MESSAGE FROM THE CO-CHAIRS OF PECC
On behalf of the members of the Pacific Economic Cooperation Council (PECC), it is our pleasure to present our twelfth annual report on the State of the Region. This year we have chosen to focus on the internet and digital economy. In some respects, to qualify the term ‘economy’ with ‘internet’ and ‘digital’ is increasingly redundant. The adoption and embedding of the internet-based technology is becoming pervasive. The internet of things connects everything from crops to toothbrushes. The implications of this for growth, development and jobs are profound. We are likely to have to address these issues in different ways over the coming years.
New technologies are revolutionizing business models and the way in which businesses and consumers interact – from ride sharing services to mobile banking. This offers the opportunity to shape a new phase of growth – one that enables even micro and small and medium size enterprises to engage in global trade. Our work in PECC is predicated on the belief that the realization of the full potential of this region depends on ‘free and open economic exchange with the objective of bringing greater economic and social benefits and well-being for the people of the region’ (PECC Charter). It is therefore of great concern to us that the top risk to growth in this year’s State of the Region survey was increased protectionism. This timing could not be worse – there is a risk that new barriers to trade will be put in place that, far from resolving issues of equity, exacerbate them, and we will miss the opportunity to leverage the opportunity that the digital economy offers for more inclusive growth.
There are deep structural shifts taking place within our economies that need to be addressed. But absent the cooperation and support for open markets in our region, we risk the emergence of disorder in our region, increasingly the center of the global economy; the end result would be a life that is ‘solitary, poor, nasty, brutish, and short’ (Thomas Hobbes, Leviathan). The reality is that significant parts of our communities feel that they are not benefiting from the rapid growth we have seen. That the top priority for APEC leaders’ discussions was not a trade issue but the promotion of sustainable, innovative and inclusive growth is a clear indication from the regional policy community that we need to focus on the objective of free and open markets – a better life for the people of the region. It is a timely reminder that the free and open trade is a means to an end and not the end in itself. Free trade is neither a panacea nor is it the problem. We are conscious that there is much more work that needs to be done to open markets – but this must be complemented with other policies including improving connectivity and effective social policies.
There are many people we would like to thank for taking the time to help us to provide a gauge on the sentiments of the regional policy community: all of our member committees without whose support this work would not be possible; as well as the many expert groups who sent out the survey to their members, including: the APEC Policy Support Unit; the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT); the Asia-Pacific Research and Training Network on Trade (ARTNET); the US APEC Business Coalition; the US National Center for APEC; Groupe Spéciale Mobile Association (GSMA) Asia Pacific; Asia Cloud Computing Association (ACCA); the Internet Society (ISOC) Regional Leadership Group; Consumer Unity & Trust Society (CUTS International); and the Papua New Guinea Committee on APEC Policy Issues (CAPI).
While this is now PECC’s 12th report of the State of the Region, this work has a much older vintage: Pacific Economic Outlook (PEO) report. Given the plethora of economic outlooks, in 2005, we took the decision to evolve PECC’s annual report from a pure economic forecasting exercise to one that engages the stakeholder community. The survey is not one of public opinion but attempts to gauge the views of the regional policy community – those involved in regional and international discussions in their individual capacities as thought or opinion leaders.
In previous reports we have included separate chapters on the economic outlook and our survey results. Chapter 1 combines them into a single chapter on the regional economic outlook. We hope that this helps readers to develop a better understanding of perceptions of major trends in the region and the possible reasons underlying that perception.
Chapter 2 is a thematic essay on the ‘Asia-Pacific Agenda for the Digital Economy’ based on the discussions at the 24th PECC General Meeting held in Hanoi in May this year, authored by the cochair of the Indonesian PECC committee as well as former Minister of Trade of Indonesia, Dr. Mari Pangestu, and the coordinator of PECC’s taskforce on the internet economy, Dr. Peter Lovelock. Those discussions formed the basis for the chapter along with the findings of PECC’s survey of views of the policy community on the internet and digital issues.
Chapter 3 provides an update of our index of regional economic integration authored by Dr. Bo Chen. Unlike other attempts, this index not only looks at trade, investment and people flows in our region but also measures the extent to which our economies are ‘converging’ along several key dimensions.
We thank Mr. Eduardo Pedrosa for coordinating this year’s report and for providing Chapter 1 as well as Dr. Kenichi Kawasaki, Dr. Ruan Zongze; and the Chinese Taipei PECC committee who contributed sidebars. We are also deeply appreciative of chapters contributed by Dr. Mari Pangestu and Dr. Peter Lovelock on the internet/digital economy, and Dr. Chen Bo for his continued efforts on the regional integration index. We would like to thank the editorial committee of this report who provide guidance and insight on the various issues it addresses as well as the staff of our International Secretariat for their work on this report.
Don Campbell
Co-Chair
Tang Guoqiang
Co-Chair