APEC Business Forum opens with mixed views

By Prapti Widinugraheni & Medyatama Suryodiningrat

MANILA (JP): Corporate leaders opened the APEC Business Forum here yesterday with different outlooks on the business environment and the market place likely to arise out of the economic grouping's action plans.

Some executives expect a more conducive business climate in the region but others foresee fiercer market competition in the free trade era.

Businesspeople from developed member countries of the Asia Pacific Economic Cooperation (APEC) forum see the opening up of the region's markets and its development opportunities as a chance to spur their businesses.

But those from developing countries are more cautious, arguing that without sound preparation, the only ones to benefit from APEC would be the developed countries.

The two-day forum of corporate chief executive officers (CEOs), launched by Philippine President Fidel Ramos, is the first-ever to coincide with an APEC ministerial meeting since the grouping was founded in 1989.

The forum, attended by more than 500 CEOs of major companies based in APEC countries, is expected to discuss ways to reduce trade and investment barriers.

Ramos said the meeting was expected to "locate business in its rightful place within the region... which is shoulder-to-shoulder with the peoples and governments (of APEC economies)".

He warned that APEC's efforts should benefit not only the major economic players of the region but also small and medium enterprises (SMEs).

"At the most basic level, the APEC vision is about improving people's lives," he said.

Agus G. Kartasasmita, an executive of the Indonesian Chamber of Commerce and Industry, agreed the government should do more to develop SMEs.

"The government, for instance, should see to it that SMEs can develop without being bothered by the problem of burdensome collateral and high interest rates," he said on the sidelines of the meeting.

He said strengthening SMEs was among the host of problems that governments must urgently address. "There is no other option and no turning back. We have a deadline to meet," he said.

APEC has set 2010 and 2020 as the deadlines for developed members and developing members to free trade.

The business forum's host, the APEC Business Advisory Council (ABAC), has identified five important areas to businesses: cross- border flows; finance and investment; infrastructure; small and medium enterprises and human resource development; and economic and technical cooperation within APEC.

Jing Shuping, the chairman of the All-China Federation of Industry and Commerce, said yesterday that cross-border economic flows between APEC members should continue to meet the principles of equality and cooperation between developed and developing countries.

"In the actual removal of barriers for cross-border flows, the principle of mutual benefit, mutual accommodation, mutual support and mutual cooperation should be implemented," Shuping said.

Shuping said that while trade and investment liberalization and facilitation were important, the processes of economic and technical cooperation should not be neglected.

"Cross-border flows cannot be separated from the economic and technical cooperation among APEC members," Shuping said.

Maurice R. Greenberg, the CEO of American International Group Inc., in his speech yesterday emphasized that businesses must help develop the regions infrastructure.

Quoting a World Bank report, he said East Asia alone would need an infusion of some US$1.5 trillion in infrastructure investment by 2004, of which 20 percent was expected to come from the private sector.

He suggested APEC members improve their investment climates by pursuing free capital repatriation and currency conversion; a reasonable and predictable tax regime; an effective, credible legal and judicial system; and an enforceable commercial code.

He also called for the establishment of mechanisms for perfecting financial liens and claims, a reliable and prompt dispute resolution mechanism and an unconditional investment policy which is not dependent on performance requirements.

"Inadequate infrastructure... stands in the way of an era of even greater prosperity and dynamism. Slow growth will only make elimination of such bottlenecks much more difficult," he said.