Philippines

 The Philippines greets you, Sir, on your election to the presidency of the forty-third session of the General Assembly. It is not only the votes of the membership of this body, but your own erudition, experience and diplomatic skills and your country's brilliant contributions to this Organization that have elevated you to that exalted office. My delegation awaits the impact of your shining leadership on the labours of the Assembly. You succeed Mr. Peter Florin, the President at the forty-second session of the General Assembly, and the Philippines appreciates his performance in that capacity. It was a performance that was at once vigorous and unselfish. We recall that he returned to New York several times to preside over our resumed sessions and at one special session, which attests to his commitment as well as to his diplomacy I bring the General Assembly a message from the poor of my country. Why are many Filipinos poor? They ate not poor because they come from an indolent race. Out countrymen now covet the earth - two million of us in the Americas, half a million in the Middle East, a quarter of a million in Europe, half a million in Asia and the Pacific - seekers all of toil and of life, teachers of nations, physicians of men, builders of industry, designers of modules that challenge the stars and settle on the moon, men and women of skill and diligence, like those of Europe who settled America and here built a new world. They ate not poor because they do not know how to fight for their rights. They were the first in Asia to shed their blood against Western colonialism and produce their own republic. Ninety years later, they were the first nation in the world to mass by the millions, to confront guns with rosaries and bring down a dictator without the shedding of blood. In those four bloodless, spectacular days of February, under the leadership of Corazon C. Aquino, they raised the new peaceful rallying cry of "People power.·" which even now resonates in the streets of nations in transition on more than one continent of this earth. They are not poor because they multiply too fast. They try not to, against their own human instincts. And they know that in rich nations it is the building of cities and industries, not the extermination of human instincts, that has reduced this multiplication. They are not poor because their nation does not grow. For our country does grow. Now that we are free again, although we remain harassed by the extremes of left and right, we have kept to our democratic course and our economy is growing again, last year by S.6 per cent, this year by 6.8. Why, then, do so many of us remain poor? Thirty years ago, our country was second in East Asia in economic development, next only to Japan. Twenty years ago, along with those developing countries you now call the South, we were growing faster than the developed countries of the North. Then one day the countries that produce oil decided to form a cartel. And why not? Other countries more powerful then they had deprived them of their just profits and it was time that they stood up, joined forces and assumed control of the wealth that God had given them. We in the South who do not produce oil waited for the new oil alliance to share their profits with us. But they did not. The South was not ready with the mechanism to attract and absorb these profits. Therefore, the oil producers chose instead to store their gains in the bank vaults of the North. The petrodollar was born, and the bankers of the North opened their doors wide to the money-famished financial planners of the South, including those of my country. We started to borrow, borrow, borrow, enticed by abundant funds and low interest rates. Some countries learned to control themselves, to borrow just enough, to use their borrowed money wisely and begin to grow. But for our leaders the lure of more and easy borrowing was too strong. Then one day a dictator seized power in our country. There was no more legal opposition, no free press to question enormous r hasty loans. Absolute power produced absolute corruption. The petrodollar was recycled back to the North in the bank deposits of the dictator and his friends. No one warned us of the cataclysm that had to follow. Instead a banker of the North said to just "Do not worry. Sovereign countries never go bankrupt." And so, indeed, they lent us more and more. These debts were at that time guaranteed by the Government of the debtors. And sovereign Governments never disappear. They just change hands. Thus it was that in 1970, our country and those of the South owed only 100 billion dollars to the North. Ten years later we owed $500 billion. Now we owe 1 trillion. It was our Mexican friends who were first to realize it could go no further. They produced oil but its value went down when the cartel collapsed and industry decided on other ways of fuelling itself. Mexico said "We have no money. We cannot pay" and the South woke up to the realities of borrowing. The banks of the North began to say: "We have been lending too much, even more than 20 times our capital." And so now we must pay more for every dollar we borrow, and there are less of those dollars to borrow. And so, after we were titillated into a borrowing pattern - nay, a borrowing spree - the spigot is turned off. Up to 1981 the money was coming into our countries: now it is going out. Now we of the South must together send out 320 billion more than we are receiving every year from our international creditors. Last year alone our country sent out 31.7 billion more than it received. Our country must now export much more and import mud· less just to earn the money with which to pay our debt. Yet, what do some of our friends of the North do? They make it harder for us to export. When they decide that we are exporting enough, they want us to restrain ourselves. When our exports displease their labour, they cut them down. When we export the fruits of our soil, they demand health certificates. When we export what we manufacture, they decide that our products are not good enough. When they cannot say that our products are not good enough¡, they say it is our packaging that is no good. And when we have done everything to please them, they inundate us with customs documentation. When the countries of the North want to export their service industries to us - their insurance, their banking, their finance - they ask us for market access, national treatment, right of establishment. Yet, are the market services of the North open to the South? If it is their services, they call it export. If it is our services, they call it immigration. So many of our factories, unable to export more, to import enough of the raw material that they needed for their products, shut down many of their machines. By 1985, 600,000 in our country had lost their jobs this way. In despair many were tempted to join the rebels in the mountains} many who understood and who saw that death by bullet could be less painful than death by debt. But, though many are starving, they have faith in the ways of peace, which are the ways of the nations united in this Assembly. This then is the message I bring to the Assembly from the poor of my country. It is the same message from the poor of the world, the poor who suffer, but who want peace, not violence. It is a message of hope, not of despair. How do we respond? As Polonius advised his son Laertes: "Neither a borrower, nor a lender be, For loan oft loses both itself and friend. And borrowing dulls the edge of husbandry." (Hamlet, 1: iii) Shakespeare's admonition may have its relevance for an adolescent who is about to set out on his own, but it has no appeal for a young nation that must grow, must build, must stoke its furnaces with the resources of other nations. Yet borrowing can be heady stuff for eager nations and avid lending houses, and the point of crisis is not difficult to reach. Debt crises are not new in this century, and they have not been beyond solution. In fact, when the crisis is bilateral and horizontal, between North and North, lessens have been learned in time and new disasters averted. At Versailles in 1919 the victorious Allies of the First World War refused to condone the enervating obligations of the defeated Germans, and Germany went to the radical right for a solution. That solution produced the Second World War, The Allies, again victorious in 1945, remembered Versailles, and in London, forgave 70 per cent of the German debt. The same bold visionary leadership that executed that condemnation also conceived the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade (GATT). But when it is a multilateral and vertical crisis, between North and South, the condemnations come much more swiftly and painfully. There was one such crisis in the 1930s. At that time the creditor countries refused and most debtor countries responded quickly and simply. They refused to pay their debts. A few did pay like Argentina, where British leverage could administer sanctions. But for the rest of the debtors no sanction was to be feared. There was no hegemonic Power to enforce international contracts. When most of the debtors refused to pay, the world economy did not collapse. The debtors could not pay and the creditor Governments chose to look the other way. There was only the impulse to create the institutions that would provide the framework for international economic relations. There is one hegemonic Power today that could crack the whip: the united States of America. But the crisis is enormous and there are rising economic Powers with which the enforcer must co-ordinate if order and resolution are to be readied. This is not happening. Today the fund well is dry and there have followed recession and inflation. The response of most creditor countries has been to tighten monetary policy and reduce trade deficits. And so the cost of debt has increased. For its part, the United States has opted for supply-side economics, continuing budget deficits, reducing tax rates and expanding the economy. In the North there has followed turmoil in interest rates as well as unemployment which is now being blamed on imports from the South. The South is now being asked to undertake structural reforms and to rely more on the market and the private sector. But the North with all its technology could solve its unemployment problem# not by blaming imports from the South# but by getting out of economic activities in which the North has no economic advantage: textiles# garments, shoes. We repeat our salute last week to President Ronald Reagan's veto of the protectionist textile Bill. That masterful act of principled determination was a signal of hope for justice in international free trade and of faith in international negotiations and institutions. We also applaud Japan which has offered to recycle $30 billion of its annual surplus by supporting export industries in developing countries. But for this strategy to succeed the developing countries must know what it would be profitable to pursue·, and to know this they must also know what structural transformations can take place in the North. The debt crisis is not a problem only for the debtor·, it is a problem for the creditor; it is a problem for the world. Therefore, the solution cannot be sectoral; it must be total. It cannot be regional; it must be global. It cannot be technocratic; it must be political. Economic and finance ministers of the world must confer. That is vital. But that is not sufficient. The men and women who make political policy - it is these who must agree on the final resolution of this global tragedy. In this last year, in many capitals of the world, political policy-makers of this stature have met and called for valiant responses but have not yet found formal decisive consensus: in Manila last December at the summit of the Association of South-East Asian Nations (ASEAN) in Toronto last June at the summit of the Seven, again, in Manila last June at the International Conference of Newly Restored Democracies; in Cyprus last month at the meeting of Foreign Ministers of the Non-Aligned Movement. How shall we resolve debt? It is valuable to reschedule debt. But it is even more precious and human to forgive debt. The makers of policy must agree to resolve the question, who is entitled to debt relief and debt forgiveness? Is it possible to fix standards rather than leave the answer to the strengths and weaknesses of negotiators? They must agree to alternative adjustment programmes to promote growth that will suit both planned and free economies. They must also develop new modes to carry out global solutions. For the present mechanisms are not equipped for such a momentous mission. The International Monetary Fund (IMF) approaches short-term problems, like balance of payments, with an average span of 18 months. But the structural and financial horizons of transnational debt can span a generation. The World Bank has primarily concerned itself with financing projects, and, more recently, with programmes. Yet, it is only in the context of an aggregate panorama that the financial obligations of nations can be amply appreciated. It is now seven years that the debt crisis has been thundering across our planet. The assault is overwhelming us because our defences are isolated and our strategies fragmented. I propose a global counter-attack by forces that will transcend geography and ideology. I propose an international debt and development commission. I propose that this commission be constituted of men and women whom the world recognizes for their redoubtable seasoning in foreign policy, diplomacy, finance, political economy, trade and development. I propose that the Commission be provided not with a new bureaucracy but with a staff seconded from outstanding multilateral agencies. I propose that the commission be rendered a life-span of five years. I propose that this commission be mandated to evaluate alternative schemes for global debt management, move to concrete action to rectify the trading system consistent with that global debt management, formulate institutional changes in international agencies so that they may discharge a more comprehensive role in the process, commend specific actions to member Governments to address alternative schemes, oversee and monitor its own output. I propose that the commission conduct its own study, but look into recent proposals on global debt management, including the report on an international debt management authority made by the Committee on Banking, Finance and Urban Affairs of the United States House of Representatives, and the French plan announced by President François Mitterrand. I propose that with this mandate the commission develop standards under which debtor countries nay qualify for debt relief or debt forgiveness; formulate alternative adjustment programmes that promote sustainable growth among nations accompanied by an expansion of their capacity to pay their debts; specify actions, such as the amending of bank laws, necessary for this growth; offer policy practices for industrial countries, newly industrializing economies, middle-income and low-income nations; identify precise interactions between debt, trade and growth which require multilateral response. I propose that this commission submit these measures to the United Nations for approval, proclamation and execution. The United Nations has been demonstrating an expanding genius for waging triumphant campaigns for disengagement - in Afghanistan, in the Middle East, even as it is now engaged in promising peaceful actions in Kampuchea, Western Sahara and Namibia. It is a tribute to this General Assembly, to the Security Council, to the Headquarters and agencies, to the Secretariat and perhaps above all to Javier Perez de Cuellar, that the United Nations has at last become validated in its avowed designation, not only as the forum, but indeed as the engine par excellence for peace. Yet what is this debt crisis but a monstrous threat to peace? Pope Paul VI once stood on this very podium and proclaimed that development is another word for peace. Debt, reasonable debt, even in the holy books, is sanctioned and is meant to develop man. But today the debt of nation to nation is not developing man. It is killing man. The killing must be stopped, and only the nations of the world together can stop it. Stop it now on end the dream of peace in our time. Stop it now or answer to the generation of tomorrow for decimating the human number s of the generation of today.