Goal: Removing ‘behind-the-border’ barriers
THE PHILIPPINES’ chief economist urged his Asia-Pacific Economic Cooperation (Apec) peers to move forward the region’s inclusive growth agenda by removing the “behind-the-border” barriers still existing in individual economies.
Economic Planning Secretary Arsenio M. Balisacan also stressed the need to enhance cooperation in services and promote innovation in line with the proposed “Renewed Apec Agenda for Structural Reform” for the 2016-2020 period, which is aimed at inclusive growth not only across the region but also in each of the 21 member-economies of Apec.
At the opening of the recent Second Apec Structural Reform Ministerial Meeting in Cebu City, Balisacan said the new five-year roadmap would be built around three pillars, namely: open, transparent and competitive markets; deeper participation in those markets by all segments of society, including small and medium enterprises (SMEs), youth, women, persons with disabilities and older workers, and sustainable social policies that promote such participation, enhance economic resiliency, and are well-targeted, effective and non-discriminatory.
“These pillars will guide us in continuing and enhancing what has been successfully done in [the previous inclusive growth roadmap called Apec New Strategy for Structural Reform] in terms of reducing ‘behind-the-border’ barriers in the Asia-Pacific region,” said Balisacan, who is also the director general of the National Economic and Development Authority (Neda).
In the case of the services sector, the Neda chief noted in a separate speech during the Apec Regional Conference of Services Coalitions also held in Cebu recently that it “faces unique and significant barriers that, in many cases, are regulatory in nature.”
“If a regulation is too restrictive and prescriptive, it will hinder innovation,” Balisacan pointed out.
To push forward effective reforms in service trade, Balisacan cited the need to “balance competing objectives, which include, first, enhancing competition or contestability of markets; second, ensuring effective regulation to deal with market failures to promote efficiency; and third, attainment of social objectives to promote equity.”
Services—which include banking and finance, construction e-commerce, education, engineering, healthcare, legal, telecommunications and transportation—contribute two-thirds of the combined gross domestic product of Apec member-economies, Balisacan noted.
In the Philippines, for instance, the services sector employs 54 percent of the workforce, or about 21 million, the Neda chief said.
Available jobs in services are “important at a time when Apec economies are facing an environment of slower global economic growth, slower potential growth, and relatively weak business investment,” he added.
“We would like the Apec to continue its reinvigoration of the services sector in the region. We recognize the capacity of the sector to bring in technological progress that fosters innovation and develops new growth areas for economies,” Balisacan said.
According to Balisacan, “enhancing innovation and the services sector will definitely give SMEs in each of our economies a better access to our envisioned regionally-integrated markets”
“Prioritizing services in the region’s development agenda and eliminating barriers and restriction in its growth, efficiency and productivity is clearly in line with Apec’s goal of inclusive development,” he said.
As far as inclusive growth goal is concerned, Balisacan stressed that Apec was “always facing the challenge of bringing down the benefits of growth to the level of smaller geographic areas, groups, firms and individuals.”
In this regard, he said “initiatives to equalize opportunities should be strengthened to reduce gaps between sectors of our societies in terms of capability and accessibility.”
“We need to underscore the critical role of human capital development to unleash the potential contribution of several sectors to our economies. We note that human capital development contributes to greater innovation, which improves productivity that is vital for the survival of firms,” Balisacan said.
“We encourage Apec members to invest heavily in education, health, infrastructure support, and also help lagging areas in the region through increased development collaboration,” the Neda chief added.
