Alan Bollard was Executive Director of the Apec Secretariat.
Alan Bollard was Executive Director of the Apec Secretariat.
In 1989 the world changed, as the Berlin Wall tumbled down and the Cold War ended.
That year, a group of insightful ministers and officials looked at the vast Pacific Ocean, and pondered how to align the growing Eastern economies with the richer West.
That was the year trade ministers met in Canberra and agreed to establish Apec. It has since grown to a network of 21 economies skirting the Pacific Rim, constituting over half the world's economy. The members were never like-minded in their form of government (from capitalist to communist), or in their governance (from democracy to autocracy), nor in their religious outlook their religious outlook (Islam, Buddhism, Catholicism, and everything else). But they did all agree that trade, investment, and other cross border flows could help them grow their living standards.
If David Ricardo was the theoretical spirit behind this move, there was also a fair dose of self- interested pragmatism about the benefits of co-operating and integrating.
After two decades of policies guided by the plan known as the Bogor Goals, the result has been clear: trade driven growth, evolving supply chains, and urbanisation have delivered huge dividends to Western consumers and wages to East Asian workers.
This has been an important contribution to the biggest economic gains in history — one billion people have risen from poverty into middle class.
That was the positive spirit, which underpinned New Zealand's last hosting of Apec in 1999. As Treasury boss I attended Leaders Week, held in the Auckland Domain. Locals complained about traffic congestion. But my memory was more positive — Bill Clinton, Jiang Zemin and Vladimir Putin all working together to keep the economic initiatives on track (and a side meeting that aided the birth of independent East Timor).
I reconnected with Apec in 2012 when I became Executive Director of the Apec Secretariat based in Singapore. For several years we kept the spirit of the Bogor Goals alive, reducing harmful trade barriers, harmonising business regulations, and promoting best practice policies. Not every economy agreed with every policy initiative (there are usually several hundred initiatives under way) and not all working groups (there are over 50) delivered on all their promises. But the politics and the economics seemed aligned, there were gains for all countries, livelihoods were improving.
2016 was another watershed year, when the world changed yet again: problems had been mounting after the Global Financial Crisis, Chinese debt had been building up, the UK voted for Brexit, and the US voted in President Donald Trump. Populist nationalism was afoot.
The Apec leaders were meeting in Lima that year, and I recall their surprise and consternation about what was happening and what it might mean. Apec responded by altering its growth objectives to "inclusive growth", and then added other descriptors such as "balanced", "sustainable" and "secure".
However it proved difficult to get agreement on just what these changes meant, and how policy should be recast.
In 2017 we met in Da Nang, and Trump launched his "Make America Great Again" agenda with its decoupling and trade protection, while Xi Jinping announced retaliatory trade policies including "Made in China 2025". When there is tension among the big powers, it soon sparks differences among smaller economies. It was pretty clear to me, back in Singapore, that the traditional spirit of cooperation around the Apec table was hardening.
In the past, Apec organisers could usually achieve consensus on a new initiative.; now this could be assumed no longer. This became painfully evident at the 2018 Leaders meetings in Port Moresby, Papua New Guinea (PNG). US Vice President Mike Pence gave an aggressive anti-Chinese speech about "a constricting belt and a one-way road", and the Chinese unleashed their wolf warrior diplomatic attack. The poor PNG Government, which had struggled all year to host the Apec meetings, could only watch sadly as for the first time the big powers failed to agree on a way forward.
And then there was Covid! I had spent years trying to get Apec diplomats to agree to save costs, time and emissions by meeting virtually (using "Skype for Business" in those days). Most diplomats informed me it simply could not be done — "diplomacy requires being in the same room together". As New Zealand has taken over hosting this year, we have shown that with careful preparation, tight agendas and agreed meeting conventions, good virtual meetings are possible.
During the several hundred meetings already held this year, New Zealand has focused on scripting a new agenda to fit the newly agreed Putrajaya Vision. This means building a work programme around the economic recovery from Covid which is happening in quite different ways across Apec but has every Government's attention. Under this umbrella, New Zealand is promoting growth initiatives with more attention to who gets the gains, to the growth of indigenous economy capabilities, and to improved digital platforms to allow small-to-medium enterprises (SMEs) to better benefit from regional growth.
Next week we will hear from international business-people attending the CEO Summit, and from Apec Leaders attending Jacinda Ardern's meeting. We will not hear so much about the real engineers behind the Apec machine — the New Zealand bureaucrats who have spent years preparing, who were deeply upset they could not host normal meetings to showcase New Zealand's attractions and strengths, and who instead have organised hundreds of virtual meetings, and spent hours in windowless studios in the early hours of the mornings (timed to suit our regional colleagues).
And with no planes and easy electronic access, this can claim to be Apec's greenest and most inclusive year of meetings ever.
Alan Bollard
Alan Bollard is an economic leader in New Zealand and internationally. Dr Bollard is a Professor of Pacific Region Business at Victoria University of Wellington, and inaugural Chair for Pacific Region Business. As Governor of the Reserve Bank from 2002-2012, he was responsible for monetary policy and bank regulations, helping steer New Zealand through the global financial crisis, before leaving the Reserve Bank to become the executive Director of the APEC Secretariat in Singapore between 2012 and 2018.
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