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.

The Jakarta Post - Magazine - - Contents -

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.

Bo­gor legacy

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.

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