Neda urges Apec to fast-track Asia-Pacific FTA

MANILA, Philippines—A wider free trade deal coupled with initiatives aimed at mitigating the effects of climate change would help buoy the economies of countries belonging to the Asia-Pacific Economic Cooperation (Apec) amid a still fragile global economy, Socioeconomic Planning Secretary Arsenio M. Balisacan said on Monday.

In a speech at the symposium on Apec 2015 priorities during the Informal Senior Officials’ Meeting in Makati City, Balisacan said he believed that “the advancement of economic integration in the Asia-Pacific region will further strengthen and facilitate trade and investment among Apec member-economies.”

Apec has been working to put in place a Free Trade Area of the Asia Pacific (Ftaap) to facilitate the seamless flow of goods and services across the 21 Apec members.

Balisacan, who is also the director general of the National Economic and Development Authority (Neda), urged his Apec peers to further enhance regional integration despite protectionist tendencies amid slow global economic recovery.

“[T]he slow recovery from the global financial crisis and the projected sluggish growth of world trade over the next two years, and perhaps beyond, are expected to present headwinds to these discussions [on Ftaap]. While these mean that many economies may have to look inward to promote economic growth, we need to remain resolute in our efforts toward greater economic integration as this provides a more robust channel to growth and development,” Balisacan said.

Besides economic integration, Apec should also focus on small and medium enterprise (SME) as well as human capital development to bolster the region’s growth, the Neda chief said.

“Currently, SMEs constitute more than 90 percent of the businesses in the developing Apec economies. Focusing initiatives to support this sector will have immense multiplier effects in terms of employment generation, product innovation through establishment of new industries, and countryside development by means of introducing and spreading new business opportunities,” he pointed out.

Apec should make the business environment “open and transparent” so that local entrepreneurs can participate in the larger regional and international value chains to gain more profit while improving their capacity to supply huge global firms with world-class products, Balisacan said.

This can be done by making SMEs’ access to financing easier as well as slashing the cost of doing business by 25 percent across the region, he said.

Also key to poverty reduction alongside economic growth is investing in human capital development, the Neda chief said.

“As economies and regions become more interconnected, the needs of the constantly innovating and dynamic industry and services sectors require a better-equipped and more competitive labor force,” Balisacan said.

In this regard, Balisacan said Apec should come up with interventions to implement educational reforms at both the primary and secondary levels; align education and training programs to respond to the requirements set by industries; emphasize the importance of the public and private sectors and the academe in human capital development; empower women and vulnerable groups; and provide training for skills upgrading that can reduce job-worker mismatches.

Balisacan also emphasized the importance of building communities that are not only sustainable but also resilient, especially to natural disasters and calamities.

He cited that Monday’s meeting was held amid the onslaught of Typhoon “Ruby” (international name: Hagupit), which is the strongest to hit the country since Supertyphoon “Yolanda” (international name: Haiyan) devastated central Philippines in November last year.

“The Philippines is particularly prone to natural hazards … The other economies in the region have, in varying degrees, their own share of risks to natural hazards,” Balisacan said, citing the Intergovernmental Panel on Climate Change’s fifth assessment report released last year showing that “the occurrence of extreme weather and climate events is actually becoming more frequent and intense.”

“We hope that Apec will tackle interventions to mitigate the effects of climate change and push for enhanced disaster risk reduction and management,” Balisacan said.—Ben O. de Vera