APEC BUSINESS ADVISORY COUNCIL (ABAC)

(For instructions on how to download the entire 1996 ABAC Report click here.)

ABAC is the senior business advisory council to the Asia-Pacific Economic Cooperation forum.

APEC has placed a strong emphasis on business participation in APEC. Businesses have taken part in the APEC work program in, for instance, in working groups in industry sectors such as telecommunications and transportation. In 1993 APEC economic leaders e stablished a Pacific Business Forum for one year to give business advice to government leaders. It made recommendations to APEC economic leaders in Bogor, Indonesia in 1994 and in Osaka, Japan in 1995.

In 1995, APEC economic leaders and ministers acted on recommendations from the Pacific Business Forum to establish a permanent senior business advisory council. Ministers asked the ABAC to organize its structure, funding, and activities in 1996.

The council met first in Manila in June, Honolulu in August, and finally in Hong Kong in September. It set itself up with two or three business representatives appointed by APEC economic leaders from each APEC member economy and decided to have a chair he ld by a business person from the economy holding the APEC chair during each calendar year. Co-chairs were chosen from the APEC economies from the past and future APEC chairs.

In 1996, Mr Roberto Romulo from the Republic of the Philippines is the ABAC Chair. The two co-chairs are Mr Minoru Murofushi from Japan and Dr Dorothy Riddle from Canada.

The ABAC Report: APEC Means Business: Building Prosperity for Our Community

The thrust of ABAC's work this year has been to complete an inaugural report to APEC economic leaders. On 24 October, ABAC Chair Mr Roberto Romulo presented the report, entitled APEC Means Business: Building Prosperity for Our Community, to President R amos, the APEC Economic Leader for the APEC Chair in 1996. Other ABAC members presented the report to their economic leaders as well for them to consider during the final four weeks until the main APEC meetings in Manila. The report was released publi cly on 24 October and is available from the ABAC members and from the APEC Secretariat in Singapore.

APEC ministers will gather in Manila on 22-23 November. ABAC members will meet Economic Leaders in Manila on 24 November. On 25 November economic leaders will meet in Subic.

APEC Means Business: Building Prosperity for Our Community, the 1996 ABAC report, calls for economic leaders to endorse specific measures (excerpted below) in five areas that are important to business:

Cross Border Flows: Impediments to flows of people, goods, services, information and capital across borders directly affect business and consumers. For a more productive "borderless" regional business community, ABAC asks APEC economic leaders to :

• Endorse the creation of an APEC Business Visa and the establishment of APEC Business Immigration Lanes in ports of entry to facilitate business-related travel.

• Endorse the establishment of an APEC Central Registry for Trademarks and Patents to promote investment and technology flows.

• Develop and commit to adopt a set of common professional standards for business-related service providers in the region, to be developed by appropriate professional accreditation bodies, and supported by any needed legislative measures.

• Adhere to 100% implementation of the Bogor trade and investment liberalization goals, with ABAC's continued aspirations to accelerate the process kept in view.

Finance and investment: ABAC wants Economic Leaders to agree that the scope and reach of APEC Non-Binding Investment Principles should be expanded. ABAC offers recommendations on evaluating progress and on the accelerated implementation of member economies' commitments under the General Agreement on Trade in Services and the Agreement on Trade-Related Investment Measures. ABAC calls for the development of a multilateral understanding on the avoidance of double taxation. In particular, Economic Le aders might:

Establish APEC Voluntary Investment Projects (AVIP), under which economies can voluntarily apply a specific set of principles for enhanced investment protection to selected projects above and beyond the protection provided for in the Non-Binding In vestment Principles.

Through the AVIP concept, projects accorded higher levels of investment protection can enjoy improved access to capital. Implementation of this proposal will lead to increased investment flows within the region and demonstrate the benefits of adopting pr inciples that protect investment.

Infrastructure: Expanded public-private sector cooperation is needed to meet the region's urgent need to expand, coordinate and rationalize investment in major projects. ABAC recommends that APEC:

Hold a series of Joint Public-Private Sector Infrastructure Roundtables in interested APEC economies to examine the infrastructure needs of the host economy, identify and recommend corrections to remove impediments to private sector involvement in developing new infrastructure, disseminate regional best practices, and establish productive linkages between entities from both sectors that are able to meet particular infrastructure needs.

Beyond this recommendation, ABAC offers guidelines for ways in which host and investor governments and multilateral institutions can enhance their efforts to attract expanded private sector investment in the development of the region's infrastructure.

Small and medium enterprises and human resources development: Small and medium enterprises are vital to economic development and in creating employment and wealth in the Asia-Pacific region. SMEs provide the largest volume of productive units and the majority of employment both domestically and regionally. The Osaka Action Agenda calls on member economies to institute policies to maintain and develop SME dynamism. To do this, frameworks of operation favorable to SMEs must be introduced to enhance their capabilities. ABAC asked economic leaders to:

• Endorse the establishment by September 1997 of an APEC Network for SMEs, to function as a network of networks in each economy, to be linked electronically at the regional level through the APEC Center for Technology Exchange and Training for Small and Medium Enterprises (ACTETSME). It shall pursue an initial action program focusing on four key areas: human resources development, access to technology and information, access to credit and capital, and access to market opportunities. ABAC also asks the Economic Leaders to direct appropriate government agencies to undertake actions in support of the program.

• Endorse the holding of initial Roundtables in each economy that bring together all relevant government agencies, banks, venture capital and other credit facilities or sources, associations, and SME representatives to address the growth and export fina ncing needs of SMEs in concrete ways, with the recommendations from the Roundtable reinforced by government policy.

• Endorse the collection and reporting of data on SME statistical indicators by September 1997 to create a baseline from which targets for progress can be established.

Economic and technical cooperation within APEC: Economic and technical cooperation is vital to the building of a sense of community within APEC. Economic leaders have established this as one of the two parts of the Osaka Action Agenda and acknowl edged that the development needs of APEC's diverse economies cannot be met by trade and investment alone. To facilitate effective and strategic implementation of economic and technical cooperation efforts, ABAC asks economic leaders to:

Launch APEC's new model of economic and technical cooperation based on strategic focus in line with the "Essential Elements" agreed to in the Osaka Action Agenda; partnership between government and business/private sector; and the establishment of a regional network for economic and technical cooperation.

In formulating each of these recommendations, ABAC has attempted to contribute to the major themes of this year's APEC activities: "APEC means business" and "Building the spirit of community." ABAC urges the region's economic leaders to act by transformi ng their vision of APEC into concrete and measurable actions that will effect significant and tangible improvements in the business environment and benefit the community at large.

The full report is available from the APEC Secretariat. Inquiries should be directed to the ABAC Coordinator, APEC Secretariat, telephone (65) 276 1880, fax number (65) 276 1775, or email address [email protected].

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