Let us speak plainly about the World Economic Forum on East Asia that opened yesterday at the Makati Shangrila Hotel, with some 600 delegates from Asia and beyond in attendance, and a smattering of government leaders present, notably Indonesian President Susilo Bambang Yudhoyono and Vietnamese Prime Minister Nguyen Tan Dung.
Philippine organizers, particularly the Department of Finance and Malacanang, have labored hard to project the event as huge, the biggest international event in the country this year, exceeding in prestige if not in popularity the visits of pop music superstars.
But international and Philippine media covering the WEF are mostly asking why China is nowhere in sight, with none of its top economic officials and corporate executives deigning to cross the South China sea to attend.
Philippines: the next Asian miracle
The first official session today focuses on the topic: “Philippines: The Next Asian Miracle.” We get first crack in the publicity front as host and rightly because we are bankrolling the meeting to the tune of P70 million, and millions more of expenses besides.
The organizers and publicists did their utmost to inflate the significance and importance of the WEF-East Asia, but a few factual qualifiers must immediately be stated:
The forum should not be mistaken for the global and celebrity-studded get-together that takes place annually in Davos, Switzerland, where attendance is strictly by invitation, and to which political and corporate leaders go on pilgrimage, desperately hoping to be noticed and heard.
The World Economic Forum is a \o “Switzerland” Swiss \o “Nonprofit” nonprofit \o “Foundation (nonprofit)” foundation, based in \o “Cologny” Cologny, \o “Canton of Geneva” Geneva. It is as an independent international organization committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.
Besides the Davos winter meeting, the WEF also convenes six to eight regional meetings each year in locations such as Latin America and East Asia. The meeting in Manila is one of the regional meetings this year.
1. The WEF- East Asia is in no way comparable to the annual Asia-Pacific Economic Cooperation Summit, which the Philippines will host next year, and which will gather the heads of state and government of over 23 Asia-Pacific Economies.
2. The forum is not even equivalent in importance to the annual summit of the Association of South East Asian Nations.
When China decided not to send a delegation to Manila, it clearly did so knowing that her absence would detract from the substance of the discussions.
Calling the forum a “summit” is a desperate attempt to invest it with significance. A summit is by definition a meeting of the top leaders of states. Three of them do not make a summit.
The elephant in the hall
Communications secretary Herminio Coloma says that Malacañang is not bothered that China decided not to send a delegation to the WEF. Finance Secretary Cesar Purisima tried to douse speculations that China’s absence was a rebuff to the Philippines because of the maritime disputes in the South China Sea. “I think what’s important is we look at what we will discuss during this meeting and the quality of discourse and I think we are all excited to host the delegates who are coming,” he said.
And yet, despite the bombast, China will clearly be an elephant in the hall during the conference. A high-profile session on Friday will look at how security issues can affect the region’s economies, a timely topic because of the growing tensions over competing territorial claims in the South China Sea and East China Sea.
The head of the US Pacific Command, Admiral Samuel Locklear, will be one of the panel members for the security session.
Like holding the Olympics without Russia and America
Superficially, holding a conference on East Asia without the biggest country in the region and the second biggest economy in the world is like staging the Olympics without Russia and America.
China’s boycott will be analogous in impact to the twin Olympic boycotts that occurred in the 1980s, and its deplorable effects on the quality of competition.
US President Jimmy Carter ignited the boycott fever when he declared that the United States would boycott the 1980 Olympic Games in Moscow, in response to the 1979 Soviet invasion of Afghanistan. 59 other countries, on US prodding, followed suit and boycotted as well. It was the largest Olympic games boycott ever.
In 1984, three months before the start of the 1984 Olympic games in Los Angeles, the Soviet Union declared it would “not participate” in the 1984 games. 13 countries, mostly socialist and communist states, joined the boycott.
There have been no boycotts since the meltdown of the Soviet Union in 1989.
China’s economic statecraft
We will learn nothing from China’s absence in the WEF meeting in Manila, if we do not look deeply at what it reflects of Chinese policy and what it portends.
More important, our government should view this in the light of the broader thrust of Chinese foreign policy and strategy.
Professor James Reilly of the University of Sydney has written a paper on China’s economic statecraft that provides invaluable insights on Chinese thinking and strategies in the economic sphere,
Entitled, “China’s Economic Statecraft: Turning wealth into power,” Reilly’s paper discusses in some detail specific actions and policies that China has taken in pursuit or defense of its interests.
The paper should be instructive and useful to our policy makers and diplomats in our dealings with China.
An executive summary of the paper runs as follows:
“Never in world history has one government had so much control over so much wealth. It is no surprise, therefore, that Beijing is deploying its vast economic wealth to advance foreign policy goals. China is using economic statecraft more frequently, more assertively, and in more diverse fashion than ever before. Yet fears of China’s economic coercion should not be overdrawn. Diverging interests across the broad array of state and commercial actors engaged in China’s economic statecraft impedes effective policy implementation. A review of cases where China has used economic sticks or carrots shows a mixed record of success.”
Generally speaking, writes Reilly, “Chinese leaders prefer using economic carrots rather than sticks as a means of obtaining diplomatic benefits. In their view, incentives offer mutual economic benefits – a ‘win-win’ outcome. Spreading economic goodwill also eases diplomatic relations, tempers public anxiety over China’s rise, and builds closer economic and political ties. Yet Beijing also remains willing to deploy punitive economic measures in defense of core national interests.”
“For China’s leaders, sanctions offer a low-cost, low-risk way to signal dissatisfaction, increase the costs to states that take undesired actions, and satisfy domestic demands to ‘do something’. Beijing often uses the specter of sanctions as diplomatic language—a costly signal of frustration. They also serve as a deterrent—warning that if the action is not reversed, China will be forced to take even more stringent action, and that other states risk facing similar economic costs for crossing Beijing’s red lines.”
“Unlike US sanctions, which are formalized through domestic law and/or presidential decisions, China rarely openly declares its economic sanctions. Instead, Beijing prefers to use vague threats, variation in leadership visits, and other informal or indirect measures, enhancing Beijing’s flexibility while minimizing diplomatic fallout . . .”
Philippines needs statecraft and strategy
This limited look at Chinese economic statecraft and foreign and security policy leads me to think that the Philippines has to think more deeply, more strategically, and more wisely about its relations with China, especially now when our country is ubiquitously portrayed as a thorn in China’s ambitious thrust toward global leadership.
This is a field, in which as Walter lippmann warns, amateurism and naivete are dangerous.
Looking at our diplomacy with China as a problem of statecraft is a necessary first step in the right direction.
The literature on statecraft has expanded of late thanks to the work of American and British leaders and scholars
US diplomat Dennis Ross, in his book Statecraft and How to Restore America’s Standing in the World (Farrar,Strauss and Giroux, 2007), defines statecraft as “ the use of the assets or the resources and tools (economic, military, intelligence, media) that a state has to pursue its interests and to affect the behavior of others, whether friendly or hostile. Statecraft involves making sound assessments and understanding where and on what issues the state is being challenged and can counter a threat or create a potential opportunity or take advantage of one.”
Ross concludes his defining passage with these words: “Statecraft is as old as conflict between communities and the desire to avoid or prevent it. Plato wrote about statecraft. Machiavelli theorized about it. And Bismarck practiced it, never losing sight of his objectives, and recognizing that his objectives should never exceed his capabilities.”
This is to say that we need diplomats and strategists whose minds are as nimble and penetrating as the Chinese today. This is not a field for incompetents.
In her book entitled, Statecraft, Strategies for a Changing World, former British Prime Minister Margaret Thatcher equated statecraft with statesmanship. She underscored the distinctive features of the 21st century that govern the nature of statecraft today, of which the theme of “globalism” is paramount.
She focused the greater part of her book on the maintenance of international security.
APEC 2015; more fitting coming-out party
I will conclude with this comment. WEF- East Asia is not the fitting forum for the country’s coming-out party.
The better forum is APEC 2015, which we will be hosting in Clark, among several venues.
APEC is a very big deal with many of the biggest economies in attendance. China can’t afford to boycott it, even if PNoy continues to annoy her. That’s how important the summit is to all the member economies.
By then also, I am hopeful that a dose of good sense and maturity will have overtaken Philippine foreign policy. We won’t be crossing swords with Chinese statecraft with mere public relations.