Integrating Sustainable Fiscal and Monetary Policies

A source from the International Cooperation Department under the Ministry of Finance said SFOM is a mid-year annual meeting at the technical level of APEC financial cooperation channels. At this meeting, finance officials of APEC member economies considered and discussed the implementation progress of cooperation topics initiated at the start of the year and preparations for cooperation activities in the remainder of 2013. SFOM discussion contents centred on assessing global and Asia - Pacific economic prospects; strengthening regional infrastructure investment; promoting inclusive financial access initiatives; financing trade; modernising State treasury system; and other issues.

 

Remarking on global and Asia - Pacific economic outlooks, delegates agreed that the global economy which is now weak and uncertain may affect growth prospects of APEC economies in both short term and long term. Faced with those risks, the conference underscored policies for APEC economies. Accordingly, developed economies need to integrate sustainable fiscal and monetary policies, while developing countries need to take the opportunity to deploy structural reform measures towards productivity improvement and internal economic investments, especially infrastructure and human capital investment.

 

Regarding increased investment for infrastructure in the APEC region, delegates discussed and found that there was a need for a long-term roadmap and plan for promoting regional infrastructure development. The meeting debated a multi-year plan for infrastructure development and investment. This draft plan will be discussed and perfected in the coming time. The gathering also agreed to study the formation of a coordinating centre for public - private partnership (PPP) to increase the participation of the private sector in infrastructure construction and development in regional economies.

 

With reference to strengthening inclusive financial access, the meeting worked on the construction of guiding principles to assist households, small and medium-sized businesses with more convenient access to financial services. Participants exchanged views on promoting trade finance in APEC economies, especially private markets which have played important roles in trade finance, and recognised that APEC economies tend to reduce dependence on European banks in trade finance, while Asia banks are becoming the suppliers of trade finance instead. This trend needs to be encouraged, but there is a need for preparations for regional banking supports because the current capacity of these banks are still not enough to provide financial support for regional trade. At the same time, delegates also discussed measures to help small and medium-sized businesses to grasp plentiful low-cost credit sources to finance their trade activities through the guarantee and audit of governments and international institutions in the region.

 

As regards the modernisation of treasury systems in APEC economies, APEC member economies stressed the urgent need to accelerate the modernisation of treasury systems because the internal demand of economies (strengthening management effectiveness and rationality and allocating resources) and external demand (global economic downturn requiring increased spending efficiency and tightened budget management). The conference identified that the lessons of treasury system modernisation in APEC economies need to be shared among the members to draw the best practical models for further exchange and discussion for member economies to study and apply.

 

In addition, delegates discussed a number of issues like reviewing the progress of Asia Region Funds Passport (ARFP) initiatives and hearing presentations by representatives of the Organisation for Economic Co-operation and Development (OECD) on disaster risk management principles, and debated issues related to preparations for the APEC Finance Ministers Meeting in 2013.

 

During this event, the Workshop on Financial Inclusion also took place. This is one of four major topics during the APEC year chaired by Indonesia in order to create opportunities for APEC member economies to meet and exchange measures for increased participation of all classes of citizens and businesses, especially small and medium enterprises and individual business households, on access to financial services and production and business promotion.

 

Representatives of APEC member economies worked together on such themes as innovative approaches, new tools; legal framework/support regulations, and strategic roles of public-private partnership (PPP) in promoting eligible households and small businesses to access financial services. The workshop also prepared discussion contents and recommendations for the APEC Finance Ministers Meeting slated to open at the end of September 2013.