APEC members are determined to use all policy tools – monetary, fiscal and structural – individually and collectively, to achieve strong, sustainable, balanced and inclusive growth.

The determination was the highlight of a joint statement issued by the Finance Ministers of 21 APEC member economies on Saturday.

The statement marked the successful conclusion of the 24th APEC Finance Ministers’ Meeting (FMM) held in Hoi An City, central Quang Nam Province.

The FMM is the most important event under the APEC Finance Ministers’ Process, which is a forum for APEC member economies to address regional macroeconomic and financial issues as well as domestic and regional financial policy priorities.

The three-day meeting, marked by what attendants said were proactive and fruitful dialogues, was chaired by Vietnamese Finance Minister Dinh Tien Dung.

They agreed that the near-term outlook for global economic growth was encouraging but in the medium term, the risk remains of tightening global financial conditions and slower productivity gains, which could inhibit sustainable growth.

Dung said that monetary policies should continue to support economic activity and ensure stable prices while remaining consistent with central banks’ mandates.

He said strong fundamentals, sound policies and a resilient international monetary system were essential for the stability of exchange rates.

The Finance Ministers agreed that excessive volatility or disorderly movements in exchange rates could have adverse impacts on economic and financial stability.

“We will refrain from competitive devaluation and will not target our exchange rates for competitive purposes,” Dung said.

He also reaffirmed the key role of structural reforms in achieving strong, sustainable, balanced and inclusive growth.

The ministers recognised the importance of four priorities identified by Viet Nam for APEC 2017.

For long-term investment in infrastructure, while agreeing on the role of public investment, the joint statement also stressed the role of diversifying financial sources and private sector involvement in infrastructure projects.

The meeting also endorsed a policy statement on Diversifying Financing Sources and Fostering Private Sector Involvement in Infrastructure Investment in APEC member economies. It recognised the essence of building risk allocation mechanisms and applying appropriate risk mitigation instruments in public-private partnership (PPP) contracts.

The ministers agreed on enhanced regional co-operation in sharing experiences, approaches and good practices on tax policy development, legislative design and tax administration to address base erosion and profit shifting (BEPS) challenges. They also emphasised the need to enhance certainty, transparency and fairness of the tax system.

The statement said effective disaster risk financing and insurance strategies, including solutions for financial risk management of public assets, would help mitigate and transfer risks, and better support timely recovery and reconstruction after disasters.

The ministers encouraged member economies to continue to improve their risk information systems based on their specific circumstances and explore partnerships with the private sector for innovative market-based risk transfer solutions.

The joint statement highlighted the importance of financing for the sustainable development of agriculture and rural areas, and for narrowing income gaps. The introduction of new and varied financial solutions for this sector would create more favourable opportunities for people and businesses to access suitable and affordable products and services.

Financial infrastructure, particularly credit information, secured transaction and insolvency systems as well as trade and supply chain funding are essential, the statement said, encouraging co-operation on credit information to support cross border trade and investment.

The statement also highlighted achivements in discussions on the Cebu Action Plan and other issues. It appreciated support and recommendations from international organisations including the International Monetary Fund, Asia Development Bank, World Bank, Organisation for Economic Cooperation and Development, and APEC Business Advisory Council.

Results of the meeting will be reported to the APEC Economic Leaders’ Summit in November in Da Nang. The next APEC Finance Ministers’ Meeting will be held in Papua New Guinea in October next year.

Not everyone benefits

Earlier, in his opening remarks, Prime Minister Nguyen Xuan Phuc had said the meeting was taking place in the context of global economic recovery as well as improvement in trade, investment and finance.

However, there were many challenges facing the region, including slowing trade, increasing trend of protectionism and use of non-tariff barriers, he said.

The PM spoke highly about the four priorities for financial cooperation in APEC 2017, including long-term investment in infrastructure, base erosion and profit shifting, disaster risk financing and insurance and financial inclusion.

“Practically, not all members of society benefit from globalisation and trade liberalisation and investment,” Phuc said.

The Asia-Pacific region, which has several of the world’s leading and dynamic economies, continues to be a driver of global growth, but economic growth and productivity in some economies was still low, he added.

The PM called for stronger co-operation and coordination in policymaking among APEC’s member economies towards establishing a stable financial system and achieving sustainable development. — VNS