ASIA PACIFIC ECONOMIC COOPERATION SUMMIT IN MALAYSIA (Outcome)

Mr Simon S C Tay asked the Minister for Trade and Industry how the outcome of the Asia Pacific Economic Cooperation summit in Malaysia will affect the region's recovery and further development.

The Minister for Trade and Industry (Mr Lee Yock Suan): Mr Speaker, Sir, APEC has taken a useful step forward in Kuala Lumpur to revive the crisis-hit economies of East Asia. Leaders at the Summit committed to pursue a cooperative growth strategy to put the region back on a recovery path. They urged individual member economies to play their part by adopting growth-oriented, prudent macro economic policies. They supported on-going work to recapitalise and restructure the financial and corporate sectors, attract private capital back into the region, and strengthen the international financial architecture.

Specifically, the Leaders agreed that an expanded G22 forum should co-ordinate efforts to strengthen the international financial system. They instructed their Finance Ministers to develop related proposals for implementation. They proposed a taskforce to examine the scope for strengthening prudential regulation of financial institutions, promoting safe and sustainable capital flows. They called for work on improving crisis management, including orderly debt workout arrangements with the private sector.

The US$30 billion financial package proposed by Japan, the multi lateral initiative announced by Japan and the US in conjunction with the Asian Development Bank and the World Bank, the Australian Economic Governance capacity building initiative, and Singapore's initiative to provide technical assistance programmes at the IMF-Singapore Regional Training Institute will also contribute to the region's recovery.

Looking ahead, the KL Summit also endorsed programmes to strengthen the basis for sustained growth of the region, in the areas of human resources development, small and medium-sized enterprises, electronic commerce, economic infrastructure, and science and technology industry cooperation. Overall, the Kuala Lumpur APEC Summit will contribute to the recovery of the region, and to building a prosperous and dynamic APEC community.

Mr Simon Tay: May I ask the Minister whether the failure to agree on the early voluntary liberalisation scheme would have a negative impact on the otherwise positive agenda he has given us?

Mr Lee Yock Suan: I think that the signal to the market is that APEC is on track in terms of trade liberalisation. Granted there were difficulties in finally concluding this package of nine sectors because of political problems in Japan over the two sectors of fisheries and forestry, nevertheless, all the 16 participating economies have agreed that this is a package that they are willing to work on and this is to be then submitted to the WTO in Geneva to try and bring more economies on board, especially the European Community. Therefore, this is a good stepping stone to further trade liberalisation.