RISE REGIONAL INTEGRATION FOR SUSTAINABLE ECONOMIES EXTENDING THE MARKET PLACE BEYOND URBAN BOUNDARIES INTEGRATED INFRASTRUCTURE ROADMAPS  FOR DEVELOPING ECONOMIES by the PACIFIC ECONOMIC COOPERATION COUNCIL (PECC) and the International Organization on ASIA-PACIFIC ECONOMIC COOPERATION (APEC)

Overview

Prior to the global financial crisis, APEC developing economies were rapidly building infrastructure to serve mostly urban areas.  Asia’s economic crisis has not diminished the need for new infrastructure but it has forced countries to re-examine the role of infrastructure in sustaining economic growth. In particular, governments are looking for ways to build economic prosperity for all populations, not only those in major urban centers, but also the vast majority of people in APEC economies who live in lower density areas. 

With the support of APEC, the Pacific Economic Cooperation Council (PECC) is launching a new initiative in 1999 to demonstrate how integrated infrastructure development will stimulate new industrial and agricultural growth in areas beyond the urban centers, enabling them to participate more effectively in the global economy. PECC officially launched this program with an international planning meeting May 26-27 immediately after the 1999 World Agriculture Congress in St. Louis, Missouri.  The planning meeting convened decision-makers from the public and private sectors of the APEC economies, together with experts in the various facets of infrastructure development, to identify new financing strategies for integrated infrastructure development in areas beyond urban centers. Methodologies to identify existing, early-stage infrastructure projects in the urban-rural nexus was the focus of the meeting, with the overall project goal of forming team-led efforts to advise and design these initiatives in APEC developing economies. 

Background

This project recognizes the critical importance of improved rural infrastructure for successful distribution and marketing of agricultural products. It follows the commitment by APEC Ministers and Leaders meeting in Vancouver in 1997 to the improvement of infrastructure, not only for more efficient and competitive production in rural communities but to extend the essential linkages of these areas to the broader regional, national and global economies. In short, the aim is to support development of diversified and competitive food systems in APEC economies through a project on Regional Integration for Sustainable Economies (RISE).

Many emerging market economies lack the basic infrastructure that would enable rural residents to competitively participate in national and global commercial activities. The result has been overly rapid urbanization with concomitant serious negative impacts on the environment and social cohesion. Several factors are critical to achieving the full integration of the wider APEC population into the mainstream economy through balanced growth in the region: 

• Rural populations--both on and off farms--derive benefits from globalized markets only if they are able to participate competitively in those markets.
• Infrastructure is the most critical priority in giving rural residents a stake in the global economy and giving farm producers a position in the global food system. 
• Rural infrastructure should not be considered in isolation from national economic systems.  Modern technology provides the innovations to more equitably create links between rural areas and national and global markets. 
• Public/private investment and public policy need to work hand in hand to support the infrastructure development that builds the required human and physical capital, allowing the simultaneous flow of social, economic and environmental benefits to and from rural to national and global markets.

What Is RISE? 

RISE is a cooperative public:private regional integrated infrastructure initiative designed to accelerate diversified growth of intermediate-level rural cities.

RISE Mission

The mission of RISE is to accelerate the growth of large, medium and small-scale enterprises and productivity in non-metropolitan APEC regions (hubs and their rural/resource environs) through integrated infrastructure development.  A priority emphasis is on—but not limited to—food system development. 

In addition to APEC's Infrastructure Experts Workshop (chaired by Indonesia) and its EcoTech Committee, and the U.S. Department of Agriculture, the RISE initiative also enjoys the support of the Asian Development Bank, ABAC, PBEC, U.S. Council for International Business, the US-ASEAN Council and the National Center for APEC Studies.

Implementing RISE

RISE will be implemented through addressing two components: Knowledge Management and Regional Growth Center Demonstration Projects (RGC Projects). 

Knowledge Management

In 1999-2000, RISE will work with APEC Member Economy governments, private sector officials and development institutions to collect data and develop analysis of:

(1) examples of generic and specific cases that illustrate best practices pertinent to the mission of advancing multi-sectoral infrastructure and productive sector development; and 
(2) a catalogue of financing options and alternatives

RISE will utilize Internet communications among APEC Member  Economies to deliver information on market infrastructure essential to catalyze initiatives and link participants and resources.  The objective will be to build road maps or "models" that can then be used in providing practical guidance on the various combinations of potential cost recovery, private and public funding, public policies and other factors that could build viable integrated projects. 

The knowledge that is compiled will include such components as:

• Listing of basic principles for combining infrastructure effectively with  regional economic development
• Illustrative examples of good/best practices from both developed and developing economies including mobilization of local communities, broader private sector and public initiatives identifying potential economic developments as well as planning and mobilizing effective infrastructure schemes,
• Specific examples of public versus private funding, delivery mechanisms and cost recovery
• Compilation of cases studies in regional planning with lessons-learned integrating infrastructure and productive development involving rural areas and regional hubs
• A catalogue describing financing options of private, public and mixed financing vehicles that have had or could have strong potential for application in supporting the RISE mission. 

Regional Growth Center (RGC) Demonstration Projects

RISE is requesting APEC Member Economies to present proposed regional sites for RGC Demonstration Projects (RGC Projects). 

The RISE component will be a feasibility consultation with participating economies.  That is, RISE will create project teams with the appropriate public and private sector expertise to act in an advisory capacity with national, regional and local development agencies and private sector officials in developing a Strategic Decision Path appropriate to the objectives and resources of the designated RGC pilot project. 

The member economy should be committed to participating at the national, local/regional level in working with the selected RISE team of experts.  Their common goal will be to develop and design the most appropriate and viable plan that will serve as the basis for a viable RGC project to be carried out by the member economy.  Member economy officials should consider making an RGC proposal based on regional development efforts to date, business involvement, community commitment, funding, and public policy development for the purpose of attracting private investors.

The RISE project teams will be selected based upon the specific requirements of each RGC Demonstration Project.  The RISE team will work directly with Member Economy participants to develop the local options and methodology to provide practical guidance concerning basic requirements, start-up processes, and ultimate follow through.  Given the anticipated feasibility of a proposed RGC Project, the process is intended to work toward a commitment-building stage and a road map for implementation of action, including securing the critical financial, investment and public policy components. 

At this preliminary stage, RGC Projects should meet basic criteria of member economy commitment, project viability, and good market prospects of the combined integrated
infrastructure/productive investment.

RGC Demonstration Projects will have to demonstrate financial viability, good prospects for additional agro-food system revenues, use of integrated infrastructure, and integration of local/regional community into the national and international marketplace. 

More detailed information on RISE RGC Project terms of reference, services and the project selection process can be obtained from the PECC Food and Agriculture Forum.

Rise Background

Infrastructure development is one critical component in building an APEC Food System. But infrastructure has many dimensions. There is physical infrastructure that creates the backbone of any economy--from power and telecommunications systems to water/sanitation treatment, transportation (roads, bridges, rail, air, ports) and finance.  Institutional infrastructure is also vital at local, regional and national levels of government in order to underpin economic activities (that builds confidence in a rule of law governing the operation of the marketplace).  Last, but not least, there are the components of social infrastructure that include vital education and medical systems that enable a well-trained workforce and healthy population to participate in economic activity. 

Most of these infrastructure supports have been concentrated in major metropolitan/urban areas due to the requirements of concentrated population, and the relatively attractive "payback" on investments made.  However, the result of this urban bias has been a distortion in economic development that has kept many people outside of the mainstream and led to forced economic migration to major urban centers. 

RISE is directed to focus private and public officials on expanding basic infrastructure investment in "micropolitans"—intermediate-level rural cities.  RISE will also seek to examine and develop new potential modalities for bringing the necessary finance to these non-urban regions to expand participation in national—and even global—markets.

The need to improve the economic viability of rural regions of APEC Member Economies RISE initiative was specifically identified in the Ninth APEC Ministerial Joint Statement (Vancouver, November 21-22, 1998) whereby it was suggested that an initiative be established to achieve: 

Infrastructure for rural diversification and integration:

"Ministers noted that improving infrastructure in rural communities, including roads, telecommunications, power generation, and capacity building, is critical to the region's
development and cannot be overlooked.  Ministers directed APEC fora to work with the private sector and include in their efforts infrastructure initiatives for promoting integration and diversification of rural economies."

In order to carry out this initiative, APEC has determined that an appropriate next step to implementing this initiative is a project to be carried out by the Pacific Economic Cooperation Council (PECC) Food & Agriculture Forum in Cooperation with the U.S. Department of Agriculture and Indonesia as an integral component of  the APEC Economic Committee’s Infrastructure Workshop. 

The RISE project, as detailed above, responds to the Ministerial call by bringing together decision-makers from the public and private sectors of the APEC economies, together with experts in the various facets of infrastructure development, with an underlying objective to identify promising new financing strategies and best practices for infrastructure in regional growth centers. 

RISE Major Components

Pacific Food Outlook Meeting: Tokyo

In conjunction with this project, PECC will issue its annual Pacific Food Outlook (PFO) 1999 edition, the central theme of which will be the basic infrastructure components for the APEC Member Economies.  A meeting of the PFO team of experts was held in Tokyo April 7-8 to address individual contributions as well as an overview paper on the infrastructure needs of the food system.  The Pacific Food Outlook: 1999-2000 is being printed for early delivery to the APEC Ministers and Leaders during their meeting in Auckland, New Zealand in September 1999.

RISE Planning Meeting: St. Louis, Missouri

The launch of the RISE infrastructure initiative took place in St. Louis, Missouri, May 26, 1999 with a planning meeting involving the participation of APEC agriculture ministers, international agribusiness executives, and infrastructure development experts. 
The meeting confirmed the goals of the project, established the commitment and specific interests of APEC member economies in achieving those goals, and began to build an international executive steering committee to guide the project. 

Projects for Development Acceleration: 

Immediately prior to the APEC CEO Summit and meetings of APEC Ministers and Leaders in Auckland, New Zealand, the RISE project examine commercially viable infrastructure financing strategies for the under-served urban–rural nexus in developing economies.  Best practices, case studies, and specific infrastructure development programs appropriate to rural areas will be among the topics examined.  Most importantly, the overview will select specific, ongoing development schemes within APEC economies to be visited by expert teams whose assessments, advice, and help in mobilizing new resources will jump-start these early-stage projects. 

RISE Project Team: Manila

In October 1999 a project team will visit the Philippines to advise the first of the rural development plans selected by the RISE project. This “development acceleration” process will serve as the model for similar team-led advice in other APEC economies.

The Philippines is an appropriate venue in which to showcase the work of the project inasmuch as the General Meeting of PECC (PECC 99) will take place in Manila at the same time. RISE will hold a special session on infrastructure and the Pacific food system during PECC 99 in association with sessions on sustainable cities and sector specific sessions on energy and telecommunications.

RISE Participants

The RISE Project will include participation by senior level representatives of private industry and officials from APEC economies with portfolios in areas related to infrastructure and rural development. These will include industries in agribusiness/food, agricultural production, power and energy, telecommunications, water/sanitation treatment, roads, ports, and other infrastructure areas. From this network of expertise the Project will derive its special working teams to advise rural development initiatives.

RISE Supporting Organizations

In addition to APEC's Infrastructure Experts Workshop (chaired by Indonesia) and its EcoTech Committee, and the U.S. Department of Agriculture, the RISE initiative also enjoys the support of the Asian Development Bank, ABAC, PBEC, U.S. Council for International Business, the US-ASEAN Council and the National Center for APEC Studies.

RISE Project Components 

• Development Research. Concise, useful information about specific development programs in selected APEC economies and their infrastructure components.
• Review of Linkages and Roadblocks. Case studies of infrastructure success and failure drawn from World Bank, ADB and APEC-based development agencies.
• PECC Pacific Food Outlook.   Analysis of the status of the food system infrastructure in the region and infrastructure gaps that inhibit market development and diversification. Cases presented of existing regional public/private partnerships that help build new infrastructure. 
• Development Meetings: Meetings to reviews regional development plans that present opportunities for policy and technical assistance that will accelerate private sector investment in infrastructure. Recommendations of ways to improve investment conditions for infrastructure growth. Illustrations of best practices in the development of the Pacific food system infrastructure. 
• Pilot Projects: Agreements between rural development authorities and multinational teams assembled through the RISE Planning Meetings and network of experts. The team will advise and wherever possible assist an ongoing rural development plan, using the new strategies for financing and multisectoral infrastructure linkages addressed by the project.

• February
  PECC’s Pacific Food Outlook (PFO) International Advisory Group (IAG) experts to define PFO “Rural Pacific Infrastructure Report” coverage and focus and assignments for meeting in 1999.  Information packets and invitations to Planning Meeting issued.

• April 
  Japan: First working meeting of the PFO.  Planning Meeting agenda finalized.  Project Steering Committee confirmed.

• May
  Planning meeting in St. Louis on May 26 in conjunction with World Agriculture Forum.  Agreement on RISE Project implementation plan. 

• June-August 
  Preparation and editing of initial RISE Report to ministers concurrently with final editing and publication of the PFO.  Both reports to feature the challenge of creating food system infrastructure in the Asia Pacific region. 

• September  
  RISE discussions of the Project International Advisory Group, infrastructure finance officials, and the rural development authorities of selected APEC economies.

• October 
  RISE Project Team, Manila.  Advisory and consultative team begins work on a Philippine rural development project, holds seminar in conjunction with PECC 99.

• November-December
  Preparation for RISE Project Team visits to other APEC economies in year 2000.

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