Asia Pacific businessmen cite need for new growth drivers, address rising income inequality

Members of the Asia-Pacific Economic Cooperation Business Advisory Council (ABAC) has finalized its recommendations for submission to the APEC Leaders to address challenges being faced by policymakers and businesses in APEC member-economies.

ABAC 2015 Chair Doris Magsaysay-Ho said they expect their “two-fold” recommendations to generate new drivers of growth as well as address income inequality.

She explained that the traditional growth drivers "are running out of steam."

"Export-led growth is no longer sufficient to drive economic prosperity. The major economies in the region are undergoing structural transformation toward domestic demand led growth," she said.

Similarly, Ho said that integration of the APEC economies have lifted some people out of poverty but pointed out that income inequality also increased.

"At the same time, we faced challenges to the sustainability of growth with dwindling natural resources, the rising demand for food and energy and ever-present threat of natural resources," she said.

Ho said the ABAC 2015 have proposed recommendations that include developing new sectors of opportunity in the services sector; the globalization of micro, small and medium enterprises (MSMEs); increasing productivity and sustainable use of resources through innovation and connectivity; strengthening of the financial markets; and helping economies become shock-resilient.

She noted that, for one, the services' sector share in combined domestic output of APEC economies is about 66 percent, accounting for about 52 percent of total employment.

The industry also accounts for 40 percent of value of physical goods, she said.
"The key to unlocking the potential of services as an engine for growth lies in promoting its provision across borders thus, spurring efficiency and increasing availability," she explained.

The 2015 ABAC Chair cited that hindrances to services trade "are not at the border but beyond the border in the form of regulation," and these has not been focused on by APEC until recently.

She pointed out the conduct of three public-private dialogues on services will determine where the problem lies and how to address these.

"To generate momentum for the interest that this has awakened, we have supported the creation of an APEC Coalition of Services Organization to provide effective advocacy for the development of trade in services," she said.

Also, participation of MSMEs in global exports is being pushed as it only accounts for less than 35 percent of exports even though the sector accounts for more than 97 percent of business in APEC-member countries and employs over 60 percent of people.

Ho said problems that bar MSME players from increasing their participation in global exports include complex customs requirements, access to foreign markets and financing.

"(These problems) can be addressed by a robust cross-border e-commerce infrastructure and e-payment systems," she said.

"And so we have urged governments to take action to create a supportive ecosystem as a major step towards empowering MSMEs to go international," she said. (PNA/PCOO News Release)