On February 19, 2008, a public seminar was held in Jakarta to review the issues raised in the report by the Pacific Economic Cooperation Council (PECC), the State of the Region (SOTR) 2008-2009.

One of the lead speakers, Dr Chatib Basri from the Faculty of Economics, University of Indonesia, who is the Indonesian contributor to the regional economic outlook of the report, informed the audience a revised set of projections in view of the latest developments.

Dr Miranda S Goeltom, Deputy Senior Governor of the Central Bank, who has been a regular contributor to PECC's structural part of the Pacific Economic Outlook (PEO) project, made additional remarks, focusing on financial issues.

The third presenter,  Dr Mari Pangestu, Minister of Trade, addressed the challenges caused by high and volatile food prices. 

Comments from the audience of about 200 people were mainly on the impact of these developments on Indonesia and what the country would need to do to overcome these challenges.

The session was moderated by Dr Hadi Soesastro, Secretary of the Indonesian National Committee of PECC (INCPEC) and Executive Director of the Centre for Strategic and International Studies (CSIS), who summarized the discussion in the context of the key challenges faced by the Asia Pacific region, drawing on the other parts of the SOTR.

Rapid income growth and urbanization is having profound impacts on the food system in the developing member economies of the region, creating opportunities to enhance farm-sector profitability and encourage vibrant rural areas.

To achieve that potential, private and public decision makers must work to streamline and modernize the food system, embracing new approaches to link rural areas with expanding urban markets, according to PECC’s 2007-2008 Pacific Food System Outlook (PFSO) report.

To economically uplift poor rural areas, agricultural producers will need to adapt to changing market dynamics. This includes producing food products compatible with changes in the nation’s dietary habits, encompassing increases in demand for animal protein, fruits and vegetables, and processed products. Today’s consumers also demand higher quality and safety standards.

 Private and public decision makers have significant roles in the process of integration:

• More attention must be focused on lagging inland infrastructure in developing economies. Expansion and upgrade is needed of roads, railways and waterways—a crucial linkage of rural and urban markets that provides producers with timely access to markets.

• Incentives are needed for modern supermarket chains to better connect with rural areas and domestic producers

• Policy makers can help small- and medium-sized participants in the food supply chain to better respond to changes in the food system.

• Policy makers may need to help traditional markets identify and maximize their niche in the evolving food system.

(view report)

PECC forecasters expect 4.9% real GDP growth for the region as a whole in 2008, rising to 5.2% in 2009.

This forecast assumes that the United States will not enter into a recession and that a recovery in the housing sector will take place in the second half of 2008. The US slowdown will affect exports from East Asia but this will be offset somewhat by robust import growth in China.

Downside risks dominate the economic outlook. “With the full consequences of the sub-prime loan problem in the United States still playing out, the potential for turbulence in the financial markets to spill over into the real economy remains a serious concern. There are also worries about inflationary pressures in the world economy, speculative bubbles in Asia, and the rapid unwinding of the US current account imbalance,” said
Woo.

The report includes the findings of PECC’s annual survey of opinion leaders in the Asia Pacific region.
Survey respondents identified high energy prices, water pollution, and global warming as the top three risks to economic growth in the region.

“There was broad support from across the region on the need to address climate change,” said Charles Morrison, International Chair of PECC and President of the East West Center. The report suggests that APEC is well placed to contribute to a global climate change solution because it has a diverse membership that spans developed and developing economies, and encompasses a wide range of energy interests.

However, APEC’s “aspirational goals” on energy efficiency and increasing forest cover fail to address the core principle of Kyoto, which is to reduce the global level of carbon emissions rather than just the intensity
of energy use.

PECC’s State of the Region Report consists of three sections: The Regional Economic Outlook, Medium and Longer Term Challenges for the Region, and Regional Institutions. It is based on a survey of Asia Pacific opinion leaders and forecasts from Pacific Economic Outlook panel.

The 5th PECC Trade and Investment Fair concluded on 11 November with close to RMB400 million (US$53 million) worth of deals signed at the event.

The event was opened by Madam Gu Shoulian, Vice Chair, Standing Committee of the National People’s Congress, Mr Zhang Gaoli, Secretary of the Tianjin Communist Party, Hon Mayor Dai Xianglong, Mr Wei Jiangui, Vice Minister of Commerce and Mr Xu Zuyuan, Vice Minister of Communications

This year's fair on "Modern Ports and Logistics showcased the latest technology and service of international ports.

This year's fair featured six different thmeed areas: the Tianjin Binhai New Area; the sea ports and airports; storage and packing equipment; logistics services; logistics and propety mangement for port areas.

Globalization and economic integration are changing the face of tertiary education in the world today. Students are now exploring an ever increasing range of options for university degrees -both in where and how they study.

Traditional hubs like the United States (565,000 foreign students), the United Kingdom (270,000) and Austrlaia (280,000) are vying with emerging centers like China (140,000), Japan (100,000), Singapore (50,000) and Malaysia (45,000).

The project will examine developments in the education sector and the opportunities and challenges they present for regional economic integration and community building in the Asia Pacific. 

The project will be a joint undertaking between PECC and the Association of Pacific Rim Universities (www.apru.org)

The expert group will examine trends in the various modes of supply of education services across international borders and identify impediments to efficient international cooperation in this sector. 

See www.pecc.org/education for more details

(Sydney) Opinion-leaders in the Asia Pacific expressed deep concerns about the lack of progress being made in WTO Doha Development Agenda negotiations and hoped that APEC leaders would make progress on this issue at their upcoming meeting in Sydney.

A survey of close to 400 of the region’s business leaders, government officials, and analysts chose the WTO DDA as the top priority for APEC leaders when they meet in Australia for the APEC summit.

This was closely followed by a desire to see progress on a Free Trade Area for the region, energy security, strengthening APEC, and climate change. 

Commenting on the results, the coordinator of the report Yuen Pau Woo said it was not clear that that APEC can do much to revive multilateral trade talks or that an FTA for the region as a whole is a near term possibility. 

“The survey results nevertheless suggest a desire on the part of opinion leaders for more tangible action towards free and open trade in the Asia Pacific,” he said. 

Indeed, more than 70% of respondents identified protectionism as a risk to economic growth in the region in the short and medium term. “The threat of protectionism is particularly acute at a time of financial market volatility and economic slowdown in North America,” said Woo.

PECC was represented at the APEC Ministerial Meeting by Dr Charles Morrison (PECC Chair), Mr Bill Shields and Mr Jim Short (AUSPECC), Prof Edward Chen (HKCPEC) and Amb Zhou Mingrong (CNCPEC).

The seventeenth PECC General Meeting concluded in Sydney on 2 May. Close to 200 delegates from all of PECC’s member committees participated in the event.

The theme of the event “Managing the Challenges of Growth” reflected growing concerns about how the region can sustain the tremendous growth in the region over the past three decades while addressing emerging challenges such as people migration, and energy, environment and climate change.

Australia’s Minister for Trade, Mr Warren Truss noted that “our region’s importance to the world economy has shifted decisively, and it is now very clear that we cannot resolve challenges to the world economy without engaging our region.”

The first day addressed current issues being addressed by PECC including the state of the region, public private partnerships for infrastructure development and regional architecture.

This year’s ABAC chair, Mr Mark Johnson, emphasized that to achieve greater regional economic integration there is a need for APEC to address behind the border issues, Prof Philippa Dee noted that policy reviews can be an effective tool for identifying best practices and to help manage the various domestic interests involved in the policy debate.

The second day addressed future issues for the region including changing demographic structures and their implications for labor mobility, and energy use and its consequences for the environments. Prof Graeme Hugo reported that by 2020 it is projected that the number of persons in Asia over 65 will increase by over 85%. He also noted that there are over 8 millions foreign workers in Asia.

Prof Gary Hawke in summing up the discussions on changing demographics in the Asia noted that migration issues have become a political issue and one important contribution from an organization like PECC would be to de-politicise the topic.

Australia’s Minister for Trade, Mr Warren Truss noted that we live in a time of great optimism on the region but there are “risks that cloud our horizon and unfortunately, there is no hard empirical basis to measure how these risks will play out over time.” He added that “PECCs work to understand these risks offers enormously useful guidance to policy makers on a day-to-day basis. Economies in our region would be prudent to take notice.”

PECC launched two new signature projects at the General Meeting, one on international labor migration and another on the Asia Pacific Education Market. In a new initiative led by the Hong Kong PECC committee, the General Meeting also included youth delegates from Hong Kong, Indonesia, Japan and Mexico.