The regional grouping is forging ahead with implementation of enhanced regional cooperation.
Resilience is the appropriate theme for this year’s APEC gathering in Bali.
While much progress has been made by Asia-Pacific Economic Cooperation (APEC) member economies in preliminary meetings, with participants airing views and proposed actions, further discussions on issues related to specific sectors are expected to be progressed into tangible actions.
There will be more than 5,000 economic leaders and CEOs from the region among the 10,000 delegates, leaders with their aides and the media reporters. They plan to participate in the APEC Economic Leaders Meeting (AELM) and Related Meetings from October 2-8, 2013. Their outstanding issues related to specific sector will receive adequate discussion and concrete agreements.
“They will hear firsthand and deliberate with decision makers who shape the future of Asia the Pacific, building on recommendations from their previous meetings,” said Director General of Information and Public Communication at the Communication and Information Ministry Freddy H. Tulung.
This year’s APEC Summit commences with Senior Officials Meeting on Oct.1 and 2, followed by the Ministerial Meeting on Oct. 4 and 5, the CEO Summit on Oct. 6 and 7 and concludes with the AELM on Oct. 7 and 8. It will prioritize attaining the Bogor Goals, achieving sustainable growth with equity, promoting connectivity in the region.
As a host of economy of this year’s APEC, Indonesia carries the theme, “Resilient Asia-Pacific: Engine of Global Growth.”
Despite the global economic slowdown, with European nations particularly hard hit, most AsiaPacific economies remain resilient economically. The theme is highly relevant, Freddy said, “in the context of how to build economic resilience that utilizes the regional strength of Asia-Pacific, the results of which are expected to become the engine of global growth”.
He underlined the strategic nature of the APEC forum, saying that
APEC economies account for 40 percent or 2.7 billion of the world’s population of 7 billion; second, 44 percent of the global trade contributed by 21 APEC economies and third, 55 percent of global GDP is enjoyed by APEC’s 21 members, with Purchasing Power Parity (PPP) standing at 3.5 percent per year, compared to the average global PPP of 2.7 percent per year. APEC recorded PPP of US$17.7 trillion in 1989 and increased to $35.8 trillion, higher compared to the PPP recorded by non-APEC members.
“This is the main capital of the cooperation among APEC economies. This is one of the APEC strengths. Therefore, as a host Indonesia is eager to take advantage of APEC as substantially as possible to lift up our domestic economy and play a greater role in the global economic development,” he said.
Established in 1989, APEC is composed of developed and developing countries, with the Bogor Goals issued in 1994 during its summit continuing to bear a strong influence. The Bogor Goals are aimed at creating a regional economic integration.
The Bogor Goals will be carried out through continued efforts to create deeper economy integration by first, strengthening multilateral trading system; second, trade and investment liberalization and facilitation and third, capacity building. In the context of today, economies of APEC are different in terms of level of economy and in facing global crisis. “Therefore, focus is given to economic empowerment, engagement of stakeholders and utilization of untapped potentials,” he said.
APEC economies recognize that their backbone is small-and - medium scale enterprises (SMEs), accounting for 90 percent of overall business entities in the 21 APEC economies and provides millions of jobs: equivalent to at least 60 percent of the total workforce in the region. Currently, however, they produce only about 30 percent of the global exports.
APEC has tasked its specific working group with promoting the development of the SMEs and strengthening the capabilities to integrate into global trade. “It is obvious that APEC not only will raise the issue of multi-national cooperation but, what is more important, because of the dominant role of SMEs (in economic development) in most of the APEC member countries, SMEs will be discussed in the upcoming APEC SMEs Ministerial Meeting in Bali,” he said.
“It is important to discuss how to raise the role of SMEs as part of the global competitiveness through innovation and enhance the role of women as one of the main economic components in the context of empowering economic community and ensuring financial inclusion, strengthening food security, and improving health services.”
The SME issue was discussed in the APEC-CTI Workshop on Attaining the Bogor Goals that Ensure Equitable Benefits of Liberalization” in Medan, North Sumatra, in June 2013.
Eduardo Pedrosa of the PECC, for instance, who delved into economy - level findings of recent survey, concluded that global value chain presents opportunities especially for SMEs, but “there are barriers to their engagement, that is, lack of connectivity and knowledge, and disproportionate impact of red-tape on SMEs”.
Other speakers highlighted the importance of connectivity for SMEs, saying that basic physical infrastructures are needed by SMEs in order to join global value chain connectivity, and recognizing there are infrastructure gaps between and within economies.
Recommendations were made for a better general investment environment and public private participation to overcome the problem.
Health and wealth
Regarding health services, APEC member countries are endeavoring to raise the issue of herbal products and traditional medicines as one of the primary components that must be agreed upon in the upcoming leaders meeting.
Research data issued by an informal meeting on a strategic planning on traditional medicines showed that the consumption of traditional medicines in the AsiaPacific region is on an increasing trend. Traditional medicine consumption in Australia reaches 48 percent, China (90 percent), Hong Kong (60 percent), Japan (49 percent), Korea (69 percent), Philippines (57.3 percent), Singapore (45 percent), Vietnam (50 percent).
“The consumption of traditional medicines has shown an increasing trend in Indonesia. It has reached 50 percent over the last 15 years. Therefore, we think that traditional medicines is one of the significant issues to be discussed related to SMEs,” Freddy said.
In the context of Indonesia, less than 10 percent of the Indonesian population has access to banking. Financial inclusion is imperative for SMEs.
“At the regional level, banking remains elite. Access to banking, for instance, in the form of loans, bank account stands only between 10 and 20 percent, and consequently, because they do not have a bank account and more access to banking products, they are considered not bankable,” he said.
According to data at Cooperatives and Small and Medium Enterprises Ministry, there were a total of 55.2 million SMEs as of June 2013, representing nearly the entire business units in Indonesia. The SMEs employed up to 101.72 million workers, or 97.3 percent of the country’s labor force. SMEs also contributed 57.12 percent of GDP, amounting to Rp 8.2 trillion.
However, the majority of SMEs fall under the informal sector, with only 10 to 20 percent of them considered financially capable.
Other developing issues to be brought to the APEC forum for discussion include financial inclusion, women and economy, and risk disaster management.
Despite their dominant role in home industry and service sector, women and their economic potential have yet to be utilized maximally. It is why women and their role in the economy is an essential issue to discuss. Participants of the women and economy summit on Sept. 7, 2013, will not only be state leaders and businesspeople but also NGOs.
While, a planned discussion on risk disaster reduction is oriented toward cooperation in the context of sharing experience in tackling disaster, capacity building, skills and facilities because most APEC economies are located in natural disaster-prone regions.
A wide range of equally important issues will be discussed at the upcoming AELM but when it comes to APEC’s endeavors to achieve regional economic integration, developing SMEs will stand out as a priority.