Social Protection of the Vulnerable Group in a Changing World

The Chair, Mr. Tian Xiaobao
Distinguished Participants
Ladies and Gentlemen

I would like to thank the organizers, both China and Korea, of this APEC High-Level Seminar on Social Safety Nets for giving me the opportunity to contribute to this session.

The APEC process has developed since it was launched in 1989 as a forum for building cooperation between economies of the Asia-Pacific region. The scope of APEC work is in three broad areas, or pillars, namely trade and investment liberalization, business facilitation and Economic and Technical Cooperation, or ECOTECH. It is this third pillar that in many ways ensures that the first two pillars can be achieved.

The APEC Senior Officials Committee on ECOTECH guides the APEC Process on the management and coordination on a range of developmental and capacity building initiatives that are essential if all APEC member economies are to be competitive. There are a range of measures included in the APEC ECOTECH program and Social Safety Net activities are an essential part of this agenda.

While there have been a range of benefits delivered to member economies since APEC began fifteen years ago, it is essential that the APEC process continues to be able to respond to ongoing and evolving development needs in the APEC region.

APEC as a forum of member economies continues to develop and implement pragmatic programmes to deal with the socio-economic costs relating to economic structural adjustment. Offering technical support and guidance to potential vulnerable groups, sections of society or industry groups that are dealing with the change and adjustment brought about by the demands of a global economy remains an important priority of APEC.

The importance of this work is clearly reflected in the main theme of APEC Chile 2004 of 'One Community Our Future.' This theme highlights the notion that despite our cultural, social, political and developmental differences, our Member Economies cooperate as partners to advance together. This means extending capacity building and infrastructure strengthening assistance where it is needed.

Social Safety Net activities in the APEC process represent efforts to not only mitigate social impacts following the Asian financial crisis in 1997 and 1998, but also to address the social dimension of globalization and economic and trade liberalization/facilitation.

APEC Social Safety Net activities related to addressing the social dimension of globalization and economic and trade liberalization and facilitation make an important contribution to sustainable growth and broad-based development. The role of Social Safety Nets along with effective corporate and non-profit organization governance and labor market adjustments were among the key factors responsible for the recovery of APEC economies affected by the Asian financial crisis.

APEC Leaders recognize the important contribution that Social Safety Nets have made to reducing the harmful effects of economic shocks, minimizing the costs of structural change and promoting sustainable and equitable economic development.

In the aftermath of the Asian Financial Crisis, APEC Leaders declared at their meeting in Kuala Lumpur in 1998 that "given the ramifications of the crisis and the importance of addressing social vulnerabilities, we agree that as a matter of high priority, APEC should intensify efforts to address the social impact of the crisis."

In particular, APEC Leaders directed Ministers to work with the World Bank, the Asian Development Bank, the Inter-American Development Bank and where appropriate, public and private institutions to formulate strategies of concrete actions aimed at strengthening social safety nets.

APEC Leaders again reiterated their commitment to developing Social Safety Nets in the Shanghai Accord of 2001 and stated that "developing the social safety net is a high priority, as it can make an important contribution to reducing the harmful effects of economic shocks on vulnerable groups."

The importance of Social Safety Nets in minimizing the costs of structural change and promoting sustainable and equitable development was further highlighted by APEC Leaders in their meetings of 2002 and 2003.

The importance of Social Safety Nets to the APEC Process was formalized at the APEC Ministerial Meeting held in Shanghai in 2001. Ministers endorsed a recommendation to establish the Social Safety Net Capacity Building Network. This Network was established to provide a forum for experts, policy makers and practitioners to share experiences and best practices in managing and planning Social Safety Net activities.

APEC Leaders, Ministers and Senior Officials have instructed the Social Safety Net Capacity Building Network to focus its activities on ensuring the trade liberalization efforts to achieve the Bogor goals result in minimal social disruption. In this regard, the Social Safety Net Capacity Building Network is working in collaboration with the Human Resources Development Working Group on the issue of workforce retraining.

At the APEC Ministerial Meeting in Bangkok last year, Ministers commended the initiatives undertaken by APEC on Social Safety Net issues to ensure a more equitable distribution of the benefits brought about by globalization. Ministers noted the value of work undertaken to empower vulnerable people, particularly the jobless, to better manage the impact of the structural change.

Recognition by Leaders and Ministers of the importance of Social Safety Nets reflects development in terms of the expanded scope and their role in the changing circumstances that develop such as a financial crisis. It is a strong indication that all the member economies of APEC have recognized the importance and the need to improve their Social Safety Nets.

The concept of Social Safety Nets in the formulation of public policy has been present in industrialized economies for more than half a century and is now being introduced and adopted in various forms in the developing economies throughout the world.

It is important that Social Safety Nets in APEC, with the current era of globalization that transcends all areas of economic activity, are strengthened beyond the current redistributive role. This would see Social Safety Nets provide greater opportunities for individuals to mitigate risks from unforeseen contingencies and crises that may occur.

Sustainable Social Safety Nets at the regional level are required for political stability and social cohesion to ensure long-term economic growth and broad-based development.

A report entitled "Social Safety Nets in Response to Crisis: Lessons and Guidelines from Asia and Latin America." provided findings that participants in the APEC process may well find informative.

The report was an initiative of the United States with the collaboration of the International Monetary Fund, the World Bank, the Asian Development Bank and the Inter-American Development Bank.

The main findings of the Report include:

I can assure you that the APEC Secretariat will continue to provide our highest level of support and cooperation to ensure that the work in relation to Social Safety Nets is further enhanced in meeting the objectives and goals of APEC.

Finally, I wish you all the best in your deliberations and look forward to fruitful discussions in the next two days towards a successful conclusion of the Seminar.

Thank you.