Asia-Pacific’s economic challenge

Q: As host nation, we have a huge task this year to lead APEC on its first steps for implementation of the Putrajaya Vision. How do you want ABAC to be contributing to that process?

Let’s start with recognising that APEC’s strength is the ability to bring people together… the region has never needed that to happen more than it does today.  Collectively we’re confronted with COVID-19, challenges of economic inequality, political tensions, digital disruption and Climate Change. So the APEC conversation is really essential for all of us wanting to get the region onto a sustainable growth path. New Zealand was very closely involved in forming the Putrajaya Vision and we intend having a very active role in its implementation.

We’ve already started to articulate priorities... and we’ll be advocating quite strongly for an early harvest of outcomes so everyone can see demonstrate effects of the vision. ABAC (the business leaders arm of APEC) will be working in that vein very closely with APEC officials… including New Zealand’s APEC Senior Official Mark Talbot and the SOM Chair Vangelis Vitalis, as well as conveying our recommendations and concerns directly to Leaders.

Part of our role is to ensure we keep the policy makers’ feet to the fire.  Our big message to them is that we need to be bold and ambitious and work with urgency on realising the vision.

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Q: With your leadership, ABAC has established three themes for all its work this year -- Tāngata, Taiao, me te Taurikura (people, place and environment, and prosperity). Could you give some idea of what you want to achieve under these themes?

We are advocating strongly for progress under each and of course, the themes are closely interrelated. Taurikura is not an end in itself and we cannot achieve enduring prosperity if we leave some people behind. Greater prosperity helps us all create better lives and more security for everyone, so ABAC will be working very hard to ensure that growth is inclusive. We particularly want to ensure that women, indigenous communities and small businesses – groups that are underrepresented in today’s world -- are helped to engage more effectively in economic activity and trade. Removing trade barriers, developing skills and leveraging digital technologies to take advantage of new opportunities… these are key things going forward.

I’m really excited about bringing indigenous economic inclusion and success to the fore because there are a myriad of stories to be told and there are also, of course, a myriad of challenges to be tackled. This hasn’t been prominent on the APEC and ABAC agenda to date but in fact, there are many indigenous communities around the region who need us to help create a more level playing field. When this theme was first introduced as a topic, there was general support because it opened the way for a more granular level of discussion on inclusion than we have had before.

We’ll be working on identifying barriers to growth in indigenous economies and exploring the capability building that is needed for people to be able to seize the opportunities. And I am particularly excited in having an indigenous leaders side event which will include some really smart, innovative Maori businesses that will be interest right across the region. That for me, will be a real highlight this year.

Q: Is the focus on Taiao mainly about getting APEC to take a more active role on Climate Change issues from now on?

It’s really important to note just how inextricably related these themes are. The future of our communities and even our planet depends on changing the way we all live. It’s about how we can tread more lightly on the Earth and embrace more sustainable ways of doing everything … hardly a mystery! We all know that Climate Change is a core responsibility for leaders and that includes business leaders who don’t need to wait for governments to take action.  We can take our own actions… it’s part of the beauty of being in business. 

So one of our ABAC goals this year is to develop a set of Climate Change leadership principles. There’s one core idea underpinning these principles which is that we can really only make progress on climate if everyone is on board. It goes back to that idea of inclusion… we just have to work inclusively and collaboratively across the region within communities and within businesses. And actually that is something we are very used to doing around the ABAC table.

To get more into the specifics, we will be talking about ways to move faster on emissions reduction from fossil fuels, to help communities adapt to Climate Change and to ensure that there are just transitions for all parts of society. It is a complementary element in the drive for sustainability... how do we expand the role of renewable energy, how do we level the playing field for environmentally responsible goods and services, and how do we develop a digitally-enabled and trade-friendly food system… these are priorities for ABAC under New Zealand leadership this year.

Q: Tourism is obviously important to most economies, not least Aotearoa New Zealand. Do you see scope for a re-set in this industry given its current energy intensive nature and also the disruption caused by COVID?

I think our tourism industry is in a very precarious position with the borders closed.  But there’s also a huge opportunity here for positive change relative to our need for lower-carbon, more sustainable tourism into the future.  We need the better operators and those who can change quickly to survive. But it’s very hard to change when there’s no-one coming through the door and no revenues.  That old saying, “it is easier to be green when you’re in the black” is so true.

If we as a nation are going support those businesses who can survive and who can make the positive changes that we all want to see, then we are going to have do that demonstrably.  The unenviable alternative, I think, is massive attrition. New Zealand has a stellar reputation as a tourist destination.  So let’s use this opportunity to invest and make that reputation even more real.

Q: To what extent do you see 2021 as a re-set year for economies in general? Can APEC resume the momentum which previously existed for reduction in trade barriers, and for easier and less costly processes as good cross borders?

At this point in time, I think we have some huge challenges on the economic front with the effects of COVID, all against a backdrop of a long rise in protectionism and turbulence in the global trading system. There’s a huge coming together of issues that make it fascinating for New Zealand as APEC hosts this year.

We remain convinced that open markets and seamless connectivity are crucial for revitalising growth and making progress on inclusion, equality and sustainability. It also means we have to keep moving forward on realisation of FTAAP[1], on reform and revitalisation of the World Trade Organisation (WTO) and on work for resilience to supply chains and the digital economy. ABAC is championing all these things and insisting on the ambitious approach to implementation of the Putrajaya Vision.

Definitely there is unfinished business from the Bogor Goals[2]… tariffs on agriculture is just one example. Addressing nontariff barriers (NTBs) is also a top high priority for us this year and these are even more of a headache. We look forward to outcomes on NTBs and FTAAP... these are something we really are hopeful of in 2021.

In regard to the WTO, a set of cross cutting principles were developed a couple of years ago along with a similar step of new principles for APEC which we want to see operationalised soon. ABAC has advocated for APEC-wide commitments to ensure supply chains are resilient and inter-operable… it’s an area where our thinking continues to develop. We need to be reducing friction in trade processes, and this means building more digitally-enabled supply chains. In fact, we have a taskforce looking into interoperability and cross-border data flows which indicates the importance of these issues to us at the ABAC level.

Q: How is ABAC functioning in 2021 given closed borders and dependence on online interaction?

We have had to develop a whole new way of working through a series of virtual meetings, without the luxury of four-day gatherings. We have completely redesigned the system and hope it works as well as intended.  So far, so good. All members have been incredible in their motivation to really pull together and work on the programme.

We have five working groups which are thematic in nature and three task forces within each group. They have very specific deliverables for 2021 which is great for me as chair because it puts a steely focus on delivering a report and some resolutions at the end of the year.

Q: Your own processes obvious require good “infostructure” – technology infrastructure and data exchange. Where does that concept figure in your work on economic and trade issues?

ABAC is very focused on data and data flows, as well as the broader issue of “infostructure” concept you reference. Data is sometimes described as the new oil and it’s hard to imagine economic activity today without it. So digitalisation underpinned by data flows can ensure broader participation in economies and is really key to economic recovery from COVID. In fact we have a symposium coming up on how the digital economy can unlock more of the right kinds of economic growth.

Fundamentally, we must have free flows of data but designed in a way that preserves and builds trust and confidence.  Of course, there are a host of complex considerations about ownership, movement, storage and security of data … along with questions of interoperability. We are putting a lot of thought into how these issues are best approached.  Digital technology and data are certainly part of the APEC conversation.  There are no silver bullet solutions but lots of kōrero in and around the issues. 

From a New Zealand perspective, infostructure and data have become really important in how we can share stories about our sustainably produced, high quality food and beverages with customers around the world, as well as ensuring we have the food safety and traceability systems in place to substantiate that quality.

Q: Where do global data standards fit into your view?

Absolutely, global data standards are very important. Within ABAC, New Zealand has always been a major champion of these, and our Government has always been a strong advocate at that level. In 2021, we see potential for getting greater uptake in various economies although there’s more to be done in raising awareness of how important this issue is.

Q: Broadly, do you see a greater meeting of minds within ABAC as a result of so many issues now being on the table?

I think the pandemic has really shown us that we can all experience the same thing at the same time, in the same way… what differs is our response. Different economies are learning from each other about great and not-so-great responses to COVID. And that approach to problems is flowing into other areas such as trade. I think the pandemic has opened the door for better conversations because it has highlighted the fact that we are one region, we are interconnected and there’s no going it alone by one country with any degree of success.

Q: Does New Zealand have something especially worthwhile to contribute to the current regional processes?

There’s been talk about our ability to deal with other people through digital channels but I think that’s just a given for New Zealanders.  We are a nation of incredibly smart and determined people. I have always thought that homework and preparation, along with aspiration and ambition, are what get us results … not just the old adage about Kiwis’ skill at adapting with “no. 8 fencing wire”.

With ABAC this year, we have quite deliberatively reformed the way we manage interactions... reformed the way we engage members and seek their inputs. We have very deliberately paced the work so that by the end of our year we have a number of deliverables. I have made it very clear that our working groups have been built with a bias towards action.

Stopping or slowing progress because of COVID and other issues are just not options. In fact, the desired outcome is to speed up because the needs of our region are bigger that they were before!

Q: What are some of the personal learnings as ABAC chair, especially in regard to ensuring business leaders can really influence what governments decide?

Being a member of the ABAC group and then Chair for 2021 has made me appreciate how you need to pick you points of influence and inflexion when dealing with government… that’s because the work is so complex and the programme is huge. An enormous amount has gone on before I assumed this role and there will be much, much more to follow, so I am really asked myself, “what are the most important things for us to concentrate on right now... what do we need to deliver this year”.

There are government structures running parallel to the work of ABAC. It’s hard to influence those structures and to find some cohesion between the different positions.  You need to focus on the points that matter most to people. ABAC itself has a very collegial culture… people are committed to the getting the same outcomes for the most part.  Always you will find differences of perspective on the detail of how we can achieve those outcomes. And in this, we can’t leave anyone behind… that’s become very apparent to me over the past 12 months.

[1] FTAAP refers to the concept of a Free Trade Area of the Asia-Pacific, referred in the Putrajaya Vision.

[2] These were set at the forming of APEC in 1994 when leaders committed (at Bogor, Indonesia) to open and free trade and investment by 2010 for industrialised economies, and by 2020 for developing economies.