ASIA
26 November 2015
APEC needs to boost inclusive growth
When Asia-Pacific Leaders gather in Manila for the annual summit, they should focus their discussions on ways to ensure that more people are part of the growth of the region, according to PECC.
According to the Pacific Economic Cooperation Council’s annual State of the Region report, the report the region will grow at 3.2 percent this year, the slowest rate since the Global Financial Crisis of 2008-2009. Almost 40 percent of respondents to PECC’s annual survey expected weaker growth for the global economy over the next 12 months, citing a slowdown in the Chinese economy; failure to implement structural reforms; a lack of political leadership; a slowdown in the US economy; and a lack of adequate infrastructure as the top risks to growth.
‘APEC’s agenda has moved on from a focus on trade liberalization to addressing a broader set of issues since the Philippines last hosted the meetings in 1996,” said Mr. Eduardo Pedrosa, coordinator of the Report and Secretary General of PECC. ‘While continuing with the implementation of the vision APEC set out when it started, there needs to be a much greater focus on ensuring that future growth is more inclusive. The top areas identified by our survey for promoting inclusive growth were: provision of public education; reducing corruption; providing support to micro, small, and medium enterprises (MSMEs); quality of health services; and social safety nets including healthcare, unemployment and pensions reforms,’ he said.
'These priorities for inclusive growth were reflected in the issues that stakeholders in the AsiaPacific cooperation identified as the top priorities for Leaders’ discussion: Progress towards the Bogor Goals and the Free Trade Area of the Asia-Pacific (FTAAP); The APEC Growth Strategy; SME participation in regional and global markets; Corruption; and Climate change cooperation and disaster resilience. ‘APEC set out a bold goal for achieving free and open trade and investment in the region 21 years ago. Since then the idea of a Free Trade Area of the Asia-Pacific has become a long-term vision for the region,’ said Ambassador Tang Guoqiang, Co-chair of PECC.
‘The conclusion of the negotiations for the Trans-Pacific Partnership (TPP) has completed one part of the jigsaw puzzle of a more deeply integrated region,’ said Ambassador Don Campbell, Co-chair of PECC. ‘The challenge now is how to bring all of the region’s economies into a single trade system.’ While the TPP, if ratified, would generate an additional US$225 billion to the world economy by 2025, and the Regional Comprehensive Economic Partnership (RCEP) is estimated to generate US$645 billion, the FTAAP would add about US$2.5 trillion.
At the same time, there are a number of initiatives under way such as the Asian Infrastructure Investment Bank (AIIB) to help provide additional funding for infrastructure to boost growth. However, even these are not enough to account for the drop in income growth that has occurred since the Global Financial Crisis. ‘Over the course of APEC’s history, almost 300 million people have been lifted out of poverty, but there are still many more that are currently excluded from the growth story. In such a big grouping the priorities for reform will always diverge depending on the circumstances of each individual economy,’ said Eduardo Pedrosa.
The top issues identified by PECC’s survey panel were: Education and labor; Innovation and entrepreneurship; Infrastructure; Regulation; and Financial sector policies. The Report highlighted a number of education and labor market challenges faced by economies in the region including the relative preponderance of jobs in the informal sector. The survey showed low levels of satisfaction across the region with the match between educational training and needs in the economy; cooperation between education providers and employers; and wage and working hour flexibility.
The Report argued that structural reforms that foster entrepreneurship can create formal sector jobs for members of vulnerable groups, because young firms create a disproportionately large number of jobs. Combining wage and working hour flexibility with improved social insurance coverage for laid-off permanent workers is one way to bring members of disadvantaged groups from informal to formal sector employment.
Despite their progress in the past few decades, human capital policy priorities remain focused on strengthening children’s access to basic education. Areas where there are still large gains to be made, include improving physical access to schooling, school affordability including provision of free secondary school education, and higher quality teaching and teacher training.
‘APEC’s membership of economies at different levels of development and different systems gives it a unique advantage in being able to provide a diverse range of experiences in dealing with problems. Far from having a one-size-fits-all approach, APEC enables economies to discuss issues and problems and set goals together as a community without a single prescription of how to get there,’ said Tony Basilio, Chair of the Philippines PECC committee.
‘They are able to effectively share experiences on what has worked under different circumstances,’ he added. ‘While the regional economy has remained resilient after the Global Financial Crisis, it has come mainly through extraordinary stimulus. The region needs to shift gears and begin implementing structural reforms if it is to continue the success it has had in reducing poverty and promoting growth,’ said Mr. Pedrosa. ‘As APEC continues on its path towards regional economic integration, it needs to implement reforms that provides opportunities for all sectors of society,’ he concluded.
Director of Public Affairs,
PECC International Secretariat,
Singapore
E. This email address is being protected from spambots. You need JavaScript enabled to view it.
T. +65 6737 9822/3
‘APEC’s agenda has moved on from a focus on trade liberalization to addressing a broader set of issues since the Philippines last hosted the meetings in 1996,” said Mr. Eduardo Pedrosa, coordinator of the Report and Secretary General of PECC. ‘While continuing with the implementation of the vision APEC set out when it started, there needs to be a much greater focus on ensuring that future growth is more inclusive. The top areas identified by our survey for promoting inclusive growth were: provision of public education; reducing corruption; providing support to micro, small, and medium enterprises (MSMEs); quality of health services; and social safety nets including healthcare, unemployment and pensions reforms,’ he said.
'These priorities for inclusive growth were reflected in the issues that stakeholders in the AsiaPacific cooperation identified as the top priorities for Leaders’ discussion: Progress towards the Bogor Goals and the Free Trade Area of the Asia-Pacific (FTAAP); The APEC Growth Strategy; SME participation in regional and global markets; Corruption; and Climate change cooperation and disaster resilience. ‘APEC set out a bold goal for achieving free and open trade and investment in the region 21 years ago. Since then the idea of a Free Trade Area of the Asia-Pacific has become a long-term vision for the region,’ said Ambassador Tang Guoqiang, Co-chair of PECC.
‘The conclusion of the negotiations for the Trans-Pacific Partnership (TPP) has completed one part of the jigsaw puzzle of a more deeply integrated region,’ said Ambassador Don Campbell, Co-chair of PECC. ‘The challenge now is how to bring all of the region’s economies into a single trade system.’ While the TPP, if ratified, would generate an additional US$225 billion to the world economy by 2025, and the Regional Comprehensive Economic Partnership (RCEP) is estimated to generate US$645 billion, the FTAAP would add about US$2.5 trillion.
At the same time, there are a number of initiatives under way such as the Asian Infrastructure Investment Bank (AIIB) to help provide additional funding for infrastructure to boost growth. However, even these are not enough to account for the drop in income growth that has occurred since the Global Financial Crisis. ‘Over the course of APEC’s history, almost 300 million people have been lifted out of poverty, but there are still many more that are currently excluded from the growth story. In such a big grouping the priorities for reform will always diverge depending on the circumstances of each individual economy,’ said Eduardo Pedrosa.
The top issues identified by PECC’s survey panel were: Education and labor; Innovation and entrepreneurship; Infrastructure; Regulation; and Financial sector policies. The Report highlighted a number of education and labor market challenges faced by economies in the region including the relative preponderance of jobs in the informal sector. The survey showed low levels of satisfaction across the region with the match between educational training and needs in the economy; cooperation between education providers and employers; and wage and working hour flexibility.
The Report argued that structural reforms that foster entrepreneurship can create formal sector jobs for members of vulnerable groups, because young firms create a disproportionately large number of jobs. Combining wage and working hour flexibility with improved social insurance coverage for laid-off permanent workers is one way to bring members of disadvantaged groups from informal to formal sector employment.
Despite their progress in the past few decades, human capital policy priorities remain focused on strengthening children’s access to basic education. Areas where there are still large gains to be made, include improving physical access to schooling, school affordability including provision of free secondary school education, and higher quality teaching and teacher training.
‘APEC’s membership of economies at different levels of development and different systems gives it a unique advantage in being able to provide a diverse range of experiences in dealing with problems. Far from having a one-size-fits-all approach, APEC enables economies to discuss issues and problems and set goals together as a community without a single prescription of how to get there,’ said Tony Basilio, Chair of the Philippines PECC committee.
‘They are able to effectively share experiences on what has worked under different circumstances,’ he added. ‘While the regional economy has remained resilient after the Global Financial Crisis, it has come mainly through extraordinary stimulus. The region needs to shift gears and begin implementing structural reforms if it is to continue the success it has had in reducing poverty and promoting growth,’ said Mr. Pedrosa. ‘As APEC continues on its path towards regional economic integration, it needs to implement reforms that provides opportunities for all sectors of society,’ he concluded.
For media enquiries:
Jessica Yom,Director of Public Affairs,
PECC International Secretariat,
Singapore
E. This email address is being protected from spambots. You need JavaScript enabled to view it.
T. +65 6737 9822/3