14th Conference of the Asia Pacific Labour Network (APLN)

Lima, Peru, 27 October 2008
  • Speech by Ambassador Juan Carlos Capuñay, Executive Director, APEC Secretariat
I would like to begin by thanking Mr. Guy Ryder - General Secretary of the International Trade Union Confederation - for having included me in the 14th Conference on the Asia Pacific Labour Network (APLN). This meeting takes place at a time of dramatic change and in a period which will likely be recorded as a pivotal time in history.
In the past weeks, we have watched as once seemingly indestructible financial institutions have crumbled; the wealth of many has disappeared over night and the global economy has been thrown into complete disarray.
This, of course, is not an isolated blow but comes as the world is at an already-precarious state. Negotiations at Doha have failed, with members unable to overcome their differences; divisions over oil and other precious resources are increasingly distinct; the world is acutely aware of the need to curb its environmental impact but lacks the genuine will to do so; and the frequency and scale of natural disasters have rendered the idea of insurance obsolete, in even the most developed economies.
We are not at the end of a road. Rather we are at the beginning of a transformation in the structure of the economy. And the situation is daunting - we will have to acknowledge that the economic world as we know it has drastically changed. We now have to learn how best to adapt to the new circumstances of a radically different global economy.
But this might also be considered a time of unprecedented opportunity. Indeed, no great change has ever been achieved without a struggle, without a catalyst. If has now become obvious that change is necessary; indeed many institutions will have to improve how they conduct their business and learn to function in ways that will now benefit the majority.
"If it isn't broken, don't fix it," people say. But now we can see what is broken. And not only can we fix it; we can actually make it better.
Today, I would like to share with you some of the ways that APEC has been making things better this year and some of the areas that are likely to receive attention in discussions at this year's Leaders' Meeting. I believe you will agree that this year, APEC's agenda coincides with the Labour Network platform and is also timely.
Let me first explain to you that since its inception APEC has created almost 190,000,000 jobs, 174 million in small economies while 200 million have been lifted from poverty. And trade has increased three times since 1990 with a positive effect in the level of employment.
Among the recommendations of the APLN last year, addressing the social dimension of trade has been among the most important proposals of APEC this year. APEC 2008 Peru has as its overarching theme "A New Commitment to Asia-Pacific Development" and has consistently emphasized the social aspects of trade. Governments, the private sector, international financial institutions as well as civil society all have something to contribute.
In general, it can be said that globalization increases business and wealth-generating opportunities exponentially. However, one can easily see how these opportunities are more advantageous to those with the ability to recognize and exploit them. For those who are not able, globalization may only widen the chasm between them and the things they wish to achieve.
On the other hand, APEC's social perspective means that marginalized groups should be empowered to realize the benefits of globalization and effectively diminish that gulf. To do so benefits the Asia-Pacific, as a whole, and leads to long-term sustainable development.
ABAC - APEC's Business Advisory Council comprises some of the most respected and innovative minds in business; it notes that trends in labour mobility are imperative considerations in the context of the free flow of goods and investment. Specifically, the decline of lower skilled labour in relation to accelerating labour flows must be addressed as a matter of priority.
Specifically, ABAC recommends that APEC's 2009 Agenda include a work plan to address issues affecting labour mobility, such as the challenges associated with demographic and labour imbalances; protection of temporary workers and the transfer of skills. To ignore these sorts of issues, they say, would inevitably lead to tensions and have an overall negative impact on business.
In order to implement APEC's new commitment to the Asia-Pacific and to emphasize the social dimensions of the APEC agenda we look at several areas. That is SMEs, education, the private sector and public-private partnerships as well as structural reform.
As we consider priority groups in the context of globalization, both the public and private sector players have cited the significance of small and medium enterprises. In the APEC region, small and medium enterprises account for over 90 percent of all businesses and employ as much as 60 percent of the work force.
The flexibility of these small businesses stimulates innovation and competition. Their flexibility allows them to quickly accommodate market demands. Employment opportunities lead to both economic and social stability. They lead to the flow of capital and, ultimately, they contribute to a healthy macro-economic environment.
However, at present, SMEs account for only 30 - 35 percent of exports from the region. This disproportionate figure suggests that there is great opportunity for SMEs, if only they can be enabled to expand their business beyond borders.
To this end, recommendations include that funding be made available through financial institutions; that the cost of doing business - customs and tariffs - should not be prohibitive; and that young entrepreneurs and SMEs be trained in language and technology skills.
ABAC has made clear its own commitment to involving SMEs. This year, the 2nd ABAC SME Summit was held in Hangzhou, China and presentations from very distinguished bankers, entrepreneurs, CEOs and philanthropists were made.
The event attracted participants from over 5,000 SMEs from throughout the region and informed the draft letter that ABAC wrote to Leaders, immediately afterward. The second part of this summit is to be held in Lima, this November, in order to include the widest range of inputs from the smaller business community. SMEs of Latin America are the commercial and business bridge between Asia and the Americas, and their participation in the summit reflects the transpacific nature of APEC.
In a similar vein, Ministers agree that consideration should also be given to including SMEs when developing the new generation of FTAs.
Ultimately, however, SMEs are as strong as their components and in this respect, Education Ministers are also contributors. Recognizing the need to shape 21st century citizens, Ministers are committed to the Millennium Development Goal to achieve universal education and - further - to make that education relevant to new and ever-changing conditions. The ability to communicate across cultures, for example, is increasingly important as businesses transcend borders and production may involve the input of numerous economies.
It is for businesses to do business. It is for governments to entrench policies that make this possible. To this end, structural reform has been another priority at APEC this year. Time-consuming regulatory obligations and redundant procedures compromise the potential of businesses to flourish. Attitudes of government officials must change so as to effect the necessary changes.
In terms of labour, one might also anticipate a trickle-down effect by which the livelihoods of employees are also negatively impacted. On the other hand, where business is facilitated, employers are able to pass the benefits on to employees who are more likely to enjoy favourable conditions and fair pay.
To increase security, APEC has developed codes of conduct for businesses and public officials as well as Anti-Corruption Principles for the Public and Private Sectors. Transparency is a key tool for engaging business.
While corporate social responsibility is not a new idea, it has become less an adjunct consideration and more a fundamental consideration, and now integral to any effective development planning. This has occurred partly as a result of Peru's agenda and partly as a shift in global dynamics.
If we are as socially-concerned as we purport to be, we must use regulation as a means to enable. In this respect, we can see the positive influence of social responsibility in the achievements made and the priorities that will be put before Leaders this year.
But perhaps even more striking is that social responsibility has presented itself as a necessity. Only through the shared commitment of both public and private entities can the challenges of the 21st century be addressed. As I contemplate our achievements this year and as I attempt to summarise the contribution of Peru to APEC, I consider social responsibility to be a legacy.
It has become ever more evident that an appropriate response to the existing business climate will depend on the input and cooperation of both public and private entities. Systems supported by a multiplicity of institutions, markets that move freely and allow for ebbs and flows, and citizens who adapt quickly to change are definitive to economic health in the 21st century. Moreover, this could be the only way forward.