Fidel V. Ramos is seen by many in his country and elsewhere as the best President the Philippines has ever had. He is considered as best performer not so much in comparison to the underwhelming performance of his immediate predecessor and to the non-performance of his immediate successor as in his own right.
On the political front, FVR made or tried to make peace with secessionists, rightists and leftists. He successfully forged a peace agreement with the Moro National Liberation Front (MNLF) to abandon its secessionist ambition and with military adventurers to desist from the series of coup attempts to remove the head of government, one of which was nearly successful. And he went as far as gaining a ceasefire agreement with the leftist National Democratic Front and its military arm, the New People’s Army, which had been engaged for decades in an armed struggle to seize political power. On the economic front, he levelled the playing field for doing business, including dismantling of well entrenched monopolies in public utilities. He travelled abroad frequently with businessmen, for which he was criticised by misguided observers, to attract much needed foreign investment, notwithstanding the myopic discrimination against foreign investors enshrined in the Philippine constitution.
Not surprisingly, there was a movement to amend the constitution to let him continue beyond his six-year term. But it was promptly quashed by his predecessor who hand-picked the people that wrote the constitution and by the eminent and irrepressible Jaime Cardinal Sin who flagrantly violated the principle of separation between the Church and the State.
Apart from nation building, FVR took a shot at sub-regional community building when he proposed expansion of cooperation between the southern border areas of the Philippines and their counterparts in Indonesia and Malaysia, along with Brunei Darussalam. He saw closer cross-border cooperation as one of the tools by which persistent secessionist sentiment in Muslim populated border areas fuelled by striking socio-economic disparities could be overcome. He probably drew inspiration from his diplomat father, Narciso Ramos, who was one of the five signatories of the 1967 Bangkok Declaration that established ASEAN. The three other ASEAN Leaders positively responded to FVR’s diplomatic initiative when the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) was launched on 24 March 1994 in Davao City, Philippines.
The main objective of BIMP-EAGA was to stimulate and accelerate economic growth and development of the provinces comprising the growth area (Kalimantan, Maluku, Sulawesi and Papua in Indonesia; Sabah, Sarawak and Labuan in Malaysia; and Mindanao and Palawan in the Philippines) through sub-regional cooperation among each other and with Brunei, one of the more advanced ASEAN Member Countries (AMCs) but with a very limited domestic market.
Recognising that the private sector is the primary actor and beneficiary of any economic cooperation initiative, particularly through trade and investment, BIMP-EAGA was deliberately designed to be led by the private sector, with the public sector performing an enabling, facilitating and supporting role.
Essentially, the strategy was to exploit the area’s natural resource endowments, with due regard to environmental sustainability, and to promote trade, investment and tourism, using sub-regional cooperation as the principal tool. The private sector would cooperate in identifying and seizing cross-border business opportunities, including identification of possibilities and making arrangements for business cooperation in the production value added chain. The public sector would in turn cooperate in removing barriers to trade and investment and coordinate the planning and implementation of the necessary physical infrastructure support.
Ten years after its launch, BIMP-EAGA has produced some concrete results. New and direct air and sea links between major urban centres have been opened thereby contributing to reduction of physical barriers to cross-border movement of goods and people. In addition, uniform user fees have been adopted in selected ports, travel and exit taxes have either been harmonised or removed altogether for travel within EAGA, and long distance calls within EAGA have been reduced by 20 percent, thereby encouraging and facilitating business and personal transactions within the sub-region. Indeed, these measures may have contributed to the observed increase in domestic and cross-border investments in hotel and other tourism-related facilities in the area. But there is no hard evidence yet to suggest that they have contributed to sub-regional integration in a way and to the extent that would enhance the economic competitiveness of BIMP-EAGA and its attractiveness as a private sector investment destination.
Interestingly, FVR’s initiative to establish BIMP-EAGA was taken in 1992 when ASEAN Economic Ministers agreed on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA). Ten years later, AFTA became a reality. As of 1 January 2002, tariff on all products had been reduced to 0-5 percent, except on those in an exclusion list for reasons of national safety and security.
In October 2003, ASEAN Leaders decided to deepen and broaden economic integration beyond AFTA when they declared the formation of the ASEAN Economic Community (AEC). A year later in November 2004, they adopted an action programme containing regional cooperation measures to realise the AEC by 2020. More importantly, they agreed to accelerate the process of regional economic integration in 11 priority sectors. By 2010, ASEAN is envisioned to function as a single market and production base in those sectors, including wood-based products, agro-based products, fisheries, air travel, and tourism, all of which are similarly targeted for priority development in BIMP-EAGA.
Among the measures agreed upon that cut across the 11 sectors was elimination of tariff on all products, except on those included in the usual negative list. For the 6 relatively more advance countries (ASEAN 6) including BIMP, the deadline for removing tariff is 2007. Elimination of tariff is to be accompanied by other measures relating to relaxation and eventual removal of non-tariff barriers to the free flow of goods and people – as consumers, producers or traders in the product market, and as skilled workers, investors or entrepreneurs in the factor market. These include transparent, predictable and standardized application of the ASEAN Rules of Origin to qualify for duty free importation, adoption and application of the WTO Agreement on Customs Valuation, and visa exemption for intra-ASEAN travel for ASEAN nationals. The deadline for these measures is even earlier – end 2004 for the first two and end 2005 for the third.
As a sub-regional cooperation scheme, BIMP-EAGA can be viewed as a sub-set of ASEAN. Consistent with that view, BIMP-EAGA initiatives to deepen sub-regional economic integration could be pursued within a broader ASEAN integration effort. Although the former is narrower than the latter in terms of geographic coverage and scope of cooperation, their long-term and fundamental goal, strategic objectives and tools are essentially the same. Both are aiming at faster, equitable and sustainable economic growth and development as a fundamental goal. And to realize it, both are promoting economic competitiveness through economic integration as strategic objectives, and sub-regional and regional cooperation, respectively, as the principal tool.
Indeed, there is a strong case for closer cooper
ation between the two inter-country initiatives to allow fast-tracking of ASEAN economic integration in BIMP-EAGA. One measure that could be fast-tracked in the 4 BIMP countries and show-cased for the benefit of the rest of ASEAN is the removal of tariff on all products in 5 priority sectors cited above. BIMP countries could consider advancing the removal of tariff on cross-border trade earlier than 2007.
Implementation of other ASEAN regional cooperation measures to facilitate trade could also be accelerated in EAGA. These include simplification and harmonisation of documents, formalities, procedures and practices related to customs clearance. For example, a common customs form, which is basic in any economic integration initiative, could be considered for immediate adoption in EAGA cross-border trade.
In addition to customs, special attention could also be given to immigration, quarantine and security with respect to cross-border trade. In the area of immigration, streamlining of rules and procedures in the issuance of working visa for BIMP nationals and closer cooperation between immigration authorities in their enforcement could be given special attention. This would obviate escalation of tension between BIMP countries as increasing number of workers move across borders within EAGA.
All of the above sub-regional cooperation measures could be duly reflected in the roadmap currently being prepared by the Facilitation Centre based in Kota Kinabalu, Malaysia “to chart the way forward” towards realising the objectives of BIMP-EAGA. It is being crafted even as “illegal” cross-border movement of workers has created tension in Malaysia’s relations with Indonesia and with the Philippines. The tension with respect to relations with Indonesia escalated recently because of territorial dispute over an island within EAGA in connection with the award of an oil reserve exploitation contract. These three BIMP countries cannot afford to let this tension erupt into an open conflict if the gains from decades of ASEAN cooperation are to be preserved.
Recent experience in handling the flow of migrant workers in the sub-region dictates closer and more effective cooperation between the originating and receiving country. Clearly, there is a signal emerging from the sub-regional market that provides incentives for workers (or alternatively jobs) to continue to move across borders. They do so in response to that signal and in line with the ASEAN vision of “one community, 10 nations”. They, just like their employers, are willing actors and beneficiaries of BIMP-EAGA and ASEAN integration. They should therefore be seen and treated as such and not as “illegal” victims.