APEC finance ministers likely to discuss oil price impact
APEC finance ministers likely to discuss oil price impact
Associated Press, Seogwipo, South Korea
Pacific Rim financial ministers will likely face pressure to
discuss the impact of higher oil prices when they meet this week,
with the situation in Indonesia of most immediate concern.
Finance ministers or their deputies from the 21-member Asia-
Pacific Economic Cooperation forum will gather in this city on
Jeju Island off the southern coast of South Korea for two days of
discussions beginning on Thursday, part of the run-up to the
group's annual summit meeting in November.
APEC is a mix of heavyweight economies like the United States,
Japan, China and Canada and smaller, though important ones like
Indonesia, Mexico and Russia. Representing a total population of
about 2.8 billion people, the group accounts for nearly half of
global trade.
The stated themes of the meeting are capital movements among
APEC members and financial opportunities in aging societies. But
with crude prices still near record highs and the final impact of
Hurricane Katrina unknown, oil will likely be on everyone's mind,
economists say.
"There's a risk that we're going to move into uncharted
territory" if oil prices rise further and stay in a range of
US$70 to $80 a barrel, said Mike Moran, regional economist at
Standard Chartered Bank in Hong Kong.
Indonesia has been hit hardest among Asian nations by the
roughly 50-percent rise in crude costs over the last year.
The central bank has raised interest rates and President
Susilo Bambang Yudhoyono has said fuel subsidies must be cut to
stem the rupiah's fall to four-year lows against the U.S. dollar
and keep the nation's budget from ballooning out of control.
Discussions will take place in the absence of the finance
chiefs of the world's two-largest economies, Japan and the United
States, who are staying away to tend to matters at home.
The Treasury Department announced last week that John Snow
would remain in Washington to focus on domestic issues such as
promoting President George W. Bush's proposal to overhaul
government pension plans.
Snow's deputy Robert Kimmitt will fill in.
Sadakazu Tanigaki, meanwhile, is campaigning to defend his
seat in Sunday's elections for Japan's lower house of Parliament.
Launched in 1989, APEC has as its primary aim the goal of
boosting trade among its members.
In 1994, APEC called for members with developed economies to
fully liberalize trade and investment by 2010, with developing
members to follow by 2020.
In subsequent years its focus has broadened to include other
issues including fighting corruption and combating terrorism.
South Korea is hosting this year's APEC leaders' summit
scheduled for Nov. 18-19 in the southern port city of Busan. Bush
and other leaders are expected to take part.
APEC also includes Australia, Brunei, Chile, Hong Kong,
Malaysia, New Zealand, Papua New Guinea, Peru, the Philippines,
Singapore, Taiwan, Thailand and Vietnam.