Bill, thank you very much, and I particularly appreciate your reference to both Longfellow and to Joshua Chamberlain, who remains a hero to me and, I might add, to many in the Pentagon, for his leadership, his rhetorical skills, but also his courage and flexibility in a time of crisis, at a great moment of challenge to him when he was far outnumbered in the Battle of Gettysburg and his troops were completely out of ammunition. He had a choice to either order surrender or retreat, and instead he gave a signal to his troops to fix bayonets and charge. And they were so successful in absolutely astonishing the Confederate forces that it ended up in a rout and he became a hero of that Civil War. So thank you for reminding me about the tradition I have to try and carry out.
And Gary Tooker, members of the Council, distinguished guests. It's always something of an intimidating experience to look out into an audience and see the faces of experts that I am supposed to talk to about a subject that they know far more than I do about. I am mindful of my oldest son, who graduated many years ago from college, the same college I attended, Bowdoin College, and he reminded me of a story that took place in his senior year in college. There was one professor on campus, he happened to be a professor of religion. That's not really why he was the most popular professor. But he used to ask the same question each year on the final exam, and it was always: 'Discuss the wanderings of St. Paul.' And so the students loved him, because they knew they'd always get the same question, to which they would study the night before, and they would go in and get an A on the exam. Except in my son's senior year. He walked into the room with his classmates; they looked down at the exam; within ten seconds they all started to get the shakes, butterflies in the stomach, some got nauseous. They looked down and it said, instead of 'Discuss the wanderings of St. Paul,' it said, 'Discuss the meaning of Christ's Sermon on the Mount.' And within about three minutes, everybody had cleared out of the room. They threw their hands up in despair, except for one student who sat there, and he wrote and he wrote and he wrote for the full three hours of that examination. And finally, to the astonishment of his professor, he turned it in, he walked out, and the professor looked down at the exam, totally befuddled as to how this one student was so confident. And he looked down at the exam and it said, "To the experts I leave the meaning of Christ's Sermon on the Mount; as for me, I should like to discuss the wanderings of St. Paul." That's more or less how I feel today as I look out into this audience and see the expertise that is here.
I must tell you, for over 30 years the Pacific Basin Economic Council has distinguished itself both as a valued constant and a visionary catalyst. You have served as a constant force for sound and far-sighted economic policies that support growth to keep open those pipelines of investment and keep the trade flowing. And you've also served as a dynamic catalyst for future prosperity, lending a very powerful voice of expertise and experience to governments all the way from Santiago to Sidney to Seoul.
And just to glance through the list of attendees here today, and I understand some of you may have had some difficulty because of the fog in arriving, but to look out and to see this audience and to see the list of attendees, I think, only confirms that this year's meeting is going to perpetuate the fine tradition that has been established. Government officials, distinguished academics and business leaders, your collective presence is evidence of the close relationship between economics and security. Bill touched upon it very briefly - in fact as I listened to his brief introduction, I said, "There goes my speech," because he really synthesized the issues that are involved here, the reality and the relationship between economics and security. It's always been recognized, although not always articulated. But the notion of a Secretary of Defense speaking to an economic forum such as this, I think, at one time might have struck people as being rather improbable. But within the span of our lifetimes, millions of people the world over, especially the people of the Pacific Basin and Latin America, have experienced first-hand the integral link between freedom of democracy and the freedom of the markets; between security from instability and security for investment.
And so the title of this session could not have been more appropriate. Peace and stability are the very cornerstones of prosperity. And without them it's impossible to imagine the vast investments in productive capacity and supporting infrastructure, much of it across international borders, which has fueled the Pacific Basin's economic growth for several decades.
It is equally important to remember that stability is not merely stasis; it's not simply the status quo resistance to change, to progress. Real stability involves predictability -- predictability that borders are secure, that the threats do not emerge unexpectedly, that predictability involved in [that] conflicting interests are going to be resolved in a peaceful and reliable fashion. All of that really pertains to security.
And it's the combination of our military and diplomatic forces to create security in a region that leads to greater stability. There is an old expression: 'Business follows the flag,' that when you find there is an area that is stable, you are likely to attract investment, and if it's not stable, then investment will flee. So when you have investment you have the opportunity for prosperity, and if you have prosperity that too will strengthen democracy, which in turn reinforces stability and security. So what you have basically is what we call a virtuous circle of security and prosperity.
This journey to a brighter Asia-Pacific is important to all of us. Freedom for us means less confrontation, more cooperation -- military, political, diplomatic, economic. It means more security, more democracy and thus fewer threats to our collective interests in regional peace and stability. And it means a future where the Asia-Pacific region and the countries of Latin America reach a new century not through confrontation, but through cooperation.
These goals are easily definable and they are highly desirable, but the means of achieving them are less so. The Asia-Pacific region remains a concentration of powerful states with huge economies and sizable militaries, some of which are nuclear-armed. It's an area with numerous navigational choke points, sea lanes that are the economic arteries carrying the lifeblood of many, many economies.
And indeed, I think, the events of recent weeks are a stark reminder that instability in the Asia-Pacific area can send out ripples across this globe. And this audience needs no reminder that what happens in Indonesia touches the lives of those who live in Seattle or Santiago.
The American diplomat John Hay - he was at the beginning of the century Secretary of State - made an observation. He said that the Mediterranean is the ocean of the past, the Atlantic is the ocean of the present, and that the Pacific is the ocean of the future. That observation was made back in 1900, and so he was quite visionary for his time. And notwithstanding, as Bill mentioned just a moment ago, the current economic difficulties being experienced in the Pacific, it is still the ocean of the future. But the question we have is, How do we build a Pacific that is even more prosperous for all of our citizens? What are the cornerstones for a Pacific peace and stability?
First and foremost is America's engagement in the region. For half a century, America's military presence and engagement in the Asia-Pacific has helped to support that region's peace and stability. And one of my very first tasks as Secretary of Defense was to design a comprehensive review of our defense strategy and our military posture. It was something called the Quadrennial Defense Review. In Washington we simply call it the QDR. Congress - I was then a member of Congress - passed legislation saying to the Defense Department, "Examine thyself; conduct an examination of who you are and what your strategy is going to be for the future. The world is turning very, very rapidly, so tell us exactly what you have in mind." And I can sum up that rather lengthy document that took months and months to prepare in three simple words: shape, respond and prepare. Those are the three key elements of our strategy and our posture.
At the very center of a strategy of shaping, that means being forward-deployed. It means having roughly a hundred thousand of our forces out in the Asia-Pacific region. It means having roughly a hundred thousand of our forces throughout Europe, it means having forces in the Mediterranean, it means having forces in the Gulf if necessary. It means having a presence, and through that presence we send a signal. We send a signal to our allies that we are reliable; we send a signal to potential adversaries that we are formidable; but in each case we are sending signals that we are shaping the environment. And so we will continue to shape the environment [in] ways that are favorable to our interests and those of our allies. So that's a key element of our strategy: being engaged in world affairs, being forward-deployed, militarily, economically and certainly diplomatically. This did not come about through inertia. We explicitly rejected some proposals to shrink back. Some of my American friends in the audience might recall, back in 1972 one presidential candidate had as a theme, "Come home, America," and that was from the left. And now we have other presidential candidates of today from the right who are saying, "Come home, America; let's disengage, let's shrink down our forces, let's let Asia take care of Asian problems, let the Europeans take care of European problems, and we will come back to continental United States, a nice comfortable cocoon, and we can watch events unfold on CNN." That is not realistic. That is not responsible. We have to be engaged in world affairs, and if we are not engaged, if we retreat back to continental United States, the world doesn't walk away just because we walk away from the world. It tends to come back to us and present its problems in a much more magnified and nearly impossible fashion.
The second element of that strategy is responding. We have to be in a position, as far as our military posture is concerned, to respond to an entire spectrum of crises, all the way from something that might be a humanitarian mission, as when there was a typhoon that struck Vietnam [or] an earthquake that struck in China. We have to be flexible enough to deal with major regional conflicts, should one ever occur, let's say, in South Korea, on the Korean peninsula, or with Iraq, if Saddam Hussein should continue his efforts to try to either invade or intimidate his neighbors with the use of chemical or biological weapons. So we have to have that capability as well. And we have to have flexibility of conducting peacekeeping missions, such as in Bosnia, where we have soldiers who are working with personnel from the PBEC countries from Malaysia to Chile [and] Argentina.
So being able to respond in an uncertain world means having forces that can quickly descend and dominate any situation. So the third part of our strategy is that of preparation- how do we prepare for the future? So we are now working with our Pacific and hemispheric friends and allies to exploit what we call a revolution in military affairs. We are using the most advanced technologies to build the most advanced forces in history. If any one of you were to go out to Fort Irwin in California, you would see what we are doing. We are able to take technology that allows us to view a battle space and to communicate that directly to every soldier on the ground, so that we have total battle space awareness and dominance. We know where the adversary is; we know where every single person on that battlefield is. Those technologies are now being fully integrated into our forces. So we are having a revolution in military affairs. We are also having a revolution in business affairs, and that's where you come into play as well. We are trying to adopt many of the business practices to make ourselves more efficient.
So this policy of engagement of ours is the first cornerstone of the Pacific peace and security that is reflected by that engagement. And the second cornerstone is building what I would call strong bilateral relations. We have strong bilateral relations that are maintained not only with the United States and individual countries such as Korea and Japan, but relations that Korea has with Japan, Japan and China, Russia and Japan, Argentina and Brazil. Strong bilateral relations are also the second key component of peace and stability. And we've had to try to help our bilateral relations to adapt them to a new era and a new century, to make them more pro-active rather than reactive.
And we have to continue to ensure that these relationships don't stand against anyone, but they are for shared objectives such as trust and transparency, confidence and cooperation. These are the basis for the region's peace and prosperity. And so this transparency between our military institutions is no less important than between financial institutions. It makes for a more reliable security which benefits all of our countries. And that is true throughout Latin America and all the nations across the Pacific Rim.
Let me give me you a couple of quick examples. We have the so-called revised U.S.-Japan guidelines. They will ensure that we are prepared for challenges all the way from peacekeeping and humanitarian relief to responding to crises that affect Japan's security and the region's stability. We have the U.S. and South Korean alliance that's always on guard against any kind of an imminent danger. And for five decades that has been the case, and it will remain the case in the future. After the issue of reunification or unification is finally resolved, we intend to have a presence there. That is something that the South Korean president has articulated, as has President Clinton. We have revitalized our alliance with Australia, really focusing on common regional security challenges, and we are pursuing new areas of cooperation with them. In Southeast Asia, we have strong relations with all of the ASEAN countries. I was there in January making a tour of all the ASEAN countries and to send a very special message, and that is there are some serious economic troubles confronting the ASEAN countries today. I wanted to go there to say to them that we are with you and supportive of you in good times and also in bad times. We are a reliable ally for the region. And in Latin America let me say that we have turned a new page in the history of inter-American relations, where many of our countries and our soldiers are training together, they are exercising together, they are learning from each other through these military exchanges.
And a third cornerstone of the Pacific peace and stability is the overlapping network of what I would call multilateral channels in which the United States is also engaged. And that is the so-called ASEAN Regional Forum, as well as the conferences we have on practical security cooperation and specific types of groups that will address identifiable problems such as the Four-Party Talks on the Korean Peninsula. And I would include the Defense Ministerials of the Americas in that category, and I'm looking forward to our session in Colombia in December.
The United States views these multilateral mechanisms as being very, very important. But they can only succeed if the foundation for strong bilateral relations and U.S. engagement really continue to flourish. They cannot be a substitute for either one. Given the high stakes involved, the security structures, no less than financial structures, have to be built on solid foundation and not on shifting sands.
And it's [these] cornerstones - our engagement, the bilateral relations, the multilateral channels - these are going to help us endure the gale force winds of change in the region. And among perhaps the greatest of these changes is the emergence of China. Today, China is an Asian power - and let me say, rightfully so. The United States does not fear this, nor do we view China as an adversary. Rather we seek to encourage China to step forward as a responsible and cooperative international nation. And that's why we have engaged China. We've already taken a number of steps in the security realm to increase our mutual confidence and to decrease miscalculation. We are exchanging military personnel. We are conducting reciprocal ship visits. We've agreed to share information on humanitarian exercises.
Last year the summit between Presidents Clinton and Jiang Zemin, I think, gave great hope to our two nations that we can deepen our engagement. We can work together toward common goals of stability and security and prosperity. And I would say, since that visit of President Jiang Zemin, I've had an opportunity to visit China in my current capacity. I became the first Western official ever allowed into their Air Command Control Center in Beijing. I also had the privilege of addressing their future military leadership at their Academy of Military Sciences. President Clinton, as you all know, has an upcoming visit to China, and I believe that holds out even greater possibility of more progress. So we seek a partnership where China adheres to the international norms, including a peaceful resolution of disputes, the control of weapons of mass destruction and freedom of the seas -- a partnership that recognizes the common interests that we all have and that we share.
We are also fortunate, I might add, that as the Pacific Rim weathers these changes, it's bolstered by a responsible, forward-looking nation such as our host Chile. Chile has strengthened democratic control over its armed forces. It's recognized that the military indeed has a role in preserving peace and stability, but it's a role under the rule of law. And Chile has been a trailblazer -- setting the standard for openness and trust as the first nation in Latin America to publish a Defense White Paper that outlines its military strategy, its budget and its policies.
Today, Chile and all of the democratic nations of Latin America are demonstrating their commitment to a prosperous, peaceful future by increasing our ties in trade and consultation. Indeed, when the leaders of this hemisphere came together last month to address common challenges, they came to Santiago for the second Summit of the Americas. And so our increased ties to security extend throughout the region. We are looking forward to infusing the spirit of Santiago into the third Defense Ministerial in Colombia.
The seeds planted at the first two ministerials, I think, are already bearing very ripe fruit. There is a widespread recognition of a fundamental truth: that democracy is the cornerstone to building regional peace and security. That professional military forces, under civilian control and respectful of human rights, are essential to preserving democracy. And so today, instead of disunity, distrust and discord, we are also seeing growing integration and harmony of interests; working together, we have helped bring Peru and Ecuador to within reach of a lasting peace. Where the United States once saw security problems, we now see security partners; Argentina and Chile have resolved most of their long-standing border disputes. Where we once saw secrecy and surprise, we see more openness and honesty. In short, over the entire spectrum of fields from economics to security, the nations of Latin America are building a hemisphere of hope and of a free people with free reign to change and to choose a better destiny.
But as Simon Bolivar, who brought freedom to so many peoples of this continent, once said, "Let us not be dazzled by the victories that fate has given us. Nothing is accomplished when there is something left to do. And we still have much to do."
And I would say indeed, from Chile to China, the Pacific is a sea of change and that we have much to do. We have to anticipate and to manage this change by relying on those very cornerstones I mentioned just a moment ago. We have faith in the future of the Pacific Basin, notwithstanding the present difficulties. The energy, the creativity, the discipline of the peoples of the region continue undiminished. And with this continued self-confidence in these strengths, a determination to pursue the economically-sound path that we are on, I think the nations of the Asia-Pacific region can emerge from this crucible of current crisis fundamentally stronger.
And finally, I think we have to acknowledge that the dazzling future we seek for the Pacific Basin will not fall fortuitously into our laps. But through hard work and heavy lifting, we can and will build a Pacific future as great as the ocean that links our shores and the waves that reverberate well beyond. From Vancouver to Vietnam, from Lima to Kuala Lumpur, and from Mexico to Manila. Because in this new era and this new century, [the] security and prosperity of the Asia-Pacific region is central to the security and prosperity of the world.
Thank you very much.