15 November 2009
APEC Leaders Agree on Sustainable Growth Strategies
Washington — President Obama says quick, coordinated, unprecedented actions by many of the leaders in the Asia-Pacific Economic Cooperation (APEC) forum helped pull the global economy back from the brink of a deeper recession, but now is the time to begin putting balanced economic growth strategies in place.
“Economies around the world are beginning to grow again. And we are on the path to recovery,” Obama said November 15 at the 17th annual APEC forum being held in Singapore.
One fundamental economic strategy adopted by the 21 APEC leaders is a set of policies aimed at ending the traditional economic pattern of rapid expansion and contraction that nearly always ushers in a recession.
“We cannot follow the same policies that led to such imbalanced growth,” Obama said.
APEC members account for 53 percent of the global gross domestic product, buy 58 percent of U.S. exported goods, and represent a market of 2.7 billion consumers. In 2008, U.S. goods exports to the Asia-Pacific region totaled $747 billion, an increase of 8.3 percent over 2007, the White House said in an APEC fact sheet. During the same period, U.S. services exports to the region totaled $186.5 billion, up 7.7 percent.
ECONOMIC POLICIES
Following the lead set at the Pittsburgh Group of 20 Summit that included advanced and emerging economies, the APEC leaders agreed to make growth more inclusive through initiatives that support development of small and medium businesses, establish worker retraining programs for jobs more focused on the 21st-century economy, enhance economic opportunities for women, promote development while also reducing poverty levels, and enhance measures to improve the environment.
The leaders also agreed to strengthen supervision of banks and investment firms to prevent a similar economic crisis without adequate warning.
The leaders adopted a strategy for monetary policies that are based on “market-oriented exchange rates” that more accurately reflect economic conditions. Currently established economic stimulus policies, put in place to halt the recession and jumpstart recovery, will be maintained until it is clear that a durable recovery has taken hold in member economies.
“In the United States, families are already saving more and spending less; consumers are paying down their credit cards; and businesses are getting their balance sheets in order,” Obama told the APEC leaders. “And we know these actions can’t just be short-term responses to this crisis. They have to become long-term habits.” In addition, the U.S. Congress is considering new and sweeping regulations for the nation’s financial industry and the mortgage-lending industry to prevent a similar crisis, Obama said.
But rebalancing economies and what drives them will not be an easy or short-term undertaking. The U.S. economy is consumer-driven, and to rebalance it would call for less consumer spending, greater consumer saving and expanded U.S. exports. China’s economy is more export-driven, which would require substantial redirection to achieve greater balance with other regional economies.
Obama also pledged to APEC leaders that he will take “serious steps to reduce America’s long-term deficit — because debt-driven growth cannot fuel America’s long-term prosperity.”
The APEC nations pledged to increase trade across the region by simplifying customs procedures and improving the movement of goods across and within borders. They also announced an action plan designed to make it 25 percent cheaper, easier and faster to conduct business in the region by 2015 by cutting costs and streamlining processes associated with starting and operating business in APEC economies.
Japan will host the 2010 APEC forum and then the United States will host it in 2011 in Hawaii, where Obama was born. Obama pledged to the 21 APEC members that the United States will remain an active partner.
ENVIRONMENTAL ISSUES
On climate change, the APEC leaders called for global action to reduce greenhouse gas emissions, which are thought to be a prime cause of global warming. The United States and Japan have already pledged to reduce climate-harming emissions by 80 percent by 2050.
The APEC leaders called for collective action to reach an ambitious outcome at an international climate change conference in Copenhagen, Denmark, in December.
To aid global food security, which has been in peril in less developed economies for several years, the APEC leaders directed their governments to implement programs aimed at improving farm productivity and enhancing agricultural markets in the APEC region.
Obama is on a four-nation, nine-day trip to East Asia — his first as president. It began in Tokyo, then he traveled to the APEC forum in Singapore, and he left Singapore for Shanghai and Beijing where he will spend three days before concluding his trip in Seoul, South Korea. A significant reason for this trip was to make clear to East Asian nations that the United States will remain engaged and active in regional affairs.
