Financial woes overshadow APEC meeting in Penang

Financial woes overshadow APEC meeting in Penang

PENANG, Malaysia (AFP): Asia-Pacific trade officials begin their first round of talks chaired by Malaysia here today with most of the region preoccupied by a financial crisis which has triggered widespread rioting in neighboring Indonesia, the largest economy in Southeast Asia.

The two-day meeting of senior officials and week-long series of related talks is the first of three formal gatherings before the APEC summit in Kuala Lumpur in November when Russia, Vietnam and Peru are set to join the group.

Under an agreement reached by the leaders in 1994, the Asia- Pacific Economic Cooperation (APEC) forum is committed to achieving free and open trade and investment in the region by 2010 for industrialized members and 2020 for developing economies.

At their last summit in Vancouver in November, APEC leaders said it was "critically important that we move quickly to enhance the capacity of the international system" to prevent or respond to the sort of financial crisis that has swept Southeast Asia since last July.

APEC officials were ordered to intensify the group's economic and technical cooperation, "giving priority to upgrading financial systems, enhancing cooperation among market regulators and supervisors, and other measures to help improve the integrity and functioning of financial markets."

The 18 leaders stressed that such cooperation should be explored with the World Bank, the International Monetary Fund and the Asian Development Bank.

Noor Adlan, a former Malaysian ambassador to China who is now executive director of the Singapore-based APEC secretariat, said this "continued commitment to open market principles" was one of the most important decisions emerging from the summit to affect Malaysia's chairmanship of APEC this year.

Another important decision, Noor said, was an accord for "early voluntary liberalization" in 15 sectors of which nine have to be ready by next year.

APEC trade ministers have only until June to finalize "detailed targets and timeliness" for these nine fast-track sectors -- chemicals, energy, environmental goods and services, fish and fish products, forest products, gems and jewelry, medical equipment, telecommunications and toys.

Malaysia's International Trade and Industry Minister Rafidah Aziz, who will chair the June meeting of trade ministers in Kuching, said last month that APEC needed to ensure its programs remain relevant in helping its members overcome their economic problems.

Noor said that other major decisions coming from last year's summit were the agreements to expand membership to Russia, Vietnam and Peru and to set up a special sub-committee devoted to economic and technical cooperation .

"Malaysia will consolidate activities in trade and investment liberalization and facilitation and further raise the profile of technical cooperation," he said in the annual APEC update published earlier this month.

Noor said Malaysia would "emphasis capacity building" and "work closely with other APEC economies in developing initiatives in the areas of human resources development, harnessing technologies for the future and broadening outreach efforts about APEC to a wider segment of the business community.

"Malaysia will also work on management issues with emphasis on rationalizing APEC fora," the executive director said.

The two-day meeting of senior officials opening in Penang on Monday follows a weekend retreat here and is being chaired by Abdul Razak Hamli, head of the APEC department in Malaysia's international trade and industry ministry.

Among the other APEC bodies meeting here, the Philippines now chairs the powerful trade and investment committee, having recently taken over from New Zealand, while the economic committee remains chaired by Canada, although China is in charge of preparing this year's economic outlook.

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