Policy Proposals Asia and Oceania 2nd Asian Business Summit Joint Statement Achieving Sustainable Economic Growth in Asia through Private Sector Initiative
September 29, 2011
Asia has the capacity for dynamic growth and is playing a major role in global economy. It is vital for the Asian business community to strengthen intra-regional ties so that it can play a leading role in making this growth sustainable and shaping economies and societies where the private sector takes the initiative in creating prosperity. To this end, representatives from 13 business organizations of 11 Asian economies gathered in Tokyo on September 29, 2011, for the Second Asian Business Summit hosted by Keidanren. This event followed in the footsteps of the first summit held last year.
Summit participants had a lively exchange of opinions on topics of common interest including strategies for economic growth in Asia, promotion of regional economic integration, advancement of innovation, infrastructure development in the Asian region, financial cooperation, and environmental and energy issues. The participants also talked about the regional cooperation on disaster response, which was critically felt in the aftermath of earthquake in Japan on March 11th.
The Asian business community will provide the following inputs to forums including the APEC Leaders' Meeting and the East Asia Summit while fulfilling its own role.
1. Achieving Sustainable Economic Growth in Asia
- (1) The Asian economy is steadily recovering from the crisis of 2008, and emerging countries, in particular, are increasingly acting as growth engines for the global economy. To turn this trend into sustained and balanced growth, we must aim to create fair, liberalized and seamless business spaces by developing attractive production bases, opening consumer markets, and platforms for research and development, where capable persons can work together.
- (2) To achieve sustainable economic growth led by the private sector, the Asian business community will proactively make contributions in various areas including promotion of regional economic integration, innovation, and development of "soft" and "hard" infrastructure. We remain committed to fair and free trade and firmly oppose the protectionist approaches.
2. Expanding and Strengthening Regional Economic Integration
- (1) The First Asian Business Summit proposed creation of an APEC-wide free trade area, namely, the Free Trade Area of the Asia Pacific (FTAAP) based on the principles of openness, fairness, transparency, mutual benefits, inclusiveness and functional cooperation. We welcome the APEC Leaders' Meeting held last November for clearly stating in its "Yokohama Vision" that FTAAP would be pursued as a comprehensive free trade agreement. We also support the best use of existing economic partnership agreements (EPAs) / free trade agreements (FTAs), and efforts to conclude the ASEAN+3 EPA, the ASEAN+6 EPA (CEPEA) and the Trans-Pacific Partnership (TPP) in accordance with the circumstances and needs of each economy as pathway towards achieving FTAAP.
- (2) To achieve high-quality regional economic integration, it will be crucial to make stronger efforts to encourage cross border movement of natural persons with specialized knowledge and skills, to liberalize investment and services by easing foreign capital restrictions and rectifying opaque domestic regulations, to further cut tariffs, and to remove export controls and other restrictions. To this end, the Asian business community will play a leading role in forums aimed at concluding EPAs and FTAs, such as industry-government-academia joint study meetings and business environment committees.
- (3) Promotion of regional economic integration and multilateral liberalization of trade and investment are the twin engines of growth. The Asian business community urges the parties to negotiate in good faith to conclude the WTO Doha Round.
3. Environment, Energy and Disaster Response
- (1) In order to develop sustainably into the future, Asia needs to ensure within the region stable supply of the earth's limited resources and energy and actively promote resource conservation, energy saving, and recycling. Alternative energy sources, such as renewable and nuclear energy, are options for many Asian countries. Strengthening such efforts in the region will contribute not only to regional growth, but also to stable economic development throughout the world.
- (2) On the climate change front, we need to establish a fair and effective post-2012 international framework in which all major GHG emitting nations continue their efforts to reduce emissions. With a view to constructing a low carbon society, the Asian business community will promote such initiatives that include sectoral transfer of energy efficient technologies, dissemination of environmentally friendly products, capacity building etc.
- (3) Following the earthquake in Japan on March 11th, the Asian business community reaffirms the importance of Asian supply chains to the global economy and collaborates to restore and maintain the smooth functioning of the supply chains. Also, we will collaborate with the public sector in the reconstruction of basic infrastructure and sharing of disaster response experience and expertise.
- (4) The Asian business community will work together to construct future cities which can accommodate our needs on environment, energy and disaster response.
4. Promoting Innovation
- (1) Sustainable development in the Asian region requires reinforcement of the region's role as an R&D center. To create an environment where Asia can harness innovation to provide the world with high-added-value products and new business models, the Asian business community will collaborate with the public sector to provide forums for joint research and development, encourage the free movement of highly skilled human resources, and make stronger efforts to conduct vocational training and specialized education.
- (2) Unification of standards is a key prerequisite for joint development and transfer of technology. Recognizing that standardization has greater effects than a single invention, we will promote standardization in vital fields, including IT, the environment, energy, electronics, machinery, and chemicals, within Asia and make these standards global ones. In addition, mutual recognition of standards should be promoted.
- (3) By protecting intellectual property rights, creating environments that enable companies to appropriately recoup investment in R&D, and maximizing private-sector R&D capabilities, we should promote innovation and technology transfer. We will gather information on actual difficulties the business community faces and propose frameworks for protecting intellectual property rights to our respective governments.
5. Promoting Infrastructure Development in the Asian Region through Public-Private Partnership
- (1) To ensure sustainable growth and construct a platform for affluent living, there is a need to prioritize the development of core infrastructure, including roads, railways and ports; power generation infrastructure that helps to conserve energy and cut GHG emissions, such as nuclear and highly efficient thermal power stations; and urban living infrastructure, including housing, water supply, and sewerage. Since infrastructure development requires vast funds, it necessitates the introduction and utilization of public-private partnership scheme (PPP), whereby basic infrastructure is funded from public finances and parts of projects expected to be commercially viable are handled by the private sector. The Asian business community will actively participate in such projects and approach respective governments to propose the establishment of effective PPP frameworks.
- (2) To promote high-quality infrastructure projects with low environmental impact and high cost-effectiveness over the medium to long term, we call on its respective governments to establish fair and transparent international bidding systems.
- (3) The Asian business community pays attention to the proposal made by some representatives of bilateral offset mechanisms, whereby countries transferring low-carbon technologies overseas may have CO2 reductions achieved by the relevant technologies counted as a contribution by the transferring country. Such bilateral offset mechanisms will help to diversify financing methods in recipient countries and encourage the widespread use of environmentally friendly infrastructure.
- (4) In partnership with the public sector, the Asian business community will encourage support for developing "soft" infrastructure, including the establishment of relevant laws in each country and training of personnel taking part in projects.
6. Promoting Financial Cooperation in Asia
- (1) With a view to making effective use of Asian private capital for infrastructure development, we will promote financial cooperation including the development of bond markets within the region. We welcome the outcome of the 21st Century Policy Institute's study (February 2011) in this regard.
- (2) As well as cooperating to foster institutional investors as a driving force for the creation of a bond market and to develop new products designed to expand the investor base, private financial institutions themselves in Asia will actively participate in the bond market. Private financial institutions would also contribute towards inclusion of SMEs in the financial market.
- (3) We call on our respective governments to continue applying outcomes from the Asian Bond Markets Initiative (ABMI) to enhance bond market systems, establish rating mechanisms, ensure transparency of transactions and corporate information, and strengthen functions related to the supply of financial instruments to meet investment needs.