H.E. Teofisto T. Guingona, Jr.
Vice President and Secretary of Foreign Affairs

at the
International Conference on Financing for Development

Monterrey, Mexico
March 21-22, 2002

"The Challenge of Poverty"

Señor Presidente; 

Distinguidos colegas: 

La República de Filipinas le felicita sinceramente por su elección. Somos ciertos que bajo su liderazgo, nuestra conferencia gozará un estupendo éxito. A la vez, la delegación Filipina agradece al pueblo y gobierno Mexicano por la calurosa bienvenida y los preparativos excelentes para nuestra reunión. 

Me quedo profundamente honrado por esta oportunidad de dirigir palabras, en nombre del gobierno Filipino, en esta conferencia, en la ciudad hermosísima de Monterrey, abrazada por las montañas y el ardor de su amable pueblo. Reconocemos la importancia de participar en el comienzo de un proceso muy importante para el desarrollo de nuestros pueblos.

Mr. President,

I am a Filipino. I come from the Philippines in Southeast Asia. Our land is rich, but our people are poor.

Our advance to relative progress was disrupted by the global financial crisis in July 1997. More than 30 million have fallen below the threshold of poverty. Many of them live without adequate food, clothing, and shelter. Many cannot finish grade school, and many of those who graduate often cannot find jobs.

We have a new government dedicated to alleviating poverty. We are pledged to shape our policies in line with the historic Millennium Resolve of the United Nations to eradicate poverty by the year 2015. 

We want development. We want technology in many vital sectors - in food, in medicine, in education. But it seems that technology is generated by rich nations and corporations to suit the demands of the market not the needs of the poor.

Multinationals invest in research. They come up with costly medicines. Their expenses are carried over to all products, making them more expensive. Cough medicines, antibiotics, pills for the heart, tuberculosis and immunization shots - are basic cures for the poor, which the poor want but cannot afford. Necessity compels them to borrow, in order to buy these medicines. In the process, the poor become poorer. And the development we desire is dampened.

We aim to modernize agriculture, especially because the bulk of our population still relies on rural enterprises. We want to empower our farmers - teach them how to raise high-value crops; how to increase yields thru biotechnology. However, the Asian Development Bank reports that bio-technical research is done by a handful of multinationals who cater to problems of rich farmers and developed consumers.

For example, bio-technological research has come up with crop varieties resistant to insect pests. But to be effective, the farms need surrounding buffers requiring space to raise crops that are not pest resistant. Not cheap. Not feasible to our poor farmers.

We want technology transfers. We want to use the Internet as a vehicle to educate our teachers, our students, our entrepreneurs. But brand computers are still costly. Software remains expensive. Licenses for exclusive operations are still binding for 20 years.

The commitments made to promote technology transfer to developing countries seem paper promises thus far, often negated by profits.

How then do we eradicate poverty, as envisioned by the United Nations Millennium Declaration?

We should seek a just and workable solution.

1.   A developing nation like ours is not seeking a dole-out. We want technology because it is vital to lift us from poverty. We will implement policies to make technology transfer from rich nations more convenient. We will build roads, communication channels, infrastructure needed to support a computer I.T. industry.

Advanced countries concentrate on high technology. They design electronics, computer, and other operating systems. Then they locate the assembly and manufacturing plants in a developing country with skilled and cheaper labor. The Filipino is a fast learner. He is a good factory worker, and adept technician, and able computer operator. He has the potential to create new software; service likes data warehousing; backroom operations to animate cartoons and programs; accounting systems for client firms abroad.

Thus, the transfer of technology and training to the Filipino may mean less expense for developed nations, but they mean a significant empowerment for us. They mean more jobs and more opportunities to lift people from the dregs of poverty.

Yet such progress may not suffice. Today, we do not have enough classrooms; we do not have enough books; we do not have enough teachers. Help us to leap beyond this hurdle. Sell us computers that we can afford - even if they are second hand. Sell us pertinent software that we can adjust. Then we can turn this dream into reality: computers that compensate for classrooms: that can span distances and teach pupils vital subjects like mathematics and science; complement vocations with skills and education that will empower them to face life.

Today, our farmers face a bleak future. No money; no training; no real knowledge on how to break off from traditional products like rice and corn. They can hardly survive. Help us to overcome this barrier. We need computers and pertinent software for them. Give them a fighting chance to overcome. Then we can turn dream into reality. I envision farmers in tattered clothes, grouping together beneath trees, in the Philippines, to watch lessons about a new product unfolding on a computer screen. The extension worker explains: chili. Asparagus. Other varieties instead of rice and corn. At cheaper cost! Generating more income! Competitive in the market!

Yes, even today, here are many coconut farmers who own two or three hectares of land. A few of them have had the courage to experiment on cash crops planted between trees and have been rewarded with success. They constitute the exception. But if we give them technology transfer on a massive scale, it will benefit them. It will benefit the consumers of developed nations. It will bridge the gap between the great divide.

2. On intellectual property rights, like patents for medicines, we ask that developed nations and multinationals consider different pricing for developing countries.

Many of the poor cannot afford them. The specter of a sick boy dying in a hovel because he cannot buy needed antibiotics is real. Since them main cost of pharmaceuticals is in research, not in production, then perhaps rich nations and corporations can make necessary adjustments. The fear of distorted trade is understandable, with lower-priced products finding their way to rich consumers, thereby defeating the objective of alleviating poverty.

But if rich nations and corporations sell to us at affordable prices - without fixed costs involved in product development - the Philippines pledges to implement laws that would prevent the exportation of products, with technological subsidy, to other markets other than our own. Examples of these are modern medicines to cure diseases such as diabetes, heart and neurological problems. They will help save lives, diminish the scourge of poverty.

In 1997 the Philippines was on the way to progress. But in July of that year, a severe financial crisis struck us. Our foreign debt swelled. It now totals $50 billion dollars -- depreciating the peso from p26 to p50 to the dollar; shriveling incomes; causing the discontinuance of development projects, layingoff people by companies.

Poverty has worsened. Before, the threshold of poverty affected only slightly over 30 percent of the population. Today, forty percent of Filipinos are poor.

Our national debt service is heavy: about P250 billion Pesos - equivalent to US$5 billion Dollars - a year. We have imposed austerity measures. However, we maintain good relations with our creditors. We pay our debts, no defaults; no delays; no write-offs.

In the wake of continuing crisis - we suggest to our valued creditors: give us a rational swap -- debt for technology transfer.

Instead of servicing the debts for the year, allow us to utilize the equivalent fund for technology transfer, for education, for social services. Give us the means to modernize our agriculture; to buy seedlings and grandparent stocks for high-yield corn; to grow better hogs and chicken; to set up laboratories to meet our phytosanitary requirements; to initiate programs like improved fisheries and low-cost housing.

Instead of paying 250 billion Pesos, or 5 billion US Dollars, allow us to help our farmers and fishermen and small entrepreneurs give meaning to life.

For example, part of our debt-service payments to certain banks can be channeled for the purchase of satellites or telecommunications equipment or computers or computer software. In return, these creditor banks will be given the business of sourcing suppliers; handling importation, export credits, and the insurance of these purchases.

Creditors can also consider debt for-shelter programs. A portion of debt-service payments can be directed to housing. There are many technologies for pre-fabricated materials - from the US, Europe, Japan, Canada. Some of plants can be brought to the Philippines. With proper adjustments, they could produce affordable housing units - in a matter of days or weeks.

In turn, creditor banks can be given the first opportunity to source the suppliers; to get the business for the housing materials, the supplies, the insurance, the freight, etc. If the banks are interested, they can have the right of first refusal to finance the purchase of these houses by the buyers. The risks can me minimized through guarantees from our housing guarantee corporation or take-outs from pension and housing loan (PAGIBIG) funds.

More importantly, debt service can be plowed back to agricultural research, to increase production. Private companies can be given incentives or start-up funds to develop high-yielding varieties, or new methods for growing fruits for export, or new, more efficient processes for extracting more by-products from coconut.

Today, I stand and plead for your support. When you transfer technology to us, you empower us. When you sell pharmaceuticals at affordable prices, you alleviate pain and save lives. When you swap debt for socialized housing and modernized agriculture and fisheries, you open the windows of opportunity.

And when you implement the 20/20 arrangements agreed upon in Copenhagen in 1995 and the official development aid of 0.7% of GNP for developing nations agreed upon in Rio de Janeiro in 1992, you truly help the people in developing countries.

Mr. President, honored colleagues, our people are poor not because they are destined to be poor, but because of deprived opportunities. We decry the plight of millions who cannot find jobs, the hundreds of thousands of tattered children who cannot finish school, the scores of farmers and fishermen who cannot make both ends meet. But open the windows of technology, and they will respond. Empower them with the means to improve their skills and they will use that power to grow new seeds and generate new jobs. Give us the instruments, and we lift from poverty more than thirty million people.

Just as a house divided cannot stand, so will a world divided break. Yet if we follow the mandate of the United Nations Millennium Resolution to eradicate poverty by 2015, we preserve the progress of the rich even as we elevate the poor - and prevent the tragedies that even now are tearing peoples and nations apart.

Give us those opportunities. Empower farmers. Educate our young. In turn, we pledge you - we will overcome!

Thank you Mr. President.

Statements at the Conference
Conference News