Tomorrow starts the two-day summit of 21 leaders (or representatives) belonging to the Asian-Pacific Economic Cooperation (APEC) member-economies. With news of the Paris bombings still resonating, security will be tight; but the agenda stays on course.
Groundwork of the culminating activity in the next two days of the 27th APEC Forum started right off the end of the previous year’s forum held in China. The Philippine government had been preparing for this hosting honor, only its second since APEC was first convened in 1989.
The first time the Philippines hosted the leaders’ forum was in 1996 during the term of former President Fidel V. Ramos with the main agenda of helping develop free trade in the region. The Philippines then (as it is now) was the darling of economies, showing a resurgence not seen for a long time.
However, the Asian financial crisis of 1997, coupled with domestic political problems in successive years stifled the economy’s take off, squashing expectations of seeing the Philippines taking on a role as an emerging economy in the region.
This time around, this nation of 100 million people appears on a sustainable path of economic growth, charting exceptional GDP statistics since 2003 (except in 2009, at 1.15 percent) despite the global financial crisis of 2007-2008 that brought the US and Europe to its knees.
APEC 2015 indeed came at a good time, with the promise of becoming a harbinger of greater opportunities even as the global economy struggles to shed off the baggage of the last world economic disaster, as well as the bigger threats of ideological war and global warming.
Strengthening economies
Since its inception, APEC has been focused on improving business (or economic) relations among its member-countries and partner economies. APEC’s combined GDP is now estimated at $32 trillion, double from $16 trillion in 1989, and accounted for 57 percent of world GDP and 47 percent of world trade in 2012.
Of the 44 meetings that had transpired over the last 12 months leading to the leaders’ summit, two stand out as among the most significant: the Cebu Action Plan (CAP), which aims at strengthening the finances of APEC members; and the Boracay Action Agenda, focused on enabling micro, small- and medium-sized businesses to participate in global trade.
CAP falls within the Philippine Finance department’s responsibility, and is geared primarily to facilitate transparency, resilience, and integration among all participating nations to strengthen the APEC financial network.
For the Philippines, specifically, this would mean a chance to boost domestic infrastructure financing to support the funding requirements of its ambitious private-public partnership (PPP) program. For APEC, this means finding $1 trillion every year to fill up an estimated infrastructure financing gap.
So far, in the Philippines, local conglomerates have largely led in the bidding for PPP projects, and involvement and partnership by foreign companies have been on a supportive/minority basis. With so many projects still on the list, the Philippines needs to facilitate new project proponents, preferably those with solid global networks.
CAP is also expected to address the region’s vulnerabilities for sudden reversals of capital flows and disasters. The roadmap shows steps for member economies to strengthen regional safety nets, cooperate in disaster management and risk financing, and build deeper financial markets.
CAP is also expected to lower the cost of sending remittances, an integral component in many of the developing APEC economies’ survival over the last decades. In the past five years, the total level of remittances has been estimated at $135 billion annually, of which the Philippines accounts for a significant amount.
Initiating inclusiveness
The Boracay Action Agenda (BAA), on the other hand, is under the stewardship of the Philippine Trade department, a magnanimous gesture towards invoking the welfare of micro and small businesses in the APEC’s agenda.
Inclusiveness of MSMEs (micro, small, and medium enterprises) in the APEC agenda is regarded as a first, and the BAA aims to institutionalize this by paving the way of MSMEs’ involvement in the supply and value chains of big businesses.
Also tackled to support MSME growth was the opening up of cross-border business opportunities for small firms to boost job creation, innovation, and productivity.
Several priority areas were identified in the BAA for cooperation and action on trade facilitation, e-commerce, financing, and institutional support to address the barriers faced by MSMEs in international trade and to collectively support direct participation of MSMEs.
Among the more important areas are: (1) simplification and streamlining of rules of origin (ROO) procedural and documentary requirements and harnessing IT to ease documentation and procedures; (2) streamlining of customs-related rules and regulations and assist in the compliance of MSMEs; and (3) provision of timely and accurate information on export and import procedures and requirements.
Messages and measurements
As with most summits, messages can get pretty distorted in the flurry of meetings and resolutions, and APEC Philippines 2015 is no exception. An outstanding criticism about APEC in its more than 25 years of existence is its wanton disrespect for growing economies’ interest as the agenda of free trade continues to be pushed.
The Philippines has tried to make the most of its hosting, including spending close to P10 billion and calling off work for almost a whole week, by bringing to fore the imperatives that we consider as important in charting our own growth roadmap.
Strengthening financial networks through the Cebu Action Plan will undoubtedly lead to substantial rewards for Filipinos if carried through. The Boracay Action Agenda, on the other hand, faces some tough work ahead as developing nations like the Philippines continue to fail in helping its MSMEs grow.
There may be no quantitative measurement of how much the Philippines stands to gain from this hosting, but there is not much choice but to cooperate and make the most out of the situation.
If it’s any consolation, APEC continues to be a vibrant forum of economies compared to others. And as the Philippines strives to improve its rank in the phalanx of developing and developed economies, it’s good to be seen rubbing elbows with the haves.
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