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APEC needs to find new engines of growth

SINGAPORE, Feb 27 (Bernama) -- The Asia-Pacific region continues to face an uncertain economic environment with major economies undertaking stimulus measures to bolster growth.

This environment points to an urgent need for the region to find new engines of growth and these should ensure that people benefit from the integration process.

Jusuf Wanandi, Co-chair of the Pacific Economic Cooperation Council (PECC) said, "The region has benefited from the integration process but we need to move beyond this to ensure sustainable and inclusive growth, as we transition into the next phase of the region's development."

In his keynote speech at the recent PECC conference , Hatta Rajasa, the Coordinating Minister for Economic Affairs of Indonesia said the economic crisis was not yet over.

"There is much that needs to be done to put the global economy on a sustainable growth path and create opportunities for the persistent high level of unemployment in several advanced economies," he added.

Professor Zhang Yunling, Director of International Studies at the Chinese Academy of Social Sciences, meanwhile, said there is a need to renew focus on the importance of capacity building, not as a second thought but as an integral component of all initiatives to ensure that economic growth is more equitable and inclusive.

"Capacity building should be looked at not just in terms of providing technology transfer from the more advanced to the less developed, but also in terms of fostering a sense of shared future and strengthening cooperation in various areas," he added.

Singapore Minister for Trade and Industry, Lim Hng Kiang emphasised that improvements in cross-border flow of capital, goods, and people will make it easier for economies to adapt to changing patterns of comparative advantage, and allow for technology transfers across borders.

He said economies will therefore be able to compete globally, with their companies adapting and moving up production value chains more quickly.

While Asia-Pacific cooperation processes have focused on trade integration, there is an urgent need to strengthen the financial cooperation pillar.

With Asian economies have been left relatively unscathed from the effects of banking crises in Europe and the United States, there are short and long term challenges.

The first is that the deleveraging process in the banking sector in Europe means that there is a risk that bank lending could be curtailed, especially in developing Asia.

Over the longer term, the regional financial system is in urgent need of upgrading to ensure the savings of the region are used for more productive processes.

The development of the financial sector is critical to ensuring that future growth is more sustainable and equitable. One example of this is that the region needs to invest over US$750 billion a year in infrastructure to bring the benefits of integration to more people.

Given limited government budgets, private sector funding needs to be leveraged.

To do so requires substantial cooperation among various stakeholders in the project, including local governments, consumers, service providers as well as multilateral institutions.

"While times are difficult, we must not lose sight of the opportunity to improve domestic and cross-border connectivity," said Dr Masahiro Kawai, President of the Asian Development Bank Institute (ADBI).

He said public-private sector partnership is the way to go.

Co-Chair of PECC, Ambassador Don Campbell said export-oriented trade liberalisation is not an end in itself but a means and process.

"We recognise that there are many ways in which governments can make a difference to ultimately enhancing the quality of living and equitably distributing the benefits among the people and economies.

"APEC can facilitate this aim and provide a fresh impetus by going beyond the Bogor goals which were set back in 1994 when circumstances were very different," he added.

About 250 regional thought-leaders from the government, research and business sectors gathered in Singapore from Feb 22-23 for the PECC conference themed,"Asia-Pacific Economic Integration and Connectivity: Pathways for Resilient and Inclusive Growth."

The event was co-organised by SINCPEC (Singapore Committee for PECC) and INCPEC (Indonesian Committee for PECC).

"The purpose of the event is to provide a unique opportunity to hear policy recommendations from regional opinion-leaders on what it can do to improve resilience, and be an engine for growth, as Indonesia hosts APEC 2013 culminating in the Leaders' Meeting in Bali in November," said Associate Professor Tan Khee Giap, Chair of SINCPEC.

 

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