APEC business chair: ‘We can’t give up on globalization, this is not the time to regress’

An APEC private sector representative told BNamericas the coronavirus-fueled global economic crisis “was not going to go away anytime soon” and underscored the importance of trade to recovery efforts.

Latin America – already sputtering prior to the outbreak – is being pummeled by fallout.

“We’re looking at 2022-23 for full recovery [globally],” said Dato’ Rohana Tan Sri Mahmood, chair of the cooperation forum’s Business Advisory Council (ABAC).

“It’s not going to be next year, especially countries that are compounded by other things, when you have infrastructure issues, when you have all these problems…

“We can’t give up on globalization, this is not the time to regress. There are some flaws and issues but that is the only way we can pull up all the 197 countries in the world.”

Against this backdrop, FDI – key to each of the 21 APEC economies – has taken a major hit amid the pandemic, compounded by issues such as political pressure from an inward-looking Washington, as well as Japan, on manufacturers to return home. 

Declining trade, worsened by protectionism, exacerbates the depth and duration of economic contraction, an ABAC statement said. Outlining the central role of the World Trade Organization’s (WTO) multilateral rules-based system, ABAC has urged APEC trade ministers to lead a process of WTO reform to ensure trade rules remain fit for purpose, relevant and credible.  

ABAC has produced a report which contains its recommendations to respond to the immediate impacts of the pandemic, and lay the groundwork for economic recovery and build resilience in the region.

“Fundamentally trade can and must be at the center of tackling both the immediate crisis and of laying the groundwork for a return to growth,” Dato’ Rohana (pictured) said in a statement. She urged closer collaboration and cooperation between APEC countries, which include the US and China. In Latin America, Chile, Mexico and Peru are members. In Chile, organization Fundación Chilena del Pacífico works as the national secretariat of ABAC, the primary voice of business in APEC.

Dato’ Rohana said the US and China have key roles to play on the global stage, indicating that a win in November by US presidential candidate Joe Biden would help ease tensions but that no sudden sea change was expected.  

“Open and non-discriminatory markets will ensure that goods and services can reach those in most urgent need,” she continued. “Likewise, continued investment in the region will be important to countering the economic fallout from the pandemic.”

Meanwhile, as the crisis eases, management focus on environmental, social and governance  (ESG) criteria – along with sustainable and inclusive development – will tighten, Dato’ Rohana told BNamericas.

However right now, companies are concerned about simply staying afloat and keeping people in work. 

“But it’s not going to go away,” said Dato’ Rohana. “I’ll put money in your company if I know you’re doing the right things in regards to ESG, I will need to know what are your climate change issues, what is it that you want to do. Then I need to look at things like inclusivity, how many women do you hire, how about youth, how about underrepresented people.”

Based in Malaysia, Dato’ Rohana, an investment bank board member and private equity fund co-founder, added that the crisis nevertheless constituted an opportunity for companies and governments to build in associated criteria as they work on a post-pandemic strategy, citing areas such as sustainable development, climate change and digital transformation.

Regarding digital transformation, Dato’ Rohana said it was vital and that a challenge was helping microenterprises and SMEs advance in this area. In terms of importance, digital transformation is to the current crisis as compliance was to the financial crisis of 2008-09, she added.