TRADE-APEC: Entrepreneurs Back Globalisation Despite Asian Crisis

By IPS Correspondents Reprint | | Print |

Gustavo Gonzalez

SANTIAGO, May 26 1998 (IPS) - Representatives of the Asia-Pacific Economic Co-operation forum (APEC) came out in favour of financial globalisation despite the current crisis in stock and currency exchanges, supporting ongoing market liberalisation.

The crisis amongst the Asian Tigers, and particularly in Indonesia, is one of the main topics on the agenda of the Pacific Basin Economic Council (PBEC) to end Wednesday.

PBEC represents more than 1,000 business groups of the 20 APEC economies (Australia, Canada, South Korea, Chile, China, Colombia, Ecuador, Fiji, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, the Philippines, Russia, Thailand, Taiwan and the United States).

The analyses and resolutions of this forum will be considered in the up coming annual summit of APEC leaders, planned for November this year in Kuala Lumpur, where the progress of the trade liberalisation process in the area will be discussed.

Executives of Asian, US and Oceanian companies meeting in Santiago agreed it would be counterproductive to try and put the brakes on globalisation of the financial markets as a measure to counteract the crisis in Southeast Asia.

For the entrepreneurs, the way out of the current stock and currency exchange, political and social problems of Indonesia and other countries of the region is, precisely, to recover their investment capacity by attracting new capital.

Working from this basis, the PBEC forum reiterated its condemnation of all types of protectionism, with criticism of health and safety barriers on trade in foodstuffs and also of environmental and labour norms which impose conditions on the circulation of capital and goods.

The liberalisation of new sectors, like telecommunications, was one of the central questions tackled in the first workshop, with suggestions of how to guarantee competition by blocking forms of monopolisation.

Entrepreneurial backing for economic liberalisation was also made clear in the discussion of privatisations, considered not only as an instrument to attract investments, but also to contribute to trade liberalisation.

Chile’s President Eduardo Frei, inaugurated the meeting Monday stating the crisis in Southeast Asia must not lead to procrastination on the creation of an Asia-Pacific free trade area in the early years of next century.

Frei said the process of gradual and liberalisation by sector agreed by the APEC governors is already behind schedule – the initial aim was to liberalise the markets between 2010 and 2020, but it is now suggested this process be delayed.

“In our opinion such an unhappy backward step would be highly negative, as this would seriously damage the credibility of this forum,” said the Chilean leader.

The Asia-Pacific free trade area would be the biggest free market in the world, not only in terms of population, but also in contribution to the world product and the volume of exchange.

The economic potential of the vast Pacific Basin should be one of the main motors for reinforcing the economic globalisation process, without allowing for this to be beaten by the current crisis in Southeast Asia, concluded the meeting.

Filipino banker Octavio Espiritu said the difficulties faced by some countries do not provide enough foundations for turning back the financial globalisation process, as this has simple and plentiful benefits.

Bruce Galloway, of the Royal Bank of Canada, declared he also supported the financial liberalisation of foreign funds, with the precondition that the countries must liberalise their internal financial systems.

The Canadian banker advocated flexibilisation of the exchange rates, within a framework of strict regulations and supervision impeding disproportionate increases in interest reates due to the difficulties this creates.

Gong Haocheng, of the Shanghai Stock Exchange, said investments must be attracted to guarantee the economic development of the countries, which must in turn work towards adequate control of their foreign debt.