APEC Growth Strategy and Beyond

Wayne Chen

        APEC, as a premier forum to facilitate economic growth, trade and investment in the Asia-Pacific region, has been promoting cooperation on issues beyond its traditional agenda. Through economic and technical cooperation (ECOTECH), APEC is dynamic in narrowing development gap and enhancing capacity building among its member economies across the region. In so doing, APEC has improved economic growth in terms of both quantity to quality, and this feature demonstrates that APEC, a non-binding organization, significant in leading regional integration in the globe.

        The APEC Leaders' Growth Strategy announced in 2010, by following which all the 21 member economies achieved consensus on objectives of their pursuit of economic growth, was a milestone for APEC carry on its ECOTECH activities. In 2015, APEC is drafting the second framework to continue the collective endeavor for common prosperity for another 5 years. The essay views the 1st phase APEC Growth Strategy and beyond.

Emergence of Growth Strategy

        After 2000, APEC has been extending its Trade and Investment Liberalization and Facilitation (TILF) agenda by incorporating a wide range of capacity building activities as well as issues not directly related to trade. As shown by the three pillars of APEC's agenda--Trade and Investment Liberalization; Business Facilitation, and; Economic and Technical Cooperation-- announced in 1994, APEC has been focused on capacity building and APEC was achieving growth and prosperity for a common future through narrowing development gap.

Emergence of Growth Strategy

        After 2000, APEC has been extending its Trade and Investment Liberalization and Facilitation (TILF) agenda by incorporating a wide range of capacity building activities as well as issues not directly related to trade. As shown by the three pillars of APEC's agenda--Trade and Investment Liberalization; Business Facilitation, and; Economic and Technical Cooperation-- announced in 1994, APEC has been focused on capacity building and APEC was achieving growth and prosperity for a common future through narrowing development gap.

        In this context, anthropocentric issues, such as health, welfare, inclusiveness, and social safety net, have gradually involved in the agenda. The health working group was establish in response to the increasing risk of epidemic diseases in 2007, and the Emergency Preparedness Working Group was built in 2009 after the hit of tsunami and earthquake in the South Asia, South-East Asia, and Chile.

        Climate Change, Energy Security and Forestation, and other ecology related issues were later introduced to APEC. The Sydney APEC Leaders' Declaration on Climate Change, Energy Security, and Clean Development recognized that "economic growth, energy security and climate change are fundamental and interlinked challenges for the APEC region," therefore, Leaders are "committed... to ensuring the energy needs of the economies of the region while addressing the issue of environmental quality and contributing to the reduction of greenhouse gas emissions." 2 goals were revealed in the Declaration: 1) to increase forest cover in the region by at least 20 million hectares by 2020, and; 2) to reduce energy intensity of at least 25% by 2030, with 2005 as the base year.

        Given the long history of expanding the APEC agenda, it is not surprising that the APEC Growth Strategy soon served as a comprehensive framework upon which various APEC issues were coordinated and integrated after the Strategy came in place in 2010.

        In 2009, APEC was seeking to develop a new growth paradigm for the changed post-crisis landscape considering that "growth as usual" is not realistic anymore. The Growth Strategy drafted in 2010 was comprised of 5 attributes, namely: Balanced Growth, Inclusive Growth, Sustainable Growth, Innovative Growth and Secure Growth.

        The Balanced Growth refers to growth across and within economies that will unwind imbalances and raise potential output through macroeconomic policies and structural reforms. The Inclusive Growths emphasizes that economic growth needs to take social inclusiveness into account by promoting equity, human resources, employment and welfare of vulnerable groups. The Sustainable Growth or Green Growth urges the use of natural resources and economic activities to be ecological friendly and its applications are often technology oriented in the APEC context. Innovation is crucial to the development of other growth attributes given that ICT is such powerful tools for transition to knowledge based economy. The Secure Growth accommodates issues of emergency preparedness, health, food security, anti-corruption and anti-terrorism.

       

Applications of the APEC Growth Strategy

        Since 2010, the Growth Strategy has been supervising capacity building activities across the APEC region by shaping annual priority areas. Through the lens of Growth Strategy, member economies could also be categorized by their development progress. For example, developing economies are supportive to social inclusiveness and infrastructure investment which are crucial for narrowing development gap and disparity with the society. Developed economies that are of advantage in R&D are focused more on innovative growth and sustainable growth which lead to cutting-edge technologies, IPR and energy saving devices. The USA and Russia are in particular active in this regard.

        In practice, the Growth Strategy has been utilized intensively in evaluating projects and initiatives within APEC, and therefore, the Growth Strategy was implemented from a top-down manner, from the Leaders to the Working Groups. However, on the other hand, the Strategy was not fully used in evaluating the outcome of initiatives or assessing the performance of working groups due to the lack of qualitative goals. In 2015, while APEC member economies reviewed the first Growth Strategy and working collectively on the new one, it was suggested to involve clear goal or quantitative objective as G20 does, but such comment was not much echoed particularly by developing economies.

Looking Forward       

        The 2nd phase of the Growth Strategy-- APEC Strategy for Strengthening Quality Growth--- was drafted by all member economies during the 3rd Senior Officials' Meeting in Cebu and is being submitted to Leaders for endorsement in November. in the new Strategy, 3 Key Accountability Areas (KAA), namely: Institution Building, Social Cohesion, and Environmental Impact were newly added for examining and prioritizing APEC initiatives and meanwhile the 5 growth attributes remain. It is not clear yet what changes the addition of KAAs is bringing up, APEC Leaders may not elaborate address priority works of the Growth Strategy in detail. Instead, the new Growth Strategy can be linked and interpreted in line with UN ongoing tasks, such as the Millennium Development Goals and the Sustainable Development Goals to highlight its significance accelerating regional integration and development. APEC still needs to further elaborate the Strategy to member economies, APEC fora and subfora. Similarly, the APEC working groups will need to study the comprehensive Strategy and translate it into strategic plans and work plans for implementation.