APEC economies to sustain region's economic rebound

APEC economies to sustain region's economic rebound

BANDAR SERI BEGAWAN (AFP): Asia-Pacific economies will sustain
the region's economic rebound but potential minefields lay ahead
in terms of rising oil prices and a slackening in global demand,
a report released here Wednesday said.

"There are clear indications that the economic recovery that
started in early 1999 can be sustained in the short-term period
as the Asian crisis appears to have fully run its course," the
report said.

The report was released ahead of a gathering of senior trade
officials and diplomats from the Asia-Pacific Economic
Cooperation (APEC) forum here on Thursday.

The three-day Senior Officials' Meeting (SOM) will set the
agenda for the annual summit of APEC leaders in oil-rich Brunei
in November.

Strong global demand for electronics and information
technology goods was the driving force in the recovery, bolstered
by the continued strong growth in the United States -- the major
export market for these items.

Based on a consensus forecast for this year, APEC economies
"are expected to recover from the crisis and post considerable
growth in gross domestic product," the report said.

However, it cautioned that a large part of the growth would
depend on "stronger global demand as influenced by the U.S.
economy, and a possible rebound for the Japanese market."

While the U.S. economy continues to boom, "there are
indications that U.S. equity valuation remains abnormally high"
which could lead to a sharp fall in U.S. stock prices.

The U.S. current account deficit also continues to widen and
could lead to a depreciation of the dollar if funds prove
inadequate.

"Together, the fall in equity prices and depreciation of the
U.S. dollar could lead to a significant slowdown in the U.S.
economy.

This would have considerable impact on the world economy since
the U.S. has accounted for 50 percent of global demand," the
report said.

Another "risk factor" is an increase in U.S. interest rates as
well as the spriralling oil prices in the world market which
could lead to inflationary pressures, it said.

Oil prices reached new 10-year heights of U.S.$37 a barrel
this week despite a pledge by oil producers to increase output.

"This will further erode the purchasing power of crisis-hit
currencies, affecting consumer spending," the report said.
Political conditions in individual countries and the pace of
economic reforms were also crucial to the recovery process, it
said.

Internet

Asia-Pacific economies will put their individual action plans
(IAPs) on lowering trade barriers on the Internet by November to
encourage transparency, officials said Wednesday.

The e-IAP project is expected to be launched during the Asia-
Pacific Economic Cooperation (APEC) forum summit in Brunei in
November.

A statement ahead of a three-day meeting of APEC senior trade
officials and diplomats said the committee on trade and
investments will report on the progress of e-IAP -- a joint
undertaking by Australia, Brunei and Singapore with software
giant Microsoft Corp.

The project aims to encourage the 21 APEC members to put their
IAPs on the web.

IAPs contain the voluntary commitments of each APEC member to
tear down trade barriers in line with the overall APEC objective
of free trade and investment in the region by 2010 for
industrialized economies and 2020 for developing ones.

APEC leaders meeting in Auckland, New Zealand last year agreed
with a view from the private sector that the IAPs should be "more
specific, transparent and comprehensive."

Trade ministers who met in Darwin, Australia in June said
putting the IAPs on the Internet would facilitate "wider, faster
and easier online access to transparent, comprehensive and
specific accounts of the progress" economies were making in their
commitments.

APEC economies have been conducting regular "peer reviews" of
the IAPs of fellow members.

APEC groups Australia, Brunei, Canada, Chile, China, Hong
Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New
Zealand, Papua New Guinea, Peru, the Philippines, Russia,
Singapore, Taiwan, Thailand, the United States and Vietnam.