APEC leaders strive for sustainable growth 'recipe'

Updated: 2011-11-11 22:43


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HONOLULU - The Asia-Pacific Economic Cooperation (APEC) leaders gathering near the Waikiki beach in Honolulu could help shape long-term and sustainable growth patterns which can inject confidence into the global economy.

That's the word from World Bank Managing Director Sri Mulyani Indrawati.

The world needed a "unified commitment" to boost sustainable and inclusive growth, and the APEC leaders are showing such a strong commitment, Indrawati told Xinhua on Thursday in an exclusive interview on the sidelines of the APEC meetings.

This commitment was pivotal to staving off mounting pessimism and declining confidence on whether the world could grow itself out of a gloomy picture, and the Asia-Pacific region was the area that could provide a better story in the scenario, she stressed.

The weakening global growth projection for 2011 and 2012 was affecting both developed and developing economies in this closely inter-connected world, as the fiscal and banking stresses in euro zone economies were weighing on market confidence, Indrawati added.

"Emerging and developing countries in general still have strong potential as shown in 2008 crisis," said Indrawati, adding this was still true even with the lingering euro zone debt turmoil.

Like preparing for the time-consuming and delicate Indonesian cuisine, it would also take time and efforts for APEC members to complete a recipe for long-term economic growth drivers, said the former Indonesian finance minister.

"If you want to enjoy something which is very good and long-lasting in your memory, you have to prepare it in a very long and meticulous way," said Indrawati who loves cooking in her spare time.

She insisted that developed nations can also draw some lessons from emerging markets in areas including development and fiscal consolidation.

However, developing countries had used much fiscal and monetary policy firepower in 2008 and 2009, resulting in the fact that around 40 percent of developing countries currently run large fiscal deficits, she cautioned.

That means developing countries should rely more on structural reforms and creating new growth capacity including effectively channeling savings into infrastructure projects to shore up future growth, Indrawati added.

To identify problems and challenges facing the global recovery was not difficult, but it was not an easy task to implement the solutions achieved by various economies in a bid to better protect interests of the underprivileged social groups and create badly needed jobs for youth and others, she stressed.

APEC leaders can work together to chart a future pathway by building a "more efficient, less polluted and cleaner" growth model, she said.

The non-binding and cooperative nature of the APEC provides a good platform to address a range of thorny issues, Indrawati said.

When commenting on China's role in the shifting global economic landscape, Indrawati noted that China's robust economic growth helped to "secure" the trend of global recovery during the 2008 financial crisis and bolstered the economic growth of many developing countries including those in Latin America and southeast Asia.

Many low and middle-income countries were looking to China for successful experience in poverty reduction and infrastructure and industrial upgrading, she added.

China was also confronted with tough challenges to sustain the rapid economic expansion and serve as the global growth engine, Indrawati said.

The APEC meetings were held at an important timing on the heels of the G20 Cannes summit, and her discussion with other policymakers from the APEC members focused on restoring confidence and lifting global growth, Indrawati noted.

Policymakers in the APEC members agreed that the region should focus on structural reforms to create long-term, sustainable and balanced growth, she added.

A string of APEC meetings, including the most important APEC Economic Leaders' Meeting, the APEC Ministerial Meeting, the APEC Finance Ministerial Meeting, the APEC Business Advisory Council and the APEC CEO Summit, are scheduled to be held in Honolulu this week.