State of the Region Report 2017 - Pacific Economic Cooperation Council

Pacific Currents

Global value chains: From fruitful discussions to meaningful actions
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Climate change in SOTR
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Digital Technologies, Services and the Fourth Industrial Revolutions
Submitted by Jane Drake-Brockman, Christopher Findlay, Yose Rizal Damuri and Sherry Stephenson

COVID-19 has Exposed Major Gaps in our Social Safety Nets: In a Post-COVID World Will these Gaps be Closed?
Hugh Stephens
Vice Chair, CANCPEC; Distinguished Fellow, Asia Pacific Foundation of Canada; Executive Fellow, School of Public Policy at the University of Calgary

Multilateral Cooperation is a Safeguard against Pandemics
Rebecca Fatima Sta Maria
Executive Director, APEC Secretariat

International cooperation during COVID-19
Sungbae An
Senior Research Fellow, Department of International Macroeconomics and Finance, Korea Institute for International Economic Policy (KIEP)

State of the Region 2017-2018

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On behalf of the members of the Pacific Economic Cooperation Council (PECC), it is our pleasure to present our twelfth annual report on the State of the Region. This year we have chosen to focus on the internet and digital economy. In some respects, to qualify the term ‘economy’ with ‘internet’ and ‘digital’ is increasingly redundant. The adoption and embedding of the internet-based technology is becoming pervasive. The internet of things connects everything from crops to toothbrushes. The implications of this for growth, development and jobs are profound. We are likely to have to address these issues in different ways over the coming years.

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icon State of the Region Report 2017-2018

CONTENT

I MESSAGE FROM THE CO-CHAIRS OF PECC

II EXECUTIVE SUMMARY

III CHAPTER 1: ASIA-PACIFIC ECONOMIC OUTLOOK

Figure 1.1: Asia-Pacific GDP Growth
Figure 1.2: Expectations for Global Growth
Figure 1.3: Expectations for Growth in Selected Regions

RISKS TO GROWTH

Figure 1.4: Top-5 Risks to Growth
Figure 1.5: Number and Type of Trade Restricting Measures Adopted by Asia-Pacific Economies
FEARS OF INCREASED PROTECTIONISM
Figure 1.5: Number and Type of Trade Restricting Measures Adopted by Asia-Pacific Economies

LACK OF POLITICAL LEADERSHIP

Figure 1.6: Lack of Political Leadership as a Risk to Growth
BOX 1.1 THE STATE OF PLAY OF REGIONAL ECONOMIC INTEGRATION INITIATIVES
Chart 1. Macroeconomic gains and sector adjustments

POSSIBLE SLOWDOWN IN WORLD TRADE GROWTH

Figure 1.7: Growth of Exports of Goods and Service
Figure 1.8: Growth of Imports of Goods and Services
Figure 1.9: GDP and Trade Volume Growth
Figure 1.10: Are GVCs Contracting?
Figure 1.11: Trade Value vs. Trade Volume

A SLOWDOWN IN THE CHINESE ECONOMY

FAILURE TO IMPLEMENT STRUCTURAL REFORMS

Figure 1.12: Failure to Implement Structural Reforms as Risk to Growth
Figure 1.13: Savings vs Investment in the Asia-Pacific
Figure 1.14: Asia-Pacific Infrastructure Needs 2016-2040 (US$ billions)
Figure 1.15: Investment in the Asia-Pacific Region (% of GDP, 2017 and 2020)

BOX 1.2 THE BELT AND ROAD INITIATIVE: A NEW FRONTIER FOR WIN-WIN COOPERATION

Injecting Impetus into World Economy
Development Opportunities for Participating Economies
Important Practice for a New Type of International Relations

PROSPECTS FOR FREER TRADE

Figure 1.16: Political Environment for Freer Trade and Investment

WHAT PROSPECTS FOR THE FTAAP?

Figure 1.17: When will the RCEP be completed?
Figure 1.18: When will the TPP 11 be completed?
Figure 1.19: Will the US Rejoin the TPP?
Figure 1.20: Likelihood of US Rejoining the TPP under a Different Name

PRIORITIES FOR THE APEC LEADERS’ MEETING

Figure 1.21: Priorities for APEC Leaders’ Meeting in Danang

BOX 1.3 INCLUSIVE GROWTH AGENDA FOR THE ASIA-PACIFIC REGION

Digital Economy
MSMEs
Women Empowerment
Jobs and Skills

IV CHAPTER 2: AN ASIA-PACIFIC AGENDA FOR THE DIGITAL ECONOMY

INTRODUCTION

DIGITIZATION: REDUCING FRICTIONS,INCREASING TENSIONS?

CHANGING BUSINESS MODELS?

INCLUSION

Figure 2.1: Asia-Pacific Cost of Internet Access (Mobile Broadband Price, % GNI per capita 1GB)
Figure 2.2: Average Internet Speed in the Asia-Pacific
Figure 2.3: Mobile and Electricity per capita for Selected Emerging Asia-Pacific Economies

DIGITAL ECONOMY AND JOBS

Figure 2.4: Impact of the Digital Economy on Jobs

EDUCATION

THE POLICY AGENDA

AN ASIA-PACIFIC AGENDA

Figure 2.5: Policy Priorities for the Digital Economy

INTERNATIONAL COOPERATION

CONCLUSION

V CHAPTER 3: INDEX OF ECONOMIC INTEGRATION IN THE ASIA-PACIFIC

Figure 3.1: Composite Index of Regional Economic Integration
Table 3.1: Weights Used Composite Index
Table 3.2: Comparison of 2013 and 2014 Indices

ASIA-PACIFIC TRADE FLOWS

Figure 3.2: Intraregional Trade Flows (% of GDP)

FOREIGN DIRECT INVESTMENT

Figure 3.3: Intraregional Flows of Foreign Direct Investment (%)
Figure 3.4: Intraregional Tourist Inflows (% of total)

TOURISM FLOWS

Figure 3.5: Convergence Index

CONVERGENCE INDEX

Figure 3.6: Deviation of GDP Per Capita

LESS DIVERGING INCOMES

Figure 3.7: GDP Per Capita Growth
Figure 3.8: Deviation Indicator: Urban Resident Ratio
Figure 3.9: Deviation Indicator: Share of Non-agriculture in GDP
Figure 3.10: Deviation Indicator: Expenditure on Education as a Proportion of GNI
Figure 3.11: Deviation Indicator: Life Expectancy

VI ANNEX A FOR CHAPTER 1

Table 1: GDP Growth
Table 2: CPI Inflation
Table 3: Growth of Exports of Goods and Service
Table 4: Growth of Imports of Goods and Services 2015 2016
Table 5: Current Account Balance (US$ billions)
Table 6: GDP & CPI Weights
Table 7: Export Weights
Table 7: Import Weights

VII ANNEX B FOR CHAPTER 2: RESULTS OF ASIA-PACIFIC POLICY COMMUNITY SURVEY

GOVERNMENT

BUSINESS

NON-GOVERNMENT: RESEARCH COMMUNITY/CIVIL SOCIETY/MEDIA

RESPONDENT BREAKDOWN

BREAKDOWN OF RESPONDENTS BY SECTOR

BREAKDOWN OF RESPONDENTS BY SUB-REGION

VIII MEMBER COMMITTEES

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