by
Brian Gomez
PM meets Apec heads of
government
Grand Chief Sir Michael Somare will
be among the leaders of the 21 nations at the Asia Pacific
Economic Cooperation (Apec) summit in Sydney this week.
In terms of the size of the population of attending countries,
PNG will be the fourth smallest with an estimated six million
people.
At the bottom of the list, in terms of population size, is
Brunei with only 400,000 people followed by New Zealand with 4.1
million and Singapore with 4.5 million.
At the top end of the scale is China with 1.3 billion people
followed by the United States with 296 million people, Indonesia
with 219 million, Russia 143 million and Japan 127.4 million.
Although it excludes India, Apec represents the most dynamic
trading bloc in the world, being home to 2.6 billion people –
more than 40% of world population.
It accounts for 56% of global gross domestic product and 49% of
world trade.
The dynamism is shown by the fact that since Apec’s founding at
a 11-nation meeting in Canberra in 1989 under the auspices of
former Australian prime minister Bob Hawke, average per capita
incomes have risen almost three-fold.
According to statistics issued by the Australian government, per
capita incomes within Apec averaged only A$5,205 in 1989 but had
risen last year to almost A$14,000 compared with a world average
of only A$10,305.
In terms of per capita income, Vietnam lies at the bottom of the
Apec pyramid on US$655 with PNG slightly above this figure in
the second last spot on US$662.
PNG would have been higher up the ladder if not for the economic
mismanagement and corruption during the so-called lost decade of
the 1990s, although per capita incomes have been rising
gradually in recent years.
One of the biggest drivers of economic growth globally and
regionally has been China, which this year could achieve 11%
growth and turn it into the world’s third largest economy after
two other Apec nations, the United States and Japan.
China’s population is four times larger than the US but its
total GDP is five times smaller at US$2.6 trillion compared with
US$13.2 trillion for the US.
The powerful Japanese economy, the slowest growing of the
Apec-21 this year with a forecast 1.9% growth, has a GDP almost
double that of China with US$4.5 trillion.
Its 127 million population is a tenth of China’s.
Apec has been a significant drive force for economic growth
since its formation with the group’s GDP increasing by 46% in
the intervening 18 years, partly as a result of various measures
to improve trade flows and minimise trade barriers.
As one of its earliest goals, the grouping committed itself to
developing free trade among the industrialised or developed
member countries by 2010.
The target for this deadline was set at 2020 for developing
countries such as PNG, Vietnam, Malaysia, the Philippines and
Mexico.
Some of the impetus for Apec’s mainly economic focus is expected
to be lost at the
Sydney summit, where Australian prime minister John Howard is
making a big push for an agreement on climate change.
Australia, like the US, had declined to participate in the Kyoto
climate change protocols because both believed this would
jeopardise their rapid economic growth.
Howard and his foreign minister Alexander Downer have argued
that Kyoto was not workable because it only set mandated
reductions in carbon dioxide emissions for developed countries,
although Japan and most European countries are participants.
Although Japan has come out with a supportive statement, the
Australian government is unlikely to achieve its aims of taking
credit for climate change initiatives partly because the Kyoto
protocols continue to present the best platform for further
global change.
PNG is a member of the Kyoto club and one of its leading
companies, Lihir Gold, is benefiting annually from the sale of
carbon credits generated by the use of geothermal power rather
than diesel-fired power generation.
The Australian government argument of a level playing field for
rich and poor Apec nations is disingenuous for the simple reason
that the path to free regional trade was also paved by
differential targets for these two groups.
Despite the negative press PNG regularly receives in the
Australian media, it should get recognition at this year’s
conference for a significant economic turnaround that has been
put in train by the Somare Government.
PNG’s likely growth rate of just over 5% this year will place it
among the top half of Apec countries in terms of its economic
performance.
It is clear, however, that on other fronts represented by social
indicators that PNG is among the laggards and has a lot of
catching up to do with about 30% of children not attending
primary school in stark contrast to other Apec countries.
According to the Apec website, “nearly all Apec economies are
achieving close to 100% primary completion rates for both males
and females, generating higher literacy rates among both adults
and the young”.
Part of the reason for this success has been the 60% reduction
in poverty levels throughout the region since Apec’s formation
and an average regional unemployment rate of 4.3% compared with
a world average of 6.2% in 2003.
Strong and steady economic growth rates provide countries with
the financial clout to ensure that all children attend school
and that most people have access to health and other public
services.
Improved trade and investment flows within the Apec region are
key instruments for positive change, but these can be retarded
by bureaucratic red tape which is also generally a conduit for
increased corruption.
