BUSINESS leaders across the Asia-Pacific Economic Cooperation (APEC) member countries have cobbled up a set of recommendations for achieving resilient and inclusive growth in the region which will be submitted to the APEC’s 21 economic leaders at their summit in Manila this week.
The APEC Business Advisory Council (ABAC) will present the recommendation report with this year’s theme of “Resilient Inclusive Growth: A Fair Deal for All” during the APEC Economic Leaders’ Meeting from November 18-19.
Doris Magsaysay Ho, ABAC chairperson 2015, said on Monday the recommendations this year will address the current challenges shared by both policy makers and business.
“We see them as two-fold. The first is generating new drivers of growth. The traditional drivers of growth are running out of steam. Export-led growth is no longer sufficient to drive economic prosperity. The major economies in the region are undergoing structural transformation toward domestic demand led growth,” she said.
“The second is that while millions have been lifted out of poverty as a result of the prosperity created by the integration of the APEC region, income inequality has been rising. At the same time, we faced challenges to the sustainability of growth with dwindling natural resources, the rising demand for food and energy and ever-present threat of natural disasters,” she added.
ABAC proposed a response to these challenges aimed at developing opportunities in new sectors of the economy, principally services, expanding the participation of micro, small and medium industries (MSMEs) in the global market, increasing productivity and sustainable use of resources through innovation, enhancing connectivity, strengthening financial markets and making economies resilient to shocks.
Particularly important is to encourage innovation through the development of the digital/ internet agenda and its ecosystem, she said.
“We have changed the conversation about services through the proper appreciation of its significant contribution to economic growth and in promoting inclusiveness,” Magsaysay Ho said.
Services account for 66 percent of the combined GDP of APEC and accounts for 52 percent of employment. They also account for an average of 40 percent of the value of physical goods with inputs ranging from design, fabrication, financing, logistics, retail, advertising, and after-sales service – all key activities that support the global value chain.
Magsaysay Ho explained that the key to unlocking the potential of services as an engine for growth lies in promoting its provision across borders, thus spurring efficiency and increasing availability.
“Most of the impediments to services trade are not at the border but beyond the border in the form of regulation. Until recently APEC has not paid much attention to these impediments,” she said.
Magsaysay Ho added: “We have supported the creation of an APEC Coalition of Services Organization to provide effective advocacy for the development of trade in services.”
MSMEs make up more than 97 percent of business and employ over 60 percent of the region’s workforce. Yet they account for less than 35 percent of exports.
“We have found through research and dialogue that the reasons for such low participation in exports include complex customs requirements, access to foreign markets and financing. Many of these impediments can be addressed by a robust cross border e-commerce infrastructure and e-payment systems and so we have urged governments to take action to create a supportive ecosystem as a major step towards empowering MSME’s to go international,” she added.
With the Philippines as host country of APEC, ABAC has also intensified and broadened the interaction between the public and private sectors in an effort to encourage the adoption of the right policies to address impediments to growth in vital sectors.
ABAC pursued reforms to strengthen financial markets through the Asia Pacific Financial Forum, the Asia-Pacific Infrastructure Partnership and the Asia Pacific Forum on Financial Inclusion and strong participation in the Finance Ministers Process which contributed in a significant way to the adoption of the Cebu Action Plan (CAP).
“We organized free flowing dialogue between CEOs and Ministers on trade, energy, and mining. We worked with APEC senior officials to organize dialogues on sustainable cities, on persons with disabilities, on the participation of women in the economy and preparing the youth for an economically integrated region,” Magsaysay Ho said.
She further said: “One of the major efforts next year to be spearheaded by Peru is in enhancing rule of law across economies. We recognize that an optimal business environment that fosters investments require open and transparent government, legal certainty, absence of corruption, regulatory enforcement, and order and security,” she explained.
“Our work through the years have been underpinned by our firm conviction that an open, predictable and transparent environment for the free flow of goods, services and investments is a necessary condition to generating new growth opportunities and in responding to this changing dynamics of the global economy,” she added.
Also, ABAC supports the meaningful steps towards the Free Trade Area of the Asia Pacific (FTAAP), she said. “We are working to bring the business perspective to bear on the APEC Collective Strategic Study as the first tangible step in the Beijing Roadmap to FTAAP. It will provide the right conditions for economies to generate jobs and sustain growth.”
The ultimate goal is to have FTAAP, and Magsaysay Ho said that completion of the Trans-Pacific Partnership (TPP) negotiations is also a significant step to build pathways to the FTAAP and encourage the Regional Comprehensive Economic Partnership (RCEP) negotiations to come to a successful conclusion soon.