Philippines in apec: Challenges and realities part 2

President Aquino will be attending his first full summit where he will sit together with the 20 other leaders simultaneously in an informal face-to-face setting. He would have by then one summit under his belt assuming all goes well and he attends the cozy atmosphere of the 17th ASEAN Summit in Hanoi after having skipped the ASEAN-Europe Summit in Brussels.

APEC Summits are conducted in a “retreat” style format with Leaders seated in chairs arranged either in a circle or a semi-circle. Topics are pre-announced, even though every time a non-Asian hosts – particularly the English speaking Leaders – they would prefer an unscripted, extemporaneous dialogue. The non-English speakers – or at least their Senior Officials – would have none of it of course. President Aquino will have his talking points prepared but what matters is not what he reads or memorizes but what he feels about the topics or indeed about APEC and its relevance to his governance – particularly economic governance. That I believe would shape his attitude towards APEC in the future. I would submit that there is plenty that is of relevance to the Philippine situation. I would pick out three that are particularly relevant.

New economic growth paradigms: Prescription for the Philippines?

I would start with the new growth paradigms that APEC Leaders defined at their summit in 2009 and asked the current chair Japan to lead in translating these into specific action plans. These new paradigms for economic development policies support more balanced growth within and across economies, achieve greater inclusiveness in our societies, address the challenges of environmental and energy sustainability, and which seek to raise our growth potential through innovation and a knowledge-based economy. This is a recipe that I would suggest is very relevant to the Philippines and President Aquino’s economic brain trust would do well to pay attention to.

Balanced growth in its simplest definition aims to gradually unwind global imbalances by calling on export surplus economies to increase consumption and investments and lessen savings while deficit economies should encourage more savings and increase productivity. This imbalance has been blamed for the global economic crisis. The Philippines is unique in Asia for having an American style economy where savings and investment rates are low and consumption is the main driver of the economy. Such situation has been made tenable by the disproportionately large flow of remittances from Philippine overseas workers unlike the US which gets by through printing more money. In both cases, they cannot persist forever. Our long term economic growth prospect lie in greater investments made possible by increased savings rate.

Inclusive growth strives to broaden access to economic opportunities to all sectors of society and build the resilience of the most vulnerable against economic shocks. This is one area which our economic policies in the past say is the priority but has not really delivered. President Aquino has the difficult task of translating this statement of intent into effective execution.

The other growth paradigm – sustainable growth and knowledge-based growth – I will not discuss fully as I think they are already recognized by our economic planners but who are however handicapped by resource and structural constraints in their practical implementation. Placing it in the APEC context would provide us with best practices on which we can build our own to suit the Philippine conditions.

Labor mobility: A multilateral approach to bettering the OFW situation

Discussion of “labor mobility” was initiated by ABAC in APEC in 2008. The interest of ABAC was sparked by the concern of the business sector about the rising shortages of skilled labor in certain sectors of not only developed economy members but also in developing member economies as a result mostly of an aging population and in some instances, job preferences of those just coming into the work force. This was increasingly being met by temporary migrant workers and the flow had become significant in the last decade. However, this flow was taking place under differing conditions that in certain instances lead to exploitative conditions for the migrant workers and raised the costs to the businesses that required them to remain viable. It was also causing social and cultural concerns in the receiving economy as did illegal migration.

ABAC Philippines had introduced the issue in ABAC with the objective of encouraging APEC to develop best practices for both labor surplus and deficit economies in managing this flow that addresses the concerns of the workers, the employers, the local community of the receiving economy, and those enforcing immigration policies. This issue should resonate well in the Philippines as it offers a multilateral solution to issues that have been proven difficult to resolve at the bilateral level. Previous efforts by ABAC and the Philippine representation in APEC have not yet gotten much traction. President Arroyo was in fact rebuffed by then APEC Chair Lee Hsien-long of Singapore who said that this was not the particular venue to discuss this issue. This is double talk of course that simply means Singapore – as did many other receiving economies – preferred this to be a sovereignty issue it would rather keep out of a multilateral setting and decide on unilaterally. This reminds me of the position that China has taken on the disputed territorial claims in the South China Sea in response to calls from the US that this be settled through multilateral consultations.

I would encourage President Aquino to take the leadership mantle on this issue. He would be more successful if he gets sympathy from receiving economies. I believe South Korea, Canada, Australia and Chinese Taipei – all of whom run good migrant worker regimes – would be good candidates in supporting our efforts to push APEC to include this in their agenda.

APEC in Yokohama

The APEC Leaders meeting in Yokohama and the ABAC dialogue with Leaders (on November 13) is less than a month away.  It is my urgent and respectful plea that the President appoint the new members of the APEC Business Advisory Council.

I submitted my resignation as chairman of ABAC Philippines to President Arroyo last June after a fruitful seventeen years of participation in the APEC process. For me, it is time to draw it to a close. It is not so much fatigue as it is the desire to pass on the flame and hopefully increase the ranks of those in the business community willing to spend time and resource in what I believe is a valuable endeavor.  As I have said in a previous a column, it is time for a generational change as there has been in the presidency of our country.  At the age of 71, I cannot claim to be part of the new generation.

But before I give my final farewell, I will conclude my column on APEC this coming Friday. –Roberto R. Romulo (The Philippine Star)