Post-2020 vision: Report to Apec leaders

Every year, the Apec Business Advisory Council (Abac) delivers a Report to Apec Economic Leaders during its Annual Leaders Meeting. The submission of that report takes place during the Abac Dialogue with Leaders just after the close of the Apec CEO Summit, and right before the so-called Leaders’ Retreat. That dialogue takes place today (Nov. 17) in Port Moresby, Papua New Guinea, this year’s host and chair for Apec.

The report is the product of the year’s research and discussions on global economic trends, as well as policy deliberations undertaken by Abac’s five working groups: Regional Economic Integration; Finance and Economics; Sustainable Development; Micro, Small, and Medium Enterprises Development; and Digital Innovation.

This report highlights three broad themes. The first is that of rising trade tensions in the world. Abac cites the critical need to head off these tensions before they descend into a round of protectionism that threatens the foundations for growth of economies. Countries (“economies” in Apec terminology) must stick to their individual trade commitments as well as respect the World Trade Organization (WTO) process. Abac recommends that Apec Leaders support the integrity and purpose of the international trading system and work within the framework of the WTO to seek solutions. Reliance on individual tariff responses may negatively affect trade and investment flows and threaten continued growth.

Apec was established almost 30 years ago on the principle that free and open trade leads to trade and investment growth and overall economic development. While Apec has moved toward that since articulating the Bogor Goals and the creation of the Free Trade Area of the Asia-Pacific almost 25 years ago, the objective has not yet been fully achieved. Nonetheless, bilateral and multilateral free trade agreements have been established and a framework for the international trading system has been set in place. It is important to maintain direction and momentum.

The second theme is that there is a need to broaden the distribution and impact of the benefits of globalization throughout each economy and across all economies. While the economic growth of the last few decades has lifted millions of people out of poverty, the gap between the haves and have-nots continues to be wide. We need to actively foster inclusive growth models to ensure that underserved and disadvantaged populations can fully engage and benefit from the global economy. Far too many people remain left out of the mainstream of global economic progress.

The third theme is that digital innovation presents both challenges and opportunities within and across the Apec economies. Digital innovation presents many benefits and possibilities for the advancement of the common good. It can connect people, provide access to opportunities for underserved sectors, and fuel the rise of whole new industries and jobs. It can create new channels for segments of the population who have been left out of the mainstream of the economic benefits of globalization and open trade.

However, to maximize the benefits of digital innovation, we will need to make sure that the creation of the necessary digital infrastructure to facilitate the internet and the safe and secure flow of data and information across borders is adequately provided, in terms of both access and price. We will also need to equip people for a more digitized economy, starting with retooling educational systems, promoting more science, technology, engineering and mathematics (STEM) programs, upgrading our vocational-technical training programs, and retraining and upskilling today’s and tomorrow’s workforce for the new jobs created to replace the jobs that will be destroyed and will outright disappear.

As Apec marks its 30th year in 2019 (and Abac turns 25 in 2020), efforts are now underway to revisit the Apec vision for the post-2020 era to address the issues of this brave new world.

Guillermo M. Luz (gm.luz@competitive.org.ph) served as private sector cochair of the National Competitiveness Council from 2011-2018 and is a member (alternate) of the Apec Business Advisory Council-Philippines.

Business Matters is a project of the Makati Business Club.