Agence France Presse | By P. PARAMESWARAN | October 15, 2003
Fourteen years after its establishment as the premier economic and trade forum in the Asia-Pacific region, the Asia-Pacific Economic Cooperation (APEC) has lost ground because of its weak operational structure and needs a major shake-up, according to analysts.
"Just like any business organisation, APEC needs to re-examine its operational model after 14 years of existence," said David Parsons, the director-general of the Pacific Economic Cooperation Council (PECC), the only non-governmental body that sits as observer in the APEC grouping.
"APEC has been and still is in a crisis although it is slowly trying to consolidate its position," Hadi Soesastro, the executive director of the Centre for Strategic and International Studies in Indonesia, told AFP.
Soesastro is a member of the APEC International Assessment Network (APIAN), an independent group that is assessing APEC's initiatives and has called for a "thorough review" of the group's management structures.
APIAN says the structures have grown both too complex and weak to meet the demands of a growing organisation.
A key problem facing the APEC forum -- whose leaders, including US President George W. Bush, meet in Bangkok next week -- is its consensus-driven decision-making process, which hinders agreements crucial to free up trade and investment among its diverse 21 member economies.
The APEC process is further complicated by a one-year rotating leadership that analysts say is too short to implement ambitious initiatives and keep track of the wide-ranging activities of the group.
The Singapore-based APEC secretariat is small and weak by design, since it has not been given any significant mandate.
It has little institutional memory because its top two leaders are in place for a maximum of two years and the professional staff members are seconded for two- or three-year postings, according to an APIAN report.
Coordination is also ineffective because most APEC officials in member countries do not work full time for the group.
Soesastro suggested an OECD-type -- but much less elaborate -- APEC secretariat "that forces the organisation to think strategically".
But as APEC is a "voluntary and loose" process, its member states are extremely cautious about developing institutions that could transfer decision-making from individual governments to a regional body.
APEC started discussing reform at its last summit in Mexico but no agreements have been reached yet, Soesastro said.
"If there is a crisis in APEC, then it is a crisis of relevance to the tasks ahead," the PECC's Parsons said.
He cited, among APEC's much criticised internal structures and rules, the implementing mechanisms it is using to try and achieve its free trade and investment targets.
The key mechanism is the individual action plan, where member states make pledges to liberalise trade and investment. Business groups complain many of the pledges do not appear credible.
"Some governments are cautious in putting in black and white their commitments as this may jeopardise their negotiating positions in the WTO (World Trade Organisation)," Parsons said. "There is a perceived lack of credibility."
Unlike in the WTO, where liberalisation is reciprocal, APEC members remove trade and investment barriers on a voluntary basis.
If this cannot be made to work "it is hard to see how the APEC process can be sustained", Soesastro said. "The biggest task is for APEC to make this modality work."
He also recommended a review of the one-year APEC chairmanship. While this rotation system has a built-in assurance that the APEC agenda will reflect a balance of interest of the group's diverse members, it has its weakness as well, he said.
"In view of its rather nomadic pattern of operation within a one-year cycle, it is not easy to establish sufficient institutional memory," he said. "Some good initiatives get lost and some others are repeatedly being reinvented."
APEC comprises Australia, Brunei, Chile, China, Canada, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, United States and Vietnam.Agence France Presse:
