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undergird America’s involvement are changing.


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 The Makati Business Club invites resource speakers to its
point where “several powers of varying size and General Membership Meetings and Roundtable Discussions
capability contend for primacy and influence and to discuss public issues and trends, whether local or global,
to maximize their individual interests,” to quote that have an impact on Philippine development. MBC Forum
Sreedhar Menon, India’s former national security highlights the speeches and discussions at these gatherings.

In short, the world order we are watching evolve well with our education and health care needs,
is better understood by those who recall the nor are we maintaining and modernizing our
Westphalian state system in Europe in the mid- infrastructure. These issues are hard to address,
17th century which gave birth to the concept of given our divisive politics.
a balance of power. That order gave primacy to
respect for sovereignty and pursuit of national Americans also face an economy, which while
interest. registering virtually unparalleled levels of growth,
job creation and prosperity, is nonetheless fragile
CHALLENGES IN US DOMESTIC AFFAIRS and on the edge of a downturn in its business
As regards to our domestic affairs, Americans cycle. In addition, we are entering a thirty or so
contend with a number of challenges – a deeply year transition to an artificial intelligence and
divisive Presidency; in the name of partisan information technology driven economy, away
advantage we face sustained attacks on core from one based on manufacturing, ordinary trade
democratic institutions, like the free press; our and agriculture. The changes we can foresee for
polity is sharply divided; we face a rise in populist our economy may be as great as those faced with
sentiment and an increase in acts of intolerance the arrival two centuries ago with the industrial
and violence. Furthermore, we are not coping revolution.

“The greatest America’s political economy is not producing

benefits for all. Inequality abounds. Wages

challenge the have been largely stagnant over the past several
decades while huge fortunes have been amassed.

United States faces The gap between Americans with great wealth
and those with modest means is greater than ever.

internationally That fact will influence the 2020 election.


The issues the US faces are to varying degrees

its relations with shared by others in the West. In addition,

Europeans are confronting their own unique

China.” challenges: Brexit and Gilets Jaunes to name a

Page 4 MBC FORUM 4-2018

“The best
In addition, we face a slowdown in the global
economy. The world has never experienced the

interests of 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 Philippines lie
economic wellbeing of key sections of western
societies stagnated with, as I noted, negative in maintaining
political consequences. We are in for a time of
slower growth and retrenchment. close, confident
relations with
The greatest challenge the United States faces
internationally is the conduct of its relations with

both of this
China. Managing the rise of China’s power is a
preoccupation that will endure for decades. In

region’s great
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 powers.”
that China’s rise posed no long term threat to
US interests or even to the global order in which recombining with the United States to assure
America played a leading role after World War balance while at the same time developing their
II. In fact, the belief was widespread that China own political and economic ties with China.
would become in time “more democratic” and a
strong participant in the rules-based, international China’s actions in the South China Sea, over the
system. Senkakus and at Doklam, make the region aware
of China’s tendency to overreach. They, like
But by 2018, that view had disappeared, replaced Americans, are also wary of China’s unwillingness
by the belief that the United States had entered to open its market or abide by recognized trade
into strategic competition with China. From the rules while at the same time pursuing China-
American point of view, the relationship with China centric advantages through One Belt One Road.
has become adversarial – an attitude shared by China’s preference for bilateral settlements of
America’s political, military and business leaders differences leads to bullying and because of its
and is widely reflected in the media and scholarly weight, gives China unfair advantage.
communities. In a word, America and China are
entering “unchartered waters” and the terms of “CLOSE NO DOORS”
our cooperation and competition remain to be The Philippines certainly shares the region’s
written. ambivalence toward the rise of Chinese power.
Your experience in the South China Seas is
While I do not subscribe to the theory of a indicative; but I suspect standing up to China and
Thucydides Trap (“It was the rise of Athens and putting at risk the economic advantages of Chinese
the fear that this instilled in Sparta that made war economic cooperation is a quandary.
inevitable.”), I recognize the road ahead is a rough,
adversarial one and will require great, navigational If there is one thing I have learned about the
skills. I do not have to remind you, the challenge Philippines is that you will define your own
is not only an American one. Nations as diverse interests. Moreover the Fil-Am relationship has
as Japan, India, Korea, Indonesia, Viet Nam and changed markedly and it has matured; there is no
Australia are moving to hedge against China, room in it for American insistence on “the right