MESSAGE FROM THE CO-CHAIRS OF PECC
The purpose of this report is to provide a longer-term perspective on the issues and developments affecting our region. It is produced under the guidance of an editorial committee whom we thank for their efforts in providing guidance and advice for the project. Our annual survey provides an opportunity for those who work on regional issues – whether in government, business, academia, civil society, and beyond to provide feedback on what they think are the most pressing issues facing the Asia-Pacific economy.
When the editorial committee met earlier this year there was clear and resounding message that this year’s report should include a thematic focus on climate change. Little did we know that, after Covid-19 respondents to our survey would select climate change as the top risk to growth. This represents a sea change in perceptions even from just a year ago when climate change was the 9th highest risk to growth.
A key takeaway from this report is that the regional policy community is optimistic about the prospects for growth over the next 12 months. This is to be welcomed. We have not seen these levels of optimism among our survey panelists since the recovery from the Global Financial Crisis. This is in spite of the ongoing Covid-19 pandemic and the emergence of new variants of the virus which was by far the top risk to growth in our survey.
While there are many downside risks to the outlook, some perspective is needed. At this point in time last year vaccines were only on trial, estimates of global manufacturing capacity was between 2-4 billion doses and the forecast was that global economy would grow by 5.1 percent this year. To date more than 6 billion vaccine doses have been delivered and the global economy is expected to grow by about 5.9 percent this year.
What has been somewhat of shock has been the emergence of inflationary pressures in some regional economies. This may be a result of the faster than expected recovery in some economies, supply-demand mismatches, and the surge in the cost of international transportation. Central banks are carefully watching this issue with some already raising interest rates. However, given that many economies are recovering much more slowly than others it is a situation that needs to be watched carefully.
There are many lessons to be learnt from the Covid-19 crisis. Our focus in PECC remains, as ever, on a long-term vision of the Asia-Pacific. The optimism among our survey respondents is an important takeaway. Our last survey in 2020 showed a deep fear that the economic impact of the pandemic would be a drag on our economies’ growth for as long as 3 years. But we cannot rest on our laurels, as shown by our survey, in addition to the ongoing pandemic, stakeholders are concerned about climate change and rising protectionism.
APEC’s post 2020 vision for the Asia-Pacific driven by trade and investment; innovation and digitalisation; and strong, balanced, secure, sustainable and inclusive growth needs economies to start generating ideas on achieve each of these drivers. We hope that our work in PECC can contribute to that process. One place to start is by ensuring that the barriers that were put in place because of the pandemic for health reasons not become an issue that we need to deal with in the post-Covid reality. A fragmented set of rules for travel is not the best starting point for achieving an open, dynamic, resilient and peaceful Asia-Pacific community.
We express our appreciation to Mr Eduardo Pedrosa, Dr Tilak Doshi, Dr Bo Chen, Ms Cindy Hook, and Mr Mike Horne for their contributions to this report as well as the tireless efforts of the team at the PECC International Secretariat.
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