[asia-apec 220] Government and Business: the APEC Interface

[wbello by way of daga <daga at hk.super.net>]

Government And Business: the APEC Interface
by: Marco Mezzera and Jenina Joy Chavez-Malaluan

APEC's effort to involve business in formulating its agenda has taken
centerstage in the APEC process.  The Philippine government's moves
are instructive in this regard.  Its interface with the business
sector overshadows whatever promise it made to involve other relevant
segments in society in the process.

Indeed, business enjoys special treatment.  Different bodies have
been created within APEC both at the national and international levels to
represent the business sector.  These bodies ensure comprehensive and
systematic interaction between the government and big business.

The principal bodies for business in APEC are the APEC Business
Advisory Council (ABAC) and the APEC Business Forum (ABF). ABAC is a
formal APEC body, while ABF is an event that brings together
international business to frame their general agenda for APEC.  For
this year, both of them are closely related with a third body, the
APEC Foundation of the Philippines, which provides the conduit for
interested parties to contribute to the expenses of APEC activities.

ABAC: The Preferred Players

ABAC started as an initiative of the ministers participating in the
APEC Summit of 1995 in Osaka, Japan.  It held its first organizational
meeting in June 1996.  At present, ABAC remains a provisional body
whose main task is to come out with a report outlining seven or eight
major recommendations for APEC.  This November, APEC will decide what
form ABAC will finally take.

ABAC can be considered the successor of the Pacific Business Forum
(PBF) and the Eminent Persons' Group (EPG), the original bodies
appointed temporarily to give advice to APEC.  It was PBF itself that
recommended that a permanent advisory body composed of business
representatives be established to advise APEC on a long term basis.
According to Dr. Emmanuel de Dios of the University of the Philippines
School of Economics, ABAC replaced the EPG "to give a more concrete
course to its, until then, too visionary way of handling" the APEC
agenda.  The inclusion of "real business people" was expected to
provide the council the facility to come up with more practical
devices for APEC.

This year, the Philippines, through former Foreign Affairs Secretary
Roberto Romulo, chairs ABAC.  His main task is to coordinate the five
committees that were established this year to focus on the five key
areas of (i) Finance and Investment, (ii) Infrastructure, (iii) Cross
Border Flows, (iv) small and medium enterprises (SMEs), and (v)
Deepening the Spirit of Community.  Acting as co-chairs of ABAC are
Murofuji of Itochu Corp. and Dr. Dorothy Riddle.

                            ABAC Committees
___________________________________________________________________
|  Committee             |    Chair/s                             |
|------------------------|----------------------------------------|
|                        |   a) Robert Denham                     |
|                        |      Salomon Inc. (USA)                |
| Finance and Investment |   b) Victor Fung                       |
|                        |   Hong Kong Trade Development Council  |
|------------------------|----------------------------------------|
| Infrastructure         |   Gordon Wu                            |
|                        |   Hong Kong's Hopewell Holdings,Ltd.   |
|-----------------------------------------------------------------|

___________________________________________________________________
|                        | a) Mario Andrade                       |
|                        |    Chile                                    |
| Cross Border Flows     | b) Jose Luis Yulo Jr.                  |
|                        |    Philippine Int'l Trading Corp.      |
|------------------------|----------------------------------------|
| SMEs                   | Benigno Ricafort                       |
|                        | Philippine Chamber of Commerce and     |
|                        | Industry - Small and Medium Enterprises|
|                        | Development Council (PCCI-SMED)        |
|-----------------------------------------------------------------|
| Deepening the Spirit   | Timothy Hong                           |
| of Community           | Brunei                                 |
|-----------------------------------------------------------------|

Each member economy appoints three business representatives to the
ABAC.  These representatives shall have the approving power in all of
the decisions drawn up by the different ABAC committees.

ABAC members can also be asked by APEC, as individuals and/or as a
group, to provide advice on specific issues.  For example, the Senior
Officials' Meeting (SOM) may ask ABAC to comment on the current
development cooperation programs that are coming out of those
meetings.  This is now a very important issue because APEC has reached
the point where it is shifting from mere vision/goals formulation to
the formulation of concrete policies.

Quid Pro Quo?

According to official sources, the positive response of the business
sector and its generosity in supporting the APEC process find their
main reasons in what Lallana describes as the business sector's "firm
belief in the positive aspects of an open market economy."  Lallana
also notes the "advertising value" of the meeting considering that
"world attention will be focused, during those three to four days, on
what will happen in Manila."

The seeming innocence of the contributions can lead one to thinking
that no particular government "favors" for the business sector are at
stake.  For instance, Lallana asserts that "it is not realistic to
expect that the Philippine government can actually do anything
specific to foster some private vested interests."  He adds that the
chances that something like that will happen are too small to justify
any interested commitment on the side of the private sector.

For his part, Parren~as prefers to emphasize the relevance of factors like the
"tax free nature of thr donations," or "the opportunity that the
national business sector can get by networking with national and
international governmental and private bodies and institutions."

But Parren~as himself recognizes the possibility that President Ramos
could look very favorably on these "dedicated" business people.  This
special attention can easily translate into special treatment and
government accommodation of special interests.  He adds that there are
a lot of Chinese businessmen who are giving money to the APEC
Foundation, consistent with their practice in national elections.
This is sometimes seen as a way of warding off harassment by
governmental institutions.

Undoubtly, the agenda of foreign business also find its way into the
official position of their respective governments.  Philippine
business is definitely not the only one to put pressure on the
Philippines, this year's host of the APEC, whose main responsibility
will be to come out with the Manila Action Plan for APEC or MAPA.

The US position is an example.  During the Senior Officials' Meeting
in Davao in August, Parren~as noted the pressure exerted by
the US delegation.  While press releases proclaimed the general
satisfaction of the US delegation over the outcome of the negotiations
on information technology (IT), many participants were critical of the
American proposal of a zero-tariff level on IT products.  The US was
clearly pushing for the liberalization only of a narrow range of
products that it has, certainly in consultation with its business
sector, identified as beneficial to itself.

All this points to the emerging landscape where there is close
interface between government and business.  At this point, APEC is
still a government show.  Business is, however, expected to move
centerstage as regional liberalization advances.  To quote US
Undersecretary of State Joan Spero: "APEC is not for governments; it
is for business.  Through APEC, we aim to get governments out of the
way, opening the way for business to do business."

*Marco Mezzera and Jenina Joy Chavez-Malaluan are contributors to the
forthcoming book Four Adjectives in Search of a Noun: The APEC Primer.