Finance Ministers from the 21 APEC economies, the world’s largest regional economic group, will gather in Beijing on Wednesday intent on reviving flagging global trade and economic growth.
Hosted by China’s Finance Ministry and chaired by Minister Lou Jiwei, the 2014 APEC Finance Ministers’ Meeting will take place on the heels of newly downgraded growth forecasts from the International Monetary Fund. Senior officials from the IMF, World Bank, Asian Development Bank and Organization for Economic Cooperation and Development will present views on the risk landscape and set the stage coordinated action to ensure recovery and long-term growth.
Emphasis will be on measures that increase infrastructure financing and investment as well as fiscal and regulatory policies that improve access to financing and promote innovation across supply chains.
“Economies in the Asia-Pacific are in an important period of transition,” said Dr Alan Bollard, APEC Secretariat Executive Director. “The fundamental trajectory of the region’s economies is still leaning in the direction of recovery but it is an increasingly tepid recovery given reduced trade-driven growth and risk levels are high.”
“There is a need to go beyond quick fixes in favor of policies that lead towards a higher long-term growth path,” Dr Bollard explained. “Part of the growth equation is expanding the capacity for Asia-Pacific trade through the development of infrastructure to accommodate increasing people and goods flows in the region and that means narrowing significant financing gaps.”
APEC economies account for about 40 per cent of the world’s population, half of global trade and 60 per cent of total gross domestic product. But an estimated USD8 trillion in infrastructure investment is needed in Asia alone for the period between 2010 and 2020 to keep economies in the region on track, cautions the Asian Development Bank.
“Barriers such as weak legal and regulatory frameworks in support of asset-based lending and huge know-your-customer compliance penalties that deter banks from extending credit to qualifying businesses must be tackled to widen access to supply chain finance,” added Dr Gloria Pasadilla, a Senior Analyst with the APEC Policy Support Unit, in remarks to Finance Deputies from member economies here on Tuesday.
“Ensuring financing access is critical to the development of small and medium enterprises and will ultimately position them to take advantage of opportunities to become more integrated into global value chains that drive trade and economic growth,” noted Dr Pasadilla. “The key is achieving the right balance between regulatory safeguards and an environment that encourages lenders to channel capital where it is needed to keep economies moving in the right direction.”
The SME sector accounts for over 97 per cent of all businesses and half of employment in APEC economies but 35 per cent or less of their direct exports.
“Improving the efficiency of capital and human resources is needed to raise productivity in the Asia-Pacific,” concluded Quynh Le, an Analyst in the Policy Support Unit, in separate remarks to Finance Deputies. “Governments have an important role to play in promoting production efficiency through the adoption of policies that support continuous private sector innovation.”
“Policies ranging from immigration reform, to greater mobility of highly-skilled workers and patent protection, as well as fiscal policies such as subsidies and tax incentives should all be considered ways to promote economic growth.”
A joint Ministers’ news conference is scheduled to take place at the conclusion of the APEC Finance Ministers’ Meeting on Wednesday.
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