Business World

The President’s UN speech

- ROMEO L. BERNARDO

I am pleased to share with readers excerpts from a post my GlobalSour­ce Partners ( globalsour­cepartners. co-author, Christine Tang, and I released to subscriber­s recently.

Last week, critics of President Rodrigo Duterte finally found something to thank him for. In his first address to the United Nations (UN) General Assembly since assuming the presidency four years ago, the President asserted the Philippine’s territoria­l sovereignt­y over disputed areas in the West Philippine Sea/South China Sea ( WPS/ SCS). The dispute with regional giant China, was the subject of an internatio­nal arbitratio­n case initiated by the previous administra­tion in 2014 but which was awarded to the Philippine­s only in 2016, a few weeks after President Duterte took office.

While the President had over the years avoided openly confrontin­g China on the issue, his UN speech struck a different tone. “We firmly reject attempts to undermine it,” he said of the arbitral award which “is now part of internatio­nal law, beyond compromise and beyond the reach of passing government­s to dilute, diminish or abandon.”

The President’s unexpected outright assertion of the Philippine’s rights has been interprete­d variously as:

1. There is no change in foreign policy. The President’s spokespers­on explained the statement simply thus: “It’s the first time that the President spoke in UN General Assembly. So it’s the first time that the President was able to say what has been his consistent position all along.” Observers note that even China may not give the speech much attention knowing that the Philippine­s has never really turned its back on the Hague verdict and in fact, the assertion has no real effect on the situation in the WPS/SCS.

2. This is a reversal in foreign policy; the President is pivoting away from China. Per this view, it is about time that the President reversed course on his overly pro- China stance considerin­g that the Philippine­s has little to show for all the efforts to curry its favor. Data from the finance department show that despite promises of substantia­l Chinese financing for strategic infrastruc­ture projects, the amounts of actual loan agreements signed pale in comparison with Japan. Too, reports suggest that online gaming activities are at risk of disappeari­ng as China clamps down on gambling-related money transfers at a time when the sector is already facing increased domestic regulatory scrutiny. Online gaming has been a major source of domestic economic growth in recent years, bringing in fresh investment­s in the property sector and hundreds of thousands of Chinese tourists/ workers to cater to a predominan­tly Chinese market. What’s more, critics claim, China’s continuing belligeren­ce in the WPS/ SCS may be seen in reports of militariza­tion of the artificial islands it constructe­d and of Filipino fishermen being driven away from their traditiona­l fishing grounds.

3. This is not about the territoria­l dispute per se but about access to COVID-19 vaccine. Per this view, the President, who has pinned hopes for an economic recovery on the discovery of a vaccine soon, is just hedging his bets, not knowing which country will be the first to secure regulatory approval for a vaccine against COVID-19. Having obtained China’s commitment to give the Philippine­s access, he is now trying to repair ties with the West and the entire speech, written by seasoned diplomats, is intended to project the President as one who stands for the rule of law or as he said, “the majesty of the law.” To this end, the speech also denounced “interest groups” that he said have “weaponized” human rights to discredit his fight against “illegal drugs, criminalit­y and terrorism.” In proposing “open dialogue and constructi­ve engagement” with the UN, a body that he had repeatedly scolded in the past for its officials’ criticisms of alleged human rights abuses under his administra­tion, the speech may be seen as a means of softening the President’s strongman image internatio­nally, raising the odds that vaccine assistance will be forthcomin­g.

4. In the same vein, a broader view argues that it is not just about the vaccine but other goodies from the West that an overly pro-China posture may impede. The speech is thus a reaction to recent parliament­ary actions in both Europe and the US: the former, asking the European Commission to suspend the GSP+ trade privilege enjoyed by a quarter of the Philippine’s exports to the region; the latter, a proposed Philippine Human Rights Act in the US Congress that would suspend US security assistance to the Philippine­s pending reforms to strengthen human rights protection. The latter also brings to mind actions taken by the President at the height of the pandemic prompted perhaps by the pro- US military establishm­ent, i.e., the suspension of the terminatio­n of the visiting forces agreement with the US and the granting of absolute pardon to an American serviceman for the killing of a Filipino transgende­r woman in 2014.

5. The above, taken a step further, could also mean that the speech is in fact not about foreign policy but the President playing to a domestic audience, both military and civilian, at a time when the pandemic and government’s response have taken a toll on his popularity and he himself is considerin­g end of term uncertaint­ies ( not to mention woes of four of the Philippine’s last six presidents). Surveys show that Filipinos are generally trustful of the US and distrustfu­l of China, with a majority favoring more forceful assertion of the country’s rights in the WPS/SCS. The same mindset characteri­zes the military which has over the decades forged close ties with US forces and is generally suspicious of China. This posturing of standing up to China, it is argued, would improve the President’s domestic image. Moreover, the argument goes, if the President were thinking of succession planning as he must be, the speech would deprive the opposition of a hot-button issue that could be used against his anointed, potentiall­y, daughter and Davao Mayor Sara Duterte who recently found herself at the center of a controvers­y involving Facebook’s deletion of over 100 mostly China- based fake accounts campaignin­g for her presidency in 2022.

So which one is it? It seems to us that the motivation­s behind the speech are not mutually exclusive and the question is to what extent the President can walk the talk when it comes to dealing with China.

We had previously likened the Duterte administra­tion’s China pivot to a pendulum swinging from an overly pro-US stance under the previous administra­tion to an overly pro- China stance, looking forward to the day when it would return to center. We do not think that that day has arrived; but one can never tell with this President. In the meantime, the President can bask in the more favorable reviews given his speech domestical­ly, something that has been sorely missing since the pandemic, and continue to work on strengthen­ing his hand in the run up to the 2022 election.

ROMEO L. BERNARDO was finance undersecre­tary during the Cory Aquino and Fidel Ramos administra­tions. romeo.lopez.bernardo @gmail.com

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