During 2014, the EC looked to support China’s APEC Priority of Promoting Innovative Development, Economic Reform and Growth. In doing so, the EC held policy discussions on the State of the Region, Ease of Doing Business and the Middle Income Trap. Subsequently, the EC was instructed by APEC Senior Officials to propose options on how to address the Middle Income Trap and assist APEC developing economies overcome the challenges of transforming from a low-income to a high-income economy. The EC also considered a proposed process for reviewing the APEC New Strategy for Structural Reform (ANSSR) and advancing the structural reform agenda after 2015. A Structural Reform Ministerial Meeting scheduled for 2015 will address APEC’s progress on structural reform and Middle Income Trap issues. EC also recommended that the topic for the 2015 APEC Economic Policy Report (AEPR) should be on Structural Reform and Innovation to support both components of APEC’s work.
Meanwhile, the Committee has had a busy year taking forward its core work which was defined under the Leaders’ Agenda to Implement Structural Reform (LAISR) and expanded through the APEC New Strategy for Structural Reform (ANSSR). Four workshops were held in the margins of the second Economic Committee meeting in Beijing, China, including a two day workshop to consider the future of the Ease of Doing Business work program. With eight concept notes submitted and a good range of EC events planned for 2015, a busy year is expected for the Committee in 2015.
Highlights of EC Activities in 2014
APEC New Strategy for Structural Reform
Structural reform focuses on policy reforms related to institutional frameworks, regulation and design of government policies that help minimize barriers to market-based incentives, competition and regional economic integration. To assist member economies prioritize structural reform issues, the APEC New Strategy for Structural Reform focuses on five broad areas outlined in the graphic below.
Five Pillars of APEC’s New Strategy for Structural Reform
The ANSSR program is scheduled to conclude at the end of 2015. Consequently, the Economic Committee considered an Australian-proposed process and timeline for Advancing the APEC Structural Reform Agenda in 2015 and Beyond.
The Committee recommended a second APEC Ministerial Meeting on Structural Reform to be held in 2015. Ministers will decide the future direction of work on ANSSR and give strategic direction to a post-ANSSR structural reform framework, including in relation to capacity building activities in APEC. The Committee noted the current importance of structural reform activities to APEC economies as demonstrated by the interest in APEC work in such areas as the Middle Income Trap, and agreed that it would be timely for Ministers to provide leadership and guidance in this area.
These recommendations were adopted in the 2014 Leaders’ Declaration.
Completed ANSSR Projects
Structural Reform Projects in Member Economies:
- Mexico held capacity building workshops on Development and Implementation of Methodologies to Improve the Quality of Regulations and Regulatory Impact Assessments for Enhancing Market Openness, Ensure Transparency and Promote Economic Growth.
- Viet Nam held a seminar on Sharing Experiences in Developing and Implementing New Growth Paradigm, and provided a summary of its project: Capacity Building to Improve the Effectiveness of Public Project Appraisal in Viet Nam.
- Malaysia implemented a project Enhancing the Quality and Relevance of Technical and Vocational Education and Training (TVET) for Current and Future Industry Needs.
- Chile shared results from its project Government-to-Citizens (G2C) Service Channels: Bringing the State Closer to the People in APEC Economies.
Third ANSSR Project Development Training Program
Australia presented its self-funded proposal on its Third ANSSR Project Development Training Program. The proposal aimed to help economies develop projects for ANSSR funding by focusing on Pillar 1 of ANSSR: promoting more open, well-functioning, transparent and competitive markets. The EC approved this proposal, and Australia subsequently followed up by organizing the ANSSR training development workshop in Kuala Lumpur from 3-6 June 2014 to assist member economies implement their ANSSR plans and to help them prepare ANSSR project proposals. The workshop resulted in the development of eight concept notes for APEC’s Project Session 2. All eight concept notes are currently being developed into full proposals, which will be submitted to BMC for its endorsement.
2014 Economic Policy Report: Good Regulatory Practices
The EC annually publishes an APEC Economic Policy Report (AEPR) to communicate its policy findings and insights from the Committee’s structural reform work program. The 2014 AEPR, led by Japan, China, and the United States, is on Good Regulatory Practices (GRPs). This 2014 APEC Economic Report highlights the challenges of APEC economies in implementing Good Regulatory Practices (GRPs) and suggests further steps in promoting the use of GRPs. For nearly two decades, APEC has been at the forefront of international efforts to develop, document, and implement principles and practices for regulatory environments that promote economic growth and enable prosperity across the region. The promotion of good regulatory practices (GRPs) is a key to building high-quality regulatory environments in APEC economies, which constitutes an important component of APEC’s work to promote free and open trade and investment in the region. In 2011, APEC Leaders agreed to take steps to strengthen the implementation of GRPs across APEC economies. APEC economies have been making impressive progress to date in reaching its GRP goals, which is highlighted in the 2014 report.
2015 Economic Policy Report: Structural Reform and Innovation
At EC2 in Beijing, EC members agreed that structural reform and innovation should be the focus of AEPR 2015. Policies to promote innovation are seen as one key means that developing economies can seek to use to escape the Middle Income Trap. Innovation here refers to both technological and institutional innovation, as structural reform includes institutional and legal reform. Developed as well as developing economies are interested in policies to promote innovation as a means of seeking to raise long-term productivity growth rates. The EC Chair will lead a governance group comprising all of the FotCs in drafting this Economic Policy Report.
APEC Ease of Doing Business (EoDB)
The Ease of Doing Business Stocktake (EoDB) workshop (organized by the United States) provided significant input and evidence for the EoDB project organizers. This workshop was undertaken to evaluate progress in reaching Ease of Doing Business goals in light of the initiative’s conclusion at the end of 2015. The Ease of Doing Business initiative includes improving the region’s business climate by making it faster and easier to do business through obtaining financing or permits, starting a business, and reducing the regulatory burden.
Ease of Doing Business 2014 Initiatives Implemented by Economies
Highlights of APEC members and achievements on improving their business climate:
Dealing with Construction Permits (Malaysia). In 2007, Malaysia was ranked 137 for EODB in dealing with construction permits. In 2014, it was ranked 43. Malaysia highlighted the efficiencies of its “one stop center” in reducing the number of procedures required from 37 to 15. Malaysia emphasized that it eliminated certain procedures rather than the requirements themselves.
Recent Reform in the EODB of Enforcing Contracts Indicator (Thailand) There was a significant reduction of time by using IT systems in procedures such as e-filing, e-broadcast of prosecutions, e-payment of fines, online appointments and e-service of notices and documents.
Boosting Entrepreneurship “Incorporations in One Day” (Chile) Incorporating a company is possible through only one procedure and zero cost, reducing the number of days to incorporate a company from 8 to 1. The law on streamlining procedures enabled Chile to improve their EODB ranking for starting a business from 32nd in 2013 to 22nd in 2014.
2014 Projects and Workshops
Several capacity building workshops were held in 2014:
The Enhanced Ease of Doing Business through Hague Conventions workshop (organized by Hong Kong China) issued conclusions and recommendations on joining the Apostille Convention and implementing E-APP, joining the Service and Evidence Conventions, considering the Choice of Court Convention and continuing the Judgments Project, and enhancing collaboration with the Hague Conference on Private International Law.
The International Regulatory Cooperation workshop (organized by New Zealand) outlined how regulatory cooperation can enhance regulatory capacity and capability and enable the sharing of resources between regulators.The workshop organizers presented the draft international regulatory cooperation toolkit for feedback, and also recommended that the Economic Committee consider potential next steps for progressing initiatives on international regulatory cooperation, e.g. through further policy discussion or more targeted sharing of experiences.
The workshop on Good Regulatory Practices: Consultations in the Internet Era (organized by the United States) demonstrated how economies can use ICT in their public consultations on proposed regulations. Following this workshop, the Committee agreed to submit to SOM3 draft APEC Actions on Public Consultations on Proposed Regulations in the Internet Era for information. Following further consultations on these guidelines, it is intended that a final draft be submitted to CSOM for agreement.
2014 Policy Discussions
State of the Regional Economy and its Policy Implications. During EC1, the EC held a policy discussion on the state of the regional economy and its policy implications.
Middle Income Trap (MIT). EC held a policy dialogue to discuss how APEC developing economies can overcome the middle income trap and graduate to high-income status. Key factors that contributed to the success of economies that have overcome the middle income trap, include enhanced human resources, structural reform and innovation. At EC2, the EC considered a paper from the EC Chair as a possible response to address Middle Income Trap issues in 2015.
2015 Policy Discussions
- A joint meeting between the Group on Services (GoS), the Economic Committee and the Pacific Economic Cooperation Council (PECC) will be held on regulatory reform and services. This will be held on the margins of EC1 in 2015.
- Policy Dialogue on State of the Regional Economy and its Policy Implications (to be led by the PSU) and Policy Discussion on Improving the Quality of Public Service (to be organized by Chinese Taipei) will be held at EC1 in 2015.
- APEC Actions on Internet Public Consultations was also adopted, which included a proposal to hold a Good Regulatory Practices Conference annually, with hosting alternating between the Economic Committee and the SCSC.
Structural Reform Ministerial Meeting 2008
An inaugural Structural Reform Ministerial Meeting (SRMM) was held in August 2008 in Melbourne, Australia. Ministers explored strategies for successful implementation of structural reforms and stressed the importance of robust legislative and institutional frameworks. They also engaged in a dialogue with business and considered the importance of structural reform to the private sector.
Economic Committee Initiatives in 2010 and 2011
The EC undertook various activities in the areas of structural reform, including LAISR and the APEC New Strategy on Structural Reform (ANSSR), the Ease of Doing Business (EoDB) plan and regulatory reform, among others.
- The EC had in 2009 identified five priority areas for regulatory reform in APEC economies, namely: starting a business, getting credit, trading across borders, enforcing contracts, and dealing with permits. These priority areas are the focus of the APEC "Ease of Doing Business (EoDB) Action Plan," which was launched by Leaders in 2009. The Action Plan sets an APEC-wide aspirational target to make it 25 percent cheaper, faster and easier to do business within APEC economies by 2015, with an interim target of a 5 percent improvement by 2011. Led by "champion economies," a number of capacity building programmes were carried out in 2010 and 2011 focusing on the necessary regulatory reforms in the five priority areas. Awareness-building workshops (Phase I) have been conducted on each of the priority areas (see below), and current attention is on developing more customised capacity building measures in those economies that have sought specific assistance on their reform efforts (Phase II). The EoDB Phase I seminars and workshops held in 2010 and 2011 included: Workshop on "Reducing Start-up and Establishment Time of Businesses"; Workshop on “Enforcing Contracts”; Seminar on "Getting Credit for Small and Medium Enterprises"; "Reforming the Regulatory System for Construction Permits”; “APEC Seminar on the First Steps of Successful Reform in Doing Business”; and “APEC Seminar on the First Steps of Successful Reform in Doing Business”.
- On structural reform, a seminar on "Impacts of Structural Reform and LAISR Stocktake", was held in Hiroshima, Japan, in February 2010, discussing three areas: first, the issue of structural reforms in the telecommunications, transport and energy sectors in APEC; second, an examination of the impacts of those reforms, drawing on the findings of a PSU research project; and third, a stocktake of the progress that has been made in implementing the LAISR. Since 2011, a series of capacity building events have been held to build specific understanding of what ANSSR will seek to accomplish, including: Symposium on APEC's New Strategy for Structural Reform 2011 (ANSSR Symposium) in May 2011; ANSSR Residential Training on Structural Reform in August 2011; and Workshop on Assessing Approaches to Structural Reform in September 2011. The workshop in September 2011 was the final series of ANSSR activities held earlier in 2011 and assisted members in their selection of assessment indicators for their domestic ANSSR priorities.
- With regard to the area of regulatory reform, an "APEC-OECD Joint Seminar on the APEC-OECD Integrated Checklist on Regulatory Reform on Japan" was held in Hiroshima, Japan, in February 2010. This Seminar shared the results of Japan's self-assessment under the Integrated Checklist among the EC members and discussed the further utilisation of the Checklist to facilitate regulatory reform in the Asia-Pacific region. Aside from Japan, the other APEC economies to have conducted an assessment are the United States; Hong Kong, China; Chinese Taipei; Australia; and Korea. In particular, in the area of Regulatory Impact Analysis (RIA).
- The workshop on “Using Regulatory Impact Analysis (RIA) to Improve Transparency and Effectiveness in the Rulemaking Process” was held in Washington DC in March 2011, focusing on how regulatory impact analysis (RIA) can be used to help develop more effective and transparent regulations, which can also contribute to improved public consultation in the rulemaking process.
- The workshop on “Advancing Good Corporate Governance by Promoting Utilization of the OECD Principles of Corporate Governance” was held in Washington DC in March 2011 and discussed the 2010 APEC Economic Policy Report on Corporate Governance specific steps that can be taken to enhance regimes for corporate governance with reference to the OECD Principles for Corporate Governance.
Rory MCLEOD (Mr)
Director, Commercial and Consumer Branch
Ministry of Business Innovation and Employment
Alvaro CASTRO ESPINOSA (Mr)