is most interesting about the post-Cold War order are the new
forces of friction that can disrupt peace and harmony within states as well as
between them. New Sources of Conflict One potential source of conflict
is the dilemma between growth versus sustainability. The triumph of capitalism
unleashed in developing countries what Keynes called the market’s “animal spirits.”
Such energy is of course central to the proper functioning of a free market economy. Many emerging economies, however,
lack the institutional structure and mechanisms to curb the excesses of a laissez-faire
system. As a result, there is little to prevent local natural resources from being
exploited to the brink of depletion in response to demand in the global market. Differences over the exploitation
of rainforests pit loggers and developers against native tribes and conservationists.
With growing populations, competition over water resources is also a possible
source of tension and conflict in the next few decades. Although such conflict
may have an international dimension, the potential for large-scale violence is
limited, at least for the time being. More problematic from the perspective
of potential violence is a growing tendency towards ethnic, religious, racial,
communal and other sectarian strife. Such
conflict is not an entirely new phenomenon. Artificially-imposed territorial boundaries
and heightened feelings of ethnic and religious apartness can pave the way for
fragmentation and sectarian violence. In Northern Ireland, in Myanmar (or Burma), in Sri Lanka, ethnic and religious minorities have long
fought to break free of majority rule. The
removal of the overarching constraints of the Cold War and sudden economic collapse
can also open a Pandora’s box of long festering animosities, leading to mass violence,
sometimes on a genocidal scale. We have seen horrific eruptions of sectarian violence
that caught us by surprise – in the Balkans, in Rwanda, even in Indonesia in the wake of the Asian economic crisis. Globalization
means that conflict and instability in one country can have repercussions far
beyond its borders. The international community therefore has a stake in preventing
such outbreaks of sectarian violence. But in most such
cases, by the time violence breaks out, any role the international community plays
can only be reactive, a Band-Aid solution for decades, or perhaps centuries, of
hatred and animosity. To address such
cases, there is talk of “humanitarian intervention,” of the international community’s
responsibility to protect human rights wherever it is grossly and systematically
violated. Such ideas are well-intentioned, but even if they were to gain wide
support, it would not absolve us of failure to address the root causes in time.
As in so many
things, an ounce of prevention is worth a pound of cure. The capacity and willingness
of states to prevent tensions from spiraling out of control is of the greatest
importance. An ancient Hindu tale tells of how a single stray drop of honey sparked
a chain of events that culminated in war between two kingdoms. As tensions are
part and parcel of human relations, the trick is in preventing tensions from reaching
the tipping point where they would escalate into violent conflict. Normally it is
the state that performs this function. Yet in the post-Cold War world, some states
lack that capacity, whether through circumstance, neglect or willfulness. A
key challenge for the international community will be capacity building for states.
There will be those states that are newly emerged and in need of institutions
to be built from the ground up, such as East Timor. Then there are those that already have
institutions in place but which require adjustment as they make the transition
towards liberal democracy (such as Eastern Europe and possibly post-war Iraq). And there will be those on the brink
of failure where institutions exist but have broken down and no longer perform
any meaningful function. To perform this
preventive function, the international community will have to ensure that its
efforts are welcomed by such states, and resolve such sticky questions as financial
burden sharing. The upside is that capacity building assistance is far less controversial
and costly than emergency intervention. The
Growing Complexity of Conflict Globalization
has introduced not only new sources of conflict. The tools for waging conflict
have also rapidly become much more sophisticated and affordable. Relatively weak
actors can leverage technology to reduce asymmetries in power. Some non-state
actors may ignore international conventions and use unorthodox means against more
powerful opponents. The most dramatic example of this is, of course, Osama bin
Laden. But a far more inspiring example in Jody Williams, who used email to fight
the antipathy of governments and succeeded in pushing through the global ban on
landmines, earning herself a Nobel Peace Prize in the process. The possibilities
opened up by new technologies are not lost on traditional state actors, particularly
those that are able to translate their economic might into military might. In
a world still between equilibrium points, the vast resources at their command
mean they are as capable as any other actor, if not more so, in determining the
new rules of the game. As international laws tend to be a step behind technology,
powerful states may use new technologies to test the limits of international conventions. Already, new classes
of biological and chemical weapons are being developed that may contravene international
conventions but are hard to detect or have dual use in civilian applications.
Hi-tech non-lethal weapons are being developed that can be used in war as well
as in more prosaic tasks such as crowd control. The threat of terrorism may ease
the acceptance of such “humane” weapons, but the temptation for abuse will be
high. Such technologies may help achieve peace with no loss of life, but it may
be an Orwellian sort of peace in which are embedded the seeds of further conflict. Conflict
resolution The proliferation
of actors and agendas, the fragmentation of societies, the loosening of rules,
the growing availability of sophisticated technology – these are ingredients that
would seemingly make fertile ground for conflict. Yet conflict is not inevitable.
Depending on one’s attitude, the very same conditions may also afford great opportunities
for potential antagonists to attempt cooperation and dialogue, align agendas,
resolve differences and find mutual accommodation. We must never
forget that the roots of conflict, and the way to its resolution, lies in human
causes. Look more closely at almost any conflict in the world today, and you will
see that it is not irrationality or wrong-headedness that lies at the root. Instead,
you will find grievances, and it does not matter whether they are real or imagined.
Perceptions of social injustice, denial of legitimate rights, mistreatment, and
other grievances can breed frustrations that may one day erupt in violence. This
is not to excuse the use of violence, but to suggest that it may be constructive
and instructive, as the old saying goes, to walk a mile in the other’s shoes. Technology has
made it easier than ever for us to physically destroy our enemy, but in doing
so there is a price to pay in terms of our humanity. The very act of trying to
kill a cancer can also kill the patient. It would be small comfort to vanquish
the enemy, only to find that the values we live by have been thoroughly eroded
in the process. The aftermath
of the First World War suggests that it is not enough to resolve conflict by defeating
one’s enemy. The conditions must also be created for a durable peace. It is a
relatively simple matter to seek and destroy one’s enemy, but a much harder task
to dissolve the bitterness that fomented the animosity in the first place. Tackling
symptoms or root causes alone is an incomplete solution. One must seek a balanced
approach in addressing the two. This is of course
easier said than done. People are complicated animals, and professional politicians,
who often have the greatest say on matters of peace and security, are a different
breed altogether. Double standards and hidden agendas are so commonplace that
it is not always easy to discern the true motivation of any policy, though one
can make educated guesses. In
these times, it is even less likely that things are as they appear. Efforts to
find common ground can easily get lost in a game of guess and double guess, cross
and double cross. This can breed impatience with finding root causes, which in
turn paves the way for unintended consequences later on. The Taliban was at first
a creature of the CIA, created to counter the Soviet invasion of Afghanistan. Saddam Hussein grew strong thanks to support
from Washington, which used him as a counterweight against Iran. As circumstances
changed, the US found itself in the ironic position of
having to track down and destroy the monsters it had unwittingly created. Some conflicts
cannot always be solved through dialogue and accommodation. Where the two sides
are so diametrically opposed that they are unable to engage each other for long
in dialogue, much less negotiation. The participation of outsiders, either on
an invited or volunteer basis, can complicate the problem as outside powers often
have their own vested interests and agenda. Ideally, then,
a peace broker should not be a major power but one that is accepted by both sides
as a neutral and disinterested party. Also, some international organization such
as the United Nations or a regional body could play an effective role in facilitating
the resolution of conflict. But
there are limits to what even a neutral and disinterested party could accomplish.
Norway, rather than a major power, played a key
intermediary role in the Sri Lanka peace plan and the Oslo Accord. Yet on
the latter, it has not been entirely successful. The Israel-Palestinian issue
has gone far beyond the reach of orthodox means and mechanisms for conflict resolution.
In all these years, the problem has somehow resisted all human efforts to find
a peaceful answer to the satisfaction of all concerned. Perhaps the “road map”
approach with the backing of the permanent members of the UN Security Council
and their wherewithal might prove to be the antidote for the two antagonists. It is apparent
that for all the experience, power, wealth, and technology at one’s command, none
of them can guarantee peace. Indeed, they may instead lead to overconfidence and
prompt unnecessary wars. As Barbara Tuchman observed in her book The March
of Folly, the power to command frequently causes failure to think. The methods
of destruction may change, the political spin may be different, but it is still
human desires and fears, more than human intellect, that drive conflict. The only real
recipe for lasting peace and effective conflict resolution lies in the human heart.
Tolerance and compassion, virtues preached by all the great religions, are still
the best prevention and the best cure. Even if conflict
is too far along to be prevented, patience and goodwill need to be cultivated.
It may be difficult at first to allay age-old suspicions and build confidence,
but it is essential for long-term peace and stability. Although mindsets
and habits are hard to change, they can and do change across generations. Problems
that are insoluble now may no longer be so 20-30 years from now. The key is not
to pass on the same hatreds and misconceptions to later generations. The ultimate expression
of tolerance and compassion is forgiveness. It may be hard to even consider forgiveness
for such monstrous acts as the September 11 attacks. But the alternative is a
never-ending cycle of reprisals and counter-reprisals that saps the vitality of
both parties as well as their future generations. An eye for an eye eventually
makes the whole world blind. It is only through forgiveness that one can be set
free from the anger and bitterness that plague those who have taken revenge on
their enemies, only to find emptiness where they expected satisfaction. In this respect,
there may be a role for non-political national or international bodies to create
better understanding of the various paths to peaceful conflict resolution. The
proliferation of non-state actors makes this an inevitable trend. Already, think
tanks and NGOs have become powerful policy advocates, often proposing creative
solutions to trenchant problems. The establishment of the Rotary Centers for International
Studies in Peace and Conflict Resolution is an important development along this
line. Conclusion Conflict has been
a part of the human condition since the dawn of time. As humanity has evolved,
so has conflict, to the point that Einstein remarked, “It has become appallingly
obvious that our technology has exceeded our humanity.” I would suggest
that we reclaim our humanity by recognizing the humanity of others, including
those whose interests are incompatible with ours. In conflictual
situations, it is a common strategy to dehumanize the enemy so as to overcome
the natural human aversion to killing. But by dehumanizing others, one also begins
to dehumanize oneself, by turning off the moral compass that is our birthright.
To accept our
enemies as fellow human beings, we need to understand the anger and frustration
that drive them to what are ultimately acts desperation. It may be easier to explain
away their grievances as irrational, but doing so only denies the legitimacy of
their position and leads to deadlock. Of course, there may be no perfect solution,
but what we should seek are solutions that both sides can live with, rather than
die from. Mankind’s intellectual
development, it seems, has served us so well that we forget that the most enduring
ideas on human relations are those rooted in moral principles. Within my lifetime,
I have seen men of intelligence and goodwill develop countless approaches and
methods designed to maintain or build peace. From what I see, their combined brainpower
and good intentions do not seem to have significantly reduced conflict in the
world. We have tried the best ideas that recent centuries have to offer. Perhaps
it is time for us to try the ideas that have lasted these past few thousand years. Understanding,
empathy, compassion, tolerance. These are the virtues that will see humanity through.
These are the virtues embodies in the spirit of Rotary International. Let us continue
to sow the seeds of love as urged by President Bhichai and start a chain reaction
that fills the world with what it needs most. Thank you.
"Leadership
in Fighting HIV/AIDS" Address by
HE Mr Anand
Panyarachun
Former Prime Minister of Thailand
30 June 2003
South-East
Asia Chiefs of Mission Conference on HIV/AIDS
30 June - 1 July 2003
Bangkok
Your Excellency, Ambassador Darryl Johnson,
Excellencies,
Ladies
and Gentlemen,
I should like to congratulate the U.S. State Department
for organizing this landmark conference on HIV/AIDS for US Chiefs of Mission in
South-East Asia and senior Embassy staff serving in the Asian and Pacific region.
That
a government Department responsible for foreign affairs, and not public health,
takes up the challenge of HIV/AIDS is in itself a significant breakthrough worthy
of emulation. I should like to pay a tribute to Ambassador Darryl Johnson
for hosting the Conference and to thank him for inviting me to address such a
distinguished gathering on the occasion of this dinner cruise. In the span
of my career, I too have served as my country's representative to yours. This
is, however, the first time that I have the opportunity to address so many distinguished
US Chiefs of Mission and senior US Embassy staff on the subject of HIV/AIDS, the
focus of your two-day conference here in Bangkok. I am thus very pleased
to share with you all this evening insights from my personal experience in national
leadership of an HIV/AIDS prevention programme when I served as Head of the Thai
Government some 13 years ago. In doing so, of all the people involved in
this national endeavour at both the policy and action level, I should like to
single out one for special mention: Mr Mechai Viravaidya, my colleague who served
as Minister responsible for HIV/AIDS and tourism development, two seemingly irreconcilable
portfolios. Imagine the predicament that Mr Mechai faced in overseeing both
these portfolios. As Minister responsible for HIV/AIDS, he had to promote more
public awareness of HIV/AIDS in the country. This was initially widely perceived
as harming Thailand's image and tourism potential, which Mr Mechai was also responsible
for promoting. You may well guess at the many interdepartmental battles that Mr
Mechai waged to launch Thailand's first nation-wide campaign against HIV/AIDS.
Ladies and Gentlemen, I assumed leadership of Thailand at a time
when HIV was rampant throughout the country. To deal with the problem, I
had to find out the exact situation by demanding facts, figures and projections. HIV/AIDS
was rapidly spreading to all sections of Thai society. There were 143,000 new
HIV infections in 1991 alone. And it was predicted that over the next 20 years,
up to 10 per cent of Thais would die from AIDS. Infection was seen as a
death sentence and the virus connoted fear. It was imperative that we accepted
the existence of the epidemic and dealt with it in the most pragmatic manner possible. We
had to accept that traditional and punitive health measures, which had been practised
to combat the epidemic, had simply failed. Tough choices had to be made,
bold new decisions had to be taken --- if the spread of the epidemic was to be
curbed. Only government and political leadership at the highest level could
make the crucial difference in fighting HIV/AIDS on a national scale. It
was a question of saving lives, protecting our economy and preventing the social
fabric from unraveling. For this we had to accept that the epidemic was fuelled
by socio-cultural practices whose existence no Government wanted to openly admit.
These practices included: - Injecting drug use.
- Commercial sex.
- Sale
of children and young women into sex work.
The fact that all such
practices were illegal made everyone want to deny their existence. Not only
did we have to admit that these practices existed, we also had to admit that they
occurred on a large scale in Thai society. For example, over 20 per cent of Thai
men were visiting sex workers every year. It was thus necessary to publicly acknowledge
the scale of the problem and to commit our Government to urgent action. To
address the situation, I demanded compilation and analysis of data and information
as a basis for policy and programme decisions. I asked the concerned agencies
to constantly update me on the situation.
Sentinel monitoring of infection
levels in all provinces indicated that HIV prevalence in Thailand had jumped five-fold
within a two-year period. Prevalence was growing rapidly among young Thai men
who were tested on conscription into the military at the age of 21. Thailand
was in the throes of an HIV epidemic. HIV/AIDS was a new threat to our country
and our people, one that no conventional defence measures had prepared our society
for. The epidemic demanded that there be an end to hypocrisy and denial,
which, we may note, still occurs in many societies in the Asia-Pacific region. I
had to give clear directives to each government ministry to develop its individual
plan and budget. I also requested our governors and each province to develop provincial
AIDS plans. We also invited the involvement of all sectors of Thai society,
including NGOs, businesses, local leaders, and people living with HIV/AIDS. This
was in recognition of the important role of civil society in mounting an expanded
national response to the epidemic. The HIV/AIDS epidemic was clearly beyond
the scope of the health sector alone. Its impact on our country's economic and
social development was potentially great. Highest political leadership was
needed to effectively combat HIV/AIDS. Thus, I established and chaired the National
AIDS Prevention and Control Committee in the Office of the Prime Minister. This
became the coordinating body for national AIDS planning and public education. To
mount a national-scale programme, we had to quickly and drastically increase the
government budget for HIV/AIDS prevention and control, rather wait for foreign
funding. The government AIDS budget for prevention and control increased
from 2.6 million US dollars in 1990 to 24 million US dollars in 1992. That represented
a 900 per cent increase in less than two years. After I left office, the
budgetary increases continued under new governments. In 1993, the government budget
went up to 46 million US dollars and in 1996 to over 80 million US dollars. These
sums did not include aid from external donors. It is with gratification
that I note that Thailand's resource investment in HIV/AIDS prevention has been
the highest among developing countries: 1.32 US dollars per capita, with nearly
90 per cent of this being domestic resources. The Thai Government recognized
the importance of allocating funds to NGOs and community-based organizations.
In 1992, we allocated 480,000 US dollars to NGOs. In 1996, this amount was increased
to 3.2 million US dollars. We also recognized the need to educate the whole
of Thai society, not just groups whose behaviour and situations placed them at
high risk of infection. We were fighting for a radical change in perception and
in behavioural response within Thai society. It was thus essential to engage
all sectors of Thai society in HIV prevention and control. We adopted a multi-level
and multi-pronged strategy. We mounted a nation-wide education campaign,
enlisting the cooperation of the mass media, including TV and newspapers. We
targeted parents and teachers, many of whom had conservative attitudes. We
also targeted young people through initiation of a national HIV/AIDS programme
in schools and a large-scale youth peer education programme in the workplace.
Since HIV infection had skyrocketed among injecting drug users from 0 to
40 per cent within one year, we promoted prevention interventions among drug users,
the majority of whom were and still are young people. To motivate behaviour
change in the use of sex work services, we decided to work cooperatively with
all those who influenced the sex industry. Thus was born the 100% Condom Programme,
a flagship programme initiated during my term in office. The Programme distributed
free condoms to establishment-based sex workers and their clients. It made it
impossible for clients to buy sexual services without using condoms. Key to its
success was the mobilization of the collaboration of provincial administrative,
health and criminal justice authorities, health workers, owners and managers of
sex work establishments, sex workers and their clients. Very early on, we
fought stigma and discrimination, to protect the rights of people living with
HIV/AIDS. When I became Prime Minister, there was a proposal to pass legislation
that would have restricted the rights of people living with AIDS. We did not pass
that bill. There were prevention campaigns that inadvertently reinforced
the stigmatization of people living with AIDS. We stopped those campaigns. We
also lifted the ban on entry to Thailand of foreign nationals known to have HIV/AIDS. Ladies
and Gentlemen, What do you think would have been the price had we indulged
in denial of the epidemic and refrained from openly acknowledging the uncomfortable
factors driving it? We know today that Thailand would have had 10 to 15
per cent HIV prevalence, a rate seen only in the worst affected seven countries
of sub-Saharan Africa. And 6 million more Thais would have died. To avert
that, Thailand became the first developing country in the Asia-Pacific region
to recognize the severity of AIDS, place the issue high on the national agenda
and pioneer a national HIV programme with significant national resources. It
was a privilege for me to serve our country in personally leading that programme
and being part of Thailand's achievements as a globally-recognized best practice.
In that regard, I should like to recognize the role of the United Nations in extending
its support of Thailand's efforts and disseminating widely the Thai model as a
global best practice. The most recent findings validate the approach that
we took in the early 1990s. - Behavioural change has reduced new HIV
infections from almost 143,000 in 1991 to 29,000 by 2001. It is further projected
to drop to 18,000 by 2005.
- Since 1993, an estimated 2 million
fewer people are HIV-infected than would otherwise have been the case.
- The percentage of adult men visiting sex workers annually has fallen and condom
use has increased drastically. The national sentinel surveillance indicates that
condom use in sex establishments is now over 90 per cent.
Sceptics
have said that Thailand's success is not replicable, that it is unique. But today,
we see that other leaders too have taken bold political decisions. They include:
- The Honorable Paolo Teixera-Ferraira, Parliamentarian in Brazil, whose personal
commitment made possible legislation that allowed government funding for harm
reduction programmes that reduced HIV infection among injecting drug users in
Sao Paolo State, Brazil.
- Muslim Imams in Uganda whose leadership
was significant in spearheading the implementation of AIDS education and condom
promotion in their communities.
- Closer to home, Prime Minister
Hun Sen who leads Cambodia's national AIDS programme.
- And the
3,000 sex workers under the Sonagachi Project in Calcutta, India, who formed cooperatives
to bargain for condom use with their clients.
Experience has proved
that the most effective prevention efforts are multisectoral in nature and require
vigorous political commitment at the highest levels. As Head of Government, a
Prime Minister can greatly influence and create a positive response from Cabinet
colleagues, and from all sectors of society. In Thailand, this had led
to a strong increase in multi-level participation and ownership of HIV/AIDS prevention
efforts nationwide. Let me share with you some of my observations of the
present scenario. I trust that these will be useful to you in reflecting on how
you might use the opportunities that come your way. - There is no room
for complacency anywhere.
- Not even in Thailand and Cambodia
where the epidemic is in overall decline, but manifesting a new pattern of spread
through mainstream sexual relations and young people.
- Especially
not in countries where the epidemic is spreading very fast without any sign of
decline --- as in China and India, Myanmar, Nepal and Papua New Guinea.
- And not even in countries where HIV prevalence could remain low for many years,
but suddenly erupt as an epidemic among population groups with high-risk behaviour
and in high-risk situations --- such as Bangladesh, Indonesia, Malaysia and Pakistan.
Ladies and Gentlemen, I am well aware of the opportunities
that each one of you has to make a difference in helping to save lives. In the
course of your duties, you meet Heads of Government and State. You deal with Ministers
and senior officials. You are a significant influence on US foreign policy
decisions that affect overall financial and technical resources for HIV/AIDS.
Importantly, you are an anchor of evidence-based interpretation of the realities
of the HIV/AIDS pandemic in the countries where you are stationed. Since
the virus has no respect for borders, territorial integrity or national sovereignty,
curbing its spread is everyone's responsibility. Preventing HIV/AIDS is entirely
possible. We now know it can be done and how it can be done. We also know
the costs of action and of inaction. There is great need to open up discussion
of sensitive and taboo topics concerning the spread of HIV/AIDS, in the finest
spirit of freedom of expression and respect for transparency and good governance. There
is need to get to the root of the HIV/AIDS problem, see it for what it really
is and have the moral courage to pursue action beyond what seems insurmountable
today. Because Ladies and Gentlemen, it makes sound economic and political sense
to do so. In concluding, I challenge you to consider how you might help
stem the HIV/AIDS pandemic in this region: - You can support the allocation
of more resources for Asia.
In this regard two points are especially noteworthy:
ü China and India alone would require
one-third of the global resources for HIV/AIDS.
ü
It is important to emphasize the need for prevention programmes aimed at vulnerable
population groups such as young people, sex workers and injecting drug users.
- You can encourage government leaders whom you meet, especially Heads
of Government, to commit themselves to tackling HIV/AIDS as a key national development
issue.
You can join us in shaping our collective response to HIV/AIDS. I
invite you to do so. For the security of the Asia-Pacific region! Thank
you.
WELCOME
DINNER ADDRESS by
Anand Panyarachun
Former Prime
Minister, Thailand
Chairman of National Economic and Social Advisory Council
Chairman,
Asian Institute of Technology Board of Trustees
Chairman, Thailand Development
Research Institute
at the
Inter-University Short Executive Programme on
Environmental
Security and Natural Resource Conflicts:
New Vulnerability and New Vigilance
14
July 2003 ----------------------------------------------------- For
the past two decades, the concept and application of sustainable economic and
human development have been increasingly adopted and embraced by governments,
business, industry, academia and non-governmental organisations. The imperative
need for policies, programmes and projects to move towards the path of sustainability
was unanimously adopted at the Rio Earth Summit in 1992 and further renewed at
last year’s World Summit for Sustainable Development at Johannesburg. It
is well recognised, in principle, concept and practice, that with more intensive
and extensive integration of the economic, ecological and sociological components
of development, the greater will be sustainability. Implicit in this integration
is that conflicts need to be reduced and/or prevented. When there is conflict
over natural resources, the environment, social and cultural differences, it will
be difficult, if not impossible to attain sustained economic and human development. The
causes and sources for conflicts are becoming more diverse, interacting and complex.
Traditional analyses viewed from a lens of inter-state conflicts are now reoriented
toward assessing conflict from the increasing intra-state perspective and expanding
the scope of inquiry beyond conventional paradigms often rooted in a framework
of political economy. Thus, conflict is increasingly analysed with a view towards
not only their economic, social and religious roots, but also to discern specific
or related precipitants such as natural disasters, or resource based causes such
as water scarcity. More often than not, the common denominator underscoring all
conflicts, are practices and policies that advocate or foster discrimination,
inequities and intolerance. Many, if not most analyses, view water
as the looming cause of conflict. Whether it is due to lack of access; insufficient
supply caused by increasing demands of urbanisation; population increase; pollution
and contamination of supply sources; perceived inequities over proposed pricing;
diversion of water or its impoundment by reservoirs and dams are some of the many
sources and causes that trigger conflicts. With global climate change,
precipitation patterns are expected to also change. Hence, water would be scarce
and not be where it is needed most for human and economic development or, equally
devastating, there would be deluge with wide spread inundational flooding. Every
year we continue to learn that in the same country or region, droughts and flood
records are being exceeded and shattered. Climate change has adverse consequences
on water supply and availability. As water is central to human welfare, well-being
and health, changes in quantity and quality have significant social and economic
effects. These, in turn, will have political consequences, causing instability
in a society and thus making it more prone to disputes, conflicts and violence. I
note that this Executive Programme will address the linked issue of climate change
and water. I also note that a number of important topics related to land, energy,
forest and marine resources will also be presented. Take the case
of energy, another key and critical issue for development and poverty alleviation.
On the one hand, there is grave concern by scientists and many political leaders
that the increasing use of fossil fuels, particularly coal and oil, will increase
the amount of carbon dioxide emitted to the atmosphere, causing global warming.
There is no scientific disputes or disagreement of the properties of carbon dioxide
gas to produce the green house effect. This was postulated and demonstrated over
a century ago by the Swedish scientist Arhenius. The argument by a powerful minority
is the extent this anthropogenically formed gas is responsible for global warming.
An equally potent argument is the very high costs of reducing the carbon dioxide
emission and the impacts the reduction measures will have on GNP and employment.
We already see the serious disputes over the Kyoto Protocol. The
burning of fossil fuels produces other pollutants as well. These also have impacts
on human health and the ecosystem. On the other hand, however, the
lack of affordable energy will have significant consequences on the economic and
social development of countries. Without sufficient energy, transportation for
commerce and trade; the mobility of people; electricity for lighting to increase
literacy, for water treatment and purification plants, etc, will also be affected. Clearly
the solution to overcome this dilemma of the need for energy, but not with the
associated health and environment consequences, can be achieved by the use of
cleaner and clean fuels. Hydrogen is increasingly mentioned as one such major
clean fuel. A hydrogen fuel economy is, according to experts, decades away. In
the meantime, every effort is needed for energy diversification, more efficient
use, conservation and changing production and consumption patterns, so that more
time will be available for a transition towards a clean energy economy. If
this is not done nationally, regionally and globally, then we can expect more
tensions, disputes and conflicts over energy within a country and between countries.
We need to remember how the shortage of gasoline in gas stations during the 1970’s
oil crisis, provoked violence amongst the motorists queuing up to fill up their
cars. There is a lack of understanding what are the sources and causes
of conflicts. In conflict prevention and resolution, experience indicates that,
often, responses and remedies are proposed without a sound understanding of the
root causes. Hence, the solutions implemented do not provide a lasting peace and
the conflict erupts and recurs. This is similar to applying a band-aid over a
wound without treating the causes of that wound so as to prevent it from festering.
A better understanding of the root and trigger causes of conflict, and they will
vary from country to country and, indeed, from place to place within a country,
will enable more appropriate prevention and resolution measures to be conceived,
planned and implemented. This understanding has the potential to provide a better-informed
base for a longer lasting peace. I am also very pleased to see in
the Executive Programme that the subject of traditional methods for preventing
and resolving conflicts will be addressed. It is observed in many countries, particularly
in Asia and Africa, that institutions and legal procedures used for dispute settlements
and conflict resolution are the legacy of colonial rule. There is now increasing
interests in Asia and Africa for forms of indigenous institutions, local customs
and precedents for the prevention and resolution of conflicts. The Adat systems
in Indonesia, the Shuras in the Islamic world and the recent revival of the Lorya
Jirga in Afghanistan are some examples. These traditional forms
of institutions and methods draw upon the social, cultural, ecological patrimony
of a country and its people and they are location-specific, making it even more
relevant. Solutions proposed are often more acceptable because they address the
socio-cultural experiences and needs of the communities. Powerful
monitoring, measuring and sensing technologies now enable us to measure substances
in nanograms and parts per billion with incredible accuracy. At the other end
of the scale, geographical mapping systems provide detail bird’s eye view of large
areas. These techniques, with the expanding advancements in information technologies
and the concomitant use, not only in academia, business, industry, governments
but also in the homes, are surely making us more and more connected and informed. We
now have the means to be kept informed speedily, instantly and accurately at any
site-specific location or globally on threats and risks posed to human health
and the ecosystem. The international awareness of and effective containment of
SARs is a case in point. I believe that there are good opportunities
to combine the best features of traditional mechanisms with that of “modern” technological
means to meet the fast changing globalised world we are living in. With increasing
use of information technology, participation, transparency and accountability
would be increased and improved. I hope that this Executive Programme
will provide the fora for continued interactions, fostering the sharing and exchanging
of knowledge. I hope in the interactive sessions, the priority areas that need
further information and understanding can also be identified so that a collaborative
research programme can be established. Identifying potential sources
and triggers of conflicts, minimising, preventing and resolving them will be very
important for sustained economic and human development. In closing,
I would like to take this opportunity to wish this important and timely Executive
Programme a success.
STATEMENT
BY
MR. ANAND PANYARACHUN
AT THE ASIAN FORUM
ON
CORPORATE SOCIAL RESPONSIBILITY
September 18, 2003 at the
Inter Continental Hotel, Bangkok I
am honored to address this opening ceremony of the second annual Asian Forum on
Corporate Social Responsibility and welcome all the delegates, presenters and
others to Thailand. I
am glad that such a significant subject is being discussed here and firmly believe
that there is an ever-increasing necessity for companies, government and civil
societies to give absolute attention to corporate social responsibilities issues.
This
conference is an opportunity for all to discuss and identify the recent developments
and innovations in relation to various aspects of corporate social responsibility.
I would like to emphasise that corporate social responsibility (CSR) is not only
a subject for business and civil society. The government also has a significant
role to play and can motivate and facilitate CSR. The social, economic, political,
environmental problems we are faced with these days are so complicated that an
interaction between the government, business and civil society is a necessity. Even
though the interpretation of the term ‘Corporate Social Responsibility’ continues
to be in a state of evolution, it is encouraging that a large number of governments,
businesses and civil societies around the world have established some basic awareness
and standard expectations towards the society, community and environment they
operate in. Several factors such as, accountability,
transparency, investor pressure and stakeholder activism have formed the direction
of CSR. Moreover, as guidance to companies and to enhance accountability for corporate
performance on CSR issues, a number of performance and reporting standards have
been produced in the recent years. Some of these are Social Accountability 8000,
UN Global Compact, and the Global Reporting initiative, OECD guidelines for Multinational
Enterprises. The CSR movement is gaining support
from investors and the business community, and is spreading rapidly in the current
era of the business world. I am delighted
that today’s business environment, the globalization as well as social pressures,
impacting the principles and perspective of the business activity, has resulted
in adaptation of the CSR culture by various companies around the world. The
significance of CSR has escalated in the global market place. In recent years
many companies who violated social and environmental standards have been targets
of adverse publicity by human rights, labor rights and environmental organizations.
Such publicity can definitely damage the reputation of an organization, which
is undeniably one of the most valuable assets of any organization. It
is interesting to observe that CSR is considered imperative for building a sound
and credible image of a company. It is now believed that, in addition to various
other factors, adopting socially and environmentally responsible initiatives enhances
shareholder value, impacts financial performance and ensures continued success
of a company. In
the new global economy, there is increased pressure from investors, consumers,
and employees to consider social and environmental criteria in corporate business
activities. Consequently the companies are no longer evaluated merely on the basis
of financial performance, but on the financial, social and environmental performance.
This has lead to using a "triple bottom line" or "sustainable"
approach - social, environmental, and financial data for evaluating the performance
of an organization. I
believe that all of you here today understand what CSR means. As you know that
there are multiple definitions of CSR, I feel that there is a need to consider
and re-define a common definition of CSR on an agreed basis. In
general terms, CSR is the alignment of business operations with its social and
environmental values. CSR is the voluntary incorporation of social and environmental
values and concerns in the business operations of an organization.
However, we cannot ignore that in this world of transparency, investors
and consumers are aware of and have increasing knowledge of the impact of all
companies’ activities on the society and environment. In
legal terms a company is created to make money with the sole purpose to increase
shareholders profit. Besides various positives, this arrangement undeniably overlooks
certain detrimental environmental and social effects.
One
commentator, Robert Hinkley*, argues that the law in USA,
in its current form, actually inhibits executives and corporations from being
socially responsible, as the purpose of the corporation is just to make money
for shareholders and that many social ills created by corporations stem directly
from corporate law. Any deviation from that can leave a corporation open to a
lawsuit. Consequently Hinkley suggests adding a phrase on CSR to corporate law
and which would then be read, to some extent, like - Directors and officers
have a duty to make money for shareholders, but not at the expense of the environment,
human rights, the public safety, the communities in which the corporation operates
or the dignity of its employees. I
would like to share my observation that the General Electric Company is one of
the companies that have moved a step ahead by setting up a Public Responsibility
Committee, consisting of Board members, for reviewing and overseeing the company’s
position on corporate social responsibilities and public issues affecting the
investors and other key stakeholders of the company. We
also cannot ignore the whole range of corporate responsibility initiatives including
policies, programs and/or reports of the various globally recognized companies
such as, AVIVA (formerly Commercial Union), Exel, Starbucks Coffee Co and McDonald’s.
Companies around the world now voluntarily
report on their environmental and social practices and performances and are candidly
addressing the CSR issues on their websites. Various companies are endeavoring
to release their corporate responsibility report using Global Reporting Initiative
guidelines. The fundamental advantages
of CSR cannot be overlooked. According to some, CSR is similar to quality management of a company since it is considered
as an investment and not a cost. I think the advantages of CSR initiatives unquestionably
outweigh any costs incurred in relation to such initiatives. The
CSR initiatives assist in creating an atmosphere of trust in an organization that
results in motivation and commitment of employees. Certain CSR initiatives may
also directly decrease operating costs. For example, efforts to reduce gas emissions
may increase energy efficiency and reduce utility bills. In
the present global environment, customers, investors and suppliers often support
companies viewed as “socially responsible” thus, escalating market opportunities
for the company. One
of the key advantages of CSR is that it can assist in better performance of the
companies and generate growth and profits of the company. The shareholder value
is increased as social investment funds target the company. Moreover, effective
CSR policy in a company can also assist in improving risk management and avoiding
lawsuits against a company. Let me wrap
up now by reiterating a few key points: Firstly,
we need to appreciate that any company that demonstrates a commitment to its stakeholders
through socially responsible business operations will be considered a good corporate
citizen and will also have a competitive edge over its peers. Secondly,
Organizations should realize that a good business sense requires concurrent handling
of the needs of their employees and the societies in which they operate. And,
Thirdly, that Government, civil societies and companies can no longer ignore irresponsible
corporate practices, as CSR is applicable, in equal measures to the governments,
civil society and business. I
hope you all are, in this meaningful gathering today, ready for the challenge
to participate and expand your understanding and implementation of CSR. I
wish you all a successful and productive conference. Thank
you for your attention. * * * *
Speech
by
Anand
Panyarachun
Asia
High-Level Symposium on Threats, Challenges and Change
Shangri
– La Hotel, Hangzhou
2
April 2004
-------------------------------------------------------------------------
Ladies
and Gentlemen,
It
is an honour and a pleasure to be with you today.
As
you know, the Secretary-General of the United Nations established the
High-Level Panel, and appointed me Chairman, on 4 November. The
Panel held its first meeting from 5 to 7 December in New York, and
its second meeting from 13 to 15 February in Switzerland.
We
originally were expected to deliver our report on 15 August, but we
have extended our deadline to 1 December, as our preliminary
discussions indicated that we would need more time to do our work
effectively.
The Terms of
Reference gave the Panel three objectives:
-
To assess current
and future threats to international security
-
To evaluate
whether the instruments and institutions of collective security are up
to the task of meeting those threats
-
And to recommend
policy and institutional changes to ensure that collective action will
be effective in providing peace and security.
As the
Secretary-General has emphasized recently this is not a Panel on UN
Reform. It is a Panel on building collective security for the
twenty-first century.
Of course,
the Panel may tackle the reform of institutions, including the
Security Council, the Economic and Social Council, the General
Assembly and the Trusteeship Council. But it will do so only if it
deems it necessary for meeting the new challenges of international
security.
Thr Panel
recognizes the scope of its challenge, the short time frame, and the
high expectations from UN members and from public opinion.
For this
conference I would like to highlight four challenges that the Panel
faces – challenges that we hope your insight will help us to
overcome.
First, a key
challenge for the Panel is to reconcile the concerns of state
security and human security. We acknowledge that many of today’s
security threats cut across national boundaries and that there are
circumstances under which outside intervention may be necessary for
preventing crisis or protecting people. In addition, the Panel
recognizes that security threats are not posed by states alone, but
by various non-state actors. But how do we expand collective
security, which after all is traditionally focused on the security of
states, to encompass the new challenges of today?
Second, we
started this exercise with everyone agreeing on the value of
multilateralism. That is not a debatable point. The challenge,
however, is to put forward proposals for policy and institutional
change that will promote the attainment of multilateral response. The
onus is on us to convince the doubters that a collective response
is indeed more efficient and more effective and is in their interest.
A third key
challenge that we face is the lack of consensus about the threats to
peace and security. Certain countries have different priorities
concerning threats, and many countries feel that their major concerns
are not being addressed. At our first two meetings, the Panel
recognized that we must validate different perceptions of threats in
order to build support for a new collective security regime. This
has led us to take a non-hierarchical approach to threats and we will
examine such key threats as civil war, inter-state rivalries,
poverty, infectious disease (in particular HIV/AIDS), weapons of mass
destruction, terrorism, and international organized crime.
This is all
and good, but we also know that this validation is not enough – for
we must show the interconnections among threats and create a new
consensus that we face common threats.
This leads
to a fourth challenge. While the Panel wants to include a variety of
threats and to treat them in a balanced way, we must also try to
recognize our comparative advantage, and not repeat discussions and
reinvent the wheel in addressing each of these threats. Where there
are good, solid proposals moving forward in other forums, reports or
initiatives, we should have no qualms about endorsing them.
I would like
to conclude by sharing with you a flavor of our most recent
deliberations. At our second meeting in Switzerland, the Panel’s
discussions highlighted issues such as prevention, early warning, and
the need for coordination, both within the United Nations and between
the United Nations and outside actors such as the international
financial institutions and regional organizations and security
alliances. The Panel emphasized the role of regional organizations,
while noting that an emphasis on regional solutions should not
displace collective responsibility at the international level. The
Panel also noted that today’s security institutions suffer from a
reputation for double standards, and that the lack of equity in
response to common challenges makes a mockery of what we hope to
accomplish.
In closing,
I would like to thank His Excellency, Mr. Qian Qiqian for organizing
our meeting. I look forward to hearing your insights over the next
several days.
Remarks
by
H.E.
Anand Panyarachun
Transparency
Night, April 21, 2004
Tunku
Abdul Aziz, my very dear friend of long standing, excellencies,
ladies and gentlemen.
Some
of you may have taken note that I have a hoarse voice because I just
returned from a ten-day trip to New York and London and I picked up a
certain bug along the way. So I hope you forgive me if my voice is
not too clear tonight.
I am deeply honored by this award
from the Kuala Lumpur Integrity Society, Malaysia Transparency. This
is another event that is organized by Transparency Thailand and we
are pleased and honored to have the presence of Tunku Abdul Aziz and
his colleagues from Kuala Lumpur. Some of you know me intimately.
Some of you may have heard of me. Most of you who are here tonight
know that I am not a corrupt person. I am, however, not quite sure
about some who are outside this hall.
I accept this honor with great
humility, particularly since I succeeded two other individuals,
firstly, H.E. Lee Kuan Yew, Senior Minister in the Singapore
Government and Prime Minister of Singapore for over three decades. It
is not an easy thing to be compared to a man of that stature. A man
who is known to be incorruptible. Not only incorruptible for himself
but he saw to it that Singapore is an incorruptible city. Whatever
one may think of Mr. Lee Kuan Yew, one cannot deny the fact that he
has transformed his country into a new, progressive and vibrant
society, mainly on the basis that it is a transparent government and
that it is incorruptible.
The second individual who preceded me
on this award is the former Mayor of Seoul who is now the Prime
Minister of Korea. We wish him luck. I think the fact that he was
given this award is a testimony of his incorrupt behaviors.
Now I do not know what the future
holds for me. Let me be very personal on this particular aspect that
since my childhood, I have often heard the term “corruption”.
Surprisingly or perhaps unsurprisingly, we do not have an equivalent
Thai translation for the word corruption. From my early days, I have
heard the word used, and as I got older, I appreciated more the real
meaning of the term corruption. In Thailand, the term corruption
applies mostly to the financial corruption which is equivalent to
dishonesty, graft and bribery, but I think to really appreciate the
word corruption you have to go a little beyond a common
understanding. The word corruption is a very meaningful word;
it
applies not only to financial corruption but it is mainly the
corruption of the mind. Similarly, we do not have a Thai word for
“integrity”. Most Thais would be confused between the
words integrity and honesty. But there again, integrity goes beyond
honesty. For me, it is interesting to see that the words corruption
and integrity can never be translated into Thai words and it does
take the Thais a little bit longer to understand these two words.
Generally speaking, a society would
be doing fairly well if it is not dishonest and is not a financially
dishonest society. But I think that we should be aiming at a society
that goes beyond the level of plain honesty and financial corruption.
These values have to be instilled in the minds of youngsters to
teenagers, to adults and to old people. What is the test? The test is
that in your everyday life, you do your own thing, you carry out your
duties, you conduct a family life and you interact with your friends
and relatives. Somebody who is not corrupt does not have to be fully
and forever conscious about the word corruption in his mind. He knows
what corruption is and what it is not. It is ingrained in his
everyday life - in his everyday activity. Those who are not corrupt
would not constantly boast about not being corrupt. The word rarely
enters his mind because in his daily habits, he can distinguish what
is right or wrong, what is ethical and unethical, and what is honest
and dishonest. So if you truly appreciate the word and you practise
it everyday, you do not even bother to use the word. It is part of
your everyday life, part of your daily habit and part of your
everyday interaction with other members of society.
To Aziz, I am deeply grateful to you.
You and I have been friends for over thirty years and I am glad that
we at Thailand Transparency have built up some kind of a strategic
alliance –strategic partnership with our friends from Malaysia.
I am deeply touched by your words. I am very much humbled by the
award and shall be forever grateful to the recognition that you give
- not to a man but to the word “integrity”.
Thank you.
|
PARTNERSHIPS FOR CHILDREN
Address
by
H.E. Mr. Anand Panyarachun, former Prime Minister of Thailand
UNICEF Goodwill Ambassador
23 March 2005
7th
East Asia and Pacific Ministerial
Consultation on Children
Siem Reap, Cambodia
23-25 March 2005
Madam (or Mr) Chairperson,
UNICEF Executive Director Carol Bellamy,
Distinguished Delegates,
Ladies and Gentlemen:
I am greatly honoured to be with you here today in
Siem Reap for the
7th East Asia and Pacific Ministerial Consultation on Children. I thank
Prime Minister Samdech Hun Sen, the Royal Government of Cambodia and
UNICEF for the excellent work they have done in organizing and
preparing for this most important event. Of course, this is not the
first of these Ministerial Consultations I have addressed and
participated in. I am thus well aware of the significance of this, the
only gathering at this level devoted exclusively to advancing the
rights of children in our region.
I will address today the fundamental importance of
partnerships for
children, a subject that relates to much of the work I have done over
the years in both the public and private sectors, and as a UNICEF
Goodwill Ambassador, a position I have been honoured to hold for the
last nine years.
Distinguished Delegates, Ladies and Gentlemen:
As we all know too well, the biggest natural
calamity to hit our
region
in recent times was the Indian Ocean Tsunami. It had absolutely
devastating effects on a number of countries, most notably Aceh and
North Sumatra provinces in Indonesia, many parts of Sri Lanka and
Maldives, Andaman and Nicobar Islands and Tamil Nadu State in India,
parts of southern Myanmar and western Malaysia and, in my own country,
Phang-Nga, Phuket and some of the southern provinces of Thailand. It
even struck countries as far away as the Seychelles, Somalia and Kenya.
Media attention focused on the scale of the
disaster with large
pictures of the effects of extremely large waves. It drew our attention
to the particular vulnerability of children, whether in the scale of
death among these fragile young people or in the potential dangers of
their succumbing to deadly diseases, such as cholera, malaria or
measles, all of which we thankfully avoided. It highlighted the
unfortunate potential of criminal elements in our countries to take
advantage of unaccompanied children to traffic them for in-country or
inter-country adoption or for sexual exploitation, again largely
avoided thanks to a timely alert. It underlined the trauma faced by
affected children, especially since they were deprived of the normalcy
of education with the destruction of so many schools and the deaths of
their teachers. This is a disaster we can not, should never forget.
I subscribe to all these observations. However, I
draw a number of
other lessons from this unprecedented disaster.
Firstly, I salute the heroic efforts of the
governments and people
of
the affected countries. They have truly led the response to the Tsunami
from immediate relief to planning for longer term recovery. This
includes the great contribution made by local non-governmental
organizations, a matter to which I shall return later in may address.
We should all be proud of our fellow Asians in their demonstration of
incredible resilience. I salute too the very positive contributions
made by our friends from around the world, from the various external
armed forces that immediately placed their substantial assets and human
resources at our disposal, from international NGOs that came to our
assistance through material and technical aid.
I would make special mention of the United
Nations, an institution
that
is essential to our lives in an international and interdependent world.
I have recently served as Chair of a Group of Eminent Persons looking
into how the UN could further improve in its relevance and
effectiveness. The UN played its true role in working with governments
to provide leadership and coordination in the relief effort, with our
own UNICEF doing so especially in the areas of education, water and
sanitation, and child protection. The UN still has much to contribute
as we enter the phase of recovery and reconstruction.
Secondly, like you, I was overwhelmed by the
incredible outpouring
of
public and official sympathy and support for the victims of the
Tsunami. Governments around the world have pledged billions of dollars
for both relief and recovery, including contributions from those not
normally considered as donors, from China to Lao PDR.
Even more impressive though were the enormous
gifts given selflessly
by
ordinary people. We know about the massive public fundraising in
Europe, North America, Japan and Australasia, but it doesn’t end there.
Millions of Thai and Indonesian citizens made their own private
donations. Mongolians and Vietnamese for perhaps the first time came
forward to make personal contributions to causes outside their own
countries. Many of these donations came to UNICEF for the benefit of
children. As of today, UNICEF’s ample resources to respond to the needs
and rights of children in Tsunami affected areas come one-third from
government sources but two-thirds from non-governmental sources, mostly
public donations.
Thirdly, notwithstanding the devastating and
heart-wrenching effects
of
the tsunami, I can’t forget the other very grave problems faced by our
region and our world. I’m especially concerned that the latest disaster
will cause us to forget these other concerns. I have spent much of my
professional and private life trying, often very successfully, to get
governments and people to take seriously the threat of HIV and AIDS. In
the long term AIDS will kill far more people than any natural disaster,
however big. We must not forget that. We must not neglect that.
Furthermore, within the countries themselves
affected by the
Tsunami,
there are other areas where children suffer almost equal deprivation.
In Indonesia, it is actually the easternmost provinces that are the
most deprived day in and day out. In Thailand, we have made such
enormous strides in national development that many, including myself,
see us as a potential future donor country. Yet we still have many
problems to resolve for vulnerable families in the north and east, as
well as in the far south of our country. We must not forget that. We
must not neglect that.
And then there are innumerable children and others
ravaged by
unnecessary and resolvable conflicts around the world, for example, in
Darfur, the Democratic Republic of Congo, Iraq and Palestine and, yes,
in our own region in Indonesia, Philippines and Thailand, and suffering
the consequences of past conflicts in Papua New Guinea and the Solomon
Islands, and here in Cambodia. We must not forget that. We must not
neglect that.
And further, are we to forget and neglect our duty
to meet the needs
and rights of children, who die from malnutrition and preventable
infections, or women who die in childbirth, or girls who are denied
their right to education? Are we now to forget and neglect our
commitments to the Millennium Declaration and the Millennium
Development Goals?
What then do we take forward from this experience
that is of wider
significance? I would argue that we can and must do more for children
in both Tsunami affected areas and in other domains and places. Our
challenge now is to continue to promote and facilitate international
solidarity with the Tsunami victims and turn this into concrete support
for the world’s other emergencies, and beyond that for the wider
problems and opportunities we have identified in the Millennium agenda.
This calls for new ways of doing business, for new kinds of partnership
among governments, civil society and the corporate world, which has
also played its part in financing Tsunami relief and recovery.
With UNICEF in Thailand, we have already shown how
partnerships with
the corporate sector and the general public can produce more resources
for children. More than half of all of UNICEF’s country programme of
cooperation in Thailand is funded from in-country donations. My dream
is to make this generosity available to programmes for children in
neighbouring countries and for Thailand to complete the transition from
a net recipient to a net donor nation.
Madam (or Mr) Chairperson, Distinguished Delegates:
We are here today in a Ministerial Consultation.
By definition, that
means the primary partners are governments of East Asia and the
Pacific. We have, however, rightly involved civil society, in the form
of national and international non-governmental organizations, in these
Ministerial Consultations over a number of years now. There is, of
course, a basic principle at play here. Governments are accountable to
the people. Civil society organizations are an expression of popular
engagement in public life.
Civil society organizations have proven
particularly important and
effective in advancing the rights and well-being of children, and the
NGOs present here are all dedicated to that very cause. Governments, of
course, have the best interests of children at heart, and they are the
primary duty bearers for the fulfillment of children’s rights. However,
governments are also faced with hard decisions, as I am very well aware
from my time as Head of Government in Thailand. Often it is easier to
take the most pragmatic way out, to take decisions that make practical
sense from a macro-economic or national security perspective, with
unintended negative consequences for the poor or for children.
Over-rapid privatization of social services is one example. Poorly
planned slum clearance may be another. Yet a third would be the abrupt
removal of agricultural or other subsidies. There are more.
Who is there to remind us of these unintended
consequences, but the
NGOs? It may be unpleasant to have groups constantly reminding those of
us now, or in the past, in government, but we have to recognize that we
don’t always get it right. If we truly believe in democratic
principles, we should indeed embrace this difference of opinion, not
necessarily always acting in ways that some civil society organizations
would urge us, but at least listening openly and intently. These
differences of opinion are indeed a strength in our East Asian and
Pacific societies, and something it is well worth encouraging.
Civil society organizations are truly vital
partners in all
processes
of development and humanitarian response. In the latter domain, we have
seen how effective they have been in responding to the Asian Tsunami
disaster. I also recognized their key value when, as Prime Minister of
Thailand, along with then Minister Meechai Viravaidya, I launched the
campaign to control the spread of HIV/AIDS in my own country.
Government had to provide policy and leadership. It had a duty to set
the context within which society as a whole could tackle what I saw as
our gravest problem at the time, one that has now diminished in its
present gravity but is still a serious danger. Government had to ensure
that all of its agencies were taking the necessary measures to promote
preventive action and provide care and support for those living with or
affected by HIV/AIDS.
However, we would never have achieved the success
we did without our
partnership with local, national and international civil society
organizations. It was largely they who enabled us to reach out to the
populations most at risk – commercial sex workers and intravenous drug
users – to provide them with the essential means to prevent HIV
transmission both among themselves and to the general population. I
know there are similar experiences here in Cambodia, one of the other
rare countries of the world to act with success to reduce the spread of
our world’s current greatest scourge, about which we can never afford
to be complacent.
Governments can only gain in implementing their
programmes by
opening
and strengthening partnerships with NGOs. We have to remember though
that NGOs are not mere implementing agencies. They must also be engaged
in the formulation of the policies and programmes they help to
implement. They are generally closer to the people than are the
politicians and bureaucrats – all the more reason to listen to them as
we plan our programmes for development and poverty reduction. I hope
that international organizations, such as the World Bank, Asian
Development Bank and, yes, UNICEF also take this lesson to heart.
My last point on civil society partnership is one
that is sometimes
more contentious, but I shall raise it anyway. Civil society
organizations are vital to hold governments to account. Governments
derive their authority from the people, and that authority is truly
considerable. On their behalf, governments take on responsibilities for
the respect, protection and fulfillment of human rights, including
those of children.
Among the countries represented here today, all
have ratified the
Convention on the Rights of the Child, though not all its two optional
protocols on the involvement of children in armed conflict, and
on the sale of children, child prostitution and child pornography. I
would encourage you all seriously to consider extending your
governments’ ratification to those two optional protocols. An important
part of governments’ obligations under the CRC is to report
periodically to the Committee on the Rights of the Child, and we are
privileged to have with us here the Chair of that Committee, Jaap Doek.
Painful though that process may sometimes be, the rules of the game
also allow civil society organizations to comment on these reports at
the Committee’s presessionals. If the civil society organizations are
not satisfied with the State Party report, they also have the right to
present shadow reports, which the Committee is obliged to consider.
Again I would put it to you that NGOs and other
civil society
organizations are closer to the real lives and opinions of poor
families and children than are politicians and bureaucrats. It’s
actually not a weakness but a strength to have this degree of scrutiny
on the actions and reporting of governments. If we look at the
Constitutions of most of our countries, we shall see that this is also
consistent with their basic tenets, and they are the basic law of our
countries.
Distinguished Delegates, Ladies and Gentlemen:
At the World Economic Congress in Davos in 1999,
Secretary-General
of
the United Nations Kofi Annan, proposing a Global Compact, said: “The
United Nations once dealt only with governments. By now we know that
peace and prosperity cannot be achieved without partnerships involving
governments, international organizations, the business community and
civil society. In today’s world we are all dependent on each other.” I
should now like to turn from considerations regarding partnership with
civil society to that with the private or corporate sector.
By the end of the last century our world had
changed beyond all
recognition, and it continues to change. Governments do still exercise
ultimate authority, but they are no longer the principal players in the
world economy, not even in the economies of most countries. In the
Asian crisis of 1997 we saw this with great pain to our people, as
livelihoods disappeared almost overnight through the effect of currency
trading entirely out of the hands of those controlling the levers of
State. Large multinational corporations and funds can make or break
national economies. Smaller enterprises can provide essential
employment for poor parents or be the principal exploiters of the
labour of children, including their sexual exploitation. This is a
fact, and it is one that we can not avoid. We have rather to deal with
it in principled and practical ways. Again we need partnerships to do
this.
Primarily we need public-private partnerships with
the corporate
world
itself. There are many good examples of this. In the Tsunami disaster
that many businesses contributed, or facilitated contributions, to the
relief and recovery effort. I have already mentioned that two-thirds of
UNICEF’s resources for this operation have come from private sources.
In addition to the general public, this included private business, and
among these were home-grown businesses in the affected countries
themselves. Indonesia’s largest bank, for instance, made available its
nationwide network of ATMs for donations to UNICEF. We see too one of
the world’s most powerful businessmen, Bill Gates, the founder of
Microsoft, devoting hundreds of millions of dollars entirely to promote
the health of children and women in the developing world. This is
actually only the tip of the iceberg. There are huge untapped resources
with the private sector that could be mobilized for the benefit of the
poor in all of our countries. We just need imagination, new thinking
and innovative mechanisms to tap into them, not as government revenue,
but as resources to complement the action of governments.
And this makes sense to the corporate world
itself. Firstly, by
investing in the poor, especially in children, they are helping to
reduce disease, ignorance and poverty. This can only broaden the base
of those who are the market for their products and services. Secondly,
by promoting social and human development, they look good in the public
eye. This again is a great selling point in increasing one’s market
share.
But this is not in itself enough. Yes, we do need
increased private
investment in human development, especially in the children who
represent all our futures. This must not though remain in the domain of
charity. We need to promote and facilitate it as solidarity, or as
corporate social responsibility. Just as governments should be
accountable to the people, so private companies must have a sense of
accountability not just to their shareholders but also to the wider
community in which they do business. In the case of multinationals that
community is the world.
We have seen too some of the excesses of
unregulated capitalism with
forced labour, including that of children, who ought rather to be in
school, with trafficking in human beings, including children, within
countries and across borders. Yes, governments must regulate. Yes,
governments must prosecute, convict and sanction. Yes, governments must
rescue and rehabilitate the victims. But governments can achieve so
much more by working with the private sector to inculcate the spirit of
corporate responsibility across all of the private sector, as an
essential ethic to belong to the club. I remember the amazing example
of a former Executive Director of UNICEF, Jim Grant, who in the 1980s
negotiated ceasefires between warring parties in internal conflicts in
Latin America (zones of peace for children), so that children could be
immunized. Much has been made of this example for conflict zones, but
are there not lessons to be learned in working with the unorganized
private sector?
Having just spoken of her predecessor, I am
mindful too of the
immense
contribution that UNICEF’s current Executive Director, Carol Bellamy,
has made for the cause of children during her ten years at the helm of
what she rightly calls the world’s leading agency for children. She has
moved the global influence of her organization on from the domain of
health to encompass the essential agenda of all of the rights of
children. We owe her an immense debt of gratitude, and I should like to
note that on her last occasion in her current capacity to be among the
Ministers responsible for children in East Asia and the Pacific. Thank
you, Carol. We shall miss you in your present incarnation. We look
forward to further contact personally and professionally in the future.
Ladies and Gentlemen:
If we are to achieve our goal of a World Fit for
Children, if we are
to
achieve the ambitious goals we set for ourselves through the Millennium
Declaration and Millennium Development Goals, governments must provide
leadership. But they cannot do it alone. Partnership is an essential
part of the human condition. Partnership is essential for all progress
and development. Let us resolve to build and strengthen essential
partnerships with civil society and the corporate sector, so that
together we can achieve what none of us could achieve alone.
|
|
REMARKS OF H.E. ANAND PANYARACHUN TO THE IRISH INSTITUTE OF EUROPEAN AFFAIRS
SEMINAR ON "UN REFORM: THREATS, CHALLENGES AND CHANGE"
Dublin, 30 June 2005
Excellences, Ladies and Gentlemen, Friends,
It is a great pleasure to join you for this conference. I wish
to thank the Institute for this opportunity. I would also like to
thank the Government of Ireland and Minister Ahern for generous support
to the work of the Secretary-General's High-level Panel, and for
unflinching commitment to the reform efforts underway.
Today, I would like to share some thoughts about current efforts in
New York and in capitals to address our most pressing challenges to
development, security and human rights, and how to mould the United
Nations to address most effectively those challenges in the 21st
century.
As you know, in September 2003, the Secretary-General told the
General Assembly that we had reached a "fork in the road." He
argued that divisions over the war in Iraq, and before that, the
terrorist attacks of 11 September, had generated deep divisions over
the threats we face and the ways in which we must confront them.
In that same address, the Secretary-General announced the creation of
the High-level Panel on Threats, Challenges and Change.
The Panel, despite its 16 members' wide range of views and
backgrounds managed to come to agreement on a wide panoply of
challenges. In that agreement, I believe that the
Secretary-General saw what I saw: If colleagues from former U.S.
National Security Adviser Brent Scowcroft to Secretary-General of the
Arab League Amr Moussa to former UN High Commissioner for Refugees
Sadako Ogata could all come to such wide-ranging consensus on both the
threats we face and how to renew collective responses, why not member
states?
So with his eyes on September 2005 and the five-year review of the
Millennium Declaration, the Secretary-General in March issued his own
report entitled "In Larger Freedom." Drawing on the Panel report
as well as the Millennium Project report on development, the
Secretary-General convincingly knitted together the strands of
security, development and human rights. He argued that one will
not be durable without the others. That report has now been the
object of intense discussion in the UN General Assembly, and in civil
society at large, and it was the basis for the summit Draft Outcome
document prepared by General Assembly President Ping just debated
recently in New York.
Ladies and Gentlemen,
The stage is set for historic decisions; the summit in September
will convene nearly 180 heads of state and government — more than any
event ever before. And the opportunity truly is historic; as the
Secretary-General has argued, we have it in our power to pass on to our
children a brighter inheritance than that bequeathed to any previous
generation. We can, and we must, take bold and concrete decisions at
the summit that will strengthen the work of the United Nations for
development, security and human rights, and we must improve the
functioning of the Organization's decision-making bodies to ensure that
we are equipped to do so.
We live in a world unforeseen in 1945, when the United Nations was
formed. Collective security was then considered a question of
States, borders and battalions.
Today, that understanding must be broadened in light of a new
constellation of threats, interdependence and expectations of states'
responsibilities. Today's leading threats — terrorism, organized
crime, extreme poverty, environmental degradation, the spread of
disease, the risk of proliferation of weapons of mass destruction —
transcend borders and require that all states are able to function and
exercise sovereignty responsibly.
The proposals being debated now in the General Assembly are meant to
help all states and their United Nations address those challenges more
effectively and more equitably. I hope the final outcome offers
an ambitious but pragmatic roadmap for fulfilling this responsibility.
In the way, there are still striking differences when it comes to
determining which threats should be our priority — and as troubling, an
insistence that we can address some threats but not others.
But in today's world, it is at our collective peril that we
emphasize
socio-economic threats, while giving secondary attention to weapons of
mass destruction. Our efforts to build durable peace after civil
wars may be futile if we neglect the urgency of human rights.
Terrorism, throughout the Panel's deliberations, proved a powerful
example of the interconnections between threats. Today the
developing world is just as affected by terrorism as any other
region. From Kenya to Indonesia to Peru, developing countries
know terrorism all too well. But not only that: According to
estimates of the World Bank, millions of people in the developing world
were thrown into extreme poverty as a consequence of the economic
shocks following the 11 September terrorist attacks. Catastrophic
terrorism involving a nuclear device would be far more devastating the
world over.
At the same time, the industrialized world has just as much interest
in
addressing all the threats that face us. SARS showed us how
rapidly a newly emerging infectious disease can traverse oceans and
continents, and expose the flaws of even modern health systems.
SARS spread to dozens of countries within weeks, killing hundreds and
infecting thousands. And if we are to believe what experts tell
us about avian influenza, which is now afflicting my own region, SARS
may have been merely a harbinger.
We simply cannot afford to choose among the threats we face.
In
an interdependent world, threats increasingly have a system-wide
impact. We must be serious about adapting our international
mechanisms, including the United Nations, to cope with the world of the
21st century.
Ladies and Gentlemen,
If
the reports of the High-level Panel and the Secretary-General have
exposed one glaring weakness of the UN system, it has been an
all-too-frequent paralysis in the face of the sustained but devastating
effects of ongoing violent conflict and persistent, extreme
poverty. The lethargy with which we have come to acknowledge the
prospect of catastrophic terrorism ominously follows this
pattern. But as our interdependence increases, and threats become
ever more interrelated, we must act early, decisively and collectively
against threats from HIV/AIDS to nuclear terrorism before they have
their most devastating effect.
The three basic freedoms outlined in the Secretary-General's report
— freedom from want, freedom from fear, freedom to live in
dignity — hang in the balance.
If we are successful this September, the opportunities are
astounding. We could:
— reverse the onslaught of HIV/AIDS and other deadly diseases that
now
devastate societies and undermine State capacity;
— help to build states' capacity to provide basic services to their
people, and reduce vulnerability to state collapse, mass violence and
humanitarian disasters;
— with unity of purpose combat terrorism in all its forms;
— no longer allow half of all countries emerging from conflict to
lapse back into violence within five years;
— stave off paralysis in the face of genocide or mass slaughter of
civilians;
— reenergize consensus to staunch proliferation and advance
disarmament; and
— restore the central role of the UN in the international system.
Ambitious as it seems, this vision should be within reach. I
would like to highlight those actions that will be particularly
indispensable if we are to find ourselves in such a world.
First, the reports of the Panel, the Millennium Project and the
Secretary-General, and now GA President Ping's outcome document, have
all placed a very strong emphasis on development. This is not
only because development is vital in its own right, but also because it
is the most effective means of addressing so many of the threats we
face. Building states' capacity to exercise their sovereignty
responsibly is a foremost challenge.
Fortunately, Member States are showing signs of progress in this
area. There is an unprecedented consensus around the Millennium
Development Goals. More and more countries are adopting specific
time-tables for reaching the 0.7 per cent target for official
development assistance (ODA). G-7 Finance Ministers have agreed
to cancel ponderous debt burdens. And in a few days, we can look
to the G-8 summit in Gleneagles for more positive developments.
The summit in September should give impetus to vital progress in the
area of trade negotiations and affirm all of these positive steps.
Second, we must act collectively and decisively to prevent the
proliferation of biological, chemical and nuclear weapons —
particularly to keep them out of the hands of terrorists. In the
deliberations of the Panel, members were quite struck by the rate at
which globalization and technological advancement have outstripped our
multilateral instruments. The recent failure of the Review
Conference of the Nuclear Non-Proliferation Treaty (NPT) to face up to
these challenges makes bold action in September all the more
imperative. The Panel has warned of a potential cascade of
proliferation if the NPT-based regime begins to erode, and I hope that
Heads of State and Government quickly grapple with this prospect.
Time is running short.
The Panel also drew attention to what has increasingly been
termed our "biological security" — security from disease
naturally emerging or deliberately perpetrated. SARS, as I
mentioned, was a harbinger. Today, the growing risks from avian
flu loom ominously, and a chorus of experts and leaders is warning that
we are ill-prepared for a large-scale epidemic. In the
short-term, we must fortify the World Health Organization's Global
Outbreak Alert and Response Network. But the long-term challenge
is to build up public health systems in developing countries.
First and foremost, we must address HIV/AIDS, which has spread so
rapidly and with such devastation that life expectancies in some
African countries have plunged to levels not seen since the black
plague struck Europe in the 14th century. But viable health
systems are also essential to address naturally occurring outbreaks of
disease, and to counter the risk of biological terrorism.
Third, the UN has been to slow to mobilize a united front against
terrorism in all its forms. All states must speak loudly, clearly
and in unison in denouncing terrorism. And they must make the UN
an effective international forum for combating it. This will
require implementation of the new comprehensive strategy along the
lines recommended by the Secretary-General in Madrid earlier this
year. It will also require consensus on a common definition of
terrorism. Regardless of one's cause, killing or maiming of
innocent civilians and non-combatants can not be justified.
Period. That is terrorism, pure and simple. Such moral
clarity is imperative if the UN is to fulfill its potential in
combating terrorism.
Fourth, it is imperative to build consensus around the concept of a
responsibility to protect. Many countries maintain understandable
anxieties that this concept could be used as a fig leaf for unwarranted
interventions. But I am heartened to see that Member States are
earnestly trying to bridge their differences; we all share the
fundamental goal of preventing genocide, ethnic cleansing and mass
killing. Most striking to me in the Panel's and other debates on
this question is that few excuse the United Nations failure to
intervene amidst the Rwandan genocide. And yet the principle of a
responsibility to protect quickly induces reservations. No doubt,
recent failures of the international community to protect the
vulnerable have been a product of complacency on the part of those who
would endorse a responsibility to protect. But there is
nevertheless essential value in sending an unequivocal message that all
States must be united in the face of any future atrocities.
Finally, the UN must renovate its architecture to exploit a new
consensus on development, security and human rights for the 21st
century.
We must first restore human rights to its rightful place. The
Secretary-General has shared the diagnosis of the Panel regarding the
serious shortcomings of the current Commission on Human Rights.
That Commission has squandered much of its credibility, and the
reputation of the UN has suffered for it. The Panel did recommend
universalizing the Commission but it also recommended, in the longer
term, the establishment of a Human Rights Council. I welcome the
Secretary-General's boldness in seizing this opportunity now.
Human rights must be given the central place they deserve in the
institutional structure of the UN.
Leaders at the summit will also have the opportunity to establish a
new
intergovernmental Peacebuilding Commission, which would play a central
role in helping States emerging from violent conflict. As the
Panel saw it, and the Secretary-General agreed, The Commission would
fill a real institutional gap by ensuring that all key players in
future peacebuilding endeavours share an understanding of the
challenges, needs and required actions.
The Security Council, the Economic and Social Council, donors must
work
in a more integrated fashion to ensure that states and societies
emerging from conflict are not betrayed by the failure of
well-intentioned but disparate actors across the international
system. It is particularly imperative that the Bretton Woods
Institutions and regional banks closely coordinate their vital
contributions to peacebuilding under the new commission.
Discussions in New York and in capitals reflect strong
support. I
hope there will be agreement to establish the Peacebuilding Commission
during the summit itself.
Member states must also agree to meaningful reform of the UN
Secretariat. While there have been enormous strides over the past
few years in operational areas, challenges in oversight, management
accountability, budgeting, financial disclosure and general performance
have become quite clear. The Secretary-General is undertaking
important measures on all of these fronts, but to fully realize the
Secretariat's potential, member states must in September give him the
authority he needs to effectively manage Turtle Bay's labyrinth of
departments, personnel and mandates with the authority of a chief
executive officer. They must also ensure that mandates given to
the Secretariat remain relevant, and that if they do, the Secretariat
is adequately resourced to execute them.
Last
but not least, the moment one either dreads or has been impatiently
waiting for: Security Council reform (or so goes the sentiment these
days in the august General Assembly). I am aware of the flurry of
activity in New York and capitals in the last few weeks, and of
anticipated action in the coming weeks. Ultimately, however, I
believe that the approach to this question should be rather simple:
There is no escaping that the present make-up of the Council reflects
the world of 1945, not that of the 21st century. We must accept
that the Council's effectiveness well into that century will depend on
its legitimacy in the eyes of the member states obligated to comply
with its resolutions. So we must reform the Council to include
Member States which contribute the most financially, militarily and
diplomatically, and also allow a broader, more representative
membership so that the Council is seen to be more democratic.
This important issue has been before Member States for over a decade,
and has been discussed extensively. I sincerely hope that a
decision will be taken this time around.
But
— and I cannot underscore this caveat enough — reform of the
Council may ultimately undermine its effectiveness if Member States do
not forge a new consensus on security, development and human
rights. That consensus must be the guiding constitution of a
reformed Council.
The agenda before the September summit gives us hope for such a new
consensus — a consensus in which the concerns of North, South, East,
West, powerful and poor can all be addressed effectively and
equitably. No doubt, one document will not solve all our
problems. But it could herald real progress toward a new future.
The Secretary-General, my former colleagues on the High-level Panel
and
I have been around for quite some time — all of us, in fact, longer
than the United Nations. If I may call upon that well of wisdom,
I believe that it will be many years before we are again presented with
such a promising confluence of ideas, proposals and engagement.
The opportunity is within reach; we must seize it.
International Epidemiological Association
XVIIth World Congress of Epidemiology
21-25 August 2005, Bangkok
Keynote Address by
H.E. Mr. Anand Panyarachun
Former Prime Minister of Thailand
"Towards
Equity in Health for Development: Beyond the Rhetoric"
Mr. /Madame Chairperson,
Distinguished Delegates,
Ladies and Gentlemen,
It is indeed a pleasure for me to welcome all of you to the XVIIth World Congress of Epidemiology.
The theme of this Congress deals with issues of equity in promoting health for development. This is crucial as good health is a basic human right and a necessary foundation for economic and social development as well as human security. The pivotal role of health in the overarching goal of poverty reduction and sustainable development was recognized by the inclusion of three health-specific Millennium Development Goals among the eight adopted in 2000 by the Heads of State and Governments attending the United Nations Millennium Summit.
The twentieth century has witnessed a dramatic decline in average human mortality due to rapid economic growth, particularly in countries of the North Atlantic and this has spread to other parts of the world. Much of average human heath improvement has been due to advancements in health technology and income growth, which has enabled countries to invest more in health.
However, many parts of the world, such as Sub-Saharan Africa, as well as parts of South Asia, have failed to share in the overall dramatic gains in human health and reduction of mortality. In most countries, people in the rural areas, especially indigenous peoples, are far less healthy than their compatriots.
At the same time, there are outstanding examples, such as Sri Lanka, Kerala State in India, and Cuba, that have achieved very good health status without high or rapidly growing incomes. In many developing countries, health budget allocations are concentrated on the secondary and tertiary levels, neglecting basic health services, especially for the poor.
This indicates that factors other than just economic and income growth have significant bearing on how countries benefit from advancements in technology. What it means is that the right kind of investment has the potential to yield major gains.
It is, therefore, critical that healthcare systems are strengthened around primary healthcare, in line with the principles of equity, universal access, community participation and intersectoral collaboration. These principles, as endorsed by the Alma-Ata Declaration, hold true 26 years on from Alma Ata and their neglect costs us dearly today. Indeed, it can be argued that this “right” investment must be sensitive to enhancing equitable and adequate access to education, health and natural resources. To reduce present disparities and be successful, states must choose the right mix that enhances social opportunities and effective resource utilization.
The “right” and successful investment is central to our thinking and approach to health and poverty. The income expenditure criterion for defining poverty and for targeting health service to the poor has been challenged. Increasingly, it is being replaced by a new definition of poverty based on the capacity of the poor to improve their conditions, including their health status and education.
In other words, rather than treating health and education as matters of state welfare for the poor, we might consider giving opportunities for all, including the poor, to have better access to these social services so that the poor will have more capacity to actively improve their conditions and become a more valuable asset to society. Achievement of the three health Millennium Development Goals on child mortality, maternal health, as well as HIV/AIDS and other major diseases is closely inter-linked with the other Millennium Development Goals, especially those pertaining to the reduction of income poverty and the improvement of gender equality and environment and sustainability.
The latest review of progress on the health Millennium Development Goals indicates that health should be moved to the centre of the development agenda. Increasingly, poverty and inequity in health must be tackled together in policy and in the intellectual sphere.
Investments for better access to social services are those that aim to increase the capacities of individuals and institutions to apply and integrate technological advancements with contextual and tacit knowledge to reduce poverty and improve equity in health. The goal is to harness the power of knowledge and technology for good health, regardless of its sources.
Therefore, it means that the search to discover and apply "knowledge" must be an inclusive and learning process, pursued as much by scientists in the best research institutions as farmers planting rice in different fields, or mothers trying different food regimens to help their children grow.
While it is important that this Congress adopts a global vision of the human family, it is fitting that a key concern for this Conference be the reduction of the huge health disparities among and within countries.
In doing so, the Congress will help end the era of "neo-colonialism", namely a period of exclusive knowledge production in the North for technology transfer to the South, opening a new era of bringing together knowledge producers and users in the South to join the world health knowledge system.
I believe that if we can strengthen national capacities to generate and apply knowledge through sound policy and social processes, we can advance equity in global health. Such investments require the commitment of people and leadership with a passion to make things happen.
The Congress has been designed as a forum for dialogue and exchange of diverse perspectives and ideas. Of the 1000 attendees, 600 are from developing countries. I am impressed by the caliber of the participants. Let the Congress environment create a passion for change, a passion to make things happen, a passion to build capacity to integrate knowledge from different sources and bring technologies to where they are needed.
Distinguished delegates, ladies and gentlemen,
Assuming that a country has an able and committed leader, what are some of the challenges or key issues for advancing equity in health for development that could be discussed this week?
The first key issue is the effect of globalization on the new capacities of the producers and users of knowledge. Today, nations are experiencing economic transition propelled by globalization. There are fundamental differences in the principles and values underlying the goal of health for all and recent trends in globalization that drive socio-economic and health systems.
With regard to the goal of “Health for all”, Government is the mainstay of health and social services. The goals and values of Government are thus to meet equally the needs of every individual. That is the basis of equity.
In contrast, globalization is not about equity but rather about individual rights and the emphasis is on the methods to get those rights fulfilled. Accordingly, “individual rights” means that access to any health service depends on the individual’s ability to pay, regardless of who provides the services.
Equity requires that governments ensure that everyone’s basic needs are met and therefore governments must resort to a degree of central planning and resource allocation based on a non-price mechanism. Globalization, on the other hand, pushes for private ownership and resorts to the market mechanism to do so.
Thus, it seems that equity in health and globalization are supporting different social values. The plenary on the first day of the Congress provides a forum for discussing the different values and aims, with a view towards a harmonization of these values.
The Congress will also address the need for knowledge-based decision-making by stakeholders. It will consider methods to monitor health equity, and health investment, and methods to feed the information on equity and investment into the political and social processes to devise better investment of limited resources to improve health.
The plenary on the second day will address methodological issues which would allow us to monitor health inequities and bring them into the mainstream of political and social processes. That plenary will encourage more attempts towards refining ways for policy makers and civil society to get knowledge and use it to make better investments.
Therefore, the Congress will reaffirm, beyond doubt, the importance of health research to improve equity. Research is needed to define the problems, lay out the determinants and options, and develop ways to deal with inequities through the political and social processes, which enhance accepted methods of conflict resolution. Research is essential, not a luxury. It is necessary for achieving good health.
Research must not only be multi-disciplinary but also integrative. In the new knowledge-based global economy, the power of research is widely recognized. We are in agreement on knowledge as a global public good. Our shared goal is global and local health equity, with social justice, and health as a basic human right.
Gender equality is central to the attainment of this goal. In the pursuit of research, it is necessary to recognize explicitly issues that affect women and girls differently from those of men and boys. Let us also keep an open mind to the value of wisdom that lies very much with those who have little formal training but a wealth of practical experience.
The "research divide" is less between basic-applied, global-local, or producer-user, and more between whether research serves the rich and privileged or meets the health needs of the world's poor and disenfranchised. Spending on research and development is mostly concentrated on diseases that affect developed countries, while the diseases that most commonly afflict the poor (for example, tuberculosis and malaria) attract relatively little investment. Only 10 per cent of the money spent on research is dedicated to the development of therapies that could improve the health of 90 per cent of the world’s population. This must change.
Among countries that use research to improve equity, there is considerable variation. Plainly evident are marked differences in research capabilities, performance, and constraints. In some countries, health research has advanced significantly. Others have been left behind, suffering from decaying or even collapsing infrastructure. A major conference challenge is the harmonization of such diversity with a clear focus on health equity.
Key constraints on research aimed at improving equity include weak human resources, institutional infrastructure, and financing. The producers as well as the users of research need an environment that creates motivation, skills, career structures, and an interactive critical mass.
Infrastructure is necessary to provide an enabling environment that nurtures a research culture. Flexible financing is required. Commitment by actors involved will be important to mobilize public funds from the countries themselves, supplemented by foreign development assistance. Efforts must be made to be self-sufficient in the long run and attempts made to avoid perpetual dependency on foreign aid. This is why it is vital at the global and local levels to make knowledge instrumental in the political and social processes to enhance equity.
During the third day of the plenary, the Congress will discuss the utility and challenges around large studies. Large studies are important for answering difficult questions on equity in health. Large studies are most useful when scientists of developed and developing countries join hands to make them happen in the spirit of South-South cooperation. It requires committed leadership, the motivation of partners in research, as well as the desire to learn together and generate knowledge to tackle difficult problems.
These studies have important bearing on measures to deal effectively with inequity in health for development. A social, economic and political environment that is conducive to equity-focused health research is a critical enabling factor for mounting large studies inexpensively. At the same time, it would be necessary to maintain scientific rigor and guard against the exploitation of the weak by the powerful, both in terms of scientific capability and economic strength.
Ethical considerations are also important to protect the public and the human subjects being studied from undue harm. While measures are developed to achieve such protection, some have argued that they could delay or even impede the generation of new knowledge. However, this consideration is particularly relevant in the new era of genetic epidemiology, drug and vaccine trials, stem cell studies, as well as large epidemiology studies. Transparent deliberation is called for on issues such as data protection, revealing of the patient's information, and consent for use of blood or other tissues for research.
Distinguished delegates, ladies and gentlemen,
Equity in health for development calls for a new way of doing things. This new way includes a new harmonized value system, new partnership arrangements, and new ethical approaches. The design and operation of all this may be wanting for legal, managerial and other non health knowledge. The public must have the space to participate in the initiatives not only by expressing their concerns and needs, but also in the development of innovative finance, organization and monitoring of health services and in arrangements for appropriate regulation and incentive structures.
Ultimately, our commitment is to the well-being of humankind. This Conference provides us with a valuable opportunity to strengthen our solidarity and commitment, to forge our way forward together.
I should like to pay a tribute to those who made this Conference possible. I appreciate the commitment of all to be here, despite your heavy schedules, and to give Thailand the opportunity to be your host. I am sure that the collective commitment, vision, and concern for the public good, and particularly for vulnerable groups, will serve you all well in your efforts to enhance partnership toward securing health equity.
I believe that this Conference will be a significant milestone in the long journey of our search for equity in health. Like the Chao Phraya River which nurtures life along its banks, the Conference is part of the global flow of epidemiological and health research for development, in which everyone here has a role to play.
I wish you all every success in your endeavours.
Thank you.
“The Role of the United Nations
Secretary-General:
The Past as Prelude to the Future”
by
Anand Panyarachun
U Thant Lecture Series
United Nations University
14 October 2005
Tokyo
Excellencies,
Ladies and Gentlemen,
I am pleased to be with you today to deliver this
year’s U Thant Lecture on “The Role of the United Nations
Secretary-General: The Past as Prelude to the Future”.
This is a very timely subject as we enter the final
year of the present Secretary-General’s tenure, and we begin to
think about the next Secretary-General and the challenges that he
or she may face. As you know the recent High-Level Event in
New York produced an outcome document which looked at a range of
issues and many recommendations for reform. But one area it
did not mention is the Office of the Secretary-General itself,
though I am sure in the coming months and year the nature of this
office and its future will become an increasingly hot topic of
debate.
When we talk about UN reform, we normally talk about
the Security Council, perhaps the General Assembly or ECOSOC,
sometimes forgetting that the Secretariat itself is a Principal
Organ of the UN, and perhaps the one which has developed, changed,
adapted and grown the most since the founding of the UN just over
sixty years ago.
We have had seven Secretaries-General, who have each
interpreted their jobs in very different ways, responding to an
evolving international environment. The Charter gives only a
framework, saying that the Secretary-General will be the chief
administrative officer of the Secretariat. It uses language
similar to what was in the Charter of the League of Nations, with
one important difference: Article 99, which says that ‘he may
bring to the attention of the Security Council any matter which in
his opinion may threaten maintenance of international peace and
security’. It is this article, which implicitly gives the
Secretary-General room to act on his own, to monitor world events,
identify possible crises, and propose solutions, which gives him
space. How this space is used has differed enormously over
the past six decades.
Dag Hammarskjold set the standard. Brilliant,
innovative, a master strategist as well as tactician, he was able
to use his tremendous knowledge with great effect. Under
Hammarskjold, two key concepts were born, or at least grew up:
the idea of the Secretary-General’s ‘good offices’ and of UN
peacekeeping. On many occasions he demonstrated the value of
having the Office of the UN Secretary-General as a neutral focal
point, securing for example the release of American hostages in
China in the early 1950s. He also demonstrated in 1956 the
possibility of the UN fielding a small, lightly armed military
force as impartial observers and as a buffer between warring
states.
But we must recall that that was a different world.
When Hammarskjold was Secretary-General, the UN had only
fifty or sixty members, the United States of America easily gained
a majority in the General Assembly, Communist China was denied
membership, much of the world was still governed by European
empires, and the Secretariat was a tiny fraction of its present
size. More importantly, the death and destruction caused by
World War Two was only a few years past. The idea of the UN
was backed by a solid constituency, including by the United States
of America and elsewhere.
We must also recall that Dag Hammarskjold’s model of
a dynamic and creative Secretary-General, pushing the boundaries of
the office, also ran him into difficulty. It is a fact that
every Secretary-General has had a difficult second term and Dag
Hammarskjold was no exception. By the time of his tragic
death, he had run afoul of the French and the Soviets were barely
on speaking terms with him, hardly a tenable situation for any
Secretary-General.
Then we had U Thant, the namesake of this lecture
series. U Thant, as all of you know, remains the only Asian
to have held the office of UN Secretary-General. His
background could not have been more different from that of
Hammarskjold. Whereas Hammarskjold was an aristocratic Swede
from a well-off political family, U Thant was born a world away in
a little town in the Irrawaddy delta, the son of a minor landowner
and very much part of a small but prosperous Burmese colonial
middle-class.
U Thant spent much of his formative years, in the
1930s and 1940s as the headmaster of a school in his hometown.
He then went on to join the first independent government of U
Nu, soon becoming Secretary to the Prime Minister and U Nu’s right
hand man, especially on foreign and press relations. U Thant
was part of the Burmese Government when it was a democratic
government and struggling for its life against ethnic separatism,
communism and outside intervention. This was what shaped his
views about the UN and the role of the UN in protecting the
security of small states.
By the time Hammarskjold died in November 1961, the
notion of a strong independent UN Secretary-General was already
under sustained attack. It is to the credit of U Thant that
he was able to preserve the Office of the Secretary-General, even
strengthen it further, by taking a tact very different from
Hammarskjold’s, but effective nonetheless.
Hammarskjold was a great Secretary-General by force
of intellect as well as courage and creativity. U Thant was a
great Secretary-General because he brought to the Office a special
moral tone and integrity; because all sides were confident he would
take the correct action, no matter how politically risky and
dangerous. It was the concept of the Secretary-General as a
sort of secular pope, pioneered by Hammarskjold, but further
developed under U Thant. When U Thant publicly opposed the
American war in Vietnam, he was not thinking of political
expediency.
The Soviet Union had proposed a Troika arrangement –
to replace the Secretary-General with three Secretaries-General,
one from the West, one from the East and one from the Third World.
This would have destroyed the Office. It was to the
great credit of U Thant that with his election this proposal was
put aside and never mentioned again.
When U Thant became Secretary-General there were
dozens of new states being created out of old empires. The UN
went from being a mainly western club of 50 some odd countries to a
global organization of more than a hundred. The Non-Aligned
Movement gained an automatic majority in the General Assembly and
the needs of these new states became a priority on the UN’s
agenda.
This was during the height of the Cold War, when the
UN’s political potential could not easily have been realised.
But the UN remained high in people’s minds, because it had
acquired a new agenda – development – and it was during U Thant’s
day that much of the UN’s development aims and institutions were
built. UNDP, UNITAR, UNEP were created in the 1960s under U
Thant’s watch: as the man from colonial Burma, he believed
passionately in decolonization and its natural follow-up –
international cooperation for development.
U Thant also continued in the Hammarskjold tradition
of offering the Secretary-General’s good offices for settling or
preventing disputes. During the Cuban Missile Crisis in 1962
and later in 1965 during the Indo-Pakistani War, the
Secretary-General assumed an all important role as a neutral focal
point for the warring sides and their allies.
In the 1970s and 1980s the UN entered a more quiet
phase, but then with the end of the Cold War suddenly burst into
entirely new spheres of activity. The collapse of the Soviet
Union allowed for the Security Council to intervene much more
directly in civil wars, and a new generation of peacekeeping
operations helped bring peace to Cambodia, Mozambique and
elsewhere. Under both Boutros Boutros-Ghali and Kofi Annan, the
Secretary-General again took centre stage in developing new policy
ideas, with the present Secretary-General successfully championing
arguments for new ideas about state sovereignty and the need to
act, forcefully if necessary, against genocide, ethnic cleansing
and severe human rights abuses.
But all this clouded a different track the UN was
taking – a slow tract towards increasing bureaucratic complexity
and mismanagement. Except perhaps Hammarskjold, no
Secretary-General has excelled as a manager. The bureaucracy
remains in some ways a relic of the 1950s, designed to write
reports and organize conferences, but now saddled with huge field
operations, with little change in people or culture. It comes
as a surprise to many that the average staff age in the UN is
something like 55, with more than 50% slated for retirement in the
next few years. The UN is run by a generation hired in the
quiet days and it is perhaps no surprise that it sometimes must
strain itself to keep up with present day demands.
There is also the relationship with Washington.
Washington as the sole superpower is the UN’s indispensable
partner. In the 1960s the UN was able to maneuver between the
US and USSR and build a solid foundation of support amongst the
Non-Aligned Movement through its development activities. That
option no longer exists. The Secretary-General must at once
be independent of Washington but at the same time be seen by
Washington as a useful friend and partner. It is an almost
impossible balancing act and it is to the credit of Kofi Annan that
he has managed to do what he has for so long.
The Iraq war exposed new
difficulties, new conflicts amongst the Membership, new problems
with how the UN worked or didn’t work in the early
21st century.
It was in this context that I was asked to chair the
Secretary-General’s High-level Panel on Threats, Challenges and
Change. We were asked to provide a coherent analysis of
today’s threats, evaluate critically existing policies and
institutions, and recommend change at the UN.
We did not, amongst our 101 recommendations, make any
on the Office of the Secretary-General. We were even hesitant
to make recommendations on change in the Secretariat, though now I
believe this was a mistake and that change in the Secretariat
should have taken a more prominent place in our deliberations and
our recommendations.
The week our report was presented to the
Secretary-General was the very same week the scandal over the
Oil-for-Food Programme broke out. The need for Secretariat
reform is all too evident, whatever value one places on specific
allegations or analysis of blame. The Secretariat is riddled
with dated and cumbersome rules and regulations which cripple its
flexibility and make impossible any genuine system of
accountability. People are seldom rewarded for good work and
rarely is anyone punished for incompetence. It is only
against great odds and with the dedication of some of the excellent
staff the UN does have, that it is able, for example, to mount
peacekeeping operations in the field. It is no wonder that in
trying to manage tens of billions of dollars in oil-for-food that
there were problems of mismanagement if not outright
corruption.
And so what next?
As we all know, Secretary-General Kofi Annan’s term
will come to an end next year. A new Secretary-General will
be elected by December 2006, perhaps a little before, and we may
expect discussion of the succession to begin in earnest in a few
months time.
There is some acceptance of the principle of
geographic rotation, which would mean a Secretary-General from
Asia, the first since U Thant retired in 1971. And the Asian
region in UN terms means everything from the eastern Mediterranean
all the way to the South Pacific. What sort of
Secretary-General do we need? What challenges would he or she
face? And what lessons are there to be learned from the
past?
I’m afraid to say that any future Secretary-General
will face an environment more challenging, more difficult, more
filled with possible traps and pitfalls than any of his
predecessors. Even with Kofi Annan, a Nobel Laureate and
hailed as the best Secretary-General since Dag Hammarskjold, we
have seen what attacks he has had to face, and the scrutiny and the
pressure.
The next Secretary-General will almost certainly
inherit a portfolio where he will be in charge of huge field
operations. The UN now has over 100,000 soldiers in the field
in incredibly complex political environments. We sometimes
take for granted the fact that Kofi Annan, as a former head of the
UN Peacekeeping Department, knows these operations inside out and
is able to master the intricacies of everything from staff
deployment, to logistics to mandates to the politics of peace
implementation. It is unlikely any successor will come so
well versed in these things.
A new Secretary-General will also face a big
management crisis. The recent September Summit has asked for
a complete review of all mandates older than five years as well as
all rules and regulations related to the budget and human
resources. This is an Herculean task and may not be completed
until well after the new Secretary-General has taken over. A
big part of the job will be to manage the reform of the
bureaucracy, or enhance systems of accountability and oversight,
and promote the concept of meritocracy among Secretariat staff.
All these are necessary to rebuild Member States’ confidence
in the ability of the Secretariat to fulfill its mandate with
integrity and effectiveness.
A new Secretary-General will also face a world and a
UN where differences in perception, of the threats we face, are
unprecedented. Should the UN prioritize development? Or
are terrorism and nuclear proliferation the key threats? Or
civil wars and genocide? One cannot compare the
Secretary-General to the CEO of a company. A company has one
goal – to make money. In the UN there are 191 bottom lines.
Can we have a Secretary-General like Dag Hammarskjold
or U Thant? It’s hard to imagine. Its also hard to
compare today’s environment to any in the past. I suppose if
there is one thing in common with both men, it’s that they had to
reinvent the role of Secretary-General, taking the organisation in
a new direction. More importantly, both were men of
unquestioned integrity, courage and principle, all necessary
qualities for the new Secretary-General.
Will it be unrealistic to believe that the next
Secretary-General can in every respect be the world’s top diplomat
and a moral authority in his or her own right; one who understands
the management challenge and is able to oversee if not direct a
radical reform of the Secretariat; one who is a master tactician,
able to balance the needs and perceptions of the entire Membership
without compromising the core values in which the United Nations
was founded? If we can find such a man or woman, the UN will
have a good chance to remake itself. But without such a
person, the future of the United Nations will be under threat and
the world will indeed be a less secure one for our future
generations.
Let us hope that the best man or woman gets the
job.
Thank you.
The Third Wave of Investment
Opportunities with ASEAN ?
By
Anand Panyarachun
23 November 2005 Mr.Chairman, Distinguished delegates to the 31st AJBM, Honored guests. Ladies and gentlemen, I am honored to have been invited to address the 31st AJBM this evening. I have known of the AJBM activities, and the Keizai Doyukai for a long time. When I was Chairman of the Federation of ASEAN Chambers of Commerce and Industry in the early 80's, I used to participate in some of the AJBM activities. I very much appreciated the supporting role played by Keizai Doyukai to ASEAN businesses through AJBM. But lately I have heard less and less of AJBM. So when I learn that AJBM is being revitalized, and that it will strongly support investment and businesses between Japan and ASEAN, I feel very gratified. I would like to explain to you this evening why I am so gratified. My past careers, diplomatic, business and political, have inevitably conditioned me in the role of an observer of international development. I have been fortunate to have often been at a vantage point to do it. A couple of years ago, I was invited to serve on a United Nations panel to advise the Secretary-General on how the UN system could better serve the international community in the areas of threats to peace and security. That was another vantage point for me to become more aware of the inter connection of security and development issues. They are inextricably linked and they need to progress in tandem. One may even add a third element to this configuration – namely justice. There is no security without development. There is no development without justice and there can be no justice without both. Indivisibility of security, development and justice is the conclusion. Since the end of the second world war, there were two super powers, the United States and the Soviet Union. Over three decades before the new Millennium the EU and Japan were second – tier countries. Today the only recognized super power is the US, the one and supreme power in terms of politics, military, and economy. But while there is only one recognized super power, many countries are now considered to belong to the second tier of powerful countries. In addition to the EU and Japan, the most often mentioned countries are Brazil, China, India and Russia. The countries in the second tier of power are all maneuvering to position themselves in this global context. Those which are not already permanent members of the UN Security Council all feel that they are entitled to such exalted positions. Let us now turn to Asia – or to East Asia in particular. China and India are major political entities which cannot be set aside and their stability and potential economic power will inevitable have significant impact, positive or otherwise, on the rest of Asia. China liberalised its economic system before India, focusing on manufacturing, but it was limited at first. In the recent years China went almost all the way in terms of economic liberalization, and has now achieved the status of the " factory of the world ". India adopted a more liberal economic system from the early 1990s, allowing market forces to work more readily. Following this came the boom of computer software business through outsourcing. Since then liberalization and investment in other sectors have followed. Both China and India have been very successful in their policies of economic liberalization, as evident in their international trade and their foreign exchange reserve holdings being at US$ 769 B, and US$ B, 143 respectively as of September 2005. The two countries have also moved in the direction of patching up their political adversarial relationship. The progress they made in the past years has resulted in closer and more concrete cooperation in both political and economic areas. Now both China and India are moving forward. And yet, there is a note of caution. According to a news report this morning, former Prime Minister of Singapore, Mr. Lee Kwan Yew made following remarks at a conference in India. "Whether Asia will take its place in the world ... depends on how both India and China work together as they rise and actively set out to avoid ending up in opposing camps" "They [India and China] must not be paranoid and suspicious of each other in a game of one-upmanship" Japan, a giant economic power house of long – standing but a relatively minor political centre on the international scene. Its security interests are very much intertwined with the US security arrangements. There are now initial signs of the loosening – up of that relationship, but much remains to be done before it can gain its credibility as an Asian nation. As a footnote, Japan still needs to address some sensitive issues raised by China and Korea in a more responsive manner made following remarks at a conference in India. Now we turn to the trade and business areas. China and later India have expressed interest in developing development partnership with ASEAN. And so has Japan. But from the perspective of ASEAN, their relationships with ASEAN are viewed differently. Formerly ASEAN was interested mostly in its economic relationship with the US, the EU and Japan. But now ASEAN very much welcome the propositions from China. ASEAN is also reciprocating its interest with India. But because of lack of familiarity, trade and investment with India will take more time to develop in a more meaningful way. Interestingly, ASEAN wants more trade and investment with Japan. But to ASEAN, Japanese investment seems to have focused more and more on China. Beijing has now replaced Bangkok as host to the largest Japanese Chamber of Commerce and Industry in the world. Let's try to understand the economic strategy adopted by these important countries. China is no longer ideologically driven and more politically stable. China is the " factory of the world ". It is a resource – deficit and energy – deficit country. So, it seeks special relationship with resource – surplus countries like ASEAN, Russia and also India. While China's intensive economic growth (averaging over 9% annually in the past three decades) is widely admired and serves as an engine of growth for ASEAN counties, one must not overlook China's lop-sided economic structure. Chinese economy accounts for only 4% of global GPD, but consumes 25% of the world's steel, 30% of its coal, 50% of its cement and 7% of its oil. India, a democratically governed country, cannot be expected to pursue liberal policies as fast or as effectively as China. Its economic growth is therefore bound to be slower and more bumpy, but it has embarked on the right path. India's potential is not to be underestimated. India is also an energy - deficit and infrastructure - deficit country. So it seeks energy security and investment in infrastructure from ASEAN, China, and Japan, in addition to the Middle East. Japan had a head start – long before the emergence of both China and India. It was already a formidable economic power in the sixties and seventies. And yet, the country stumbled in the nineties and its economy was in the doldrums for over a decade. Japanese investment in ASEAN in recent years has for financial reasons been surprisingly too low. It was also due to the fact that many ASEAN countries suffered from severe economic crisis in 1997 / 1998, which blunted investment opportunities. But the situation now is very much different from what it was in 1998 – 2002. Japan is recovering and assuming a more dynamic growth. We are delighted to see the beginning of Japanese economic recovery, as demonstrated by significant growth in the last four quarters. All ASEAN economics have now recovered, and have been growing at respectable rates of 4 – 6 % for a few years now. Such growth rates are creating the need for new investment in industrial and business expansion, and in basic infrastructure. In other words in 2005 ASEAN economies have entered a new investment cycle, offering a broad range of investment opportunities. While ASEAN continues to welcome investment and business from any sources, be they the United States, the EU, Russia, Korea and Australia. ASEAN has shown particular interest in Japan, their important and traditional source of direct and indirect investment. ASEAN believes this is the third round of investment opportunities, after the first in the late fifties and the second in the seventies. A new window of opportunity is opening up. But this time the opportunity must be viewed not only in the business context. Geo-politics and geo-economics are additional elements which are playing increasingly an important role in the promotion of peace and security in our part of the world. I envision a substantial growth in future years in economic and political relations among China, India and Japan. This triangular network would do well to strengthen their roles in ASEAN member states. Their enlarged contributions to our economic and social development and their expanded trade relationship with ASEAN would empower us as a significant partner in this Asian enterprise. The stronger Japanese economic presence in ASEAN countries would be reassuring to ASEAN of the continued close cooperation with Japan. The question is whether Japan, the largest economic power in Asia, shares our aspirations and is prepared to be involved, both in conceptual and concrete terms, and to join in this East Asian drive towards a new economic, political vision. The answer lies in your hands and we hope that it is a positive one. Thank you very much for your attention.
“Japan’s Role in the Coming Decade”
Keynote Address by H.E. Anand Panyarachun
Former Prime Minister of Thailand
GRIPS, Tokyo
January 31, 2008
President Tatsuo Hatta,
Distinguished Guests,
Ladies and Gentlemen,
Before I begin, let me say that, like my fellow countrymen, I have great respect and admiration for Japan and its people. However, I cannot claim to have a profound understanding of Japan. All the same, I do believe that the future of Japan and the future of Asia and the world are inextricably linked. It is a bit like the way a man feels about a beautiful woman. One tries to understand her, knowing deep down that one never will, but also knowing that one’s future happiness depends on her. So I hope you will forgive me if my views are a little simplistic, for my ardour is genuine.
Over the past decade, many thoughtful people have pondered what role Japan should play on the global stage in light of the post-Cold War realities.
In six decades, Japan has picked itself up from the ashes of war to become the world’s second largest economy. It has become a powerhouse of innovation. Its automobiles and consumer products have conquered hearts and minds and pocketbooks around the world. Its companies are some of the world’s most admired. Japan is also a global cultural power. Japanese cultural exports – video games, manga, anime – are now part of the daily lives of young people the world over.
It is not only Japan that has changed. The world has become immensely more complex since the unipolarity of the immediate post-Cold War years. The United States’ air of omnipotence, once seemingly indisputable, has been deflated, with the costly misadventure in Iraq and subprime crisis likely to preoccupy it for years to come. China and India have awoken from their slumber and are poised to change the world’s power equation in the coming decades. Russia has gone from superpower to nearly failed state and back again to newly self-assured major power unafraid to assert itself in international politics. Southeast Asia is consolidating itself and stepping up the pace of its integration, with plans for an ASEAN Economic Community by 2020.
Of course, it would be foolhardy to predict what these developments portend for the next decade. But if current trends continue, a major power realignment looks likely. At least for the next few years, the United States will have to focus on regaining its economic health and restoring its credibility abroad. China and India, barring any upsets, are likely to continue their growth trajectory and emerge at the top tier of the world’s largest economies. South Korea will likely build further on its economic and technological accomplishments.
Amidst all this, Japan may find itself in the unaccustomed position of having to work more closely with its partners and potential competitors in Asia and less closely with its traditional main ally, the United States. As the much vaunted Asian Century becomes reality, a more proactive and independent role for Japan, a Japan that works in close partnership with its Asian neighbours, will be crucial. The idea of Japan as the lead flying goose may have to be retired, as the other geese will have caught up. In the always-on, interconnected world of the coming decade, Japan may need to change its metaphor and think of itself as a key node in a partnership network.
To play this role, Japan needs to articulate a clear vision and hone its political effectiveness.
So far, Japan has not shared with the world a clear vision of its future political and economic direction. The world, but in particular Asia, does not know how Japan will position itself in the emerging world order. Will Japan continue to be the US’s “unsinkable aircraft carrier” in East Asia, or will it seek greater policy autonomy?
Japan’s defense budget is now one of the five largest in the world (at more than $41 billion in fiscal year 2006). Japan is also expanding its security role, partly at the urging of the United States. But its domestic politics – its lack of a strong, coherent political leadership – seems to have held Japan back from formulating the vision it needs. With a growing military capability but without a clearly articulated vision and strategy, memories of the Second World War will persist, as will regional concerns over Japan’s intentions.
This is all the more reason for Japan to enhance its political effectiveness. Since the Second World War, Japan’s impact on international politics has been almost negligible. Japan has maintained a consistently low political profile, more befitting of a third-world country than an economic heavyweight.
The resulting perception is that Japan has not demonstrated a willingness or ability to raise Asia’s profile in international forums, whether political or economic, preferring the comfort and safety of America’s shadow. The attitude and mindset underlying this passivity must change if Japan is to take its rightful place as a positive political force in Asian and world affairs.
With Asia rising, it makes sense to engage more effectively within the region. To forge closer interactive relations with its Asian partners, Japan should take advantage of the groundwork that is already in place. Japan already has a significant economic presence in its partner countries. It needs to make use of this presence to leverage its political standing in the region.
To achieve this, I believe Japan will have to confront and address a number of issues. Failure to come to grips with these issues would continue to hold Japan back from its true potential.
The first issue I see is one that some may attribute to culture, but which can also be thought of as communication style. One reason the Japanese mind is so mysterious to outsiders is that communications are so stylized, so carefully controlled to ensure politeness and harmony. Japan, it seems, is a consensus society that goes to great – some might say extreme – lengths to avoid public argument and confrontation. But in today’s international relations, these things are often part of dialogue, the process by which the world is finding its way forward. To engage in dialogue, a willingness to argue and to put one’s face on the line is important.
This kind of reticence, of course, is not particular to Japan. It can also be seen in some other Asian societies, including my own, that value social hierarchy and political correctness over substance. We tend to fill our meetings with ceremonial readings of prepared texts rather than use the occasion for spontaneous exchanges of views that get to the heart of the matter.
But Japan is no ordinary country. Japan is Asia’s and indeed the world’s leading economic power. If it is to play a leadership role in regional and global affairs, Japan must be more direct – in a subtle way, of course. And it must be more willing to risk disagreement in pursuit of truthful, positive answers. Many countries look up to Japan as a model of democracy and free markets. It would only be natural for Japan to also set the standard for international dialogue and cooperation.
This communication style leads us to the second issue: the lingering contentiousness of World War II history between Japan and its neighbours. After 60 years, it seems, Japan is still unable to come to terms with some aspects of the Second World War. This is understandable, as these are aspects I am sure Japan would rather forget. What is rather surprising is that despite repeated apologies from Japanese leaders, there is a lingering perception that Japan prefers to remember history selectively and differently from the rest of Asia. This perception is not helped by the certification of revisionist history textbooks, nor by some past prime ministers’ visits to Yasukuni Shrine.
Germany, by way of contrast, has managed to move on. Not only did it accept the Holocaust, it has also shown its remorse through concrete measures, paying over 60 billion US dollars in reparations to Israel and victims of the Third Reich for decades after the war ended. The current generation of Germans may not know much about the darker aspects of German history and thus may not feel much guilt. But at least those Germans who bore witness to history have come to terms with that history.
Japan needs to come to terms with its history as well, if it is to move on. To convince others of its sincerity, Japan might consider communicating in a more direct and consistent manner. I am greatly encouraged that Prime Minister Fukuda has shown his sensitivity to international opinion early on by declaring that he would not visit Yasukuni Shrine. If Japan could take more concrete gestures to show that it takes the historical grievances of its neighbours seriously, I have no doubt that the past can be buried and all countries in the region can move forward together.
The third issue Japan needs to confront is its continuing dependence on the US security umbrella. Japan is closely – some might say too closely – identified with US foreign policy. The litmus test of Japan’s policy independence is not so much whether Japan can undertake proactive policies on its own. In areas such as official development assistance or ODA, Japan has certainly been quite proactive. Rather, the test is whether Japan can pursue policies that put the interests of Asia first and foremost, even in the face of US opposition.
Perhaps the best known test case is the proposal by Japan in 1997 to set up of an Asian Monetary Fund. Even before the details of such a fund had been worked out, Washington shot down the idea and it had to be quickly withdrawn. Only much later, when it became amply clear that the AMF would not replace the IMF, did Washington’s position soften.
If such a thing can happen on foreign economic policy, one would expect at least the same on political and security matters. I realize that in Japan, there is unease about this continuing sense of amae or dependence on the United States. The changing nature of security threats and the US preoccupation with terrorism and the Middle East call into question whether and how long the US nuclear umbrella will continue to effectively protect Japan. At the same time, the nuclear threat in Northeast Asia seems to be under control. The rapprochement process on the Korean peninsula and the discreet diplomatic role played by China should allay Japan’s traditional concern over Pyongyang’s perceived aggressiveness.
Without reducing this dependence on its big brother, it would be difficult for Japan to develop meaningful political relationships with other countries. As long as Japan is perceived to be such an integral part of the US security framework, nurturing the security dimension of such relationships would be a challenge.
I am not saying that Japan should decouple itself from the US security umbrella. Britain, Germany, France and the EU all depend to a considerable extent on the nuclear protection provided by the US through NATO. Yet these countries are still able to assert themselves in international forums more or less independently of the US. Japanese industry is brilliant at coming up with innovative products. The Japanese leadership is no doubt similarly capable of charting an independent foreign policy strategy that is in step with the changing landscape of Asia and the world.
These are the three main impediments I see to Japan’s playing a more significant role in the coming decade. To overcome them, Japan should be more assertive, show leadership, take the initiative, and be more innovative.
The changes need not occur overnight. Even rising Asian giants China and India will not catch up with Japan any time soon. But Japan will have to begin adjusting its attitudes, ambitions and mindset before too long, as the reconfiguration in global power is already underway.
The country that figures most heavily in this reconfiguration, of course, is China. China has enjoyed meteoric growth for over two decades and five straight years of double-digit growth. This year, it is in position to replace Germany as the world’s third largest economy. Most observers believe it is a matter of time before China becomes the number one economy not only of Asia, but of the world.
This is all the more reason for Japan to come to terms with history and work closely with China, rather than compete as rivals. This would also reduce the tendency of some smaller Asian countries to “play the China card” in their relationship with Japan. Differences in political ideology will always be there, of course, but China appears to be maturing into a responsible and pragmatic international player. So a Japan-China partnership as the main pillar of Asian stability should not be too far-fetched.
I was impressed with the good start Prime Minister Fukuda made right at the beginning of his administration by visiting the US and China. I was also pleased to note that the outcome of the visit showed Japan’s willingness to play a leadership role in environmental protection and combating climate change. This kind of high-level professional diplomacy should by all means be kept up.
To ensure that the partnership with China is well-balanced, ASEAN, with its 540 million people, and India should also be included in the picture. Together, the four power centers should form an Asian strategic rectangle that continues to engage closely with the West and other regional powers, including Russia and Australia. Twenty years down the road, this strategic rectangle comprising East Asia and India should be a core group, in much the same way that the UK, Germany and France are in the EU. As long as Japan is seen by others as too close to the US or Australia, it would have a hard time being recognized as a strategic power in its own right. Japan as part of an Asian partnership would find its leverage enhanced considerably.
As I noted earlier, much of the groundwork for this is already in place. Japan now needs to strengthen its partnership role in the region. There are several instruments through which Japan can do this. The Asian Development Bank still has much room for Japan to show its leadership, particularly with regard to the newer member countries of ASEAN. ASEAN+3 is a well-established forum where Japan can discuss any regional initiative it may wish to propose. Thailand also has mechanisms in place to assist the Mekong countries and would, I am sure, welcome Japan as a development partner to provide assistance to third countries.
Outside the region, Japan is uniquely positioned to help raise the profile of Asia in such forums as the G8. As the only G8 member from Asia, Japan can champion expanding the participation of China and India in the grouping, along with Brazil, Mexico, and South Africa. At present, these five major developing countries engage the G8 in what is called the G8+5. But this engagement is for a mere two hours over lunch, after the G8 has met for two days. Two hours may be enough time for country statements, but if we agree that what we need more of is dialogue, then the +5 component of the G8 should be augmented. Japan’s role here can make a real difference.
Ladies and Gentlemen,
Prognostication is always an uncertain business. Even the best minds did not predict world-changing events such as the collapse of the Soviet Union or 9/11. So I would suggest that my crystal ball gazing into the coming decade be taken with the grain of salt it deserves. However, I believe the changes I have outlined can only do Japan and Asia good, not to mention the global distribution of power. The world is too complex and uncertain to leave it in the hands of superpowers, no matter how powerful. As the unfolding information era shows us, the future will be shaped by ever expanding networks of partnership. As part of the same network, let us draw upon one another’s strengths and manage the coming decade together.
I look forward to hearing your views.
Thank you.
Regional Partnership Forum on Children and HIV and AIDS
Keynote Address by
H.E. Mr. Anand Panyarachun
Former Prime Minister of Thailand and
UNICEF Goodwill Ambassador for Thailand
Monday 31 March 2008
10:10 – 10:30 AM
Distinguished guests,
Delegates,
Friends,
I am honoured to be here today. I want to first welcome to Thailand the representatives from countries and various organizations across the East Asia and the Pacific Region.
For millions of children around the world, HIV and AIDS have starkly altered the experience of growing up. Globally, it is estimated that 2.3 million children under 15 years of age are infected with HIV, and that more than 12 million have lost one or both parents to the disease. Though the estimated number of affected children in this region is comparatively small given the region’s generally low prevalence rates, the reality is that we do not quite know the full picture due to massive underreporting.
But we certainly do know about the reality faced by children affected by HIV and AIDS in this region, and it is indeed a bleak one. They experience too many losses too early in life, including the loss of parents, loss of security and the overall well-being of their family, loss of effective access to education and other essential services, and the loss of dignity due to stigma and discrimination. Many of these children also face the danger of repeating the perilous journey of their parents while growing up, adopting risky behaviours out of pressing needs for survival, for want of care-givers’ guidance or due to despair and the lack of hope and opportunities for the future.
Yet with improved public knowledge and understanding of the epidemic and improved access to anti-retroviral drugs, children affected by AIDS and those living with HIV no longer need to be doomed to lives of illness, alienation and penury. They can be free from deprivation of parental care and chronic illnesses. They can attend school. They can have families and communities that love and care for them. They can, in short, grow up just like other children. However, major gaps still exists between these possibilities and the realities, and it is these gaps that we must close at all costs.
This meeting will take stock of the progress made in ensuring positive change for children affected by HIV and AIDS, share experiences in promoting these changes, and once again confirm and strengthen our commitment to ensuring a better future for these children.
I am very pleased to note the recent decline in HIV prevalence in Cambodia and Myanmar, and I am sure these new success stories will be discussed during this meeting. In the spirit of sharing lessons learned, I would like to talk a little bit about the experiences of Thailand – the example that I know best.
As you already know, the number of new HIV infections in Thailand has fallen drastically, from the peak of 143,000 in 1991 to 14,000 in 2007. And for those living with HIV, there is now greater access to anti-retroviral drugs.
When I became Prime Minister in 1991, HIV was rampant throughout the country. The number of new infections was at its peak. Sentinel monitoring of infection levels in all provinces indicated that the HIV prevalence had jumped five-fold within a two-year period. It was predicted that over the next 20 years, up to 10 per cent of Thais would die from AIDS. We were on the verge of a major social crisis. The traditional and punitive public health measures which had been practised up until that time to combat the epidemic clearly were not working.
In order to confront the challenges of the HIV epidemic, we also had to confront our own mindset and our own denial of reality. We had to accept that this epidemic was being driven by socio-cultural practices, which at that time no government wanted to admit existed. These included commercial sex, intravenous drug use and cultural practices such as the sale of children and young women into sex work. The fact that all these activities are illegal makes people want to deny their existence in our societies. Not only did we have to accept the existence of these practices, we had also to accept that they occurred on a large scale in Thai society. For example, over 20 per cent of Thai men were visiting sex workers every year. It was therefore necessary to publicly acknowledge the scale of the challenge of HIV, and to state that we were going to take urgent action to reduce its spread.
The highest political leadership was needed to effectively address HIV and AIDS. I established and chaired the National Aids Prevention and Control Committee under the Office of the Prime Minister. This committee became the coordinating body for national planning and public education on HIV and AIDS.
To mount a national-scale programme, we had to quickly and drastically increase the government budget for HIV and AIDS, rather than wait for help from foreign donors. The government AIDS budget for prevention and control was increased by over 9 times, from $2.6 million in 1990 to $24 million in 1992. After I left office, the budget increases continued under succeeding governments. In 1993, the government budget for HIV and AIDS went up to $46 millions, and in 1996 to over $80 million. These sums did not include aid from donors. It was definitely not “business as usual” in Thailand.
Backed by these resources, an unprecedented public information campaign on AIDS was launched. We recognised the necessity of educating the whole of Thai society, not just those groups at highest risk. We were fighting for radical change in perception and a behavioural change within Thai society.
We mounted a nationwide education and preventive campaign that enlisted the co-operation of all media. Safe sex and HIV messages were aired every hour on more than 500 radio stations and seven television stations. Ensuring that everyone received HIV/AIDS information was critical. This may sound like a straightforward campaign, but at the time the tourism industry was seriously concerned about the possible negative impact of such a public education campaign on tourism. Political commitment at the highest level proved crucial to balancing the need to promote public health education with the need to increase tourism, allowing the information campaign to proceed.
We also targeted parents and teachers, many of whom still had conservative attitudes. We initiated a national programme on HIV/AIDS education in schools and mounted a large-scale peer education programme for young people in the workplace.
We promoted prevention interventions among drug users, the majority of whom were young people. We also targeted sex work and established the “100% Condom Programme”, which enlisted the co-operation of agencies and individuals to distribute free condoms to clients of sexual services. At the same time, we took effective measures to ensure the high quality of condom on sale.
Very early on, we fought stigma and discrimination in order protect the rights of people living with HIV and AIDS. When I took office as Prime Minister, there was a proposal to pass legislation that would have restricted the rights of people living with HIV and AIDS. We did not allow this bill to pass. There were prevention campaigns that inadvertently reinforced the stigmatisation of people living with HIV and AIDS. We stopped those campaigns. We also lifted the ban on entry to Thailand of foreign nationals known to have HIV and AIDS.
The subsequent development and the overall decline in HIV prevalence in Thailand validated the approach we took in the early 1990s. Similar efforts were made in other countries in the world, and I believe that it was through such efforts that the course of the epidemic was changed.
The challenge we face now both in Thailand and elsewhere is how to sustain the commitment made and the momentum generated over recent years. It is also clear that as the AIDS epidemic grows and matures, the number of children affected will increase. A child-centered approach to AIDS is vital, and this calls for strong policy measures and programmes to protect children from multiple vulnerabilities and the likelihood of them repeating their parents’ journey and becoming the next generation of those most-at-risk of HIV. It also calls for the empowerment of families and communities, and improving operational linkages within the health system, and between the health, education and social support systems in order to foster the continuum of HIV prevention, treatment and care services. Experience in Thailand has taught us that the HIV epidemic is constantly evolving. Our approaches and responses to HIV must also be ever evolving to meet the new challenges.
Dear delegates,
There is never room for complacency. Despite positive developments in many countries, the situation that we face continues to be alarming. In 2007, there were almost 20 per cent more new HIV infections in East Asia than in 2001. Despite the remarkable efforts made in scaling up HIV responses, children remain the “missing faces”. There is an urgent need to mobilize the political will and additional resources required to respond to this troubling increase in infections. I know that you are up to this task.
In conclusion, please allow me to applaud efforts by the organizers of this meeting, and offer my compliments to all of you on the great mission that you are vigorously pursuing. I hope this meeting becomes yet another milestone in shaping our region’s collective agenda, commitment and response for children living with or affected by HIV and AIDS.
Thank you.
UNESCO-ACEID
CONFERENCE
“Information Technologies
in Educational Innovation for
Development: Inter-Facing Global and Indigenous
Knowledge”
Official Opening Address
Imperial
Queen’s Park Hotel
December 12, 2000 It
is an honour for me to welcome all of you, most warmly, to this International
conference on “Information Technologies in Educational Innovation for Development:
Inter-Facing Global and Indigenous Knowledge” Ladies
and Gentlemen: Every day, newspaper, professional journals, television broadcasts
— even the shopping malls — remind us of the new technological World in which
we live. We are bombarded by images of new technological wonders, all promising
to make our lives better. Information and communication technologies are binding
everyone in the World together in a real way, never imagined before. We are told
these technologies offer great hope for humankind — and potentially, they do.
They offer the promise of unlimited access to information to all, in a way only
dreamed of in the not-so-distant past. They offer the promise of providing a more
“level playing field” in the globalized economic World of tomorrow. They promise
to connect people, across distances of time and space, as never imagined before. But,
as we are all becoming increasingly aware, for all the tremendous promise the
new information communication technologies are bringing to the World, there are
also disturbing perils. One such peril would seem to be the increasingly isolated
live people are living, especially in urban environments, all across the planet.
Perhaps in part to escape the crush of over-population, and the anonymity that
comes with urbanisation, ICT technology seems to offer solace and escape. Can’t
get along with your family? — find a chat room, or an “affinity group” of people
more like yourself! Is this a good thing? Certainly not, if it leads to the “anti-socialisation”
of peoples. For just as the people of the entire World are becoming connected
in cyber-space, they seem to also be becoming dis-connected in real-time and space.
I don’t know if there is a casual connection in this, or not, but I think it is
worth pondering. Also among the perils
brought on by the advent of ICT technologies, is the very real possibility of
smaller, so-called “indigenous cultures”, being left behind, or completely overwhelmed,
after hundreds, even thousands, of years of development and evolution. Just as
unique species of plants and animals in the rainforests are disappearing, we are
facing the potential disappearance of unique human cultures and their intellectual
heritages — some only to be kept “alive” to fuel a new tourism, that seeks comfort
in finding something of the past. Often when we hear the
term “indigenous knowledge”, many of us immediately think of traditional handcrafts
and herbal medicines. It is true, these are kinds of indigenous knowledge. They
have been accumulated over centuries, and painstakingly handed down from one generation
to another. Today, they are in jeopardy of being lost in the un-yielding march
of modernization, and the implementation of technology. There is much more at
stake here than first meets the eye. There is much more to indigenous knowledge
than quaint arts and crafts and traditional medicine, important and worth consideration
as they are. To me, indigenous knowledge encompasses much more than this. Indigenous
knowledge also includes agricultural knowledge, knowledge of local flora and fauna
even the local history of the earth and weather systems. It includes languages
and dialects, different styles of cognition, and different systems of logic. It
includes different means and traditions of social inter-action, different methods
of conflict-resolution, different means of achieving social cohesion, different
methods of child-rearing and old-age caring, different ways to mark rites of passage.
The possibility of losing these kinds of human achievements, is simply unacceptable.
Still, fueled by the onslaught of technology, these are some of the aspects of
what is called Indigenous Knowledge, that are at risk today. Currently,
sometimes through the din of modern technology and life, there seem to be some
indications that more value is being placed on so-called “Indigenous Knowledge”.
In 1995, The United Nations declared “The Decade of Indigenous Peoples”. That
sounds good, but I am not entirely sure what it means! After all, aren’t we all
indigenous to somewhere? Are not all cultures under pressure, and exposed to the
treat of losing our cultural identities, our traditions, our values, and our cultural
knowledge? Are we not all harnessed to the same great engine of change? Perhaps
the question that begs to be asked first is, “Who is Indigenous and Who Isn’t?
Secondly, “What is Indigenous Knowledge that differentiates it from other knowledge?”
Perhaps the toughest question of all is, once we have identified it,“Just what
Indigenous Knowledge do we want to maintain, save and nurture into the next century
and beyond? Who is going to make those decisions, and upon what criteria should
those decisions be made? These are keep questions and too often, I fear, we have
a tendency to gloss over the hard questions, erect a new “politically correct”
edifice and label, and then just go on doing nothing much very differently. I
applaud this conference for offering an opportunity to explore these and many
other related questions. I hope and trust that you will give yourselves this week
to fully examining some of the fundamental and difficult questions with which
you will be confronted. But, please keep in mind, words, without actions, are
just words! A conference, no matter how noble and well-intended, that does not
result in action, that does not stimulate change, that does not lead to invention
and innovation, that does not result in a serious re-consideration of its themes,
is very hard to justify. It is my hope that you, many of whom have travelled so
very far to get here, will take your time here seriously, participate fully, and
seek to apply what you learn here to yourselves and to your professional environments
when you return to your homes. Ladies
and Gentlemen: I hereby declare open this International Conference on: “Information
Technologies in Educational Innovation for Development: Inter-facing Global and
Indigenous Knowledge” officially open. I wish each of you well. I trust that your
stay in Thailand will be pleasant, and most memorable. I wish you every success
in the work before you, in addressing these important issues and topics.
Record of Mr. Anand Panyarachun’s Address
at the Foreign Correspondents’ Club (FCCT)
on Wednesday, May 18, 2005
Introductory Speech by the President of the FCCT : It is a great pleasure to welcome back to the Club, not only one of Thailand’s most respected senior statesmen, but also a good friend of the Foreign Correspondents’ Club of Thailand. Most of you are familiar with Khun Anand and the contribution he has made not only in Thailand but internationally over the years. Of course, the reason he is here to speak to us tonight is in his capacity as the Chairman of the National Reconciliation Commission. As you know, this was the Commission set up by the Prime Minister and charged with examining the problems in Southern Thailand and seeking to come up with suggestions for peaceful solutions. Many analysts characterize it as the last opportunity for that kind of solution. The timing, of course, is particularly interesting. The Prime Minister has been accused of taking a very militaristic line. Indeed, the reports that come out today from the international crisis group again charge the Thaksin Government for exacerbating the situation in the South. We have already seen a growth in the number and the sophistication of attacks in the South. Of course, last month there were bombings in Hat Yai. It was the first time we witnessed explosions of that type out in the deep South, coordinated and apparently targeted at international targets : the airport, a supermarket and a hotel.
Now, the Commission has 49 members drawn from many different walks of political, cultural and social life, and has been promised a large degree of independence in its deliberations. Indeed, Khun Anand has been to the South and has begun meeting and talking to people, community leaders down there. I will just add that, as well, of course, in his long career in politics and diplomacy, he was twice Prime Minister of Thailand, during which he tackled many difficult and challenging tasks. Being, I believe, the first leader in Asia to really recognize the problems of HIV/Aids and construct a programme to deal with it. More recently, he was intimately involved in drawing up a new Thai constitution in 1997, and also chaired the top UN Panel looking at the UN’s collective response to security threats.
Now, the Commission, which he now heads, was described by the Thai Rath newspaper as probably the best independent Commission we have ever had. But, I also suspect that of all the challenges that Khun Anand has faced over his illustratrous career in politics and diplomacy, few can be or cannot be a challenging as this. I think it would probably not be an exaggeration to say that this is one of the most important nights that we have at the Club.
It really is a critical time in the South, and the role of the Commission in examining the problems and coming up with solutions cannot really be underestimated. So, I would ask you to give a warm welcome to Khun Anand. Khun Anand :
Thank you very much, Mr. Williams, President of FCCT, and distinguished members and guests. I am not sure what the format is going to be, but I understand that you would permit me to speak about fifteen minutes, and then I will be subjected to your questions. I hope you will be kind to me.
First of all, it is a great pleasure to be invited back here. I recall that when I was Prime Minister, I did seize the opportunities of communicating with the members of the foreign press on what our Government had been trying to do and what our agenda would be. Thirteen years have gone by and much water has flowed under the bridge. I have assumed different incarnations : as Chairman of the Constitution Drafting Committee and as Chairman of the National Economic and Social Advisory Council. Last year was one of the busiest years I have ever had in my life. I had to chair a UN High Level Panel on Threats, Challenges, and Change. I am sure that not too many people understand even now what it is all about. The whole idea was to try to energize the United Nations system, particularly the Security Council, to engage in productive debates leading to collective responses and collective actions against threats to world peace and security. Now that job was completed, and I passed the buck back to Kofi Annan, and I think he is having a more difficult time than I had with my fifteen other members of the Panel.
Be that as it may, I thought this year is going to be a very easy year for me. I had long planned to retire. I promised my wife many years ago that I would retire at the age of fifty-six and I am getting on to seventy-three. Luckily she has not divorced me yet. Next year I promised myself that I would not accept any other call. But I make that pledge every year. So, you had better wish me luck.
What the King did next touched nearly every aspect of the lives of his people. Provincial administration was brought under centralized direction and augmented by specialized functional ministries. Modern law codes and other judicial reforms were decreed, and these went a long way toward pacifying the European powers’ discontent with the legal system. Fiscal administration was centralized and modern accounting, budgeting and auditing procedures were adopted. Roads and bridges, railways, telegraph lines, irrigation canals and water gates were constructed. Mining projects were launched. Mapping was introduced. The King also vastly expanded educational and medical services. The military forces were upgraded through conscription and the founding of a military academy.
Now, this National Reconciliation Commission is nothing new to you. Those of you who are based here and have been following the events in the South and how the Government, initially, with the emphasis on the word initially, tackled the problem. Mr. Williams did say that it is a Commission of forty-nine people and I disagree with one of your remarks. You said that I was promised a large degree of freedom. No, I was given total freedom and that was the condition I insisted on the Prime Minister and, so far, I think he has kept his word, and I give him credit for that.
We have a Commission of forty-nine people. I know about half of them personally, but the other half of the members were nominated to me, whispered into my ears or conveyed to me, and I studied their CVs. I asked a number of people on the credentials of these nominees. The qualification for being a member of my Commission is that he or she must have an independent mind, and that he or she must be committed to peaceful solutions of the problem in the South. I am not trying to have a Commission of those who speak the same language. I think it is important that I include a variety of opinions and judgments. But so long as they are committed to peace and peaceful solutions, that is good enough for me. I often said jokingly that my task of reconciliation started even before the Commission was set up because, initially, I have to have reconciliation with the Prime Minister, because he knows that on this particular issue and on some other political issues, I stand rightly opposite to his viewpoint. But I have always been honest with him, and I think be respects my independence and my freedom of action.
It took me two meetings to explain the facts of life to him and also to reason with him on the unproductive outcome of his past policies and also on the inefficiency of the management of the past policies. But, particularly on the mindset of a number of government leaders and public opinion moulders. I think he was kind enough to listen to me attentively and, at least, to agree to disagree with me on certain points. But, eventually, I think he was brought around to the positions that I thought I could accept. They were not identical positions but, at least, they would not be contradictory to what I have long planned to do. He was good enough to give me a free hand. I said that even though that Commission was appointed by the Prime Minister, I would not be engaged in this task unless I had a free hand.
I explained to him the structure of the Commission I was planning, and the division of labour. My viewpoints were that it needed to be led by the civil sector, the people, and that the Government and the politicians would take, I wouldn’t say secondary, but not a primary role, and that I would have full freedom to select whoever I thought fit. As for the structure, I would have eighteen or nineteen people from the area, and about six politicians, about ten or eleven civil servants and also a number of civil sector people outside the area. I included two Buddhist monks. I included a number of Islamic clerics. And even in the civil sector allocation, I even included a former commander of the forces in the South, a retired General who is a Muslim and who is well-respected in the area. And I included a number of politicians at my own choice, who would be sitting in my Commission as independent members, so they wear two hats. When they work for me in the Commission, they have to express their independent views. And the same would be for ten or eleven civil servants that I included. I even included a General who is the head of the…, I don’t know what the English term is but in Thai it is “กอ. สสส. จชต. : กองอำนวยการเสริมสร้างสันติสุขในจังหวัดชายแดนภาคใต้” something like a peace-building commission, or whatever. There were about eight ladies on our Commission, and I have people who are familiar with the culture, with the history, with the religion, both Buddhism and Islam, political scientists, NGO people and individuals who have long been involved in the conflict resolution exercise and people who know the area, know the people and can empathize with the people in general.
We have had three formal meetings, twice in Bangkok and once in Pattani. And only two weeks ago, I was down there with some fifteen members of my Commission, together with the people on the ground. We visited Narathiwat and Yala. We held public hearings. We held one-on-one conversations with the aggrieved, with the injured and with the relatives of the dead. But I think it is important at this juncture to tell you what we are and what we are not, because otherwise I am bound to get questions that I prefer not to answer.
First of all, the independent Commission is appointed by the Government, by the Prime Minister, and we have been given free hands. We have been given all the facilities; we will be given an adequate budgetary allocation. I do not report to the Prime Minister. I made it a point that it is an independent Commission. When I submit our report to the Government, perhaps early next year, simultaneously, I would release the report to the public. So there will be no questions on whether the report is the Government property or the property of the Commission.
I intend to operate the Commission in the most transparent and accountable manner. But we are not an executive agency; we are not an executive arm of the Government; we are not a law-enforcement agency; but it does not mean that we shift our responsibility. Since we do not have a police force under our command, or a military force or an intelligence or a civil service, we cannot be expected to deal with day-to-day events which occur. If you are going to ask me: why was it that since the Commission was initiated, the unrest has not died down? That is not our responsibility. When it is a question of the day-to-day events and incidents which occur, I stressed to the Government that we need better intelligence and better law-enforcement measures. We need to stress the need for protection of human rights and promotion of freedom in that part of the country. With the day-to-day incidents, I could talk to the Prime Minister or to some individuals who are in my Commission to convey messages – that is the most you can do.
Now, the second category of my mandate is that even though we are not responsible for the day-to-day events, past, present or future, we would do whatever we can to facilitate the co-operative atmosphere and co-operative relationship between the people and the Government authorities. We would allow ourselves to be a catalyst, a change agent. That is why we were not responsible for the setting up of the Commission or for their reports on Krue-Sae or Tak Bai. We did intervene and we did advise the Government that those reports should be released in full and the Government abided by our advice and passed on the authority to the Commission to consider whether the report or portions of the report could be released to the public. We did that about 3-4 weeks ago. We released the entire report with the deletion of names of certain individuals for the protection of their own identities, or in case it could impair or interfere with the course of justice that is being followed. But otherwise, the substance of the entire report was released, and we are urging the Government to withdraw the martial law. I am not going into details as to how I personally intervened in this matter and how I advised the Government.
Although these matters do not come, per se, within the scope of our responsibility, we thought that we could move them forward to create better atmosphere and better environment for the long-term reconciliation process. So, what is the long-term reconciliation process? Well, it is going to be long-term because, in my view, and I said it to the Prime Minister, the real issue is not separatism; the real issue is not terrorism. We recognize the seriousness of the separatist activities and also terrorist activities, but, to me and the members of Commission, those are not the front-line issues. They are, in my view, by-products of a much larger issue – and that larger issue, perhaps, involves the inability on both sides to understand each other. There have been incidents of injustices meted out by the Government authorities in the past, and also by the past policies, mistreatment of the people in the area, non-respect of the people of different cultures and religions, lack of awareness of the history of the area, and so forth; but the bottom line is that the people mistrust this Government, and there is no credibility. I mentioned this to the Prime Minister. Of course, he had the right to disagree with me. But I am sure that, at the back of his mind, he would have loved to say “yes” to me, that you were correct. I think it would be politically incorrect for him to make that pronouncement to me. I think the work of Commission could not be done successfully unless there is a clear understanding between me and the Prime Minister. I asked him to send a signal, a strong signal, to his people, firstly with members of his cabinet – which he duly did the next day after my second meeting with him. He even said at the cabinet meeting that he had a real conversation with me like a “farang to farang”, to quote the term used in some Thai newspapers. What Khun Thaksin meant to say was that we had a really good, honest and candid conversation. That same week he even told his cabinet meeting that I admonished him for listening only to his cronies; that if you asked people around, be it the cabinet members or his political party members, he would have different stories as to how successful he was in the South. So he said to his cabinet members at the meeting that he would try to listen more to the people who disagree with him.
So I think I have done a lot for the reconciliation process between me and the Prime Minister, and we still have good working relations!
I was glad I was away from Thailand for about a week. I came back feeling very groggy yesterday, flying from North Carolina back to Bangkok with a six hour lay-over in London, and subjected to all those anti-terrorist measures at various airports. I was scared to listen to today’s news report that he said he had given instructions to his people in the south. Sometimes they did follow his instructions, but some times they didn’t. I supposed he’d like to say that there needs to be established in this country a civilian rule over the armed forces. Now, I will explain to you what we are, and what we are not; what we can do and what we are not in a position to do. It’s a daunting task. You cannot expect quick results. But we hope that at the end of the day we have established certain policies, certain measures and certain guidelines that would, in our view, collective view, lay a good foundation for making it more difficult and more unpalatable to ill-intentioned people to engage in any violent activities.
I mentioned my initial reconciliation with the Prime Minister, but I think that my present task is also try to reconcile the differences within our own Commission. I have about ten months more, and I am aiming to achieve a consensus report. When you have Government officials and politicians in my Commission, I hope that eventually we would be able to reach a consensus on the long-term policies and measures. But what is more important is that what we submit in terms of report or in terms of recommendations, those are just written paper. People ask whether the Government would follow the advice. I said how should I know. I don’t’ even know who is going to be in the Government next year.
Secondly, this is a question, an issue, that cannot be left to the Government exclusively to deal with the situation unless the majority of the Thai people, particularly those who live outside the three southernmost provinces, also change their mindset, unless they reduce their prejudices and pre-conceived ideas, we will not be able to achieve anything. But I am still hopeful. Your President rightly said that, of all the challenges that I have been asked to face, this would be the most difficult. People are still wondering why on earth a man of my age who has stumbled through many hurdles in life, should decide to accept this responsibility. I recall that I gave an interview to the Bangkok Post three or four weeks ago, and the last question the gentleman asked me was : why did you accept it? So, I said to him “Oh, well, through my life, as if it were my fate, there is always a question not why, but why not?”
Thank you very much
--------------------------------
Questions and Answers
Reception of the People in the South
I think that the setting up of the Commission and my past reputation, good or bad, have been well received and, of course, in my diplomatic, political and business career, I have made a few enemies in this country. So you still have some talk shows, some media people who would condemn me for whatever I do. This is a fact of life and it doesn’t bother me. Obviously, I’ve gone through some of the worst periods in my life when I was a victim. I don’t know whether many of you know that I was once accused of being a Communist when I was Permanent Secretary in the Foreign Service. And when it came to the October Event in 1976, I was suspended from duties. I was accused by the right-wingers, we had a mini McCarty period. I think Thailand is very much like an American society, very conservative and many times very parochial, and I suffered a lot, and my family too. I was accused by a certain group of military people and I was sort of vilified by a number of extreme right-wingers. Those people still exist in our society and you cannot get away from reality. This doesn’t bother me, and that’s that.
The report and the reception I received from the people in the area have been quite positive. I think you have to understand that the three southernmost provinces in Thailand constitute the upper part of the Malaysian Peninsula. Thanks to the UK colonial policy, Malaysia was divided up. The upper part of the Malaysian Peninsula were left under Thai control and the UK kept the rest. That was the result of the Anglo-Siamese Treaty of 1909. And we all know something about the glorious days of the Pattani Kingdom that lasted over five to six centuries. Before that it was the Srivichai Empire.
So the difference between the people, the Muslim, the Thai Muslim in the South is that they are ethnic Malays. They are not like the Thai Muslims in Nong Jok or in two or three other areas in Bangkok or in Ayudhya, or in many other places in Thailand. We must recognize that fact and we must respect that fact. Now the population of the whole area is nearly two million people, eighty-five per cent of whom are Muslims, Malay Muslims. But, they are Thais. On my father’s side, I come from the Mon famil. My great grandfather, they came from Burma during King Rama IV and yet my grandfather rose to become Permanent Secretary of Defence. At that time, the Defense Ministry would have the administrative control of the South. On my mother’s side, I am Chinese, I am fourth generation Chinese. You look around the room – who is a Thai? Or what is a Thai?
So, I think this is something that all we Thais have to stop and think as to who we are and what we are meant to be, and what we should be. Out of two million people, eighty-five per cent are Malay Muslims, but they are Thais. They were born in Thailand. They respect the Monarchy. Their Majesties King and Queen, the Crown Prince and Princesses have been there many times. Even at the height of the tension, Princess Mahachakri Sirindhorn was there for four to five days. The Crown Prince spent a whole week visiting Muslim communities there. The Thai Buddhists and Thai Muslims have been living in harmony for centuries. So, out of two million people, how many are actually involved in a core of separatism or the terrorist activities? The figure that was given to me was no more than fifteen thousand. But even out of these fifteen thousand, how many were really gunning on violence? Thanks to our media, both local and international, every incident in the South was reported to be the result of a terrorist activity or a separatist activity. So, I told the authorities there: you are not that efficient. First of all you cannot, you are not acting like a law-enforcing agency. You cannot take in suspects, you are not able to identify the suspects and bring them to the course of justice. My own personal estimate, after I talked to a number of people, is that no less than fifty per cent of about 1,600 incidents that occurred in the past year and five months, were criminal activities in connection with narcotics, smuggling, gambling and mismanagement of natural resources. So, I don’t read newspapers. Every time you pick up a paper, every incident would be attributed to what we call “Jhon Pak Tai”. (Southern rebels)
The implication was that they were all political activities. They were all rooted in separatism and terrorism. But that was not so. You talked and you all referred to the so-called co-ordinated attack at Hat Yai Airport and the Carrefour, or whatever Department Store. They were all isolated facts! Up to now, not a single organization has claimed that it is responsible for this or that attack. If you compare the situation in the South to that of Iraq, the gap is as wide as the Atlantic Ocean or the Pacific Ocean. All you have are separate incidents.. a man riding at the back of a motorcyclist either early in the morning or at night time in a remote place in a remote village and shooting to kill, mostly not successfully, but shooting to kill somebody sipping coffee at a roadside caf?. All the arsons you heard. All right, there were some burnings of schools. But most of the burnings were public telephone booths and bus stops. So I think you have to have a more realistic and proportionate appreciation of the scale and dimension of the incidents that occurred.
Quite a number of people told me that there was a rise in the incidents. But if you observe the statistics, there are killing on a daily basis in every province. So, I think that the incident has been grossly exaggerated by the press, including the international press. When you talk about the terrorist issue in Thailand or in the South of Thailand, you must be aware that this a local issue and it can be managed by the locals and by local resources. The worst thing that can happen is that the whole thing becomes internationalized. You can forget or you can overlook now the failure of the past policies. But now it is starting a new chapter, so you must get to the basic fact. It is a difficult task. But not a difficult task in dealing with terrorism of separatism. I have lived in many countries. Wherever I went, whatever I read, there was a degree separatism in every country.
I still remember an incident many years ago, our former Prime Minister, M.R. Kukrit Pramoj, who was educated in England. He was visiting England, and he had a meeting with the British Prime Minister, that was in the 70s. I forget the name of the British Prime Minister. Kukrit was asked: how is your insurgency in the North? And Kukrit, you know, is a good actor. He looked surprised as if it was something he heard for the first time, and his response was : how is your insurgency in Ireland? You go anywhere. You go to Spain, you have the Basques; you go to France, you have the Basques. You go to Russia, you have Chechenya, you go to China, you go to Germany, you go to America, you must go to Texas. You remember the Waco, Waco Incident? You go to Texas, there are still people who want to secede. So, I make the distinction. When you have a separatist issue, it is not a big deal. Try to treat it as a normal activity, provided that it’s a peaceful expression. It becomes a crime when it takes up violence and killing. Look at Great Britain. How many foreigners make a distinction between Britain, United Kingdom of Great Britain and Northern Ireland, England, Scotland, Wales, Northern Ireland, the Irish Republic. All along you have separatism; your have a monarchy; you have a unitary state just like Thailand, and yet things were not that normal. Sean Connery, a Scottish nationalist, refused to be knighted by the Queen and he turned down the knighthood. So, what’s wrong with that? But, eventually, there has to be a devolution of power. After so many centuries of resistance, eventually you have to have a Scottish Parliament, a Welsh National Assembly. You have IRA for over twenty years. I don’t know how many tens of thousands have been killed. Eventually you have to talk. And it is a difficult task because, after so many years of violence, this distrust is not something that can be dissipated overnight. You have to nurture the peace process. You have to change your mindset; you have to change your mentality. So, to me, if we recognize that there is a separatist problem, but it can be dealt with. Yes, there is a terrorist activity, but it has to be addressed and it has to be addressed by ourselves, by our own Government. There is no quick fix.
Chance of Success
I said at the beginning that it is a daunting task, and I cannot promise you the moon, but I will do my best. I have to be an optimist, and I have to be reasonably confident of the prospects of succeeding, otherwise why should I spend my time on a lost cause? But I believe strongly that it is very important to our country and to the future of our country, and I believe that the Thais, whatever their mindsets are, whatever their prejudices are, are pragmatic in times of crises.
The reception that the Commission received from the public in general is overwhelmingly positive. Now, can we change the mindset? I think we can, but it takes a lot of education. We hope to have some kind of a master plan that deals with every aspect of peace building, the need to clear up misunderstanding, the need to be aware of the real issues, the need to recognize and respect the diversity of culture, and the need to change the mindset of the so-called unitary state to something which is more multi-cultural and multi-ethnic. That is going to take a long, long time. The need to respect the ethnicity of the people, the need to know who they are, where they come from, and the respect that we must give to people of different cultures, religions and ethnicity.
I often cite an example; why is it that we feel repugnant that a certain group of our people speak a foreign language, Malay? My response to that question is: why should that be a problem? I admit that it is a problem, particularly with government authorities, and I said if you look around the country, do we have problems with the Thai-Chinese who speak Chinese in Chinatown or some Thai-Chinese who speak Chinese among themselves in their families? Do we have problems with the Thai-Lao who speak Lao in the Northeast? Do we have problems with the Thais who live in Burirum or Prachin Buri who speak Khmer? Do we have any problem with the Northern Thais in Chiang Rai who speak Thai Yai? Do we have any problem with the people in the North who speak a northern dialect? Or those in Isan who speak an Isan dialect? Or those in the South who speak a southern dialect?
All we have to do is just recognize that the so-called Malay language happens to be a regional dialect of the people who live in the three southernmost provinces. So, within ourselves, within each individual, we have to reconcile all these contradictions and differences in our mind.
You go to any country. The Scots still speak the Scottish dialect; so do the Welsh. I think we are living at a time when every country, every civilized society, finds that there can be unity in diversity and that there is a greater enrichment in our society if there are people of diverse origins, diverse cultures and diverse religions. Somehow, we have to come around that problem. It is a mental block, but we have to come to the realization that the diversity is an asset, not a liability. So you can see that what we are trying to do is not merely to address the issue of the South, but perhaps, I am overly ambitious in considering it a national agenda. It is a truly national reconciliation within our country. In the future, you never know what other problems of a similar nature may occur in other parts of Thailand. So I believe it is incumbent on us, on the present generation, to look ahead and not to take the trees for the forest. We have to have a macro perspective of our national identity, of our national way of doing things, seeing things and solving things. I always say that this is a local issue, as far as the South is concerned. But, what we are trying to do is to get our society better organized in dealing with problems of this nature in the future. I do not believe that it is an impossible task. I look around, I travel a lot, and I visited many countries. I read foreign journals. I watch intelligent TV shows, TV talk shows. I participate in discussions in various fora. I don’t see that our problem is greater or more serious than the problems that exist in many other countries.
I lived in the United States for twelve years. When I look around as to what the United States has been doing, I am worried for them. I am already dead scared. But this is not to be taken as an unfavorable view of my good friends, the Americans. If we take a good look around Europe, Africa, and Asia. I do not think that our problems are unique.
What if Thaksin is Leaving as a Prime Minister?
I am not worried about Thaksin leaving or not leaving. I think he has a clear majority, whether you like it or not, he is going to be there for a long time. There is nothing permanent as change. I think people change. I hope he has changed, at best in regard to the issue in the South. And I have no reason to doubt that he is not sincere.
Credibility of the Commission Among Muslim Population
I theoretical terms, I am very, very serious about truth, search for truth, and I personally believe that the reconciliation process must be premised on the disclosure of truth, on peace and justice, and on human right. The recent history of our country does not give us much assurance that truth and accountability are items of priority interest. But as far I am concerned, and as far as the Commission is concerned, we will continue to urge the Government to be accountable for all these incidents, particularly, the disappearance of a number of Thais. I confronted this question with Khun Thaksin when I had my first meeting with him, and he did not ignore my question. But I think he, at that time, did not place such importance. He said to me: “Yes, we knew about disappearances, but there were no evidences that we could have gone on that.” Of course, there were no evidences that they were perpetrated by people or individuals in official circles.
When I went down south, I was misreported, and misquoted that I asked the people or relatives of the dead and injured to forget the Tak Bai incident. That was a total misinterpretation. What I said to them was that it is imperative that the Government would address the issue of the dead, the missing and the injured. Yes, compensation must be provided. But that is not sufficient because it takes time to engage in a healing process. You take away one life, intentionally or otherwise, then you must ensure that you give the future to the children of the dead and the injured. But at the same time, people must not remain preoccupied with the event, otherwise they will have no future. I told them of my personal experience that I would never forget what I had to go through. It is indelible in my mind, in my heart. But I will not let that unfortunate event in my life bother me or prevent me from carrying on with my life. So it is not that I asked them to forget. I said I would never forget it. It is something which is unforgettable, and you should not forget it. You must try to learn lessons of that event, of that loss and get on with your life.
Recommendations to the Government Regarding the Military’s Role in Security Issues in Southern Thailand and the Reconciliation Process
If Khun Thaksin wants to be true to his words, and if he wants to demonstrate that he is a changed person, and that her adapts himself to the lines of policies that I advocated and still advocate publicly, then, he has to make sure that his people in the Government follow through his instructions. I do not know what instructions he gave, but I give him the benefit of the doubt, and I think he is committed to the statements made public many times that he is a changed person, and he has admitted the failures of his past policies. That is something unusual for a man like Khun Thaksin who is very proud of his achievements, and rightly so. But he admitted that publicly. I think for the first time in five year that he has been in power, he found it possible to admit the failures of the policies and the inefficiency of the management. But he must persuade his people, be they the army people or police or civil servants, to toe the new line and follow the peaceful resolution method. He has to assure that to the public in the future. I will not change and the direction of the Commission will not change, but I need to enlist his support. I need to enlist his co-operation. I need to enlist his willingness to put his foot down with the authorities under his control. It is as simple as that.
Opposition in the Military or Among the Officials
That is not my problem. If there were any dissenting voices or dissenting statements. It is those people who have problems with the Prime Minister. It is not my problem. They are not accountable to me. They do not work for me and I respect their viewpoints. They can be critical of me and my Commission, but that is not my problem. If they want to say anything, they should say it to the prime Minister.
Is the NRC in Favour of Emergency Law Rather Than Martial Law?
There are three levels of our work. The first level of work is between the Prime Minister and myself. There are certain matters that I do not need to consult the Commission, because it would take up too much time, and there are certain recommendations that I made on my own account, in my own personal capacity. The second level is that there are certain issues discussed with the Commission without any definitive conclusion, particularly in the details. But if I deem it to be of urgency, of great urgency, I would take it up with the Government without waiting for specific conclusions or recommendations of the Commission. The third level is that we have full discussions on the matter within the Commission and we make official recommendations.
Up to now I focus on the first two levels; one-to-one with the Prime Minister, and me as chair having ascertained some viewpoints from the Commission members and I would take it on myself to bring them up with the Government, either with the Prime Minister, with the Deputy Prime Minister, the Minister of Interior, or whoever. Yes, we did discuss the question of martial law. But before we get to the question whether it should be withdrawn or it should be replaced by a less stringent law, I need to point out that the first failure of the authorities is the inability to ensure protection of life in the area, particularly lives of innocent people. I am not trying to say that different lives have different values. But for certain purposes, I think we have two categories, lives of those who work for the Government and lives of innocent people, by-standers or those not involved.
In the past, there had been serious incidents. When I talk about the past, I talk about the past 30-40 years when the targets were mainly Government officers, be they military, police or civil servants. But, of course, in recent years the target list has been expanded to include innocent people, and that cannot be forgiven, But it boils down to the inability of the Government to provide safety and protection for the innocent people. Besides certain elements in the military and police forces, including civil servants, have been engaged in, shall we say, illegal business activities in the area. I would not be surprised if a number of killings in the South were connected with these illegal activities involving individuals who work in or for the Government.
Having said that, rightly or wrongly, I am not here to pass judgments. The Government felt that the presence of police forces were not sufficient, and there was a need to provide additional assistance to the law-enforcement agencies by bringing in soldiers to the area. According to our law, you cannot move soldiers to any area, unless there is, quote-unquote, martial law. But I said to the Prime Minister the martial law normally in most countries have different levels of crisis. You do not jump from the normality to the martial law in one step. In America, you have national disaster area, or areas whatever, that would enable the states to be provided with federal assistance, for example, when you have hurricanes or cyclones or this or that. If you said that you enforce the martial law, the martial law allows the people involved to do so many things. Khun Thaksin explained to me, and the military too, that they did not apply all the provisions of the martial law. All they needed was a legal provision which would allow them to operate in the South. So, I said to them, in such a case, why did you need a martial law? Why did you not have any other legislation? You have the parliamentary majority! He said that a law would allow the presence of military and that should be sufficient. But I stopped at that because I had no idea that there was another bill waiting in the wings and I do not know what that bill is going to cover, whether it is going to be worse than the martial law or whether it is going to be better. But if the purpose is to enable the introduction of the military forces to do things legally in the South, why not have a new law but confined just to that particular aspect. The danger is, of course, that it could be sort of a mess-up. The new law might expand into something which is, perhaps, more dangerous. I do not know. I do not engage myself in speculations. And if you ask me: cant I trust the military or can I trust the police force? It is not whether I trust them or not. But the people in the area do not trust the Government. They do not trust the military. They do not trust the police force. They do not trust Government civil servants.
It is not for me to say whether such a situation is justified, but the Prime Minister and his Government must be made fully aware. The first time I met him he chided me. He said, I was an old man and he was still youngish. I am a computer illiterate. I still write long-hand when I write my speech. Many years ago, I tried to explain to him and he said “Well, you are not digital, you are what….analog.” I did not even know what that meant. I had to go up back to look it up in the dictionary. He said “You still think within the old paradigm.” And I pretended I did not know the term, he used the English word. I pretended that I did not know the meaning of the word “paradigm”. So he stared to explain to me. He said “You know, the old paradigm is that all these problems arise out of injustices, mistreatments, abuse of power, lack of human rights, bad civil servants, corrupt military and corrupt police forces.” He said it had all changed now, it had all changed. Everything is good. The army is good. The police force is good, everything is good. So, I said to myself, that is not a new paradigm, that is an old paradigm!
But I let it go. I let it go because I have been at the business long enough to know that I have to operate with the result-oriented business management.
Chaturon Chaisang’s Plan
Chaturon’s plan was good. It was not comprehensive, but it was good as far as it went. And if it had been implemented in full eight or nine months ago, we would have had some progress towards, shall we say, a comprehensive reconciliation. As it stands now, it has been shelved. The Government says that quite a number of his recommendations were already implemented. I have no way of monitoring whether those plans or those measures were actually implemented. But we have a larger agenda than Chaturon’s plan because Chaturon’s plan was designed to defuse the explosive situation. In our view, we need to go much further than immediate objectives. We have to focus on long-term objectives.
Devolution of Power
You talked about the devolution. This is a very tricky and very sensitive issue. In every Constitution it is stated that Thailand is a unitary state which is indivisible. So it is subjected to a number of interpretations. Of course, when you say it is indivisible, it means indivisible in terms of territory, which is acceptable to me. The trouble with our country is that our language does not catch up with the current thinking or current concepts. Some of you may know that some 60 – 70 years ago, we had to attempt to coin new Thai words to provide for technical terms in science, particularly in modern living. Prince Wan, who was our Foreign Minister, coined many words to cover the political science terms, and he found that he had to resort to the use of Pali and Sanskrit words. Many of the words he coined, are, I would say, unintelligible to the common people. Words like “territorial integrity” he coined, I am sure my daughter doesn’t know that either. The Thai word for “Territorial Integrity” is “บูรณภาพแห่งดินแดน”. I challenge any Thai here who is not in the foreign service to understand such word. In the Thai language the dividing line between “honesty” and “integrity” just does not exist. So, sometimes, he had to coin words which are very long. We do not have a word for integrity even though some may have tried to refer to it by the word “คุณธรรม”, which is not the exact meaning.
We were so successful in coining new words that India had to send her Pali/Sanskrit experts to learn from us. For example, you have in English “telephone”, “television”, “telecommunication”. For “Tele”, Prince Wan once used the term “tora”. So, telephone is “torasap”. “Sap” means to her. Television is “torathas”. “Thas”, means to see. Telecommunication is “toracommanacom”. So, there are some wonderful words that had been coined. But when it comes to more abstract terms for modern living or concepts, we have difficulties. When you talk about devolution, I do not know how the word devolution can be translated into Thai. But leave it aside. We must not use terms or words which could be, I would not say misinterpreted, but I would say would be distorted by the ultra-rightists, or by the extremists. Many times in my life apart from being accused of being a Communist, I have been accused of being a separatist. When we were drafting the Constitution, I was accused of reducing the King’s constitutional power. So, it is nothing new. But when it comes to words like “self-rule” or “autonomy”, we do not have proper translations into Thai. The moment you try to explain to a Thai the word “autonomy”, he would say “Ah, that’s independence”.
So, I warned my Commission members not to bring up this subject publicly yet. But we have to start thinking seriously as to how we could bring justice, as to how we could bring recognition of cultures and ethnicity to our national life. We can only talk about the distribution of power in accordance with the Constitution. That is a by-word, other wise we would be wrongly accused. We cannot use the term “autonomy” because there is no word for “autonomy” in Thai, and if you use the word “autonomy”, people will say you are talking about independence of the three southernmost provinces. And even the term “self-rule” can also be distorted. So, for the time being, I would say, yes, the direction would be along that line.
I think, in a way, if you look at the history of Thailand, unfortunately, we are victims of our own successes. We have history, recorded events, but we do not have history books which explain why such and such events took place, and what impact or what consequences came after those events. During King Narai’s reign in Ayudhya, we had a Prime Minister who was a Greek named Falcon, and the highest courtier in the Ayudhya Dynasty was a descendant of Sheik Ahmed from Persia. And we had a Chinese, a high-ranking mandarin at the court. But after that we forgot who we were and where we came from. During the drafting of the Constitution, I was very much criticized and, I would say, vilified for being a part of the movement to stop the public call for making Buddhism the state religion. I think it is important that we have to think about the need of the people in the area to be able to govern themselves. If it is a federal structure, it is easier. The Brits have left many bad legacies after their departure. The Chinese often say that wherever the Brits went, and when they left, they made such a mess. They should have made Burma into a federal state. They left India, subcontinent India, in such a big mess too, not to talk about what they left in China after the Opium War.
So you can blame the legacies of the past colonialism, western colonialism. We do not forgot history, but what can we learn from history? Definitely, Thailand cannot be a federal structure. It is a unitary structure. But we can distribute power; we can give authority following the principles of governance, principles of participation. They should have certain powers to administer. You can leave the defence, you can leave foreign affairs, you can leave security, to the central government. But that is, perhaps, the direction that we may have to think to take in the future if we can get consensus.
We, unfortunately, are victims of our successes because we had been able all along to assimilate the Chinese, assimilate the Lao, assimilate the Khmer, assimilate the Mon. And 50 – 60 years ago, there was a Government that wanted to assimilate the Thai Malays. But circumstances are different. When the Chinese came here, they came without their wives; they fled from poverty and impoverishment. They left their wives back home. They came here, they looked alike the Thais; they married the Thais. After three generations, they are more Thai than the Thais themselves. We assimilated the Lao, the Khmers, some Burmans. We cannot follow the same path to of assimilate the Thai Malays. We have to integrate them. We cannot translate the word “to integrate” the people into our national life. So, we do have problems with the language.
Composition of NRC
Out of forty-nine, I included six politicians and a Member of Parliament in Yala who is a Buddhist. There were 18 – 19 persons from the area. There were about sixteen Muslims, so I included two or three Buddhists from the area. I think the Democrats are well represented. But mind you, I did not choose them because of their party label. I chose them in their individual capacities and basis. It is not a problem of one political party, but it is a national problem that we have to tackle.
Question : You mentioned earlier that you felt better intelligence and better law-enforcement were needed. I was wondering whether you could expand on that a little bit. How is it possible after such a long period of protracted, if low-level, violence that the governing authorities only seem to have the vaguest idea and contradictory ideas about who is responsible and have caught so few people for the multiple attacks that have taken place? How can the police and the army be doing such a bad job?
Better Intelligence and Better Law Enforcement
I told you that the intelligence is very weak. You asked me how to improve it. I cannot answer because I am not familiar with the organization. I am not, and I have no authority to speak on behalf of the intelligence people.
What Went Right During Your time on Intelligence.
What do You Think has Changed in that Time?
I hope you do not take my response seriously. But I can tell you that in my short stint, even twice, in my lifetime as Prime Minister, the first time for about fifteen months, or sixteen months, and the second time for four months, I ignore all intelligence.
How to Handle or Reconcile If the root cause of the Violence is Unknown?
You do not need much intelligence. Either way, to know the root causes of the problem, I would rather use individual intelligence and collective intelligence, not the intelligence you are referring to.
NRC’s Mandate : A Complete Roadmap for Government?
I was hoping, and I am still hoping that, by the end of this evening, my initial statements and my answers to your questions would clear any doubts in your minds as to what our mandate is, and what our responsibilities are. There is a clear dichotomy between what the Government has to do and what we are planning to do. Some of the questions that were posed to me tonight could be directly addressed to the Prime Minister, partly to put a pressure on him to ensure that his current moves and his current policies would be in line with the long-term approach of the work of the Commission. Obviously, there is still a lot of misconception as to what we are supposed to do, what we are about to do, and what we are capable of doing.
I did stress many times that we are not a law-enforcement agency. We are not an intelligence community. We have no executive authority. So, if people come to me and ask : why is it that the Commission has been set up for three months now and there seems to be no improvement of the situation? My answer would be : that has nothing to do with the Commission. The question should be addressed to the Government. All I want to ensure is that the Government is now working in tandem with us. I cannot force the Government to do anything or to carry out any interim measures. I am not accountable to the Government, but I am accountable to the people in Thailand at the end of the day.
My Commission cannot be held responsible for or accountable to a day-to-day event, to any explosion, or to any killing or whatever incident. It is an obvious commentary on the efficiency of the policy or on the validity of the policy and efficiency of management of the Government authorities, in its inability to dispose of the unrest in the South. I am sorry if you feel that my answer is something that you are not looking for, but I think you have to know the limits of our Commission. We are not the Government! Many of the questions posed to me by the Thai press and by some of you here could be better addressed to the Prime Minister or to the Government authorities.
Public Participation and Support on Reconciliation
Yes, and I even asked my Commission members to go around the country and talk to the people at private or public fora. I encouraged Commission members to write articles, to talk to as many people as possible, not only in the South, but all the rest of the country. My whole intention is to somehow generate a kind of debate that we had when we were drafting the Constitution. When I was given the opportunity to chair the Drafting Committee of the Constitution, I made sure that it would be a transparent exercise, and it had to involve the participation of the people. So, from the very first day, I declared that our meetings would be public. Press people or anybody could walk in to our meeting rooms and listen to the whole discourse. We had many meetings for six or seven months.
There was only one off-the-record meeting and confidential session. It was when we debated among ourselves the pros and cons of making Buddhism a state religion, because it was such a sensitive topic that we did not want our discussions to be misconstrued.
This time I was also thinking of that type of open discussion, but I am afraid that there are quite a number of issues which would be too sensitive to let in the public from the beginning. But, indirectly, I would encourage open debates. You will find that not only I, but a few other member who may disagree with me on certain points, would speak up and would write articles. You can read articles in the newspapers “Matichon” or “Phoochadkarn”, or whatever.
My whole idea is that the success of the Commission is not on the report. The success of the Commission would be on the positive reception, acceptance and support of the public of our report. Only then would the Government move. And I am talking about any Government. I do not believe that this issue is a unique one in Thailand, and I do not view it as an issue that involves only the people, the two million people in the South. I view it as an issue that has to be debated and has to be discussed and resolved by consensus by the entire society. Thai is how I view the seriousness of the issue. And in this, I need the support of the objective press, of the factual press, and I do not want to see the press engage in sensational or in exaggerated versions of the true events.
Outsider Influences on the Southern Violence
The Causes of the Southern Violence
I shall answer the longer question first. I think the attention that the Thai public paid to the situation in the South is the direct result of the failure of the policies. I think there are misunderstandings and misperceptions of the causes. The Thais are very gullable people. They are very simplistic and, they tend to be swayed very easily one way or the other by propaganda or by rumors, or by plain lies. It is not a society which is given to search for the truth. I think that if I were to identify flaws of our character, it is not a society, it is not a learned society. It is not a society which is determined to search for truth, at least not as a matter of conscience or principle. So, on the other hand, the upside of this lack of curiosity for truth is that they can also be swayed more easily if we can get the truth up to them. It is an arduous task, but it is still a possibility.
To come back to your first question, you have to identify what you mean by “outsiders”? Distant outsiders or near outsiders? Well, I deal with the near outsiders first. The near outsiders, of course, are our neighbouring countries, those with a large Muslim population. I have full confidence in the policies of the Government of Malaysia including that of the Prime Minister, and their authorities, and that includes also the PAS government in Kelantan too. I have full confidence that they would not do anything intentionally to harm or to add injury to the already bad situation in the South, or to harm the long-term interest of Thailand. Definitely, they have certain viewpoints and, perhaps, they have different ways of dealing with the problem of a similar nature if it were to occur in their countries. But the advantage they have over us is that they are a Muslim nation, or the majority are Muslims and they have a Government which is Muslim. So, they have more leeway in dealing with the Muslim problems and in many cases, in a much more straight-forward and much more, I would say, strict manner than we can afford because we are a Buddhist Government. Anything we do could be easily misinterpreted as being harsh on the Muslim minority.
But the paradox of the situation is that here you have three southernmost provinces with two million people and with roughly 1.7 or 1.8 Muslims. So, they are a majority in the area, and yet they live in the country in which Muslims are not a majority. And yet, again, they live in a region, Southeast Asia region, of which, the Muslims are a majority. So, you have to strike a good balance.
In whatever treatment we deal with the question, we can not proceed on the basis that we have to be favourable to one group or the other, or to be partial, to please on group or the other. We have to be seen to have a balance set of policy measures and to be objective with our exercise. So we are walking on a tight rope.
Dissolvement of the SPBC
I think that the issue was magnified out of proportion. Yes, there were people who regretted the fact that the old Unit, whatever the acronym, was dissolved and a new Unit was formed. But I can assure you that there are not much differences between the two Units. And I talked to the person who would know because I talked to the chief of the old Unit and he said he regretted it was dissolved. The new Unit could also be a replacement. I do not think it is that serious. More has to do with the way the people in the area operate. Definitely, for whatever reasons, they were still not able to regain the trust of the people in the field, and it is difficult to pass judgement on the situation which prevailed a year ago, three years ago, four years ago.
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