Asia-Pacific states asked to improve investment climate
Asia-Pacific states asked to improve investment climate
CEBU, Philippines (AFP): Asia-Pacific economies have to improve their investment climates to win private sector help in financing their development, financiers said here yesterday.
The APEC Financiers Group (AFG) urged ministers from the 18 member economies of the Asia-Pacific Economic Cooperation forum to remove regulatory bottlenecks, free up the flow of capital and increase information transparency.
The AFG is the primary advisor to the finance ministers and meets ahead of their annual talks to make recommendations for action.
Bankers Association of the Philippines chief economist Johnny Ravalo said that infrastructure was crucial to development, as was the harmonization of infrastructure within economies.
"There is no point in an economy talking about being a tiger cub when its growl cannot be heard," Ravolo told a news conference after Friday's meeting of the AFG.
He said there was an infrastructure bottleneck that was a "silent but deadly" obstacle to development.
Ravolo noted that "practically nothing" binds the APEC member economies except "an almost uniform agreement that 18 economies are willing to talk to each other and help each other."
He pointed out that capital was ultimately scarce and a limited resource, and it was information that "provides the signal for choices of allocation of limited resources."
Ravolo said financial systems and capital markets provide the environment in which the private sector operates, as well as the signals for those operations.
He said AFG agreed on the need for an information center to act as a clearing house for economic data.
It called for the speeding up of the development of bond markets and access to equity markets for infrastructure development-related projects, which would allow access to long- term funding.
The financiers further agreed on a "roadmap" to the next meeting in Canada, and sought along the way a further inquiry into the setting up of information centers, the Philippines offering to take the lead in that field.
Ravolo said the AFG wanted an evaluation of the status of domestic bond markets in each member economy.
"If you want to develop a market you have to know at what stage it is already at," he said.
The AFG also sought an inventory of skills and training already being offered among member economies.
"The expertise right now is available," Ravolo said, and the financiers believe a "rolling caravan of expertise" could be put in place allowing members to share their skills with each other.
"We need to evaluate and enumerate the opportunities that are available right now," he said.
Ravolo said the AFG also had a brief discussion about the capital adequacy standards of the Bank for International Settlements, in which there was "a considerable mismatch" between the risk weight of members of the Organization for Cooperation and Development (OECD), at 20 percent, and non-OECD countries, at 100 percent.
He said that made the cost of capital for non-members five times higher, and for no apparent reason than because that was what the BIS said.
"This uneven treatment impacts negatively upon the cost and availability of capital across borders, a consequence that is totally avoidable if an even treatment is provided," the AFG said in a statement.
The AFG said the issue was raised last year in Kyoto, Japan, "but has not been accorded the necessary further action it deserves."
Rafael Buenaventura, president of the Philippine Commercial International Bank and chairman of the AFG, said the objective should be to "develop the structure and environment to encourage people to invest."
"That is why it is important that your economy is open enough so people will come in," Buenaventura said.