APEC to focus on longer-term growth

(Agencies)
Updated: 2009-11-04 20:05

With the world at last pulling out of recession, the 21 economies of the Asia-Pacific Economic Cooperation (APEC) can finally stop firefighting and make plans for the future.

So when APEC leaders meet in Singapore next week, they will not be discussing emergency measures like stimulus spending and getting banks to lend to trading companies.

Rather, they will be talking about how the grouping - which includes economic powerhouses like the United States, China, Japan and Russia - can better integrate their markets and boost economic growth for all.

Such longer-term issues will top the agenda when Singapore hosts the leaders' summit for the first time in APEC's 20-year history, said Prime Minister Lee Hsien Loong at a media briefing at the Istana Tuesday (November 3).

In fact, the theme of next week's meeting - "sustaining growth, connecting the region" - was carefully chosen, he added.

Although APEC economies want to go for growth, they need to make sure that this growth is balanced, inclusive and sustainable, said Lee.

Balanced growth involves tackling the world's trade imbalances - especially those between the US and China, viewed as a key contributing factor to the financial crisis.

Prosperity that comes from economic growth must also be inclusive and benefit as many people as possible - not just a minority of the lucky and rich, he added.

Otherwise, when individuals lose their jobs and blame globalisation, there will be rising pressure to erect trade barriers.

And although APEC is primarily an economic forum, it must discuss sustainable growth - for example, how to promote energy efficiency and reduce barriers to trade in environmental goods and services - ahead of the Copenhagen climate change summit next month, said Lee.

Commenting on this, APEC observers said the focus on longer-term issues was timely.

While it will take 10 years or so to rebalance the growth model, the first steps must be taken now, said Nanyang Technological University associate professor Tan Khee Giap, chair of the Singapore National Committee for the Pacific Economic Cooperation Council.

Turning to the issue of economic integration, Lee said the Singapore meetings will reopen dialogue on advancing free trade and opening markets in the Asia-Pacific region.

There will be discussions on how to improve transport and logistics connectivity, for example, and changing rules to make it easier to do cross-border business.

APEC will also discuss its long-term goal of a Free Trade Area of the Asia Pacific, which will consolidate and simplify the many free trade agreements (FTAs) different members have signed among themselves.

In addition, APEC will also do its best to set the groundwork for restarting the so-called Doha Round of World Trade Organisation (WTO) negotiations.

The Doha talks are aimed at breaking down trade barriers not just in the Asia Pacific but also worldwide, but they have stalled time and again over the past eight years.

"Without the momentum of Doha or without the impetus of Doha, the pressure and the temptation to do protectionist things becomes harder to resist," said Lee.

"We hope we can make some pronouncement to encourage movements towards a settlement."

Lee also touched upon the importance of American relations with Asia, saying the US played an indispensable role in the region's economy, politics, strategy and security.

"People talk about a multipolar world, but de facto the US is the most powerful nation in the world and will be so in time to come," he said.

This was one of the reasons why APEC, which straddles both sides of the Pacific and engages the US in Asian affairs, is an important forum, he added.

US President Barack Obama is due to co-chair the inaugural US-Asean summit, to be held in Singapore on November 15 immediately after the Apec meetings.

This will mark the first time a US leader has met all 10 of his Asean counterparts, in one room, said PM Lee.