United for inclusive growth
THERE ARE PRODUCTS THAT WERE NOT EASILY AVAILABLE TO THE PREVIOUS GENERATION – just a few decades ago – that can be readily purchased in local grocery stores, even in sari-sari stores, nowadays.
And this, according to Department of Foreign Affairs Undersecretary Laura del Rosario, is primarily because of the Asia-Pacific Economic Forum (APEC). “There is a big difference,” she tells STARweek. “Even our products, you did not see them easily before (in other countries). But now you see them all over.”
Founded in 1989, APEC is a multilateral international organization that seeks to foster free trade and economic prosperity among its member-economies in the Asia-Pacific region.
The group is currently composed of 21 members, including the three largest economies in the world based on the nominal gross domestic product as determined by the International Monetary Fund and the World Bank: the United States, China and Japan.
Since December last year, the Philippines has hosted more than 150 meetings of representatives from APEC member-economies, including several high-level dialogues among sectoral ministers, in different locations across the country.
The country’s year-long hosting will conclude with the two-day Economic Leaders’ Meeting, from Nov. 18 to 19, which will be attended by the highest officials of the APEC member-economies.
Del Rosario – who chairs the senior officials’ meeting of APEC 2015 – highlights some the benefits that the country has reaped as a member of the organization.
“Most of the lowering of tariffs came from APEC economies,” she says. “Another is the information technology agreement. If not for that, we will not have a thriving business process outsourcing industry.”
Department of Trade and Industry Undersecretary Adrian Cristobal notes that in 1989, when the APEC was founded, the average trade barriers in the region was at 16.9 percent. In 2010, it had dropped to 5.8 percent.
“You had the cost of trading significantly reduced across member-economies. So what does that mean, at least for us, for the Philippines? Why is APEC important?” he asks, echoing common questions among the general public, partic-
ularly those who may not appreciate the complexities of economics.
“In 2014, our total exports to the world were $62 billion worth of goods. That’s how much we sold. And 85 percent of that were exported to APEC members,” he explains. Since the organization’s founding, the cost of merchandise trade among member-economies grew from $1.7 trillion in 1989 to $9.9 trillion in 2012.The total trade in terms of goods and services had also increased from $3.1 trillion in 1989 to $16.8 trillion in 2010.
“You can imagine the millions of jobs that depend on trade on APEC members,” notes Cristobal.
Experts agree that it is difficult to explain to the general public the benefits of being part of an organization such as APEC as it is primarily focused on trade and economics.
But government officials and business leaders maintain that the action plans and agreements that have been established between membereconomies – particularly the different free trade agreements – benefit all stakeholders.
“We have always believed in APEC as a pathway to development and domestic economic reform,” says Del Rosario. “We have carefully developed all our APEC initiatives with the welfare of all Filipinos in mind.”
She says this was the guiding principle in the development of the theme this year: “Building Inclusive Economies, Building a Better World.”
Del Rosario says there had been a debate in the past on whether APEC would be a trade and investment forum or a development forum. Over the years, the organization has mainly focused on trade and investment. But the foreign affairs undersecretary says APEC is now including development, particularly inclusive growth, in its agenda.
“APEC is beyond trade and macroeconomic policies, we also address concerns which are central to an individual’s economic well-being,” she says. This includes health, access to quality education, skills training and mobility, among others.
The Philippines believes inclusive growth can be described in three stages: domestic or national, regional, and macro.
At the domestic level, the inclusive growth strategy is based on creating employment opportunities and jobs, involving the majority of the population in the economic mainstream, and alleviating poverty through good governance and reform. Inclusive growth at the regional level, meanwhile, is focused on expanding access to opportunity that would result in more productive employment opportunities, dynamic economic growth, and greater well-being.
At the macro level, the trajectory centers on bridging the gap between developing and developed APEC economies.
“One of the key issues was to find ways to achieve quality economic growth through good governance measures,” says Del Rosario.
The country’s hosting of the APEC this year is focused on four priorities: investing in human capital development; fostering the participation of small and medium enterprises in regional and global markets; building sustainable and resilient communities; and enhancing the regional economic integration agenda.
“We will be introducing a regional framework that focuses on social cohesion, institution-building and environmental impact as key accountability areas for economic growth,” adds the DFA official.
Inclusive growth
Tangible results
After more than 150 meetings, spending a whopping P10 billion to finance the year-long affair, the question remains: What’s in it for the Philippines, particulary for the general public?
Officials tend to describe the costs incurred as an investment, citing better returns for the country in terms of trade and investments.
In the past months, various action plans and frameworks have been
signed and agreed upon by member-economies. On the economic aspect, Cristobal highlights the Boracay Action Agenda for micro, small and medium enterprises (MSMEs).
“From a trade and investment perspective, APEC 2015 has made breakthroughs in recognizing and addressing concerns of the MSMEs that constitute more than 85 percent of the economies in APEC,” he says.
He says the agreement is a historic one, as it was the first time that the trade ministers have adopted a position ahead of the APEC Ministerial Meeting, which would happen on Nov. 16 and 17.
The trade undersecretary said the Boracay Action Agenda underscores the country’s desire to focus on inclusive growth, as it primarily benefits the micro and small enterprises, rather than the medium and big business operating in the member-economies.
“Our push for micro is that we must give them the opportunity to participate in international trade,” says Cristobal. “We have to simplify our procedures, our customs rules. We have to make it easier for micro and small enterprises to export.
”He said focus is also on strengthening e-commerce within the region. An immediate tangible result of the action plan, for instance, is the creation of a portal where important information about trading within the region can be accessed. It will be launched this month.
“By being more transparent in providing timely information, we intend to help the small entrepreneurs. The big firms, they hire lawyers, brokers, they can afford that. But we want it to be easier for micro and small entrepreneurs,” he says.
Investments
Doris Magsaysay-Ho, chair of the APEC Business Advisory Council (ABAC), also highlighted the potential investments that the Philippines can get from hosting this year’s APEC. More than 1,000 top business executives are expected to attend the APEC CEO Summit, which will be held prior to the Economic Leaders’ Meeting.
“Our hosting puts a spotlight on the potential of the big markets outside (the country),” she adds. “In my hope, it will allow our business to see opportunities of these markets.”
ABAC – which is composed of representatives from the private sector – will also hold a series of dialogues with leaders of some APEC member-
including President Aquino and possibly Presidents Barack Obama of the United States, Vladimir Putin of Russia and Xi Jinping of China.
Magsaysay-Ho also expressed commitment to expand their scope in order for it be relevant for MSMEs.
Other achievements Del Rosario also cites other achievements that the Philippines has delivered in hosting APEC.
These include the high level policy dialogues on human capacity building and on science and technology in higher education, which came up with recommendations on how to improve and reinvigorate investment in human capital in the region.
The country also led the crafting of a roadmap to develop sustainable and high performing health systems by 2020, seeking to promote health and wellbeing through a holistic approach to health security and growth.
Other outputs include the commitment of transportation ministers to enhance innovation and develop sustainable transport systems; the Cebu Declaration adopted by energy ministers that created a task force to coordinate and implement policies in disaster-proofing of energy infrastructure; and the Plan of Action aimed at re-balancing the focus on food security from grains to fisheries and highlight the sector’s nutritional value as an important source of protein. Representatives from APEC member-economies also signed the Framework on Disaster Risk Reduction, which will guide policy coordination within and between APEC economies in terms of prevention and mitigation, as well as in responding to disasters.
Both Del Rosario and Cristobal also noted the successful Women in the Economy Forum, which recommended steps for the greater participation of women across all sectors in the economy.
While there are some immediate results that can be gleaned from the yearlong meeting, the government officials admit that most of the benefits would take some time before they can be felt.
“At least, minimum of five years,” says Del Rosario. “What we’re experiencing now in APEC, the lowering of tariff on products, the accessibility of products from all over the region, it took us more than five years.”
Citing the outputs from the series of meetings in the past year, the DFA official says the Philippines has achieved a lot in its stint as the host of this year’s APEC.“I have heard that we are one of the best hosts, in terms of substance,” she says. “As I said, it has already started to cover the development agenda. It’s really inclusive.”