Resilient Asia-Pacific major driving force for world economic recovery

The Asia-Pacific region shall play the role of major driving force for world economy recovery, a Hong Kong APEC policy adviser said in an interview with Xinhua on the eve of the APEC summit scheduled for early October in Bali, Indonesia.

David Dodwell, executive director of Hong Kong-APEC trade policy group, said that the global economy is still deep in trouble due to the global financial crisis in 2008. Many economies around the world are relying on Asia-Pacific region to prop up growth.

Indonesia, chairman of the 2013 APEC summit, set "Resilient Asia-Pacific, Engine of Global Growth" as the theme of the upcoming summit and pledged efforts to ensure that the Asia- Pacific maintains robust economic growth and give great impetus to global growth amid lingering economic woes of other regions.

"We have the responsibility to try to keep the economies of the world moving back towards recovery. Obviously, the first part is to make sure our own economy going well," the executive director said.

He said infrastructure building should continue to be a high priority in the coming years with regard to roads, water supply, hospitals and schools as demands remain high across the region.

Host country Indonesia has also set out three priorities to support the achievement of the overall theme, which include attaining the Borgor Goals, achieving sustainable growth with equity, and promoting connectivity.

Dodwell noted that inclusive growth is another key component to attain a resilient economy in the Asia-Pacific region and the rest of the world, adding that over the past few years an increasingly larger portion of wealth has ended up in the hands of a tiny number of people in some countries.

"If you want to make our economies resilient, you cannot have growth relying on just a tiny minority. It got to come from the majority of population," Dodwell said.

When most people become wealthy, their consumption can underpin the economy, and that is why plenty of policies focus on narrowing the gap between the rich and poor through education, capacity building, training and so on, he added.

Dodwell said he believed that though the themes of the summit vary from year to year, APEC has ensured reasonable continuity on the priorities of infrastructure building, capacity building, poverty reduction, and narrowing the gap between the rich and poor so as to bring more people up to the consuming classes.

He said that most of the at-the-border obstacles have been tackled such as customs barriers and duties on imported goods to protect local economies. However, with the removing of these main obstacles, behind-the-border barriers have become all the more obvious, and served as real obstacle to trade liberalization among member economies.

"By 2020, the border barriers -- if that's how you define free and open trade -- to liberate goods could come down to be almost inconsequential. What we do not take into account in 1994 is that the respective regulations and standards behind the border were set to meet domestic needs and priorities, not the international ones," he said.

He noted that quite a few of the regulations and standards have been there for some historical reasons and it is very difficult to have them removed. But APEC members have already identified the problem and will strive to realize regulatory and standards harmonization.

Dodwell said that this summit will focus on infrastructure and infrastructure financing in terms of connectivity. Sustainable growth is possible only when due attention is paid to environmental protection and poverty reduction. He went on that inclusiveness is also very important as growth is not sustainable if it is unequal.

"The inclusive agenda is being very much the heart of the sustainability agenda," he added.

APEC is the only inter-governmental organization in the world operating on non-binding commitments, open dialogue and equal respect for the views of all participants.

Dodwell termed this non-binding-treaty-power trait as both strength and weakness of the regional group. Though many people consider this trait a main weakness, Dodwell found, through his own experience of working with APEC, that without the restriction of law, member economies could more easily endorse a document instead of struggling with some legal terms.

He said that APEC is unique in putting together, through a variety of working groups, a huge number of meetings based on sharing best practices and building capacity. These meetings set a platform for member economies to share their views, learn from one another, and apply other economies' good models to their own economies.

"It is up to them to make the changes, knowing that if they do change, and become more comparable with other economies, then their ability to do trade or invest will improve. If they don't, they won't. APEC will not force them to do it," he said.

Dodwell said that after the 2008 world financial crisis, there was a great danger that APEC members would resort to protectionism just like what happened in 1929 and that would be a heavy blow to the world economy.

But fortunately, APEC's mechanism enabled its members to continue discussing issues such as reducing border barriers, liberalizing economy and so on. That helped prevent them from backsliding into protectionism, which was a real danger in 2008, said Dodwell.

Dodwell spoke highly of the performance of APEC, with 21 member economies in different development phases, in striking a nice balance. He said that developed economies have to realize the real needs of their less developed peers, and become more sensitive to the real challenges of pulling people out of real poverty. On the other hand, less developed economies can learn skills and institutions from more industrialized, technologically sophisticated economies.

As China assumes chairmanship of APEC 2014, senior financial officials and central bank governors will gather in Hong Kong next September for APEC ministerial meeting. It will be the first time Hong Kong hosts such a meeting.

Dodwell regarded the meeting as a good opportunity for Beijing and Hong Kong to present themselves to the rest of the world. In addition, Hong Kong's hosting the meeting will serve to further enhance the relations between China's mainland and its Hong Kong Special Administrative Region.

"The hosting will require a lot of collaboration between the financial authorities in Beijing and those in Hong Kong. The enhancement of dialog will be helpful. Our officials (Hong Kong) will be better plugged into Beijing's economic development process, and know how we can serve those," Dodwell said.

The Hong Kong-APEC trade policy group was created by the APEC Business Advisory Council (ABAC) members in Hong Kong, supported exclusively by Hong Kong companies, and presents opinion of ABAC to APEC.