APEC Business Forum opens with mixed views

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.