PH business community’s role in Apec
Earlier this month, I had the privilege to sit, as part of a group, with 21 world leaders from the Asia Pacific Economic Cooperation (Apec) economies, including President Aquino, to discuss with them this year’s pressing issues regarding business and the regional economy. This small, private dialogue during the recently concluded Apec Summit in Bali was organized by the 64-member Apec Business Advisory Council (Abac), which was formed by the Apec leaders in 1995 to serve as the business sector’s voice in Apec. This gave us the opportunity to formally present Abac’s recommendations to spur regional growth in a sustainable and inclusive manner.
As one of the three appointed Abac members for the Philippines, together with Doris Magsaysay-Ho, Tony Tan Caktiong and Guillermo Luz as an alternate member, I attend a number of the quarterly meetings to meet with our counterparts from other Apec economies and help prepare a set of recommendations in our annual report to the Apec leaders. This year, we focused on deepening regional economic integration, promoting infrastructure growth, strengthening food security, and fostering the growth of small businesses as key initiatives.
A key message we relayed to the Apec leaders was the importance of Apec having a more ambitious agenda on its trade, investment and services liberalization targets, especially with the notable lack of progress in the WTO Doha negotiations. We reiterated our support for the eventual creation of a Free Trade Area of the Asia-Pacific, whose current building blocks are the TransPacific Partnership, the Regional Comprehensive Economic Partnership, and the Pacific Alliance (the regional free trade agreement among some Latin American economies).
Another issue that we felt deserved the Apec leaders’ attention is infrastructure development. This year, Abac issued a report highlighting the crucial role of major infrastructure investments across Apec in meeting its growth targets and facilitating desired regional connectivity. We expressed our concern for the slow implementation of the larger Public-Private Partnership (PPP) projects in the region while noting a McKinsey Global Institute report which estimated that we have a global infrastructure requirement of $57 trillion to sustain economic growth over the medium term.
Through an Abac project known as the Asia Pacific Infrastructure Partnership (Apip), Abac Philippines has hosted meetings in Manila between some Abac members and international advisors specializing in infrastructure financing. This was done with the engagement of our PPP Center and government agencies engaged in PPP projects in order to exchange ideas and learn from best practices in the region. Though many of us in the business community have expressed concern about the pace of PPP projects, we have found that this has also been the experience of other Apec economies. Engagement with groups such as Apip provides us with access to information on other PPP experiences and allows us to contribute to developing a better process on a regionwide basis. In fact, in some respects, the Philippines is ahead of other countries in the PPP arena, and it is they who look to the Philippines as a model. Needless to say, infrastructure through a PPP framework will be a long-term fixture in the Philippines, and Apec and Abac will play a growing role in creating the connectivity we all need.
Apec and Abac have also been working closely for years on regional approaches to strengthening food security. One of this year’s milestones was the completion of a comprehensive roadmap toward regional food security, which was prepared by the newly-created Apec Policy Partnership for Food Security. Two of the proposed action plans are reducing food losses through the effective use of cold chain technology and promoting the use of international food safety standards in Apec economies. If the roadmap is properly implemented, we should see wider collaboration and investment in research and development for modern farm management in the next few years.
In our quest to develop deeper economic integration, we also placed a high priority on the growth of small and medium scale enterprises (SMMEs) and the creation of new businesses. As the backbone of every economy, SMMEs must have access to finance, to international markets, and to innovative solutions. For financing, Abac recommends that Apec economies encourage private individual investors, such as angel and venture capitalists, to get involved in funding SMMEs. One feature of all Abac meetings now is the holding of regular SMME Summits in more economies to bring together successful SMMEs, IT and innovation companies, and funders to network and learn from each other and, of course, to generate new business opportunities. We will continue working within Apec on ways to assist SMMEs and target specific outcomes that will be felt by them.
These are just some of the highlights from the large body of work in which Abac is involved. It has been a long, productive year for Abac, but new challenges continue to surface and many opportunities continue to be left unrealized. We remain optimistic that the Philippines’ participation in these global dialogues will benefit the country, push economic reforms, and encourage us toward a path of competitiveness in the global economic environment.
Jaime Augusto Zobel de Ayala is chair and CEO of Ayala Corp., member of the Apec Business Advisory Council, and co-vice chair of the Makati Business Club.
