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undergird America’s involvement are changing.
STRUCTURAL SHIFTS IN GLOBAL LEADERSHIP
Profound structural shifts in the world and in the
Indo-Pacific are underway. These changes are
of fundamental importance to the United States
and to the Philippines. Gone is any pretense to
a post-Cold War, unipolar world, or to a “wheel
and spokes” description of American policy which
came into currency in the 1990’s. The world no
longer accepts the indispensability of America’s
leadership (some call it hegemony). All of us
are in global, uncharted waters on our way to a
point where “several powers of varying size and
capability contend for primacy and influence and
to maximize their individual interests,” to quote
Sreedhar Menon, India’s former national security
advisor.
In short, the world order we are watching evolve
is better understood by those who recall the
Westphalian state system in Europe in the mid-
17th century which gave birth to the concept of
a balance of power. That order gave primacy to
respect for sovereignty and pursuit of national
interest.
CHALLENGES IN US DOMESTIC AFFAIRS
As regards to our domestic affairs, Americans
contend with a number of challenges – a deeply
divisive Presidency; in the name of partisan
advantage we face sustained attacks on core
democratic institutions, like the free press; our
polity is sharply divided; we face a rise in populist
sentiment and an increase in acts of intolerance
and violence. Furthermore, we are not coping
“The greatest
challenge the
United States faces
internationally
is the conduct of
its relations with
China.”
MBC FORUM 4-2018
The Makati Business Club invites resource speakers to its
General Membership Meetings and Roundtable Discussions
to discuss public issues and trends, whether local or global,
that have an impact on Philippine development. MBC Forum
highlights the speeches and discussions at these gatherings.
well with our education and health care needs,
nor are we maintaining and modernizing our
infrastructure. These issues are hard to address,
given our divisive politics.
Americans also face an economy, which while
registering virtually unparalleled levels of growth,
job creation and prosperity, is nonetheless fragile
and on the edge of a downturn in its business
cycle. In addition, we are entering a thirty or so
year transition to an artificial intelligence and
information technology driven economy, away
from one based on manufacturing, ordinary trade
and agriculture. The changes we can foresee for
our economy may be as great as those faced with
the arrival two centuries ago with the industrial
revolution.
America’s political economy is not producing
benefits for all. Inequality abounds. Wages
have been largely stagnant over the past several
decades while huge fortunes have been amassed.
The gap between Americans with great wealth
and those with modest means is greater than ever.
That fact will influence the 2020 election.
CHALLENGES IN GLOBAL AFFAIRS
The issues the US faces are to varying degrees
shared by others in the West. In addition,
Europeans are confronting their own unique
challenges: Brexit and Gilets Jaunes to name a
few.
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In addition, we face a slowdown in the global
economy. The world has never experienced the
economic growth it achieved between 1990 and
2010, when globalization gathered speed. No
region benefited more than Asia, as your own
national economic performance indicates. But
progress for some was not progress for all; the
economic wellbeing of key sections of western
societies stagnated with, as I noted, negative
political consequences. We are in for a time of
slower growth and retrenchment.
CHINA’S CRITICAL ROLE IN US FOREIGN RELATIONS
The greatest challenge the United States faces
internationally is the conduct of its relations with
China. Managing the rise of China’s power is a
preoccupation that will endure for decades. In
2018, we decisively entered a third phase in our
relations with the Peoples Republic – the first,
which followed the victory of Communist China
over its Nationalist adversaries, was one of stark
hostility; the second was premised on the view
that China’s rise posed no long term threat to
US interests or even to the global order in which
America played a leading role after World War
II. In fact, the belief was widespread that China
would become in time “more democratic” and a
strong participant in the rules-based, international
system.
But by 2018, that view had disappeared, replaced
by the belief that the United States had entered
into strategic competition with China. From the
American point of view, the relationship with China
has become adversarial – an attitude shared by
America’s political, military and business leaders
and is widely reflected in the media and scholarly
communities. In a word, America and China are
entering “unchartered waters” and the terms of
our cooperation and competition remain to be
written.
While I do not subscribe to the theory of a
Thucydides Trap (“It was the rise of Athens and
the fear that this instilled in Sparta that made war
inevitable.”), I recognize the road ahead is a rough,
adversarial one and will require great, navigational
skills. I do not have to remind you, the challenge
is not only an American one. Nations as diverse
as Japan, India, Korea, Indonesia, Viet Nam and
Australia are moving to hedge against China,
MBC FORUM 4-2018
“The best
interests of the
Philippines lie
in maintaining
close, confident
and cooperative
relations with
both of this
region’s great
powers.”
recombining with the United States to assure
balance while at the same time developing their
own political and economic ties with China.
China’s actions in the South China Sea, over the
Senkakus and at Doklam, make the region aware
of China’s tendency to overreach. They, like
Americans, are also wary of China’s unwillingness
to open its market or abide by recognized trade
rules while at the same time pursuing China-
centric advantages through One Belt One Road.
China’s preference for bilateral settlements of
differences leads to bullying and because of its
weight, gives China unfair advantage.
“CLOSE NO DOORS”
The Philippines certainly shares the region’s
ambivalence toward the rise of Chinese power.
Your experience in the South China Seas is
indicative; but I suspect standing up to China and
putting at risk the economic advantages of Chinese
economic cooperation is a quandary.
If there is one thing I have learned about the
Philippines is that you will define your own
interests. Moreover the Fil-Am relationship has
changed markedly and it has matured; there is no
room in it for American insistence on “the right