Singapore: China, India and other Asian countries are leading the world out of the global economic crisis, business leaders said Friday, as trade and finance ministers pledged to make Asia-Pacific a cheaper, faster and easier region to do business in by 2015.
The biggest economic crisis since the 1930s has been the focus of this year`s Asia-Pacific Economic Cooperation forum, an annual gathering of 21 member economies from Asia and the Pacific Rim.
As spending drops and savings increase among consumers in the United States, the world`s biggest economy, "somebody else has to spend more somewhere else in the world. This has to be in Asia," Singaporean Prime Minister Lee Hsien Loong said.
"The next few years` growth will be slow worldwide but in the long term, Asia will do well," Lee said in a keynote address to a conference of business leaders.
He said the demographics are favorable for growth in China and India, two rare bright spots in the world economy with growth rates of over 6 percent.
The International Monetary Fund said last month that Asia would grow 2.75 percent in 2009 and 5.75 percent in 2010, far outpacing the West.
Lee said the growing middle class in China and India will have greater spending power amid greater urbanization and demand for infrastructure.
Other business leaders at the meeting, held on the sidelines of the annual APEC forum, agreed.
"Historically, the developed economies led recoveries. This time, it`s going to be the developing economies," said Dennis Nally, global chairman of PricewaterhouseCoopers International.
Still, while the worst is over, sustaining the recovery — and ensuring that it is balanced — remains a key challenge, APEC and business leaders said.
The weeklong forum culminates in a weekend leaders` summit that will include President Barack Obama, Chinese President Hu Jintao and Japanese Prime Minister Yukio Hatoyama, as well as leaders from Southeast Asia and Latin America.
Finance, trade and foreign ministers debated ways out of the crisis and to ensure sustained growth in the post-crisis period.
APEC members set a specific target of making the region a better place to do business, pledging to improve regulatory conditions in five key areas — from starting a business to enforcing contracts — by 2015.
"APEC ministers agreed to make it 25 percent cheaper, faster and easier to do business in the region by 2015," trade and foreign ministers said Thursday in a statement.
They also set an interim target of 5 percent improvement by 2011, saying the goals will mean "concrete gains" for businesses by reducing expenses to export goods and cut down the time it takes to start up a business.
Every year, the World Bank releases its annual "ease of doing business" index that tracks a set of regulatory indicators related to business startup, operation, trade, payment of taxes and closure by measuring the time and cost associated with various government requirements.
It does not track variables such as economic policies, quality of infrastructure, currency volatility, investor perceptions or crime rates.
APEC ministers selected five of the bank`s 10 indicators as key areas for improvement: Starting a business, getting credit, enforcing contracts, trading across borders and dealing with permits.
Nine APEC members, including Singapore, New Zealand, Hong Kong, and the United States, are among the top 20 in the World Bank`s ease of doing business rankings.
To achieve the collective goal, six member economies with higher rankings in each sector — the U.S., New Zealand, Japan, Korea, Hong Kong and Singapore — will share their practices and success stories to help other members carry out regulatory reforms.
APEC is a forum for countries with a common commitment to free and open trade and investment, with member economies accounting for more than 54 percent of world gross domestic product and more than 40 percent of the population.
APEC accounted for 45 percent of world exports and imports in 2007, an increase of approximately 41 percent above 1989. The forum is now exploring the possibility of turning itself into a free trade area, but that goal is years away, officials say.