Asia Pacific at forefront of global economic recovery

MANILA, Philippines – Government and business leaders were one in expressing optimism on economic growth in the Asia-Pacific region, but making it more inclusive remains a challenge.

“APEC economies will continue to lead the recovery of the global economy. We will provide an avenue for future growth,” Papua New Guinea Prime Minister Peter O’Neill said in a forum titled “The Future of Asia-Pacific Growth.”

The forum was held in Makati City during the second day of the CEO Summit, marking Manila’s hosting of the Asia-Pacific Economic Cooperation (APEC) meetings.

On Monday, APEC slashed its growth forecasts for this year and the next to 4.1 percent and 4.4 percent, respectively. The estimates were down from 4.2 percent and 4.8 percent last May.

O’Neill said APEC’s opportunity lies on “developing further” the micro, small and medium enterprises (MSMEs), one of the key sectors emphasized by this year’s meetings. MSMEs account for 97 percent of APEC firms.

Raymond McDaniels, chief executive officer (CEO) of Moody’s Corp., said the Asia-Pacific is the only region globally where the credit rater has more positive credit outlooks than negative.

“I am quite optimistic on growth opportunities in Asia-Pacific,” he said.

Much of the optimism is coming from lessons learned during the 1997 and 2008 financial crises when the region’s protectionist measures resulted in an economic tailspin, said Scott Price, CEO of US retail giant Walmart.

Open economies, he said, have allowed companies to grow. Walmart, in particular, sees 50 percent of its future growth opportunities to come from the region.

“The reality is poverty has been reduced, there is an emerging middle class, and increased health care,” he said.

“I just think competent governments and public-private partnerships can mitigate any risk ahead,” Price said.

Mark Tucker, chief executive of AIA Group, said the region is also rich in capital for its financing needs. A “pragmatic” approach to regional integration also bodes well to the region.

“Security and extremism are also very low in the region compared to others,” he pointed out.

While agreeing that capital is no problem, O’Neill said the challenge is to be able to channel these to businesses and infrastructure development.

Among his suggestions include harmonization of rules and regulations among economies as well as innovation. For Tucker, the latter means more focus on providing people a chance to “live healthier.”

Traditionally, this should translate to health spending equivalent to at least five percent of economic output, according to Health undersecretary Kenneth Hartigan-Go.

“That’s the traditional concept, but it really doesn’t matter for as long as the outcome if achieved,” Hartigan-Go said in another forum titled “Health and Education for the Future.”

Education is another area where investments should be made by matching it with the needs of the industry, Phinma Corp. president and CEO Ramon del Rosario Jr. said.

Phinma, for instance, currently operates five schools offering “courses that create job opportunities.” Tuition is also affordable at an average of $300 or around P150 per semester.

“For education to succeed in promoting inclusive growth, education has to be accessible and it has to be relevant education,” Del Rosario emphasized.