fostering sustainable, innovative and inclusive...
TRANSCRIPT
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2016/ISOM/SYM/009 Session II
Fostering Sustainable, Innovative and Inclusive Growth
Submitted by: Policy Support Unit, APEC Secretariat
Symposium on Priorities for APEC 2017Ha Noi, Viet Nam8 December 2016
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Presented byDenis Hew, DirectorAPEC Policy Support Unit
Copyright © 2015 APEC Secretariat
FosteringSustainable,Innovative,andInclusiveGrowth
Symposium on APEC 2017 Priorities8 December 2016Ha Noi, Viet Nam
Where APEC is now:Growth in APEC mirrors weakness in global economy
• TheAPECregioncontinuedtogrowduringQ22016at2.4percent,slightlyhigherthanthepreviousquarter’slevelof2.3percent,butlowerthanthe2.8percentGDPgrowthpostedinQ22015.
Note: Data not available for Brunei Darussalam and Papua NewGuinea.Sources : As ian Development Bank (ADB), International Financial Statis tics (IFS), the World Bank (WB), The Economist Economic and Financial Indicators , various economy sources , and APEC PSUs taff calculations .
GDP Growth Rates, year-on-year (y-o-y), Q2 2015 and Q2 2016
-6
-4
-2
0
2
4
6
8
Aust
ralia
Cana
da
Chile
China
Hong
Kon
g, C
hina
Indo
nesia
Japa
n
Kore
a
Mala
ysia
Mex
ico
New
Zeala
nd
Peru
The
Philip
pines
Russ
ia
Sing
apor
e
Chine
se T
aipei
Thail
and
Unite
d St
ates
Viet
Nam
Q2 2015 Q2 2016 APEC Q2 2015 average APEC Q2 2016 average
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• Thecontributionsof privateandpublicconsumptiontoGDPgrowthremainedcrucial,particularlyinviewofpersistentlyweakglobaldemandwhichadverselyaffectedtradegrowth.
Note: Data on quarterly contributions to GDP (expenditure side) are not available for Brunei Darussalam, Papua New Guinea; Russia; and Viet Nam. Missing bar per economy denotes either unavailability of data or zero percent.Source: Statistics Offices and Central Banks of APEC member-economies
GDP by Expenditure (y-o-y, in percent), Q2 2016
Where APEC is now:Domestic consumption buoys economic growth as trade remains low
-20-10
0102030405060
Aust
ralia
Cana
da
Chile
China
Hong
Kon
g, C
hina
Indo
nesia
Japa
n
Kore
a
Mala
ysia
Mex
ico
New
Zeala
nd
Peru
The
Philip
pines
Sing
apor
e
Chine
se T
aipei
Thail
and
Unite
d St
ates
Private Consumption Government ConsumptionGross Fixed Capital Formation Exports
Note: Datanotavailable forPapuaNewGuineaSource:WorldTrade Organization(WTO), BruneiDarussalamEconomicPlanningandDevelopmentOff iceandAPECPSUstaff calculations.
Where APEC is now:Export and import merchandise trade values contract in January-August 2016
• On average, the APEC region’s merchandise trade values contracted by 6.4% for exports and 6.6% for imports
Growth in Merchandise Trade Values (y-o-y, in percent), January-August 2016
-30-25-20-15-10-505
101520
Aust
ralia
Brun
ei Da
russ
alam
Cana
da
Chile
China
Hong
Kon
g, C
hina
Indo
nesia
Japa
n
Kore
a
Mala
ysia
Mex
ico
New
Zeala
nd
Peru
The
Philip
pines
Russ
ia
Sing
apor
e
Chine
se T
aipei
Thail
and
Unite
d St
ates
Viet
Nam
Exports ImportsAPEC average exports APEC average imports
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• In2015,theAPECregionattractedUSD953billionworthofFDI,equivalenttoaaround54.1percentofworldFDIandagrowthof42.3%fromthe2014level.
Source: UNCTADWorldInvestmentReport2016
Where APEC is now:APEC is the largest recipient of world FDI in 2015
FDI Flows (in billion US dollars) and APEC Share of World FDI (rhs, in %), 2000-2015
0
10
20
30
40
50
60
70
80
0
200
400
600
800
1000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
APEC FDI outflows APEC Share of the world (rhs)
Where APEC is now:Trade-restrictive measures are increasing along with investment-friendly measures
• Trade-restrictivemeasureshaveincreasedwhiletrade-facilitatingmeasureshavedeclinedinAPEC.• Investment-friendlymeasuresalsowentup,evenasinvestment-restrictivemeasureswerealsoslightly
higher
01020304050607080
Trad
e-fa
cilita
ting
mea
sure
s
Trad
e-re
stric
tive
mea
sure
s
Inve
stm
ent-f
acilit
ating
m
easu
res
Inve
stm
ent-r
estri
ctive
m
easu
res
mid-May 2015 to mid-Oct 2015mid-Oct 2015 to mid-May 2016mid-Oct 2015 to mid-Oct 2016
TradeandInvestmentMeasuresinAPEC,mid-May2015tomid-October2016
Note: Onlynineof the21APECmember-economiesbelongtotheG-20,including:Australia;Canada;China;Indonesia;Japan;Korea;Mexico; Russia;andtheUnitedStates.Source:UNCTAD-OECD-WTO Trade andInvestmentMeasures.
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Near-term outlook points to continued growth but downside risks are dominant
RealGDPGrowth,inpercentActualvsForecast
Actual Forecasts2014 2015 2016 2017 2018
Australia 2.69 2.44 2.87 2.67 2.89BruneiDarussalam -2.35 -0.55 0.38 3.95 1.71Canada 2.47 1.08 1.16 1.90 1.91Chile 1.83 2.30 1.70 1.99 2.70China 7.30 6.90 6.59 6.17 6.03HongKong,China 2.68 2.44 1.44 1.85 2.81Indonesia 5.02 4.79 4.94 5.30 5.50Japan -0.03 0.54 0.51 0.56 0.45Korea 3.34 2.61 2.72 3.04 3.06Malaysia 6.01 4.97 4.30 4.60 4.70Mexico 2.25 2.47 2.09 2.33 2.58NewZealand 3.02 3.00 2.77 2.71 2.59PapuaNewGuinea 7.35 6.62 2.54 2.95 2.49Peru 2.39 3.28 3.75 4.12 3.58ThePhilippines 6.22 5.91 6.40 6.70 6.80Russia 0.71 -3.73 -0.76 1.07 1.20Singapore 3.26 2.01 1.70 2.23 2.64ChineseTaipei 3.93 0.65 0.97 1.67 1.94Thailand 0.82 2.82 3.23 3.27 3.10UnitedStates 2.37 2.60 1.58 2.20 2.08VietNam 5.98 6.68 6.10 6.20 6.20
• Inthenear-term,APECeconomiesareexpectedtocontinue togrowbutatvaryingspeeds.
• TradegrowthandFDIflowsareanticipatedtoslowdownin2016beforepickingupin2017-2018.
• UpsidepotentialforAPECgrowthcouldcome fromimprovementsinindustrialproduction andcommoditypricesaswellassustainedFDIinflows.
• DownsideriskscouldemanatefromChina’srebalancing,uncertaintyinUSinterestrates,medium-termimpactofBrexit,andrisingprotectionism.
• Balanceof risksistiltedtothedownside.• Anappropriatepolicymixofshort-term
andmedium-termmeasuressupportshigherandmoresustainablegrowth.
Source:IMFWEO October2016.
What’s next for APEC: Skills development in a Digital Age
46
810
12
Log
of re
al p
er c
apita
GD
P
0 100 200 300Mobile cellular subscriptions (per 100 people)
bandwidth = .8
46
810
12
Log
of re
al p
er c
apita
GD
P
0 20 40 60Fixed (wired) broadband subscriptions (per 100 people)
bandwidth = .8
ScatterplotsofrealpercapitaGDPanddigitaltechnologyuse,2000-2014
Note: Fittedcurvesare generated usingnonparametriclocallyweightedscatterplotsmoothing(LOWESS).Source:WorldBank,WorldDevelopment IndicatorsandDirectorate-GeneralforBudget,AccountingandStatistics(ChineseTaipei) .
• Ahigher rateofdigitaltechnologyuseiscorrelatedwithpercapitaGDP.AplausibleexplanationisthatdigitaltechnologyincreasesGDPthroughitsimpactonconsumptionandproduction,whileahigher incomealsoincreasesfirms’andhouseholds’accesstodigitaltechnology.
• Butlinkagesbetweendigitaltechnologyandemploymentareunclear, suggestingopposingimpacts.
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Skillsneededinamoderneconomy
• literacy,numeracy,andcognitiveskills• Problem-solvingability• Verbalability,memory,andmentalspeedCognitive
• Socioemotionalskillsandpersonality• Opennesstoexperience,conscientiousness,extraversion,andemotionalstability
• Self-regulation,mindsetandinterpersonalskills
Socialandbehavioural
• Knowledgeofmethodsandtools• General technicalskillsfromschoolingandtraining• Occupation-specificskills
Technical
What’s next for APEC: Skills development in a Digital Age
• Employment inthedigitalage requiresbasiccognitiveskills,suchasliteracyandnumeracy,whileawell-equippedworkerneedsskillsthatareeasilytransferableacrossjobsandoccupations.
• Aworkerneedstobeadaptiveandflexible,beingquicktolearnnewskillsastheyarerequiredbythe jobmarket.AstheWorldBank(2016)putthem,workersinthedigitalagerequirehigher-ordercognitive,socioemotional,andtechnicalskills.
Source:WorldBank,WorldDevelopmentReport2016
Evolution of APEC Growth Strategy (2009-present)
• In 2009, the APEC Growth Strategy was launched in response to the 2008 Global Financial Crisis.
• In 2010, APEC Leaders endorsed the APEC Growth Strategy, which aimed to achieve balanced, inclusive, sustainable, innovative, and secure growth.
• Consistent with other APEC initiatives, the APEC Growth Strategy (2010-2015) rests on three pillars: 1. trade and investment
liberalization; 2. business facilitation; and 3. economic and technical
cooperation.
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• In 2014, APEC Leaders endorsed the Accord on Innovative Development, Economic Reform and Growth, which aims to promote closer cooperation in five areas:
1. Economic reform;2. New economy;3. Innovative growth;4. Inclusive support; and5. Urbanization.
• In 2015, reaffirming their commitment to the 2010 APEC Growth Strategy, APEC Leaders agreed on an APEC Strategy for Strengthening Quality Growth (2015-2020), by contributing to the achievement of three Key Accountability Areas (KAAs):
1. Institution building;2. Social Cohesion; and3. Environmental Impact
Evolution of APEC Growth Strategy (2009-present)
Recent Studies on Inclusive Growth by the APEC Policy Support Unit (PSU)
SelectedPSU Studies
Key Points
Integrating SMEs into Global Value Chains: Policy Principles and Best Practices(May 2014)
• Policies to integrate SMEs are needed on two levels: 1) on a general/horizontal level, economies should promote awareness and understanding of the benefits of global value chains; and 2) on an industry-specific level, economies should identify strengths, weaknesses, opportunities and threats for domestic SMEs to enter into global value chains and assist SMEs with relevant policy tools/packages.
Innovation, Competitiveness and the Role of Fiscal Policies(November 2014)
• APEC members need to place greater emphasis on promoting research and development (R&D) and encouraging innovation as important pathways to strengthen the region’s competitiveness, raise labor productivity and address the effects of changing demographics.
• The following lists selected APEC- PSU studies, policy briefs, and other papers on inclusive growth from 2014-present:
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Recent Studies on Inclusive Growth by the APEC Policy Support Unit (PSU)
SelectedPSU Studies
Key Points
Structural Reform for Resilient and Inclusive Growth(August 2015)
• Household demand—rather than trade or government spending—is the main driver of growth in the APEC region in recent years. Based on this finding, it seems that future APEC growth lies in strengthening household consumption through structural reform. Numerous studies show that structural reforms not only contribute to raising productivity, they also help make growth more inclusive.
The APEC Women and The Economy Dashboard 2015(September 2015)
• APEC economies have been undertaking efforts to improve the conditions for the participation of women in the economy, however, women participation in such areas as financial services; science, technology and engineering; and leadership positions in both public and private sectors remain low.
Recent Studies on Inclusive Growth by the APEC Policy Support Unit (PSU)
SelectedPSU Studies
Key Points
Tourist Arrivals and Inclusive Growth(August 2016)
• Enhancing the inclusiveness of tourism requires active policymaking at three levels: destination, economy, and international.
Exploring Quantitative Indicators for Effective Monitoring of APEC-wide Progress on Structural Reform under RAASR 2016-2020(October 2016)
• Proposed 17 indicators associated to the RAASR pillar on “deeper participation by all segments of society including MSMEs, women, youth, older workers, and people with disabilities”, ensuring that indicators contribute towardsevaluating the inclusiveness of structural reform policies.
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2015 APEC Economic Policy Report (AEPR) on Structural Reform and Innovation
“The prospects for the shared prosperity of APEC will depend on innovative development, economic reform, and growth in the region, which are complementary and mutually reinforcing.”
-2014 APEC Leaders’ Declaration11 November 2014, Beijing, China
• In response to the statement by APEC leaders, the 2015 AEPR conducted a study to examine the link between structural policy settings and firm-level innovation across the APEC region.
• The findings of the AEPR study show that:Ø There is significant diversity even between economies at the same levels of
development.Ø Structural policies play a critical role in the development of high performing
national innovation systems.Ø All member-economies face capability challenges in developing policies and
institutions that will improve firm innovation outcomes.
Thank You
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