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.