APEC, a dynamic engine of economic growth

APEC, a dynamic engine of economic growth

The Asia-Pacific Economic Cooperation (APEC) member countries begin their four-day conference today, to be followed by a two-day Leaders Meeting on Friday and Saturday with the theme “Open. Connect. Balance.”

All 21 APEC member countries have confirmed their attendance, according to Thai Foreign Minister Don Pramudwinai.

APEC, founded in November 1989 in Canberra, Australia, has since grown to become a dynamic engine of economic growth and one of the most important regional forums in the Asia-Pacific.

Its 21 member economies are home to around 2.9 billion people and represent approximately 60 percent of world GDP and 48 percent of world trade in 2018.

As a result of APEC’s work, observers have noted that growth has soared in the region, with real GDP increasing from US$19 trillion in 1989 to US$46.9 trillion in 2018.

Meanwhile, residents of the Asia-Pacific saw their per capita income rise by 74 percent, lifting millions out of poverty and creating a growing middle class in less than three decades.

Bringing the region closer together, reducing trade barriers, and smoothing out differences in regulations have boosted trade which, in turn, has led to this dramatic increase in prosperity.

Average tariffs fell from 17 percent in 1989 to 5.3 percent in 2018, according to economic analysts.

During that same time period, the APEC region’s total trade increased over seven times—outpacing the rest of the world with two-thirds of this trade occurring between member economies.

APEC implements a wide variety of initiatives to help integrate the region’s economies and promote trade while addressing sustainability and social equity.

In 1994, APEC Leaders committed to achieving the Bogor Goals of free and open trade and investment by 2020 by reducing trade barriers in the region and promoting the free flow of goods, services, and capital among APEC economies.

Since then, members have made measurable progress in achieving these goals.

APEC’s Trade Facilitation Action Plan which includes streamlining customs procedures reached its target of a region-wide reduction in costs at the border by 5 percent between 2004 and 2006.

A further 5 percent decrease was achieved between 2007 and 2010, which saved businesses in the Asia-Pacific a total of US$58.7 billion.

Over time, the APEC agenda has broadened its focus to address behind-the-border barriers such as improving regulatory practices and the local business climate.

APEC launched its Ease of Doing Business Action Plan in 2009, with the goal of making it cheaper, easier and faster to do business in the region.

Between 2009 and 2013, member economies improved the ease of doing business in the Asia-Pacific by 11.3 percent across all areas of the initiative, including starting a business, getting credit, or applying for permits.

For example, observers have noted that APEC has expedited the time it takes for a company to build a new factory or office building.

Today, construction permits are issued at a faster pace, dropping 18.7 percent from 169 days to 134 days in the last four years with APEC topping the charts globally for the shortest permit time.

Starting a company in the Asia-Pacific is also simpler with the number of procedures falling by 20.2 percent since 2009.

More on this in the next episodes.

(ai/mtvn)

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