Freer access to global markets and investment is helping to ensure resilient growth in the Asia-Pacific and buoy global trade. This is helping many economies in the region to grow domestic demand and pave the way for rebalancing, according to Dr Alan Bollard, the APEC Secretariat’s Executive Director.
But Dr Bollard cautioned that inadequate connectivity could act as a brake on the region’s growth prospects as demand outstrips existing infrastructure. This is leading APEC economies to put connectivity high on the agenda, he said on Wednesday at a symposium on the issue hosted by the Institute for Southeast Asian Studies in Singapore.
“Regional Integration of markets, production, capital and skilled labor have been growing,” Dr Bollard explained. This is part of a broader pattern of more integrated production, and the phenomenon of global supply chain management.”
“At the same time, as production processes are changing we are seeing the growth of middle classes and urbanization accompanied by demographic tightening,” he added.
“These trends are putting new demands on physical and social infrastructure.”
APEC member economies are addressing these concerns by expanding their efforts to reduce behind-the-border barriers to trade and investment, and enhance the region’s business environment.
Based on the inputs from business and government sectors, APEC has identified eight critical supply chain chokepoints together with the actions to address them.
“Addressing such issues as regulatory impediments, customs ineffectiveness and inadequate transportation networks will make a difference for the companies that ship products and for the consumers who will find more competitive prices and better varieties in their stores,” Dr Bollard said.
The implementation of APEC’s agenda on connectivity needs to be carried out at a level that is broad enough to engage all members, he noted.
This includes work towards the 2015 target of a ten percent improvement in the region’s supply chain performance, in terms of time, cost and uncertainty. A mid-term assessment is being prepared ahead of a meeting of APEC economies in April in Surabaya, Indonesia.
“There are different connectivity issues at the APEC level,” said Dr Bollard. “As we progress into the Indonesia year, APEC Senior Officials will be looking more closely at the topic of connectivity and deciding how it best fits in with APEC values.”