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Transcript of This is year's Official APEC CEO summit publication
Table of Contents
Welcome by Craig Mundie & Michael L. Ducker 10
Message from Senator Daniel K. Inouye 12
Special message from Hawaii Governor Neil
Abercrombie and Lt. Governor Brian Schatz 14
Message from Honolulu Mayor Peter B. Carlisle 16
Editorial 18
Editor’s Note 19
International Trade- 20
The Lifeblood of the 21st Century by Manuel C. Menendez III,
Founder, MCM Group Holdings Ltd -
8M8 LLC and President & CEO Elgin China Ltd.
Welcome by Vladivostok Mayor Igor Pushkaryov 22
Publisher’s Note 24
An Inside Look at the APEC Summit 36By Dr. Ira Kasoff, former Deputy Assistant Secretary for Asia,
U.S. Department of Commerce, International
Trade Administration (ITA)
APEC - The Next 10 Years 40By Hanna Trudo, Diplomatic Courier Washington Correspondent
Asia Paciic Tourism Deined by Rapid Changes 44By Ken Scott, ScottAsia Communications
Asia Rising – The View from Hawaii 50By Mike McCartney, President & CEO, Hawai’i Tourism Authority
The Women’s Century 60By Chrisella Sagers, Diplomatic Courier Correspondent
APEC and U.S. Small Businesses: 62
Let’s Strengthen this Prosperous Partnership By Francisco J. Sánchez, U.S. Under Secretary of Commerce
for International Trade
Universities: Crucial Partners in
Meeting the Challenges of the 21st Century 68By Michael K. Young, President, University of Washington
The City of the Future 70By Chrisella Sagers, Diplomatic Courier Correspondent
Yoshihiko Noda’s Vision for Japan 72By Hanna Trudo, Diplomatic Courier Correspondent
Building an Innovation Ecosystem 78By Deb Henretta, Group President – Asia, Procter & Gamble
Building a Sustainable Environment 82
for Growth and Prosperity in APEC By Richard P. Lavin, Caterpillar Inc., Group President
Creating a Common Commercial Environment 86
in Asia and the Paciic By Grant Aldonas
The Path to the FTAAP 94by Chrisella Sagers, Diplomatic Courier Correspondent
21st Century Workforce and Societal Shifts 96By Lindsey L. Larsen, Diplomatic Courier Correspondent
OP-Ed: You Cannot Cut the Seamless
Web of History 98By Robert F. Bennett, Former U.S. Senator and
Resident Scholar at the University
of Utah’s Hinckley Institute of Politics
Rethinking Healthcare: China’s Aging Population 106By Jordan Fischer, Hinckley Institute of Politics
Global Financial Regulation in a Coordinated Fashion 112By Mark Pittman, Hinckley Institute of Politics
Pressured to Study, Unable to Perform 116By Shawn Quigley, Hinckley Institute of Politics
Making Sense of Fukushima 120By Henry Sokolski, Nonproliferation Education Center
and Hinckley Institute of Politics
A Participatory Approach to Democratic
Reform in the Philippines 122John D. Sullivan, Ph.D, Executive Director,
Center for International Private Enterprise (CIPE)
EDITOR-IN-CHIEFAna Carcani Rold
EXECUTIVE EDITORSKirk L. Jowers
Courtney H. McBeth
MANAGING EDITORSRochelle M. Parker
Chrisella Sagers
CONTRIBUTORSGrant Aldonas
Robert F. BennettJordan FischerDeb Henretta
Ira Kasoff
Lindsey L. LarsenRichard Lavin
Mike McCartney
Mark Pittman
Shawn Quigley
Chrisella Sagers
Francisco J. SanchezKen Scott
Henry Sokolski
John D. SullivanHanna Trudo
Michael K. Young
GRAPHICS DIRECTORHenri de Baritault
COVER DESIGNEllesse Sorbonne
LEGAL
The oficial APEC CEO Summit Magazine is a yearly publication independent of political afiliations or agendas published by The CAT Company. The articles in the APEC CEO Summit Magazine represent the views of
their authors and do not necessarily relect those of the editors and the publishers. While the editors assume responsibility for the selection of the articles, the authors are responsible for the facts and interpretations of
their articles. Authors retain all legal and copy rights to their articles. None of the articles can be reproduced without the permission of the editors and the authors.
EDITORIAL
Editor’s Note
For those of you attending the 2011 APEC CEO Summit, welcome! This has been both a challenging and
rewarding year for the Asia-Paciic Economic Cooperation (APEC) forum. Challenging because we are traversing testing times in our global economic stage; and, rewarding because more and more creative partnerships and
alliances are being forged between the public and private sectors because of those conditions.
APEC is the premier forum for facilitating growth, cooperation, trade, and investment in the Asia-Paciic region. Its annual Leaders and Ministerial meetings are attended by heads of state, cabinet ministers, business leaders,
and the heads of the World Bank and World Trade Organization, among many others. The Hawai‘i meetings, November 12-20, 2011 at the Hawai‘i Convention Center, are expected to draw more than 10,000 people to Honolulu, a welcome boost for the state’s tourism industry.
When leaders meet in Honolulu this November, they can take pride in what their countries have achieved. As a result of APEC members’ cooperation, more goods, services, capital, and people are moving freely around the
region than ever before. Border barriers, tariffs, and customs measures have been streamlined to give way to practical procedures that save economies and businesses billions.
But border procedures are no longer the issue of the day, as most traditional barriers to trade are now low or gone. These days, the issues to tackle are logistics, security, and economic regulations. As the APEC process delves deeper into solving these issues, it can learn a lot from another body of economies, the European Union
(EU). The EU experience teaches us that getting rid of border barriers is not enough. The Europe of 1970 had a free trade area but when that was not enough, it created a single market initiative, which tackled a wider range of
costs and risks involving European members’ trade. APEC’s focus should be the tackling of impediments to in-
ternational commerce by giving attention to regulation of domestic as well as international markets and their ability
to manage structural adjustment.
APEC’s major strengths of building capacity through the sharing of experiences and best practices will be a
plus in the next wave of trade reforms. Because APEC is voluntary and non-binding, its unique approach enables smaller groups of like-minded economies ready and willing to undertake reforms to go ahead irst, allowing others to join in later when they are ready. If APEC leaders continue with this approach APEC will continue to record concrete achievements, year after year.
Lastly, hosting APEC in Hawai‘i this year ampliies the experience of the meeting. President Barack Obama’s native town is one of the world’s most diverse Asian-Paciic communities and will be an ideal host for the group.
We hope you will enjoy the selection of features and articles penned by established voices from the business,
leadership, and academic community. They represent the stakeholders of a growing and powerful summit that is gaining momentum.
Ana C. RoldEditor-in-Chief
International Trade - The Lifeblood of the 21st Century
This year the United States and the State of Hawaii
are honored to be selected by President Barack Obama as the host of the Asia Paciic Economic Cooperation meetings commonly known as APEC. These meetings are expected to draw more than 20,000 people to
Honolulu. These high-powered experts, business and political leaders will not only place Hawaii in the forefront
of much of the world’s media but will also serve as a
welcome boost for the state’s tourism industry. The par-ticipants will also experience the best part of Hawaii, the
Aloha spirit of its people. A unique multi cultural, multi ethnic, tolerant society that lives harmoniously and
whose population has many roots to the APEC nations.
Not to view the future of American commerce as
being closely intertwined with the future of the Asia Paciic Economic region would be a major mistake for the United
States. The Paciic region, being both dynamic, diverse and evolving, contains some of the world’s fastest growing
economies. This region represents 41% of the Worlds population, 45% of the Worlds Trade, 54% of the Worlds GDP and according to the US Department of Commerce,
some 60% of all US exports. More importantly the APEC member economies, with many small and medium sized businesses (SME’s), are emerging as the entrepreneurial drivers of these rapidly changing economies. In the US SME’s produce many jobs and function as the economic
lifeblood of the US economy and are where more than
50% of all private sector employees earn their living. During the past 2 decades SME’s have generated 67% of net new private sector jobs in the US.
Many people are unfortunately unfamiliar with
APEC and its 21 nation member economies. Founded in 1989, APEC functions as a unique forum in which, through consensus, leading experts and political leaders
from around the world speak about common trade and
investment issues in an open and forthright manner. The conference’s stated goals are:
• to develop and strengthen the multilateral trading system between members;
• to increase the interdependence and prosperity of member economies;
• to promote sustainable economic growth,Additionally:• APEC works to harmonize, standardize, and
simplify international customs procedures.• APEC implements technical assistance projects
which develop skills and strengthen economic infra-structure.
• APEC strives to make travel safer, facilitating faster processing of legitimate travelers while reducing oppor-
tunities for unauthorized and improperly documented persons to cross borders.
The APEC conference relects much of the Paciic region’s diversity of interests. The conference makes Hawaii a world center for the of exchange ideas leading to
the expansion of ties and strengthing of relations between
peoples and nations. The APEC conference stands as a reminder that in the 21st century our world economy
is rapidly changing…the Asia Paciic Century is not only upon us but is moving ahead with great momentum. These economic changes touch all of our daily lives and
impact the way that we work and live.
From an American perspective the forum could not
come at a better time. International trade is the lifeblood of the twenty-irst century and anyone who has even spent a short amount of time in Asia will be keenly aware
of the economic powerhouse that is modern Asia. The forum will of course be examining all aspects of interna-
tional trade. Travel and tourism (T&T), however, due to Hawaii’s location and its importance in international trade
should be a major topic for discussion.
Reviewing the comparative data from APEC
members, it is clear that their citizens enjoy a lower cost of living because of reduced trade barriers with lower prices
for daily goods and services. Some APEC economies have offered greater job opportunities leading to poverty
reduction. On a social level people living in the APEC region also beneit from its anticorruption and human and food security related initiatives. These are essential elements to travel and tourism.
T&T is not only big business in Hawaii but also
throughout the Asia Paciic Basin. All too often departments of commerce fail to recognize that T&T is perhaps one of the world’s premier export products. What especially makes T&T a valuable export product is
that, if cared for properly, it is a sustainable and renewable
resource. Unlike primary resources, such as petroleum or minerals, travel and tourism is not inite. No matter how many people visit the ocean, the ocean is still the ocean,
and no matter how many people view a mountain, the
mountain remains in place. In fact, in places that have lost manufacturing jobs, tourism offers an alternative
advantage in that unlike manufacturing jobs, visits to a
speciic locale cannot be shipped offshore. Addition-
ally business leaders who travel are part of the travel
and tourism industry. Without functioning transportation hubs, business ready hotels and instant worldwide com-
munication international trade ceases. Apec CEO Summit 2011
20
by Manuel C. Menendez III, Founder, MCM Group Holdings Ltd - 8M8 LLC and President & CEO Elgin China Ltd.
New-generation i30 made world debut at 2011 Frankfurt International Motor Show
- New-generation i30 builds on success of Hyundai’s best-selling model
- Designed, engineered and manufactured in Europe, for Europe
- Upgraded diesel engine: CO2 emissions under 100 g/km
At the 2011 Frankfurt Interna-
tional Motor Show (IAA), Hyundai has unveiled its new-generation i30, a vehicle the company expects will
build on the success of the original
model thanks to enhanced design,
quality, performance and eficiency.
Designed and engineered
at the Hyundai Motor Europe
Technical Centre in Rüsselsheim,
Germany, the new-generation i30 represents a further evolution of
the unique Hyundai form language,
‘luidic sculpture’ – the company’s distinctive design DNA – and offers
a choice of four engines with a
total of six power options and CO2
emissions below 100 g/km thanks to
an upgraded, super-eficient 1,6-litre diesel unit.
The new-generation i30 will go on sale in Europe early in 2012 as a
ive-door hatchback. The newcomer will be produced in Europe at the
company’s state-of-the-art manu-
facturing facility in Nošovice, Czech Republic.
Every new-generation i30 will be backed by the industry-best, fully-
transparent Five Year Triple Care warranty from Hyundai. This award-winning package provides ive years of unlimited-mileage warranty, ive years of roadside assistance, and
ive years of vehicle health checks.
A worthy successor to Hyun-
dai’s best-seller
The original i30 has deied the industry norm by recording
increased annual sales with each
passing year. Since launch in 2007, the i30 has recorded over 360.000
European sales, including more
than 115.000 units during 2010 – the highest-ever sales igure for an individual Hyundai model on sale in
Europe in one year, putting the i30 at six in the C-segment rankings.
Hyundai expects the new-gen-
eration i30 to maintain this growth trend, contributing to future sales
success, growing brand awareness
and improving perceptions
of Hyundai among European
consumers.
The fortunes of the new-gen-
eration i30 will also be helped by a recovering market. Industry analysts forecast the mainstream
C-segment will grow by 7% over the next three years, reaching sales
of 2,4 million vehicles per year by 2014. Hyundai is planning to sell on average over 120.000 units of the new i30 per year during the car’s lifecycle, capturing a larger market
share of around 5% and challenging established competitors.
Allan Rushforth, Senior Vice President and COO of Hyundai
Motor Europe, commented: “We
expect the new-generation i30 to play a signiicant role in developing our sales and brand image in Europe,
taking on the leading vehicles in the
C-segment and joining the all-new
i40 as a brand ambassador and quality benchmark for Hyundai.”
Style inspired by nature
The ‘luidic sculpture’ ethos utilises lowing lines inspired by nature and modern architecture to
give a constant three-dimension-
al presence to Hyundai vehicles.
Since its introduction on the Hyundai
ix-onic concept at the 2009 Geneva Motor Show, luidic sculpture has been the form language for all new
Hyundai models launched in Europe.
Thomas Bürkle, Chief Designer at Hyundai Motor Europe Technical
Centre, commented: “When
designing the new-generation i30, we used strong, luid lines to sculpt a car which looks athletic and exudes
a sense of constant motion, even
when stationary. We gave the car a bold stance, transmitting a conident attitude through sporty characteris-
tics and dynamic proportions. In this way, the car is very close to the
all-new i40, and the Hyundai design DNA is easy to recognise on these
models.”
The new-generation i30 also bears Hyundai’s signature frontal
feature – the hexagonal-shaped
grille.
“The hexagonal appearance
is unique to Hyundai, and deines the i30 as a family member. The jewel-like front headlamps which
lank the grille add a strong personality to the vehicle, as well as
a sense of reinement and luxury,” Thomas Bürkle added.
Apec CEO Summit 2011
26
Powering the new generation
The new-generation i30 will be available with a choice of three
gasoline and three diesel variants,
with power outputs ranging from
90 to 135 ps. Both fuel types play a signiicant role in the European C-segment, with diesel represent-
ing 52% and gasoline 43% of total sales. Overall, Hyundai is expecting a 50:50 split between diesel- and gasoline-powered i30 sales.
Hyundai believes that its highly-
eficient 1,6-liter variable geometry turbo (VGT) ‘U-II’ diesel unit will be the most popular engine in the range. Generating 128 ps at 4.000 rpm, the upgraded engine will accelerate the
new-generation i30 from standstill to 100 kph in 10.9 seconds, with a top speed of 197 kph.
The petrol engines, too, offer a
balance between performance and
economy. For example, the new-generation i30 can be speciied with Hyundai’s 1,6-liter ‘Gamma’ GDI (gasoline direct injection), a 1.591 cc unit that generates 135 ps and 164 Nm of torque.
Low emissions and real-world
eficiencyThe addition of technologies
developed under the company’s
Blue Drive™ sub-brand optimizes eficiency and lowers emissions for the new-generation i30. These include: Integrated Stop & Go (ISG), low-rolling resistance tyres and an
alternator management system. With CO2 emissions below 100 g/
km and an engine delivery of 128 ps, the 1,6-litre diesel new-generation
i30 will feature a best-in-class power to eficiency ratio.
Buyers will be offered a choice between manual and automatic
six-speed transmissions, with both
units providing a reined driving experience and enhanced fuel
eficiency.
Interior quality and equipment
from the class above
Cabin reinement and speciica-
tion on the new-generation i30 have been inspired by the high standards
of the all-new i40. Behind the wheel, for example, drivers beneit from Hyundai’s new Flex Steer™ option. With three operating modes – Comfort, Normal and Sport – the
system can be used to vary the level
of steering assistance and feedback
in order to suit driving conditions and
make the journey more pleasurable. A large TFT Supervision cluster is
available in the same quality found
on i40 – providing a wide range of essential information to the driver in
high-resolution clarity. Located in the centre console, the navigation
system is displayed via a 7-inch touch-screen.
The generous equipment levels
on the new-generation i30 will enhance the Hyundai experience for
passengers too. Dual-zone climate control will ensure a comfortable
environment for all occupants during
long journeys, and the addition
of a panoramic sunroof provides
increased natural light within the
cabin. The panoramic sunroof has been designed to open fully or tilt
open, offering passengers lexibility and functionality.
Customers will beneit from the new-generation i30’s roomier interior compared to the previous model. The overall length (4300 mm) and width (1780 mm) have been increased, while the height has been
reduced (1470 mm), generating sportier exterior proportions without
compromising functionality. Cargo capacity in the new-generation i30 is 378 liters with the rear seats upright – an increase of 10% compared to the original model.
Five-star safety features
The new-generation i30 features the latest active and passive safety
technologies to ensure maximum
protection for its occupants. Active safety features include ESP
(Electronic Stability Program), ABS (anti-lock braking system), VSM (Vehicle Stability Management) and Emergency Stop Signal. In terms of passive safety, the new-generation
i30 will be itted with six airbags as standard – front, side and curtain
- while a driver’s knee airbag is
optional.
The safety features available on
the new-generation i30 reinforce Hyundai’s excellent record on safety,
and the company anticipates the
new car will follow the outgoing
model in attaining the maximum
ive-star score in Euro NCAP’s impact assessment programme.
Driving leet growthSince going on sale in 2007, the
original i30 has played an important role in expanding Hyundai’s sales and
reputation in Europe’s leet sector. Hyundai expects the new-gener-
ation i30 to be even more popular with leet managers and company car drivers than its predecessor.
Targeting sales of over 120.000 units in Europe during a full year for
the new-generation i30, Hyundai forecasts approximately 50% of sales to come from the leet sector.
Five Year Triple Care will be a valuable point of differentiation for
the new-generation i30 in a highly competitive class. The ive-year warranty has no mileage limit,
roadside assistance is included for
ive years, and vehicle health checks are performed annually, providing
peace of mind for leet buyers and operators.
Compared to the original i30, total cost of ownership for the new-
generation model will be reduced,
helped by improved fuel eficiency, lower CO2 emissions and a lower
insurance classiication.
Apec CEO Summit 2011
27
(Seoul, Korea) Hyundai Motor Company will donate a total of 10
mobile clinics to African nations
this year as part of the company’
s “Moving the World Together” Corporate Social Responsibil-
ity (CSR) initiative, which aims to contribute to society and be a better
corporate citizen. The mobile clinics will be used to provide basic medical
services to residents of impover-
ished and remote communities in
Africa.
The mobile clinics, composed of
a mobile internal medicine clinic and
a mobile digital X-ray clinic, are spe-
ciically tuned to run on tough road conditions in many African nations. Starting with Ethiopia, a total of 10
mobile clinics will be donated this
year to ive African nations (Ethiopia, Democratic Republic of the Congo,
Nigeria, Ghana and Rwanda). Each
country will receive two mobile
clinics -- the internal medicine clinic
and digital X-ray clinic. The clinics will be operated
in close partnership with the
Korea Foundation for International
Healthcare, local governments,
local clinics and NGOs. The Korea Foundation for International
Healthcare will provide consultation
and training on the operation of the
mobile clinics to local personnel.
To begin the initiative, Hyundai
handed over two customized mobile medical clinics to the Ethiopian
government at the Ethiopian
Federal Ministry of Health, in Addis
Ababa, the nation’s capital. The handover ceremony was attended
by Korea’s Minister of Foreign Affairs
& Trade, Mr. Kim Sung-Hwan; Korean Ambassador to the Federal
Democratic Republic of Ethiopia,
Mr. Chung Soonsuk; Minister of Ethiopian Federal Ministry of Health,
Dr. Tedros Adhanom; President of Hyundai Motor Company, Mr. Chung Jin-Haeng; and Chairman of Hyundai Marathon Motor Engineering, Mr. Haile Gebreselassie, as well as
media members and other guests.
To overcome challenging roads
in remote regions of many African
nations, the mobile clinics have been
developed on Hyundai’s four-wheel-
drive truck (HD120 chassis, GVW 12,520kg) to boost mobility with an engine displacement of 6,600
cubic centimeters. The truck has air suspension to protect delicate
medical equipment and operates
fully independently with its own
power.
The mobile clinics are self-
suficient hospitals. The mobile
Hyundai Motor Donates 10 Mobile Clinics to African Nations
- Starting with Ethiopia, Hyundai will offer 10 mobile clinics to ive African nations to provide free medical care to the underprivileged- Mobile internal medicine clinic and mobile digital X-ray clinic to provide in-depth medical examination and treatment
- Donation is part of Hyundai’s worldwide CSR initiatives
Apec CEO Summit 2011
30
digital X-ray clinic is equipped with
a digital X-ray machine and remote
diagnostic systems. The mobile internal medicine clinic features
the latest medical devices, such as
digital ultrasonic and portable ECG
(electrocardiogram), can conduct basic medical tests, such as malaria
screening; and provide medical
supplies.
In addition to the donation of
vehicles, a total of 60 university
students from the Happy Move
Global Youth Volunteers program are engaging in volunteer activities
July 5 - 16 in Addis Ababa, Ethiopia. The services range from providing
free health care, in collabora-
tion with Open Doctors Society
of Korea, to installing communal
toilets to promoting a more hygienic
environment in partnership with
Habitat for Humanity International.
Starting with Ethiopia, Hyundai
Motor Company will send a total
of 500 Happy Move volunteers from July to August to less-de-
veloped areas in Thailand, Brazil, India and China. The volunteers will be engaged in various volunteer
programs such as environment
restoration and provision of medical
service.
REFERENCE The Happy Move Global Youth
Volunteers program is one of Hyundai Motor Company’s corporate social
responsibility programs. It seeks volunteers from Korean universities
to travel around the world to work
in areas related to the environment,
local welfare, medicine and culture.
Since its foundation in July 2008, Happy Move Global Youth Volunteers has sent 500 university student volunteers every summer
and winter to several countries,
including India, Brazil, China, Slovakia, Turkey, Egypt and the
Philippines.
From July to August of this year, volunteer students will spend about
two weeks in their assigned country
and work jointly with various NGOs,
including Open Doctors Society,
Habitat for Humanity International,
Food for the Hungry International,
International Workcamp Organiza-
tion, and Ecopeace Asia to alleviate
poverty, improve the health of
residents, protect the environment,
and strengthen local economies.
Among the projects, volunteers
will build a children library and
renovate a kindergarten in Thailand,
work to prevent desertiication of Inner Mongolia through the Hyundai
Green Zone Project, build houses
and provide free medical services
in India, and carry out cultural
exchange programs in Brazil.
Apec CEO Summit 2011
31
Hyundai Motor Named One of World’s Top Global Green Brands of 2011
- No. 4 among automakers, beating BMW, Ford and Mercedes
Interbrand, the global brand
consultancy, ranked Hyundai
as one of the world’s greenest
brands, citing the automaker’s Blue Drive eco-friendly strategy and its
industry leadership in zero-emis-
sions hydrogen fuel-cell vehicle
development.
Interbrand ranked Hyundai 11th
among the agency’s 50 Best Global Green Brands, a new global report by the agency. Hyundai placed fourth among the seven automotive
brands that made the survey.
“The company is so conident in its fuel eficiency that starting this year it is reporting monthly leet fuel eficiency igures in the U.S.,” Interbrand wrote in the survey. “Hyundai has recently seen strong
improvements in energy, GHG
emissions, water, waste, and toxic
emissions.”
The survey, which questioned
more than 10,000 respondents in 10
countries, examined each company’s
environmental record and how the
company is perceived by consumers. Companies were judged based on
their performance, their environmen-
tal impact, their sustainable growth
strategy and their corporate social
responsibility programs.
Hyundai’s Blue Drive sub-brand, launched in 2008, encompasses all of the company’s eco-friendly
technologies and products that
contribute to higher fuel eficiency and lower emissions, including
gasoline, diesel, electric, hybrid and
hydrogen fuel-cell engines.
Hyundai rolled out the Avante
LPi hybrid in 2009 and the Sonata hybrid in 2011.
Hyundai plans to bring plug-in
hybrid vehicles to market soon, while
the company is currently operating
test leets of its hydrogen fuel-cell electric vehicles and pure-electric
vehicles, called BlueOn.
Apec CEO Summit 2011
32
Hyundai Motor Signed MOU with Intel, C&S Technology To Develop
In-Vehicle Infotainment Solutions
Hyundai Motor Company signed
a Memorandum of Understanding
(MOU) with Intel Korea and C&S Technology, Ltd. to jointly develop solutions that provide both drivers
and passengers with enhanced
in-vehicle experiences such as lo-
cation-based and social network
services.
The signing ceremony was held
at the JW Marriott Hotel in Seoul, attended by Mr. Woong-Chul Yang, Vice Chairman at Hyundai Motor, Mr. Ton Steenman, Vice President and General Manager at Intel’s
Embedded and Communications
Group (ECG), and Mr. Dong-Jin Kim, Chairman and CEO of Seoul-based
C&S Technology.
“The demand for smart cars is
on the rise in Korea—a powerful IT country,” said Hyundai Vice Chairman Mr. Yang. “Hyundai will develop in-vehicle infotainment systems
that incorporate changes in digital
lifestyles and maximize customer convenience in cooperation with
Intel and C&S Technology.”
As part of the agreement, the
three companies will determine
product, technical and experiential
requirements for next generation
IVI platforms to be built in Hyundai Motor vehicles. They will jointly develop solutions based on the
Intel® Atom™ processor and the C&S Automotive IO Hub that
enable new, innovative services and
content to be offered to both drivers
and passengers in next-generation
IVI systems.
“Intel is working with automakers
and their suppliers around the world
to develop intelligent and connected
in-vehicle infotainment systems that
provide safer, more interactive and
personal experiences to drivers
and passengers,” said Hee-Sung
Lee, Country Manager of Intel
Korea. “Through our ongoing work with Hyundai Motor Company
and the new collaboration with
C&S Technology, we can develop
solutions that deliver this type of
experience.”
About Intel
Santa Clara-based Intel
(NASDAQ: INTC) is a world leader in computing innovation. The company designs and builds the
essential technologies that serve
as the foundation for the world’s
computing devices. Additional information about Intel is available
at www.intel.com/pressroom and blogs.intel.com.
About C&S Technology, Ltd.
C&S Technology specializes in automotive non-memory semicon-
ductors. Please go to www.cnstec.com for more information.
- Hyundai and Intel to develop In-vehicle Infotainment (IVI) systems based on the Intel® Atom™ processor
Apec CEO Summit 2011
33
An Inside Look at the APEC Summit
By Dr. Ira Kasoff, former Deputy Assistant Secretary for Asia, U.S. Department of Commerce, International Trade Administration (ITA)
While discussions about debt have consumed
Washington, the As ia-Paci f ic Economic
Cooperation (APEC) forum has received little
attention. But U.S. businesses and trade oficials alike should pay close attention to this important
gathering hosted by the United States in Honolulu
this November.
APEC is the premier economic organization in the Asia-Paciic region, consisting of 21 economies—economies because it includes non-countries like Hong
Kong and Taiwan (for a full list of APEC members, see http://statistics.apec.org/). APEC members account for roughly half of world trade and two-thirds of the world’s
GDP. With a market of 2.7 billion consumers, APEC economies absorb some 58% of U.S. exports. Since its inception in November 1989, APEC has been the primary vehicle for advancing economic cooperation
and trade and investment liberalization in Asia. APEC is also important to the U.S. as it has been the only regional forum that meets at the leaders level that includes the
U.S. And for the irst time since 1993, the United States is hosting APEC.
APEC 2011. Over the years, APEC has evolved
into a year-long series of government discussions and
public-private meetings on a range of trade and invest-
ment-related subjects. This year the U.S. is hosting the most important of these events, which are grouped into
four clusters. The irst two have already taken place, in Washington, DC February 27 – March 12, and in Big Sky, Montana, May 7-21. Big Sky included a joint Meeting of APEC trade ministers and ministers responsible for
small and medium enterprises (SMEs), at which the ministers identiied the most signiicant barriers faced by SMEs, and pledged to “undertake speciic and concrete actions to address each of these barriers by the APEC
Economic Leaders’ Meeting in November 2011.”
The next cluster of meetings will be in San Francisco,
September 12 – 26. Among the many activities that will take place there, U.S. Secretary of State Hilary Clinton will chair an “APEC Women and the Economy” summit. There will also be a Transportation and Energy Ministerial Conference (on transport sustainability and eficiency), an Intellectual Property Rights Experts’ Group Meeting, and a number of other conferences and
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APEC - The Next 10 Years
By Hanna Trudo, Diplomatic Courier Washington Correspondent
The Asia Paciic Economic Cooperation (APEC), the leading trans Paciic forum that helped clean up the Asian Currency Crisis, among other trade and economic
cooperation initiatives, must reinforce economic
integration in the next 10 years in order to reach its trade
target for developing countries by 2020.
The goal for 2020 was set in November 1994 in Bogor, Indonesia, when political leaders from all 18 APEC countries including Australia, Canada, Chile,
Malaysia and the U.S., among others, agreed on the common principles of free and trade investment in the
Asia-Paciic region. The APEC Declaration of Common Resolve, commonly called the Bogor Declaration, outlines a long-term goal for developing economies to
be reached by 2020, and a shorter timetable of 2010 by
industrialized economies.
The annual APEC Leaders Meeting, which was
hosted in Indonesia and Singapore in recent years, and
regularly features heads of state and foreign ministers,
will be held this November in Honolulu, President
Obama’s hometown, and will be the irst time in 18 years that the U.S. has hosted the Summit.
Last year, at the Leaders Summit in Bogor, the vision for 2020 was aligned with reasonable economic
goals for the region: APEC leaders sought to remove
all barriers to trade and investment in developing
economies by the target date. The goal was to liberalize trade -- in policy and practice -- in the Asian-Paciic region to the fullest extent.
Accelerating regional economic integration (REI) and instituting a Free Trade Area of the Asia Paciic (FTAAP), according to APEC, has been one of the organization’s main priorities since 2007, and remains a key hinge of economic integration in next decade. In November 2010, The White House released a statement that addressed
the need to move FTAAP from an “aspirational to a more
concrete vision.”
The go-ahead from Washington to turn FTAAP
ideology into actionable steps stemmed from a call for
further scrutiny. At the 14th APEC Economic Leaders’ Meeting in Lima in 2008, oficials asked APEC to weigh FTAAP’s beneits against the challenges of promoting regional integration.
The following year, researchers from Australia,
China, Korea and New Zealand conducted a study to
comb through possible FTAAP roadblocks.
The 2009 indings, titled, Further Analytical Study on the Likely Economic Impact of an FTAAP, backed
by APEC in Singapore, concluded FTAAP possesses
“great potential to boost further economic growth in
the region.” That is, if liberalization and “trade facilita-
tion schemes and rules of origin standardization are embedded within.”
During the last two years, as countries continue to
waver in the shadows of the economic crisis’ overcast,
it imperative that APEC sets up a series of conidence building measures to keep all players onboard. In past summit meetings, APEC has over promised and
under delivered on its liberalization commitments. This time around, the 2020 trade vision cannot afford to be
clouded by a series of lackadaisical missteps.
At the Mexico Summit in 2002, for example, when
the aftermath of September 11 dispirited international
actors across the spectrum, Leaders said the WTO
meeting for the following year “had to be successful,” according to Alan Oxley, chairman of the Australian
APEC Study Centre, in a 2005 report titled, Reform of APEC. But Oxley said the Cancun Summit meeting was hardly a success, and was brushed off in light of more
positive gains -- something he said is normal in interna-
tional affairs, but “reveals the weakness of the claims by
trade oficials that commitments at APEC Summits are inluential in shaping developments in the WTO.”
The report also points out an “ill fated” attempt by APEC to adopt a program of voluntary trade liberal-
ization – supported by Australia and the US and New Zealand, among others -- that was addressed at the
Kuala Lumpur Summit in 1998.
The APEC region, albeit red-penned with marks
of past lapses, has a series of role-model examples of
successful plurilateral agreements to look towards, such
as the North American Free Trade Agreement (NAFTA), China-ASEAN Free Trade Agreement and Australia
– New Zealand Free Trade Agreement, that serve to
liberalize and facilitate trade.
But APEC playing copycat with already established agreements won’t work alone. As the Hawaiian summit in November approaches, the organization must acknowledge past promises that have gone unfulilled, and strive to be consistent and transparent with the WTO
in order to remain relevant and on track to achieving its
comprehensive 2020 plan for trade liberalization.
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Asia Paciic Tourism Industry Deined by Rapid Changes
PATA, the leading voice and authority on travel and tourism in Asia Paciic, says the relentless rise of social media, mobile apps, low cost carriers and travelers from China and India are reshaping the face of tourism across the APEC region
On a recent Korean Air light from Honolulu to Seoul the cabin
was almost full. I assumed they were Korean. “Oh, no,” said the light attendant, smiling. “They are Chinese.”
The same story is increasingly
replicated across Asia Paciic and the world. According to the Paciic Asia Travel Association (PATA) China’s outbound travelers have
been increasing at an average rate
of 11.2% over the last ive years, India by 12.7%. PATA’s forecasts predict continued growth of 11.7% for China and 10.2% for India over the next two years.
In fact, China has been a savior
for many destinations in the region
formerly dependent on the US
market. As the US, European and Japanese economies continue to stutter, new generations of
inancially empowered Chinese, Indians, Russians and Indonesians
have stepped in to ill the gap.The result: the future of Asia
Paciic tourism industry is increas-
ingly looking to Asia for its new
growth. Not only has the US and Europe lost market share, PATA
believes they are unlikely to win it
back. As in geo-politics and many economic sectors, the future of
tourism is increasingly Asian, with a
strong Sino-Indian twist.“They may ly with low cost
airlines but once they arrive at their
destination they show a preference
for luxury resorts, brand name
shopping and exclusive tours,” notes Sabine Widmann, Chief
Sales Oficer, Indochina Services, a regional tour operator based in
Bangkok.Dr Matthew McDougall, CEO of
China-based Digital Jungle, puts it more starkly: “All destinations need
to radically adapt their entire tourism
ecosystem to accommodate the
Chinese.”PATA’s strategic intelligence
centre says low cost carriers,
evolving technology, especially
social media, mobile travel apps for
researching, booking and paying
for travel, shorter more frequent
holidays booked late, ageing demo-
graphics in rich countries, a younger
demographic of newly afluent urban middle class in emerging markets,
and a desire for ‘authentic’ travel experiences all now deine the Asia Paciic travel scene.
Rapidly growing and evolving
demand is good for business, but
tourism remains a sensitive sector. Excessive dependency on it is
dangerous. Economic downturns in source markets, terrorist strikes,
civil unrest, riots, disease outbreaks,
SARS, earthquakes, tsunamis and
loods in holiday destinations can and-do-wipe out years of gains.
Even in good times, without crisis,
destinations are often inconsistent on
where they position themselves on
the niche-mass continuum.Is more tourism better tourism?
There is a kaleidoscope of concerns,
especially on the supply side. Mass tourism concerns Klaus Lengefeld,
Sector Project Director at GIZ, the
German-government funded NGO
By Ken Scott, ScottAsia Communications
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for sustainable growth.“I am concerned about the
enormous growth of outbound
tourism to Asia Paciic from China and India,” says Lengefeld, “and the fact that hardly any country has a
consistent strategy to organize this tourism in a way that balances the
expected huge economic beneits with the enormous risks and threats
to their natural, cultural and social
environment.”Lengefeld argues that destina-
tions need to develop and implement
“Carrying Capacity” and “Limits of Acceptable Change” models and procedures for attractions.
“We need to protect them from
destructive overuse,” says Lengefeld, “from Angkor Wat and Borobudur to the coral reefs of the Paciic and the Hawaiian volcanoes….”
Economically and administra-
tively developed destinations such as
the US, Canada, Japan, Singapore, Hong Kong and Australia are better
placed to put such safeguards in
place. Poorer destinations such as Cambodia, Laos, Nepal and
Myanmar, to name a few, often don’t
have the regulatory infrastructure,
training or inancial resources to enforce carrying capacity rules.
Best practice needs to be implemented at the small and me-
dium-sized business level as well as the government policy level,
says longstanding PATA member,
Scott Supernaw of Tauck Inc, a
Connecticut based travel agent. He argues that there should
be the development of forums,
educational seminars, best practice
examples and assistance for smaller
travel entities to participate in the
unprecedented growth of China
outbound travel.“The explosive growth of this
market should be an opportunity
for multiple levels of travel related
organizations in many countries. To date, very little seems to have been
done -- or is known -- as to how
to reasonably enter this apparently
lucrative market.”
Asia Paciic destinations are only now slowly realizing that to do well, hotel, airlines and tour operators
will have to better understand
what Chinese, Indian, Russian and
Indonesian travelers really want
while on holiday.Signage, menus, tour options,
entertainment choices, room
design, color schemes – even the
layout and design of whole resorts
– all need to be reviewed in order
for tourism companies to attract
and retain new emerging market
business.This comes at a time where the
travel industry is facing the challenge
of trying to reduce carbon emissions
and conduct tourism in a sustainable
way that respects host cultures and
the environment. Supernaw believes that while
eco-tourism and green policies are
important, basic travel and tourism
needs such as airport development,
security and customs eficiencies, the building of three- and four-star
hotels, and urban trafic controls all have to be provided too.
Tourism is expected to strike a
balance between modern eficiency, proitability and local cultural and en-
vironmental preservation. Basic human resource training
and educating host communities
what to expect from tourism is often
lacking, notably in less economi-
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cally developed destinations where
tourism is often used as a crude
bulwark against poverty.“Governments, along with
industry, should prioritize measures focused on education and training in
order to prepare the local workforce
and the population-at-large for the
good and bad elements of tourism,” says Peter Semone, Chief Technical
Advisor for the Lao National Institute
of Tourism and Hospitality in
Vientiane, Laos. “Only with this knowledge and
human capacity can destinations
ward off the intrinsic environmental
and cultural risks association with
tourism and fully reap the economic
beneits,” says Semone.While sustainability and carrying
capacity issues are being debated,
technology changes are transform-
ing tourism.The marketing of tourism is now
being reshaped by social media,
tablets, apps for smart phones, user
preference trending and new media
distribution.International Data Corp reported
that the sales of smart phones
exceeded those of PCs for the irst time in history in Q4 2010. By 2014, industry watchers predict that there
will be more smart phones than PCs
in the world. The switch to online and mobile
already has profound implications
for travel. “The web is splintering into grooves, some of it is disappearing
into the cloud, most of it is ending up
in the hand of the individual,” says Yeoh Siew Hoon, founder of Web in Travel, a Singapore-based event
and discussion platform dedicated
to online marketing and distribution
in the travel industry.Siew Hoon says there’s a radical
shift in the way travelers plan, shop
around, buy and experience travel. It has a profound impact on the
way companies brand, market and
sell themselves and the way they
organize themselves around the new customer.
“Travel professionals, as
individuals, need to ask themselves
some hard questions. Am I stuck in the old groove? What’s a new groove I can jump to? What’s my groove? We need to hold our customers’ hands through this
change, help them make smarter
and better choices. We will need to hold our people’s hands through
this transition, creating new types
of companies and nurturing new
talent…”After 60 years’ of engagement
in Asia Paciic travel and tourism, PATA’s advice to companies is
two-fold. First, be ready to handle ever-increasing demand from
new Asian (and eventually Latin American) markets. As that demand rises, travelers will continue to
hungrily embrace new technology
that enhances their purchasing
power, choices and the quality
of the vacation on site. Second,
as demand rises, stakeholders in
tourism need to take more respon-
sibility to respect environmental
carrying capacities and the cultures
of host communities.PATA believes the rapid pace
of change in Asia Paciic travel and tourism will continue for the
foreseeable future.
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Since its foundation in 1951 in Hawaii, PATA has led from the front as the leading voice and authority on travel and tourism in the Asia Paciic region
• In partnership with private and public sector members, PATA enhances the sustainable growth, value and quality of travel and tourism to-from-and-within, the region.
• The Association provides leadership and counsel on an individual and collective basis to over 80 government, state and city tourism bodies; nearly 50 international airlines, airports and cruise lines and many hundreds of travel industry companies across the Asia Paciic region and beyond.
• PATA’s Strategic Intelligence Centre (SIC) offers unrivalled data and insights including Asia Paciic inbound and outbound statistics, analyses and forecasts as well as in-depth reports on strategic tourism markets.
• PATA’s events are create millions of dollars of new business each year for its members.
• Thousands of travel professionals belong to over 40 active PATA chapters worldwide and participate in a wide range of PATA and industry events.
• The PATA Foundation contributes to the sustainable and responsible development of travel and tourism in Asia Paciic through the protection of the environment, the conservation of heritage and support for education.
PATA’s 2011 Priorities
On behalf of its members, PATA’s current strategic direction is to:
• Build the Business for members.
• Provide valuable insights, forecasts and analysis to help members make better business decisions.
• To take a lead position on travel industry issues that need to be addressed.
PATA moved its HQ from California to Bangkok, Thailand in 1998.
Further information and membership beneits: www.PATA.org.Apec CEO Summit 2011
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The Women’s Century
By Chrisella Sagers, Diplomatic Courier Correspondent
The twenty-one member countries of the Asia-
Paciic Economic Conference produce 55 percent of the global gross domestic product. And yet, the APEC countries are missing out on billions of dollars in
potential productivity.
APEC economies are missing out on $47 billion in potential growth each year due to barriers or restrictions
on women’s participation. A lack of education opportu-
nities creates more loss in annual GDP growth, totaling
another $16 to $30 billion. A reduction of these barriers to women’s economic participation would increase the
annual gross domestic product of the United States by
9 percent; of the Eurozone by 12 percent; and of Japan by 16 percent.
Women entrepreneurs represent a powerful, yet
largely untapped market. Today, less than 10 percent of venture capital goes to companies with female
founders, despite studies that show women-owned
businesses offer a better return on investments and do
more to lift families and communities out of poverty and
cycles of violence.
Technology markets are especially suffering from
a lack of women’s participation. The heavily male-dominated ield is seen as dificult to nearly impossible for women to break into, due to degree programs and
corporate environments that do not offer women-friendly
environments or female mentors to guide young women
through. And this drastically affects the competitiveness of the world’s most innovative ield.
“It’s a business imperative to increase diversity,” said Marilyn Nagel, chief executive oficer of Watermark, a California-based, 4,000-member organization for pro-
fessional women, in an interview with Bloomberg. “A homogeneous team is not going to be as innovative and
is not going to produce the same level of well-thought-
out results as a diverse team.”
Leveraging the natural attributes and talents of
women worldwide begins with expanding opportuni-
ties for women entrepreneurs. Women have historically worked on the ground loor of industries such as textiles and agriculture throughout the APEC region. When these women have access to capital to start their own
businesses or reach management levels in a company,
they use their experiences to bring about industry-
changing innovations.
The growth of a female-owned business spreads
through the community. Women entrepreneurs are more likely to use their incomes to buy food and
educations for their children, raising community
health standards and productivity. They encourage and support other women, sharing their wealth of
knowledge; they understand what a community’s
living wage actually is, and provide that living wage to
their employees, spreading their success throughout
the community. This not only encourages increased community education efforts, but also brings new
perspectives from previously marginalized voices into the economic discourse, opens new markets, and
encourages economic vitality.
When leaders talk of encouraging entrepreneur-
ial activity, women should be the irst place they look. Because so little attention has been given to this group historically, eliminating barriers to women’s economic
activity could bring about a lurry of productivity. Barriers to women’s economic involvement include lack of education, lack of treatment for curable diseases,
and lack of access to capital. Leaders can address all of these issues, and if they are looking for the path to
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APEC and U.S. Small Businesses: Let’s Strengthen this Prosperous Partnership
By Francisco J. Sánchez, U.S. Under Secretary of Commerce for International Trade
The APEC 2011 CEO Summit is about one
thing: opportunity.
This forum provides oficials — representing a diversity of interests and regions of the world — with a unique opportunity to exchange ideas, expand our
economic imagination, and, ultimately, strengthen the
ties that now bind us in this increasingly global business
climate. The 21st century economy is rapidly changing the way we work and live. Accordingly, we must all change with it because now, more than ever, we have
shared interests and a shared future. That’s why the Obama Administration is so pleased that the United
States is hosting APEC 2011.
Our viewpoint is simple: We recognize that the future of American commerce is closely linked with the
future of the Asia Paciic Economic region, the fastest growing economy in the world. The APEC region’s economy is dynamic and diverse. That’s why it’s no surprise that it represents approximately 60 percent of
all U.S. exports, an extraordinary number. Even more remarkable is that there are incredible opportunities to
do more in region, particularly for small and medium-
sized enterprises (SMEs).
Small and medium enterprises are, in many ways,
the heart of the U.S. economy; they represent more than 99 percent of all employer irms. They are home to more than half of all private sector employees, and they have
generated 65 percent of net new private sector jobs during the past 17 years.
In addition, those who run these businesses are
among the most talented and innovative entrepreneurs
in the world. They often drive the latest, cutting-edge products and services. That’s why the Obama Admin-
istration is so determined to give them an opportunity
to succeed, in large part by increasing their access to a
wide-range of international markets.
The Asia Paciic Economic region is at the top of that list.
Since the beginning of this year, a series of public-pri-
vate “road shows” have taken places across the country, helping to “spread the word” about APEC and what it does for business. We’ve talked about how APEC has helped slash tariff and non-tariff barriers between APEC
economies. We’ve highlighted the administration’s three priorities for APEC 2011: strengthening regional
economic integration and expanding trade, promoting
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green growth and expanding regulatory cooperation
and advancing regulatory convergence. We’ve talked about our work with our APEC partners towards these
goals, whether it’s initiating APEC-wide green building
standards, agreeing to common medical device industry
ethics or helping SMEs beneit from cloud computing.
During these road shows, we’ve also highlighted
the tremendous opportunities the region offers SME
exporters, right now and in the future. That ties in well with the administration’s groundbreaking initiative to
generate healthy, robust economic activity. Last year, in his State of the Union Address, President Obama
announced the National Export Initiative (NEI), which has the ambitious goal of doubling U.S. exports by the end of 2014. Helping U.S. companies become more competitive internationally is a critical step to “winning
the future.” Of course, there have been previous efforts by the federal government to promote exports. What sets the NEI apart is that it is the irst time the United States has a Presidential-led, government-wide export
promotion strategy.
Since NEI was launched, we’ve tried to limit the red
tape and barriers that often make trade too dificult. U.S. companies, particularly SMEs, often face hurdles
when trying to close an export sale. This includes the lack of readily available information about exporting and
market research. Another challenge is obtaining export inancing. Tariff and non-tariff obstacles are also a very common problem. That’s why it’s critical that federal government gets involved and helps SMEs realize their full export potential.
The NEI works to improve trade advocacy and
export promotion efforts, while increasing SME access
to credit, removing trade barriers and pursuing policies
to promote strong, sustainable, and balanced growth. It also sends a powerful signal to the public about the
beneits of trade, and the value of keeping all markets open to new goods, services and ideas.
Right now, there isn’t a better counterweight to
protectionist interests and pressures than demonstrat-
ing how exports beneit business and the economy. APEC has been at the forefront of international efforts to
promote trade and open economies. Our stewardship of APEC this year fostered that agenda, providing all
interests with exciting, new opportunities.
Now, it’s time to seize them.
Francisco J. Sánchez is the Under Secretary
of Commerce for International Trade. He leads the
International Trade Administration, a federal agency
that promotes U.S. businesses and competiveness
with commercial offices across the United States and
the globe.
APEC SUMMIT
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Drug-Resistant Tuberculosis
A Global Emergency
Requires an Innovative Response TB: A Global Overview
Tuberculosis (TB), often thought of as a disease of the past, continues to plague the world’s most vulnerable people. The World Health Organiza-tion (WHO) estimates there were 9.4 million new cases of TB globally in 2009; in the same year, 1.7 million people died of TB – equal to about 4,700 deaths each day.
The WHO estimates that of all new TB cases in 2009, about 3.3 percent of these were the drug-re-sistant form of TB, called multidrug-resistant tuberculosis, or MDR-TB. These indings by the WHO mark the highest rates ever of MDR-TB. In some settings in the former Soviet Union, these rates peaked at about 28% of new TB cases.
These dire statistics are even more dismal considering that TB and MDR-TB are treatable and curable. The real problem lies in the fact that TB – in all its forms – is a complex disease, one which is not only a medical problem; it is also a social and economic problem.
A Multi-Pronged Approach to
MDR-TBThe Lilly MDR-TB Partnership
is a public-private initiative that encompasses global health and relief organizations, academic insti-tutions and private companies, and is led by Eli Lilly and Company. Its mission is to address the expanding crisis of MDR-TB. Created in 2003 to address the growing challenge of MDR-TB, the Partnership has adopted a 360-degree approach, and mobilizes over 25 global healthcare partners on ive continents to share resources and knowledge to confront TB and MDR-TB.
To drive the Partnership, Lilly is contributing US$ 120 million in cash, medicines, advocacy tools and technology to focus global resources on prevention, diagnosis
and treatment of patients with MDR-TB; and an additional US$ 15 million to the Lilly TB Drug Discovery Initiative to accelerate the discovery of new drugs to treat TB.
Empowering Local Communities
In order to prevent the spread of the disease and effectively care for those infected, the Lilly MDR-TB Partnership has implemented com-munity-level programmes to raise awareness about MDR-TB, increase access to treatment, ensure correct completion of treatment and empower patients by eliminating the stigma of the disease in communities and workplaces.
The Partnership also trains healthcare workers to recognize, treat, monitor and prevent the further spread of MDR-TB. These training materials and courses have been designed to ensure that the knowledge learned is passed on to peers, furthering the quality of patient care.
A Global Approach for Global
ResultsWhile community and country-
based activities empower local populations to ight MDR-TB, global change requires a global view. With this in mind, the Partnership works with policymakers to raise awareness about the toll that TB takes on the global population and encourages new initiatives that curb the spread of MDR-TB. Additionally, the Partnership promotes adherence to the World Health Organization’s standards on TB treatment and supports national TB programs that have been developed using these standards.
Sustainable Access
to Medicines
One of Lilly’s many goals is to increase the supply of high-quality, affordable medicines to the people who need them most. To do this, Lilly has partnered with manufacturers in countries hardest hit by MDR-TB, providing both
knowledge and inancial assistance to create sustainable, local sources for MDR-TB drugs. These locally produced drugs enable access to medicines at affordable prices for MDR-TB patients, while supporting local economies and ensuring high-quality manufacturing.
New Drug Discovery Initiative
While access to medicine and care help patients signiicantly, MDR-TB treatment remains a long, isolated process. To encourage patients to complete treatment and avoid even more drug-resis-tant strains of TB, research and development are necessary to discover faster-acting medicines. To address this need, Lilly has created the Lilly TB Drug Discovery Initiative, which is a not-for-proit public-pri-vate partnership that will draw on the global resources of its partners, including medicinal libraries donated by Lilly, to pioneer research.
A Public-Private Partnership for
Those in Need
Lilly and its Partners work together closely, sharing knowledge, expertise and research in the quest to contain and conquer MDR-TB, a disease that disproportionately affects impoverished populations. The initiatives of the Lilly MDR-TB Partnership all have one thing in common: improved care for some of the world’s most vulnerable people, delivered in a manner that is sustainable and builds capacity within the communities where it is needed most.
www.lillymdr-tb.comEmail: [email protected]
Phone: +41 22 306 0333
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Universities: Crucial Partners in Meeting the Challenges of the 21st Century
By Michael K. Young, President, University of Washington
The last ifty years brought tremendous changes in the global economy, including shifts from the industrial
age to the information age, and from the Atlantic to
the Paciic. Dynamic economic growth also led to the emergence of new global concerns such as energy
deiciency and food and health security. Meeting these and other challenges requires new knowledge and
expertise that universities can provide, making them
crucial anchors for sustaining and increasing regional
economic development. Taking into account the emerging challenges of the 21st century, universities are
evolving to meet these demands and expectations.
The American university model of fostering basic
science research has been a successful framework that
some economies have sought to adapt in addressing
national social-economic needs. Two areas in particular have contributed to the critical role American research uni-
versities play in the US economy: the role of government
in advancing world-class research and university-industry
partnerships that lead to economic development.
Thirty Years After Bayh-Dole
In the last six decades, American higher education
and federal research funding agencies have created a
successful collaboration in advancing basic science
research in their broader mission to generate and
disseminate new knowledge effectively as a public good. It became the obligation of the federal government to
sustain vital funding for basic science research while
resources for applied research and development were
mainly provided through the private sector. American federal funding for research and development since
the 1930’s has grown almost tenfold – to nearly $150 billion in 2010. In addition, the Bayh-Dole Act, federal legislation passed in 1980, enabled universi-ties to have broader scope and exclusive patent rights
of their inventions and intellectual property resulting
from federally funded research. The core of this policy was to stimulate US competitiveness and to revitalize a sagging industrial sector. It also paved the way for academic research and innovation to integrate
with private sector industry in the development of
new products and processes. This has led to other countries adopting versions of the Bayh-Dole Act for their own government funded research. Today, there are over two hundred ofices for commercialization and technology transfer located at US universities, and
a comparable increasing number of ofices abroad. This will provide more opportunities for university to
university research cooperation, as well as university to
industry collaboration across borders.
University-Industry Cooperation
The urgency to ind solutions to human health, and to advance information technologies and materials
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National priorities in biomedical research have
inluenced the translation of research between universi-ties and major pharmaceutical entities. Industries have also helped universities focus on the areas of technology
and applications needed, enhancing the capacity for
researchers to move discoveries from the laboratory to
the marketplace with greater eficiency.
University-industry cooperation has also evolved into
new collaborative arenas creating corridors of industry,
with small to medium enterprises and non-proit organi-zations adjacent to university communities. Since the success of Silicon Valley, many localities around the world are trying to replicate it by providing venture capital or in-
frastructure, from roads to universities. However, what is harder to replicate is the culture that deined Silicon Valley: the room to experiment and fail, the informal networks, the feeling that anything is possible.
The University of Washington, which ranks irst among public universities in federally-funded research,
much of it in the bio-medical sciences, is an economic
engine that generates $9 billion in annual economic impact for the state of Washington. This has translated to an array of companies in the area doing related
research, with more than 250 companies created from university-based research. The presence of Microsoft and other technology companies in the area has also
produced a dynamic interface between the ields of medicine and computer science technology. While some corporations locate their labs in close proximity
to university campuses, the expense of maintaining
independent labs is costly for many small to medium
sized businesses. Perhaps the greatest outcome of venture clusters has been the spawning of small
start-ups that were born from dorm rooms and garages,
not from corporations. The beneits from this fusion of activities are highly networked and diverse communities
of skilled and loyal participants.
Today, research universities are global institutions
that help to disseminate knowledge and drive economic
capacity. New multidisciplinary ields and innovations in global health and environmental sustainability are
bringing a critical mass of researchers, social scientists,
and practitioners together.
To address these issues, universities are becoming
more entrepreneurial and responsive to the demands
of their communities and serve as vital incubators of
knowledge and innovation. But they need consistent and reliable funding support. Diverse partnerships
must be collectively formed and clusters of economic
interests and strengths need to be strategically identiied and developed in cooperation with university-communi-
ty infrastructure.
As economies in East Asia continue to expand,
American higher education faces the prospect of losing
its competitive leadership in research and development. We are not producing nearly enough scientists and
engineers compared to our counterparts. But our educational system has encouraged a culture of inquiry
and curiosity that has produced a unique mass of critical
thinkers and entrepreneurs, a tremendous advantage
for the US in generating knowledge and innovation. Our decentralized educational system facilitates mobility, diversity, and increased access to higher education. At the heart of our mission, though, are our students, who
are being educated to be well equipped to understand
multiple perspectives and how to link sectors and
pursue ideas.
All countries beneit from the increasing number and diversity of talented individuals that education and
industry bring to our communities. Competition among universities and communities are healthy opportunities to
raise standards of living, education and growth. Univer-sities are critical to economic competitiveness, and we
must link our sectors and bring communities together
to invest in our future. Perhaps the greatest contribu-
tion that universities provide to society is the beneit of a global infrastructure of knowledge that continues to
advance a greater common good.
Michael K. Young became pres ident of
the University of
Washington on July
1, 2011. Also a
Professor of Law,
President Young has
a distinguished record
as an academic leader
with broad experience
in public service and
diplomacy. Prior to
that, President Young
served as Deputy Under
Secretary for Economic
and Agricultural Affairs
and Ambassador for
Trade and Environ-
mental Affairs in the Department of State under the
presidency of the irst President Bush. Apec CEO Summit 2011
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The City of the Future
By Chrisella Sagers, Diplomatic Courier Correspondent
It is a human pastime to dream up conceptual
cities of the future. From homes that ly above the city to escape smog to gigantic ships that serve as extra-
terrestrial cities, our popular culture is full of ideas for
the future.
However, we face today an interesting opportunity. Our economy is experiencing an upheaval on the scale
of the Industrial Revolution, and we are witnessing the
complete reshaping of economic and social structures
into something new. As during all such restructurings of society, the transition phase is marked by widespread
business failures, unemployment for those trained in
obsolete professions, and a movement out of the cities
too closely deined by the old economic structure.
Increasing globalization has meant that those who do not innovate or diversify, die. Take, for example, Detroit. The city tied itself to the automobile and the assembly line, failing to plan for the day when manu-
facturing would no longer be done in the United States
and the assembly line would be made obsolete by the
Technology Revolution, thereby failing to give itself a
backup plan. What will it take for the cities of the future to avoid Detroit’s fate?
Globalization means that not only countries, but provinces and cities themselves must be able to compete
in a cutthroat business world. Cities have to be able to attract educated workers and companies to employ
them, through a combination of public spaces and in-
frastructure; laws favoring business and ordinances
promoting entertainment; networks for family support
and dating scenes; networking and logistics.
A high-ranking employee – in a company coerced
to move to a city with low taxes and good infrastructure
– must be able to get to the airport easily and eficiently to seal deals with clients face-to-face, but then have
access to high-speed internet once back home in order
to manage those deals. She must be able to have access to child care services while she works, just as much as
her young entry-level employee must be able to take
his new girlfriend out somewhere interesting after work
if their new family is to be convinced to stay in the city. Businesses themselves must be able to connect with local resources and labor as much as global markets
and opportunities; these require strong business as-
sociations and civil society groups at home, as well as
bleeding-edge telecommunications infrastructure and
modern airports capable of heavy trafic.
Approaching all these challenges will require a
massive urban planning effort that re-conceptualizes
the public-private partnership. The city of Raleigh, North Carolina is on the forefront of this effort. As one of the three corners of the region’s Tech Triangle, one would
expect that industry-shaping ideas would emerge from
here; however, one of the more remarkable innovations
from the city has been the use of open-source information
and crowdsourcing feedback to gain insights into the
redesign of downtown Raleigh.
In an interview with OpenSource.com, David Diaz, president and CEO of the Downtown Raleigh Alliance,
explains why this approach was so valuable to the
downtown revitalization effort: “The people that were the most passionate had the hardest time stepping away
from it and couldn’t give us the insights that we eventually
uncovered. The person with a loose association [to downtown] gave us better insight. This was an ah-ha moment. If you only involve the advocates, you don’t get the broader view. Participation from all made the information better.”
This is a public-private partnership in a completely
new sense, with ideas passing from city planners to
the general public and businesses and back again,
creating a more informative feedback loop that,
should governments choose to listen, will bring about
better solutions to problems that affect everyone and
better cities.
And what fortuitous timing. In the next decade, it is expected that nearly 70 percent of the world’s population will live in urban areas. The city of the future will be one that will harness all of its resources, including
the collective knowledge of its population, successfully
in order to compete at the global level. For in today’s globalized world, the only mantra is, “Think global, act local… or else.”
Apec CEO Summit 2011
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Yoshihiko Noda’s Vision for Japan
By Hanna Trudo, Diplomatic Courier Correspondent
Newly sworn in Prime Minister Yoshihiko Noda, the former inance minister of Japan, might take solace in the old Japanese proverb, Money grows on the tree of persistence.
But persistence, as the proverb fails to point out, does not trump inadequacy in the face of natural,
political and economic disasters.
A new maxim, Fresh leadership grows from the
broken branches of catastrophe, might be more
applicable to Japan today.
The past ive leaders to cyclone through the country since 2006 have added to the already quaked national
morale by making promises they could not keep,
and scalding leader after leader with burdens of past
mistakes.
Yoshihiko Noda, the 54-year-old Prime Minister number six, stepped in with a cup-half-full -- though
chipped, and illed with luke warm expectations -- approach to mitigate the aftermath of the 9.0 magnitude earthquake, tsunami and nuclear meltdown in March.
But Japan, an essential arm of the APEC community, might need something stronger – an unbreakable prime
minister who exudes mirror-speech conidence, not self-deprecatory quips of mediocrity.
The iscally conservative leader must work against the grain of his in-and-out predecessors, and leverage
his economic capabilities and past successes, to secure
the longevity needed to promote political, economic and
environmental reconstructive efforts.
The odds are stacked against him, but someone
who under promises – a change from the tactics of past
politicians – might be what Japan needs to overcome the inherited economic and nuclear challenges to come.
The leadership opportunities are there, despite a
national debt that swells two times larger than the size of the economy, or the dispersed Northeastern region
that suffered the worst damages since World War II. But it’s up to the Democratic Party of Japan (DPJ) prime minister to choose adversity-triumph over low barometer
expectations.
Prime Minister Noda’s predecessor, Naoto Kan,
the DPJ leader who was in ofice for just 15 months, eventually ran out of get-out-of-March 11-disaster-free
cards. Some media reported he made unprecedented, intensive relief efforts – he was broadcast on television
wearing the same work clothes as Japanese engineers – but others reported widespread dissatisfaction, and
said his low approval ratings were directly linked to his
even lower responsiveness to disaster’s calamitous call.
In May, just a few months before former Prime
Minster Kan stepped down, Japan donated $640,000 to help stimulate the Asian-Paciic economy – a con-
tribution to the APEC Support Fund (ASF), started in 2004, that demonstrated lasting commitment to the region, despite devastating national circumstances.
During a meeting at the UN General Assembly on
Sept. 21 in New York, Prime Minister Noda picked up the conversation as the new leader six months after the
disasters – with the economy and relief efforts in the
forefront. At the General Assembly, the prime minister said the Fukushima Daiichi nuclear plant’s reactors
would be shutdown within a year, according to a White
House press release. The prime minister also said he will hold a conference in 2012 with the International
Atomic Energy Agency (IAEA) to analyze and discuss key takeaways from the meltdown.
If the Fukushima disaster is any indication of policies
and preventative measures to come, Prime Minister
Noda’s tenure will inevitably include nuclear safety
reform as a top agenda item.
He committed to working alongside the U.S. and other allies, and with the IAEA, to assume a leadership
role in meltdown responsiveness and prevention, and on
nonproliferation and national security efforts.
The former inance minister has a lot to do with little support or self-conidence. His commitment to Japan, and to the international community, will be tested by his
willingness to stimulate the APEC Support Fund, among
other regional initiatives, as he navigates into his irst months as the post-disaster prime minister.
Apec CEO Summit 2011
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Building an Innovation EcosystemBy Deb Henretta, Group President – Asia, Procter & Gamble
P&G has a long history of innovation. Be it our iconic brands like Pampers, Tide, Olay, and SK-II or
our processes and systems, like the introduction of
brand management and data based market research,
P&G has a deep track-record of innovation leadership
that has guided and sustained our Company’s success
since its establishment in 1837. For P&G, innovation is our lifeblood.
In general, whenever one talks about innovation
there is an esoteric and mysterious air about it. People imagine scientists in lab coats closeted away for
years behind their test tubes and microscopes, before
emerging triumphantly in an eureka moment. Yes, innovation is about discoveries and breakthroughs, but
when you are committed to touching and improving
lives – over 4 billion of them – everyday, you need to go beyond inventions and create an infrastructure that
delivers reliable, repeatable innovation that can make a
meaningful difference to the lives of our consumers. The irst step in this process is to deine innovation holisti-
cally; we strive to foster an innovation culture that leads
not just to product or technological innovation but also
to innovation in people practices for example.
At P&G we irmly believe that you can design to innovate. We have made sustained investments, each
deliberate and choiceful, in building a robust innovation
ecosystem that does just that. In fact, we invest more in innovation than any other company in our industry
- nearly US$2 billion in 2010. We invest at least $400 million in foundational consumer research to discover
opportunities for innovation, conducting some 20,000
studies involving more than 5 million consumers in nearly 100 countries.
But while inancial investment in R&D is important, they are only one, albeit important, aspect of the
innovation process. There are 5 other considerations that I think organizations should keep in mind as they design to innovate:
I. COLLABORATELike in the natural ecosystem, no single actor
creates an innovation in isolation. We deliver successful innovations through creating a robust network with
extensive internal and external partnerships. Our Connect+Develop open innovation model was spe-
ciically created for this purpose. We collaborate with nearly 2 million potential innovators externally, spanning
SMEs, individual inventors, and academic institutions. Successes such as Olay Regenerist, Dawn Hand
Renewal and Tide Totalcare are just a few examples of
this collaborative process
Apec CEO Summit 2011
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II. BUILD THE BASE
We believe that innovative new growth efforts
depend on a healthy core business. First, a healthy core business produces cash low that can be invested in new growth. Second, a core business is rich with ca-
pabilities that can support new growth efforts. Break-
through innovation needs time and patience; a robust
innovation architecture must therefore build off a strong
base business.
III. INNOVATE ACROSS THE PORTFOLIONot all innovations are alike. At P&G we plan for
balanced innovation portfolio that includes what we call
“disruptive market innovations” - these are the big bang breakthroughs that create new categories and new
market segments. But as we all know, these innovations come along once in several years, sometimes as much
as a decade or more. To ensure that the innovation portfolio doesn’t dry up, companies need to make sure
that they also invest in innovations that improve upon
existing innovations. Even within this type of innovation, some will be more transformational than others. Another type of innovation that we focus on and is a key source of
growth are what we call “commercial innovations”. These are innovations that reframe or redeine existing proposi-tions with new ideas. For example, P&G’s sponsorship of the Olympic games, takes the core beneit of several of our brands – of serving women, many of whom are
mothers, by making their lives a little easier, a little better
- and ties it to a larger idea of “thanking mums”. Our Vancouver Winter Games experience, where we irst rolled out our Thank You Mum campaign was a great success and we are now looking forward to thanking
mums across the world through a ten year partnership
with the Olympics.
IV. THINK BIG, START SMALL, ACT NOWIt is important to keep in mind that an innovation
ecosystem doesn’t build itself overnight. Innovation efforts typically start out small – as pilots where you
spend little and learn a lot. I have seen many big ideas coming out of 2 day workshops that have subsequently
been expanded to larger pilots in several business units
and then into a company-wide initiative. Such staged investment allows for early rapid revision, targeted ex-
perimentation and provides a built in reminder that
innovation is not a quick ix.
V.GET THE RIGHT TEAMInnovation needs fresh eyes and free minds. It is
important to staff innovation projects with teams that are
small and unencumbered by the usual processes, as it
may kill off nascent ideas. It is also important to ensure that there is a mix of young and more senior people on
the team, so that decisions can be taken swiftly and
barriers busted. Such teams are better able to focus on the most promising initiatives and make sound judgment
calls when data is inconclusive or absent.
As a company committed to touching and
improving lives, P&G needs to constantly – and con-
sistently – create innovations that serve unmet and
under-met needs. These 5 considerations go a long way in helping us build an innovation ecosystem that
improves lives of more consumers in more parts of the
world more completely.
GREEN INNOVATION
Apec CEO Summit 2011
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Building a Sustainable Environment for Growth and Prosperity in APECBy Richard P. Lavin, Caterpillar Inc., Group President
For more than 85 years, Caterpillar has been making sustainable progress possible and driving positive
change on every continent. We are the world’s leading manufacturer of construction and mining equipment,
diesel and natural gas engines, industrial gas turbines
and diesel electric locomotives. The company is also a leading services provider through Caterpillar Financial
Services, Caterpillar Remanufacturing Services,
Caterpillar Logistics Services and Progress Rail Services.
Our vision is a world in which all people’s basic re-
quirements, such as shelter, clean water, sanitation and
reliable power, are fulilled in a way that sustains the environment. Our mission is to enable economic growth through infrastructure and energy development, and to
provide solutions that protect people and preserve the
planet. Our strategy is depicted as follows:
Our deinition of sustainable development is to leverage technology and innovation to increase eficiency and productivity with less impact on the environment
and to help customers do the same.
Focusing on sustainable development is good
business. And done right it’s a formidable competitive advantage. In the next decade, the most successful companies will be those that integrate sustainability into
their core businesses while enabling their customers to
work more safely and eficiently. We’re already doing that at Caterpillar and helping our customers do the same — looking out for the environment and the bottom line.
Caterpillar customers are in industries at the heart of
many of the world’s sustainable development challenges,
including infrastructure development, mining, oil and
Apec CEO Summit 2011
82
gas, power generation, forestry and transportation. That’s why a focus on sustainability is so important to us. In fact, some of Caterpillar’s fastest-growing businesses
are those focused on the sustainability of materials and
resources.
On the energy side, Caterpillar supplies highly
eficient power systems and energy solutions. We provide engines that support alternative energy
sources, converting biogas such as landill gas, coal seam methane and digester gas into useful and clean
energy. To help customers with energy eficiency and productivity, we lower the environment impact, while
reducing the running cost for customers in the lifetime
of the products.
On the materials side, our greatest contribution to
materials conservation comes through our remanu-
facturing business. This advanced form of recycling takes end-of-life products and restores them to original
engineering speciications. The process reduces waste and consumption of raw materials to produce new
parts. And the end result is a high-quality, cost-effective repair option for customers. In 2010, Cat Reman and Progress Rail together recycled approximately 3 billion pounds of material.
Caterpillar feels a responsibility to contribute to
public debate on energy and environmental policies
that affect our industries. Sustainability is a bit of a balancing act. We need clean, secure, and competi-tively priced sources of energy, and ever increasing
amounts of natural resources. Thus, we have to address environmental concerns. At the same time, we cannot undermine our economic well-being. Instead of placing heavy regulations and expenses on businesses,
governments need to drive private sector investment
in energy solutions with more incentives and support. Accordingly, we strongly endorse the APEC Business Advisory Council’s (ABAC) recommendation in this year’s Letter to Leaders to reduce or eliminate tariff and
non-tariff barriers on environmental goods and services.
Climate and energy concerns are global issues. Each country has its own unique role to play, but we have to
keep a level playing ield. As air knows no boundaries, coordinated global actions are the only effective ways
to meet the world’s environmental challenges. Drastic variations in rules and regulations can bring huge dis-
advantages for businesses, industries and even nations. As a result, we are pleased that ABAC has identiied Regulatory Coherence as a next generation trade issue
in the Letter to Leaders, and recommended a focused
effort to harmonize diesel engine emissions regulations.
The greatest opportunity to create a sustainable
environment for growth and trade lies in promoting free
trade. Caterpillar has long believed that the pursuit of business excellence in a climate of free enterprise free
trade and unencumbered competition is the best means
for eficient development and distribution of goods and services. The enormous rise in post-World War II gross national product and living standards in countries par-
ticipating signiicantly in international commerce has demonstrated such beneits. Accordingly, we support initiatives aimed at increasing economic development. APEC Leaders have a shared vision to achieve a Free
Trade Area for Asia Paciic. We encourage APEC Leaders to set a deinitive target to achieve this vision and work together with the private sector to make it a
reality.
ENVIRONMENT & SUSTAINABILITY
Non-tariff barriers
in APEC hinder
trade in remanu-
factured products
and services
World’s First Electric
Drive Track-Type Tractor
Apec CEO Summit 2011
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Creating a Common Commercial Environment in Asia and the PaciicBy Grant Aldonas
As APEC’s leaders prepare to meet in Hawaii,
there would seem little cause for optimism. The world economy is slowing. Trade talks in the World Trade Organization have ground to a halt. Trade frictions are once again on the rise.
All of which suggests dim prospects for deepening
economic integration in Asia and the Paciic. Yet, deeper integration is essential both to the region and to
the contribution it makes to economic recovery globally.
Two trends have driven the region’s success over
the past three decades. One is the increasing reliance on institutions like private property, contract rights, and
markets as the organizing principles of the region’s economies, which accounts for much of the progress
in reducing poverty and raising living standards. The other is integration, both regionally and as part of the
global economy, which has expanded the opportunities
for specialization, raised the region’s productivity, and allowed irms to position themselves at different stages in a powerful regional value chain serving global markets.
The rhetorical support for further liberalization at recent APEC leaders’ meetings acknowledges the
role integration has played in the region’s progress. But,
that rhetoric belies a number of trends that threaten
its success. They include a disregard for intellectual property rights, conditions on investment that force irms to relinquish their intellectual property as a condition of
market access, and a suite of industrial policies intended
to foster local production at the expense of deeper
regional economic integration.
Those trends threaten the region’s prosperity in two
ways. By adopting policies that segment the region and isolate it from the global economy, governments
are moving away from the path that led to Asia and the
Paciic’s current prosperity. By weakening property and contract rights, they diminish the proits earned through technological innovation in the region, which is key to its
future growth and diversiication.
There is, fortunately, an alternative that would
reinforce, rather than weaken, Asia and the Pacific’s
upward trajectory. That alternative involves a commitment by APEC leaders to deeper economic
integration – not simply trade and investment liber-
alization as conventionally defined, but the creation of a common commercial environment that solidifies
the legal and institutional underpinning of a regional
market economy.Apec CEO Summit 2011
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The reason for moving powerfully in that direction
is globalization’s impact on how businesses are organized and how they compete. By sharply reducing transaction costs, globalization has reduced the need for vertical integration, allowing the shift toward global
supply chains and, at the same time, making them a
competitive necessity. By expanding opportunities for specialization and trade, globalization has increased the return to those factors of production that allow irms to exploit those opportunities, which has made access to
capital, talent and ideas the new basis of commercial
competition.
What that suggests in terms of deeper integration
is a need to focus on making the region as attractive as
possible to investment by irms that mobilize the capital, talent and ideas and organize the value chains that serve global consumer markets. That will require lowering transaction costs, reducing uncertainty and risk in the
business environment, and rewarding innovation and
entrepreneurial investment.
In concrete terms, that calls for strengthening
property rights (particularly intellectual property rights), ensuring the enforceability of contracts, improving the
eficiency of capital markets, and guaranteeing the contestability of markets for goods, services and ideas
across the region. In short, policymakers should aim to create a frictionless legal environment throughout
Asia and the Paciic that encourages commerce and, hence, investment.
That approach holds promise for three reasons. First, it takes the world economy as it is – one in which
the majority of trade now takes place between afiliates of globally engaged irms or within the broader reach of their supply chains – and creates an environment in
which such irms can lourish, stimulating local innovation and entrepreneurial activity through their investments.
Second, the approach outlined is a natural extension
of the policies that have driven the region’s rapid
economic progress to date and of what APEC does
best, which involves the practical work of improving the
business environment and reducing transaction costs
that might otherwise inhibit commerce.
Third, the effort to create a common commercial
environment creates a process in which every nation in
the region has a stake, yielding a positive sum outcome
that often eludes conventional trade negotiations.
The role for APEC’s business leaders in that process
is critical, both in educating political leaders on the
reasons for creating a common commercial environment
and in identifying the rules and economic institu-
tions that will lead to that goal and foster investment
and innovation in the process. With that goal in mind, APEC’s business leaders should press APEC leaders for
the following in Hawaii:
1) A strategic vision for economic integration in Asia and the Paciic that focuses on innovation, entre-
preneurial investment, and economic growth;
2) A practical work program to establish the intel-lectual foundation for creating a common commercial
environment in Asia and the Paciic and a process for getting there; and
3) A counterpart proposal on trade and investment liberalization that would put APEC on a concrete path to free trade by 2020, as the Bogor goals require, which would parallel and reinforce the effort to create a friction-
less legal environment throughout the region.
The future of the region and the global economy will
be measurably brighter if they do.
APEC & COMMERCE
Apec CEO Summit 2011
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The elegant Riu Palace Cabo
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Advertisement
21st Century Workforce and Societal Shifts By Lindsey L. Larsen, Diplomatic Courier Correspondent
Life is a process. A series of milestones set up in a sequential kind of order, ensuring that from start to
inish, every person completes the ‘process’ that is life. For example, going to college and getting degree has
become a more consistent milestone across both the
nation and the globe. Higher education, formerly viewed as a luxury, is now viewed as a necessity. We seek the degree because without it, we are not afforded the
same job opportunities. Finding a job and beginning a career in order to earn a living is also one of those major
milestones. It symbolizes independence and self-sufi-
ciency, traits that also signify success. The problem is that there are not enough jobs to go around.
It poses the global question, what is causing the job
shortage? In theory, the professional working world is like an escalator. Every worker starts at the bottom step; they slowly but surely work their way up, and exit once
they arrive at the top. Workers today are reaching the top of the escalator and stopping, they are choosing
not to retire because of the nation’s current economic
state. That leaves the younger generation with fewer job options and more qualiications, increasing the competition in the working world today.
About 50 percent of the global population falls into the age bracket of being 27 years old or younger, and every year thousands of college graduates enter the
workforce. Each of them is facing the reality of how simply having a degree does not guarantee anyone a job, only
more competition. However, young people are ighting back. While they may not have the work experience in comparison to their older-generation counterparts, they
have developed a brand-new set of skills surrounding
technology.
Dubbed the “Technology Generation,” young people are claiming their authority on something that matters
to the world’s economy: the social media. Through the use of the Internet, this generation dominates their
technological skills by using the social media resources
to change not only the way people live and work, but
also the way in which the world communicates with one
another. This generation has empowered themselves with a new way to make an impact, by using the techno-
logical tools they are equipped with to maximizing their impact. Their technological tools will also enable them to solve the global problems they are inheriting, and they
currently face more problems than any other generation
before them.
The two most effective technological problem-solv-
ing tools are Twitter and Facebook. Twitter has rapidly achieved worldwide popularity, and as of 2011 has over
200 million users, generating over 200 million tweets per
day, and is sometimes referred to as the ‘SMS of the Internet.’ It is only one of the ways to network online, but it has demonstrated strong inluence among the younger generation and has a signiicant impact on how things get done. While Facebook currently has over 750 million active members, it is proving to be one of the pillars of
change behind the Digital Enlightenment. Online com-
munication is evolving into one of the most effective
ways to send out information because of Twitter and
Facebook. Leadership relies on effective communica-
tion, and that is what social networking is all about.
The tools that the Technology Generation needs
in order to combat the abundance of global problems
they will inherit extend beyond just the social media. Leadership style and frugal innovations combined
with the social media will be necessary for all young
global leaders. China believes a way to innovate future global leaders is to reward scientiic advancements at a young age; they predict that by using this method, it
will leverage global brainpower and can be localized to stimulate local growth across the globe.
The societal changes in the workforce surround the
number of jobs and the necessary skills to perform said
jobs. Young people are combating the lack of jobs in the economy by using technology to create their own jobs. In turn, they are creating their own workforce, one that
rivals the older generation of workers who are choosing
not to retire. They are creating solutions to the problems. New skills are required for these new types of jobs, and
young people have the advantage.
The hallmark of any good entrepreneurship is the
ability to innovate and keep coming up with solutions. The Technology Generation is highly capable of
overcoming what is lacking, which is suitable platform
that can act as a launching pad for our ideas. The young people of today use the social networking mediums to
express their creativity in ways that were not possible for
the generations before. Assuming each new generation in the workforce brings new skills and change to the
table the younger generation is bringing technological
innovation, creativity, online networking skills, and the
way to use their skills effectively. Technology has become an integral part of the workforce, and the Technology
Generation are the workers who are setting the bar.
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OP-Ed: You Cannot Cut the Seamless Web of History
By Robert F. Bennett, Former U.S. Senator and Resident Scholar at the University of Utah’s Hinckley Institute of Politics
I don’t know who said that irst, but I heard it from my high school history teacher, and it has stuck with
me over the years. Through a career that has taken me throughout the world on business and then into the U.S. Senate, I have learned that the concept of a “seamless
web” is correct.
You cannot make an accurate analysis of Amer-ican-Japanese relations if you start in 1945, with the dropping of the atomic bomb on Hiroshima. To understand why that was done, you must know
about the fanatic fight-to-the-last-man dedication of
Japanese troops during the island hopping campaign in the Pacific in 1943 and ’44, which convinced American planners that an invasion of the Home
Islands would cost up to a million American lives and
probably more Japanese. You cannot understand the island campaign unless you study the Japanese attack on Pearl Harbor, in 1941, and the Japanese defeat at the Battle of Midway in 1942.
You cannot understand the Pearl Harbor attack unless you understand Japanese fears for their economic survival that arose in 1940 from the embargo placed on shipments to Japan by the United States. You cannot understand the reasons for the embargo unless you go
back to Japanese actions in China in the 1930s. And so on.
History matters because it shapes our perception
of what we need to do now. It is important not only to get the facts right but also to place them correctly
in the seamless web. The most dangerous thing a nation’s leaders can do is to pick and choose only those
historical tidbits that conirm their bias, and then, if that does not work, make something up. The President of Iran embraces the iction that the Holocaust never happened because he wants a “historical basis” from which to demonize the State of Israel and weave conspiracy theories for his followers around the foreign
policy decisions of the British and the Americans with respect to it.
Far too much foreign policy is built on this cultural
practice of using history to exploit ancient grievances,
embroidering them with lists of fresh insults and slights. Racial hatred tied to ancient tribal feuds causes wars.
But it need not be so. There is no “hatred gene” in anyone. It is something that must be taught to us rather than something that is born in us. The Germans and the
French hated and killed each other, just for being French
of German, for centuries, until a new generation in both
countries, after the Second World War, realized just how stupid that was. They still have their differences, to be sure—all countries do, to one degree or another—but their cooperation in creating the European Union and
working together on many issues relating to it has made
war between them a distant memory.
All national leaders should have a deep and accurate
sense of the history of their adversaries. Gandhi’s campaign of non-violence could not have won India’s
independence if had not been built on his understand-
ing of how well it appealed to British values. If he had tried it in the Soviet Union during Stalin’s reign, he would
have been shot on the spot. America’s misadventures in Vietnam were rooted in Robert McNamara’s (and the Kennedy brothers’) lack of knowledge of the history of Ho Chi Min, particularly of the role he played as an
American ally in World War II.
After 9/11, I did my best to gain such an under-standing of the history of the attackers. I began to study the history of Islam and the Arab world for the
irst time—such history receives little or no attention in American schools—and learned a lot about a major civi-lization which has made many contributions to modern society. I do not condone the acts of the terrorists in any way, but I have begun to understand them better
now that I know more about them and their background. I wish they would make a similar effort to understand
Americans and our background.
On the 60th anniversary of D-Day, a young woman
who was born years after the event, who worked as
a tourist guide on the beaches and in the cemeteries,
pledged to the assembled dignitaries, “We shall never
let anyone forget what they did on that day.” The German Chancellor was there, next to the President
of France, an honored guest. That was appropriate, because those who prevailed at Normandy eventually
liberated the Germans as well as other Europeans from
the clutches of Nazism.
This was history at its best—a past accurately remembered and heroic deeds properly honored by
those who had made history of their own by forging a
new bond of peace out of the ashes of war.
Former Senator Robert F. Bennett (UT) is the
Hinckley Institute of Politics’ Resident Scholar.
Apec CEO Summit 2011
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DHL – The Future of Logistics
Advertisement
by Roger Crook, CEO DHL Global Forwarding, Freight
The Future Happens Now
Spanning the globe, the
logistics industry inluences and affects the world in which we
operate. But logistics companies are equally affected and inluenced by trends and developments
around the world, such as global-
ization or scarcity of resources, as well as the changing expectations
of customers and employees.Global trends and develop-
ments in the political, economic
or social area directly affect the
conditions DHL works under
and signiicantly shape the daily business we pursue. The logistics industry in general and
DHL in particular thus not only
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business barometer at the same
time. DHL therefore attaches highest importance to all factors
that shape our future. By investigat-
ing them, we learn about the future
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future of our company.
Go Sustainable – GoGreenAccording to a recently-
released study, the pursuit of
sustainability will transform the
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of its business model as well as
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and technologies that will be used
by logistics service providers. Similarly, many people from all over
the world are concerned about the
threatening consequences caused
by the climate change and refer
to these when being asked for the
number one challenge of our times. Sustainability and, irst and
foremost, environmental protection
are an integral part of our corporate
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pursues a concrete CO2 eficiency goal – 30 per cent improvement by the year 2020 compared with
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around a billion CO2-neutral
GOGREEN shipments in 2010 – a
third more than in the previous year.
Change of Perception
According to the study, our
industry will be key to compre-
hensive carbon reduction efforts
in most sectors due to its unique
expertise and positioning along
the supply chain. We have an enormous potential of helping
other industries on their way to
becoming low-carbon economies. Some 63% of business customers believe that logistics will become a
strategic lever for CO2 abatement. Therefore, in addition to its strategic
economic importance, logistics will
increasingly be seen as essential to
achieving lower carbon emissions
across the economy.As customers, policy-makers
and companies begin to realize that logistics services and expertise
are key to providing sustainable
solutions, logistics will no longer
be viewed as a commodity, where
offering the cheapest solution rules. The leading logistics companies will
be those that possess the unique
value proposition of providing
sustainable services.
DHL – A Good Corporate CitizenWe recognize that we have
a special responsibility to use
our global presence, as well as
the knowledge, experience and
commitment of our employees in
local markets around the world, to
beneit society. As anchored in our corporate strategy, we aim to make
a positive contribution to society,
and support the long-term success
of our company through sustainable
and credible social engagement.
GoHelp: Disaster Management
When a natural disaster strikes,
communities and organizations around the world mobilize to send relief goods to the affected area. We provide the ideal global network
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GoTeach: Education
We support education and
equality of access to education
worldwide. As a large organi-zation with a high demand for qualiied employees, we cannot afford to ignore the dificulties in education today and leave the
responsibility to others. We are aware that our continued success
as an organization is reliant upon well-educated employees across
the whole range of educational
qualiication levels. This is why we promote and support initiatives that
improve equality of access to good
education and empower children to
ind their place in society.In addition, GoTeach gives
our employees the opportunity
to get involved by volunteer-
ing in educational projects and
thus expand their own horizons and contribute to the objective of
minimizing educational inequality.Apec CEO Summit 2011
104
Technology – Challenges and Opportunities for the Logistics
Industry
Sustainable future logistics
depend on innovative technolo-
gies. Forward-looking solutions signiicantly help the logistics sector reduce its carbon emissions, as
shown in the example of RFID,
Radio Frequency Identiication. RFID organizes supply chains in the most eficient way without detours and with a minimum use of
fuel and energy only, which saves
valuable resources and protects
our environment. Importantly, RFID is not a stand-alone solution. The more stakeholders in the supply
chain make use of it, the greater is
the beneit it brings along.Another future-oriented
example is multi-modal transport,
which combines different modes
of transport for a more eficient shipment and supports the greening
of supply chains. Our respective
services move goods by ocean
from Asia to a connecting transit
hub in Dubai, Vancouver, or Los Angeles, then transferring to lights into Europe, Middle East, Africa and
Latin America. By switching modes, customers can often cut their
CO2 emissions in half. Moreover, multi-modal services make use of
state-of-the art technology, such
as GPS track and trace, and the
“e-Lock” device, as well as a sur-veillance camera system to capture
data while loading and unloading.
Manage CO2 emissions more
easily
The Carbon Dashboard, a
new service developed by DHL
Global Forwarding, Freight helps
customers better understand the
main drivers of carbon emissions
from the various transport modes
involved including pickup and
delivery emissions in their supply
chain. It helps account for and manage carbon emissions,
including third party emissions,
with detailed and reliable CO2
mapping available instantly from a
web-based hub.The Carbon Dashboard ensures
a standard calculation approach
and treats CO2 as an integrated
business parameter, putting it into
relation with other supply chain
parameters such as volumes
shipped, product density and trade
lane eficiency. It also enables them to dry run various carbon reduction
scenarios using real data and
explore the effectiveness of different
optimization levers.
Still, there are further challenges
the future of logistics will have
to overcome. Just think of the increasingly complex structures
and demands of growing cities,
for example. By 2050, 70% of the world population will live in cities,
and in many areas, the modes of
street transport common today will
only be possible to a limited extent.With City Logistics, we
develop integrated, one-stop
solutions that are it for the future. By combining similar shipments, e.g. for gastronomy, hospitals or
hotels, trafic is regulated more eficiently in order to promote the economic growth of a city as well
as to improve the quality of life. The cooperation with and support
from municipal and state authorities
enables the creation of innovative
system solutions. An initial pilot project has already been started in
Dubai.
Green Growth
While many still see a contra-
diction between economic growth
and environmental protection,
sustainable business strategies
can actually enhance proitability, and will even be a prerequisite
to long-term success for most
companies in the future. Carbon pricing mechanisms will accelerate
a market based dynamic towards
more sustainable solutions. Once there is a real price tag attributed to
carbon emissions, the environment
will be an integral part of investment
decisions.Moreover, sustainability has
become a major reputation factor
for every company, whatever
industry it might come from. As a result, shares of companies who are
known as “good corporate citizens” perform better than the shares of
those who pursue no sustainability
strategy, which has become even
clearer ever since the latest inancial crisis.
According to the vision
statement of the APEC CEO
Summit 2011 – “The future. Redeined” – we irmly belief that the future does not simply happen
but that we can shape the world
of tomorrow collectively in the
present. There is no reason to wait any longer. Let’s contribute to jointly shaping a sustainable future.
DHL in Asia Paciic• Network: 120,000 destina-
tions served in more than 220
countries and territories
• Over 586,000 customers• Approx 60,000 employees• 10,300 vehicles • Over 1,500 locations• Approx 350 daily commercial
lights
Rethinking Healthcare: China’s Aging PopulationBy Jordan Fischer, Hinckley Institute of Politics
China’s Family Planning Policy, commonly known in
the West as the “One-Child Policy” is wrapped up tightly in China’s desire to modernize. When the Chinese government installed the One-Child Policy, it instigated
unusually rapid fertility and demographic transitions,
causing exaggerated social changes in many sectors. One of the most pressing problems stemming from this
world without siblings is known as the “4-2-1 problem.” Chinese culture places great importance on ilial piety, meaning that parents traditionally had no reason to
worry for their retirement or health care costs, because
their children would indubitably provide for them. In the new singleton generation, however, one child is now
responsible for the care of both parents, a responsibility
that is often too great to bear alone.
Thanks to China’s lightning transition from a
traditional society to a relatively modern one, the
population is rapidly aging, but there is currently no
established governmental or even widespread private
retirement security in place, anywhere in the country. This means that many working citizens might soon be unable to support their elderly family members, and with
no governmental safety net, the fate of China’s seniors—and those who must support them—is insecure.
“When Mao’s enormous baby boom generation
reaches retirement age in a few years, Chinese oficials fear that their families will be unable to provide inancial and social support,” explained Jane Macartney in 2008. China’s massive population is aging faster than nearly any
other on the planet. A government report estimated that in 2009, there were approximately 167 million Chinese citizens over the age of 60, making up 12.5 percent of the total population, and growing by approximately 3 million a year, relays Jaime FlorCruz in a 2011 report. At the same time, the population of working adults is
shrinking, as a rapidly declining birth-rate over the last
two generations is compounded by the fact that young
workers are putting off entering the workforce in favor of
continuing education. As a result, more elderly must be supported by fewer working young people. Population Reference Bureau’s analyst Toshiko Kaneda explains, “While the number of elderly in the population who
require care is growing, the size of the work ing-age population (who pay much of the healthcare costs) is shrinking. The elderly support ratio—the working-age adult (ages 15 to 64) per number of elderly (age 65 and above)—is projected to decline drastically, from 9 persons to 2.5 persons by 2050.”
In fact, actual ratios are probably even slimmer,
because as Vanessa Fong writes in her book, “Only Hope: Coming of Age under China’s One-Child Policy,” mandatory retirement ages are often under age 65, and many factory shut-downs have forced early retirement
on people as young as their forties, reports Don Lee. As China modernizes and becomes increasingly involved in the global market, the older generations’ skills are
becoming inapplicable. According to UNICEF and the World Bank, however, life expectancy in China was 73 years in 2009, meaning that the average retiree must live off of savings or his/her family’s charity for at least 13 years, usually more. Whether laid off or simply forced to retire at 50 years of age, older people in China are losing their income and becoming dependent on their
families early on, constituting a signiicant burden for an extended period of time.
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While other countries (such as Japan, the U.S., and many in Europe) are facing similar problems resulting from a rapidly aging population, these countries, having
passed through the fertility transition much more
slowly, have more developed infrastructures, including
established social security systems that are designed to
take care of the elderly. Unlike these countries, China’s only retirement security system currently in place is the
traditional model of ilial duty. This system is based on individuals and is often dysfunctional; at best, it is
unregulated and insecure.
In January 2011, however, a proposal was submitted to amend a Chinese law, requiring citizens to visit their elderly parents, reports FlorCruz. Such a law is already in place in Singapore, where under the
“Maintenance of Parents Act” the elderly have been able to sue their adult children for money and/or
care-taking since 1995. Unfortunately, whether or not this proposal becomes law in China does little to solve
the real problem: many families, no matter how hard
they try, will be unable to support their elderly parents
by themselves. Kaneda explains that in spite of national chronic disease prevention programs, set up by health
oficials to address the growing population of seniors, the health care system has become increasingly inac-
cessible for the common Chinese people in the past
two decades, as it becomes more market-oriented and
prices soar. Retirees are hit especially hard by the rising healthcare prices against their non-existent income.
While some efforts are being made to establish
care centers, professional elderly care is a relatively
new concept in Chinese society, and as such the ield lacks trained and experienced workers. Some local governments are hastily training laid-off factory workers
to ill this need, but many—including Kaneda—wonder if it will be enough to properly care for the many elderly
whose families are unable to do so. While many hope that this sort of program will develop in the coming years
to help alleviate some of the child’s heavy ilial respon-
sibility, others argue that this effort is far too small, and
because it is not inancially supported by the central government, the care these programs provide comes
at too high a personal cost for most families to afford,
preventing it from reaching the necessary levels of effec-
tiveness to solve China’s “4-2-1 problem.” Peng Xizhe, a professor of Population and Development at China’s
FuDan University, explains, “The [family planning] programme requires couples to reduce the number of
children they produce, but is unable by itself to provide
adequate social support for people to adjust their family
planning strategy.” Many critics argue that to fully support its mandated policy, the Chinese government
must ind and actively maintain a way to support its mushrooming population of aged citizens.
With China’s elderly now making up a solid
eighth of its population and no social security system
in place, the country faces an increasingly urgent
situation as the population ages at an unprecedented
rate. Although the central government has yet to enact or support any kind of social security program, some
local governments have supported grassroots efforts
to provide elderly care, which have been established in
recent years.
Private nursing homes have begun to provide
for those whose families are unable to do so, but they
are still too few in number to be widely effective, and
too expensive for most families to afford. Community-based care services are also available in some areas,
some supported by the local government and others by
private enterprise, providing the elderly with daily care
and their families with information on other services and
how to care for their elderly relatives.
As the problem grows more urgent and these
local care facilities become more established, it is
possible that the government, having already publicly
recognized the issue, will contribute funding and/or oficial status to these care-giving establishments, helping them to develop and increasing the availability
of elderly care in China. A social security system may soon be on its way.
Jordan Fischer is a senior at the University of
Utah studying International Economics, Mandarin and
Spanish Languages. After studying abroad in Tianjin
in 2009, she returned to China in 2011 to work in an
internship position with the Hinckley Institute of Politics.
POPULATION
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Global Financial Regulation in a Coordinated FashionBy Mark Pittman, Hinckley Institute of Politics
The recent 2007 recession, as described by the U.S. National Bureau for Economic Research, has brought about global calls for strengthening the inancial regulatory structure around the world. These calls have come from the developing BRICS nations of Brazil, Russia, India, China and South Africa, as well as from
developed nations such as the United States and the
countries of Europe. With resonating support emanating from the populace of the world’s nations, as reported
by groups as diverse as the ParisTech Review, following
the recession the question now becomes how inancial regulations can be strengthened at a global level without
hampering economic growth.
Growth is the single largest determining factor in
politics today; the growth of the economy correlates
positively, and directly, with the growth of political parties
and the success of individual politicians. One thing is clear: economies have to grow and people must be
able to work in the 21st century. Warding off the next inancial or economic apocalypse is essential for growth but ensuring that those regulations are not detrimental
to growth is another thing entirely.
In October 2007, Frederic S. Mishkin wrote: “Among the institutions that are most crucial to economic growth
are those that enable a country to allocate capital to its
most productive uses. Such institutions establish and maintain strong property rights, an effective legal system,
and a sound and eficient inancial system.” These principles not only still hold true despite the recession
and inancial crisis experienced in late 2007, but are the cornerstone of a vibrant and growing economy.
The Associated Press announced China’s accession
into the World Trade Organization in 2000 and its subsequent rise to become the world’s second largest
economy in 2010, thereby changing the status quo for
the developed nations of the world. The need for com-
prehensive and global inancial regulatory structures and cohesive agreement among nations has arrived. In the era of globalization and wide-spread web connectivity, the terms of engagement have changed to include more
Apec CEO Summit 2011
112
people in more places at more times than ever before,
as reported by TIME magazine. Connectivity through the Internet has spread from the personal computer
to mobile data phones, tablet computers and beyond. The most important implication that this brings to the
table is that governments can no longer control the low of money, information and ideas that way they used to
within their own borders. The new digital world is always evolving and continuously growing which means the
regulatory scheme must follow.
It has already become clear that the only way to
ensure greater stability for the entire system is for
inancial reform and strengthened legislation to occur globally. This presents not only a challenge but also an opportunity. Members of the G20 have assigned a Financial Stability Board; the European Union announced the coordination and creation of the Basel III banking regulations; and the United States’ government, through
conirmation by the White House, signed the Dodd-Frank Act into law. All three are valiant attempts to strengthen inancial oversight and remove volatility from a fragile and recovering economy, but these measures still fall
short of what is necessary.
A single set of ideas and principles must be drafted
into a treaty upon which all members of APEC and
perhaps even the G20 can agree. What globalization has shown us is that there is no place in the world untouched. If the United States enacts legislation that protects its
markets and economy from the effects of a crisis, and
another nation, such as Japan, does not follow with very similar measures, then the United States will sit at
a competitive disadvantage which will only cause more
individuals around the world to take advantage of the
loopholes in Japan and exploit the system to the brink of collapse. The coordination of inancial regulation does one thing better than a fractured system: it provides
businesses and individuals across the world with a set
of universal standards that make commerce and trade
cheaper, more eficient and more effective and bring stability to the global inancial markets and economy. This produces results for politicians who want and
need less volatility in their economy to stay in ofice—it beneits businesses and individuals who have common and coordinated standards to work with, and, most
importantly, it brings together the leaders of the world to
discuss policy in a comprehensive manner rather than in
a fractured and divergent way.
Starting on the path to a more stable global economy
can be as simple as arranging a group conference to
discuss these pressing issues. During the Asia-Paciic Economic Cooperation Summit, the world’s strongest
leaders can make both progress and headlines
while ensuring the vitality and success of the global
economies. Growth is necessary to ensure the success of businesses, individuals and governments around the
world, and making this growth easier, stronger and more
eficient should be APEC’s goal, while staying true to its mission of uniting to build a dynamic and harmonious
community supporting sustainable economic growth
and prosperity.
Mark Pittman is a student at the University of Utah
completing a Masters’ in International Affairs and Global
Enterprise. His educational background includes three
undergraduate degrees in Political Science, Economics
and International Studies at the University of Utah. Mark
has spent a great deal of his life all across the world,
having lived in Germany for 11 years, the United States
for nine and having traveled extensively to Australia,
China and various other parts of the world.
GLOBAL FINANCE
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Pressured to Study, Unable to Perform
By Shawn Quigley, Hinckley Institute of Politics
China pressures students to learn, but cannot
produce jobs equal to their skill level. From primary school to the university level, students in China are
pushed to study hard and receive good marks on
their exams, all in preparation for the exam that is said
can change one’s life. The marks that these students receive will determine the path of education they take,
inevitably determining their future. Testing decides what middle school, high school and university the students
will attend, and these high-stake exams even inluence what line of study the students go into. Driven to get good marks on their exams, students are often sent to
cram schools by their parents in order to receive extra
instruction. Studying is very important to the Chinese people—all those exams and extra hours at school prepare students for the exam of a lifetime, The Higher
Education Entrance Examination or the Gao Kao.
This emphasis on education performance came from
the Chinese government, which saw a need for more
educated citizens. Higher education was seen to be the key to solving many of China’s economic problems. Giving more people opportunity for higher education
would then satisfy the demand for more professionals
that could allow China to compete in the global market. The world is growing fast and to meet the demands of
globalization, more skilled workers are needed. This government priority makes it much easier for all to attend
college and graduate, but now China has the problem of
actually placing all those new graduates with jobs. This process has been more dificult than anticipated, leaving the whole country with a high volume of unemployed but
highly educated citizens.
Unemployment among the graduates is at a high
11.9%. The high unemployment could be blamed on China’s vast population and the subsequent large low of students graduating. Most of the issues are found within China’s enormous cities where students go to
study; the cities are too crowded and there is no room for
the graduates. China’s younger generation is called the generation of the “Ant Tribe,” getting this title because of the high volume of students who do travel to the big city
for higher education, then stay there after graduating in
anticipation of inding a job to it their new-found degree. This plan not working out as smoothly as one would
hope. Instead of inding a job that would it the degree, many are asked to return home to a factory job, forced
to accept a job that has little to do with the degree
earned, or can’t ind a job at all. The supply does not it the high demand for jobs.
It would be easy to rationalize that too much demand and with too little supply would be the simplest
way to understand the gaping unemployment rate
among Chinas college graduates, but this doesn’t quite
Apec CEO Summit 2011
116
compute. The problem isn’t lack a lack of jobs for graduates; it’s a lack of ‘qualiied graduates’ to it the jobs.
China sends more students abroad in the world than
any other country. From 1972 to 2009, China had 1.39 million people go over seas to study. More than 400,000 of these students sent abroad have returned home. These students are known as sea turtles, traveling
abroad to study and returning home, often inding work very quickly. Their newly obtained education and skills found outside of their native land allow for these students
to be very competitive, more so than any who graduate
from even the top universities in China.
Domestic colleges are being placed lower and
lower on the college totem poll. The return of an oversea graduate is seen as a valuable asset. The skills obtained from an education while abroad, as well as
their experiences and talents that either earned them
their opportunity to study abroad or that they gained
while studying in another country are just too appealing
to leave alone. These graduates are returning and taking all the jobs that otherwise would be awarded to
domestic graduates simply because these students are
seen to be more qualiied for the positions offered.
YaSheng Huang, Professor of political economy and international management at the Massachusetts
Institute of Technology says speciically that “there is a skills mismatch.” Referring to conversations with managers and entrepreneurs who always complain
about; “a shortage of people with the right set of skills,
capabilities and inclinations,” he argues that “China is so short of the right human capital.” There is not a shortage of jobs; there is a shortage of students with
the right skill sets. Beijing Bureau Chief Jaime FlorCruz said, “If China is to evolve from a mere manufacturing
capital of the world into a global hub of innovation, it will
have to realize that developing human capital is more important in the long run than technology and money. Talented people will bring both.”
China is working hard to solve this issue: packages
are being offered to help small business owners,
incentives are being given for students to return to rural
areas and work and students are being given opportuni-
ties for even more schooling after graduation. However, an overall solution to the high unemployment among
graduates would be to reform China’s education system
as a whole. While test scores are valuable and studying is very important, more emphasis needs to be put actual
working experience and fostering a form of learning
that sparks creativity and would give domestic students
the edge needed to compete with students who study
abroad. This type of education needs to begin at grade one. While reforming the education system is a more long-term solution for the high unemployment,
offering more educational opportunities through trade
or vocational schools could be a short-term solution,
providing people an opportunity to gain a skill and ind a vocation to match that skill more easily.
In reforming the education system, China would
reach its goal of producing more educated citizens who would be more qualiied and able to help compete in the global market; it would be a long-term investment
on human capital. Adding more trade and vocational education systems would also decrease the overall un-
employment rate by giving those who cannot attend
a four-year university an opportunity to obtain a
valuable skill set for themselves and China while giving
graduates who now are jobless a second chance to
gain a useful skill set that would provide an opportunity
for work. China needs to invest more time and money on human capital.
Shawn Louis Quigley
is a senior at the University
of Utah. In 2009 he had
the unique privilege to be
an intern for the Hinckley
Institute of Politics in Tianjin,
China, where he worked for
Wizard English. Shawn will
graduate in May 2012 and
plans to pursue an MBA or
receiving a degree in law.
EDUCATION
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Making Sense of FukushimaBy Henry Sokolski, Nonproliferation Education Center and Hinckley Institute of Politics
Ask a nuclear expert about the reactor accident at Fukushima and you are likely to get overwhelmed with a tidal wave of technical points—everything from how poorly the reactors’ hydrogen vents and emergency generator systems worked to what permissible exposures to radiation should be. It can be mind numbing.
None of these explanations, though, hit what matters most: how Fukushima has dramatically increased nuclear power’s relative costs and risks. Here the story is relatively simple. Many of the world’s richer economies—including Germany, Switzerland, Italy, Austria, Sweden, Spain, Norway, Denmark, Belgium, Taiwan, Japan, Kuwait and the U.S.—have slowed or shuttered planned reactor construction and are focusing instead on alternative ways to generate, distribute and store electricity.
The last time anything like this happened was nearly a quarter century ago in reaction to the nuclear accident at Chernobyl. Then, the U.S. and much of Europe put their nuclear power plans on hold. Since 2000, though, growing concerns about carbon emissions and global warming garnered more support for new nuclear power construction, that is, until Fukushima. Earlier this year the International Energy Agency (IEA) optimistically forecast a near doubling of reactors on line by 2035. After the Japanese meltdown, IEA slashed its forecast dramatically.
Industry insists that all of this is just a temporary setback. This, though, is mostly bravado. Existing nuclear power plants will continue to operate and several more will be built in Eastern Europe, China and Korea, but any massive nuclear revival similar to that presumed before Fukushima is unlikely on several counts.
First, even before Fukushima, construction costs were making new nuclear power plants uncompetitive against modern natural gas systems. A large power reactor was projected to cost anywhere from $6 billion to $10 billion and take ive to 10 years to bring on line. Now, with the nuclear safety reviews Fukushima has prompted, these costs and build times will only increase. Meanwhile, large, advanced gas-ired generators, which emit roughly one-half the carbon of an equivalent sized coal-ired generator, cost as little as $700 million to build and take as little as 18 to 36 months to complete. As a result, almost all U.S. electrical utilities are substitut-ing their old coal-ired plants not with nuclear, but with natural gas-ired generators.
Natural gas also is becoming more affordable and plentiful, not just in the U.S., but in the Middle East, Med-iterranean, China, Australia, Latin America and Europe. The reason why is the development of unconventional techniques for extracting gas. These new methods, including deep fracturing and tight gas extraction, have turned the U.S. from a natural gas importer to a natural Apec CEO
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gas exporter. They also have ignited hopes of reversing Polish dependence on gas imports, and turned Israel and Lebanon into future natural gas gold mines. Meanwhile, advances in pipe and liquefaction transport technologies are moving the world away from local to larger, regional natural gas markets.
All of this will buy time as the costs of more sustainable forms of clean electrical generation—e.g., wind, solar, small hydro, biomass—continue to decline. Integrated, smarter electrical grids will also help deal with these intermittent energy sources, as will cheaper electrical storage systems. Germany and others are banking heavily on these developments as they wind down nuclear power plant operations over the next two decades. For them, the risks of increasing their reliance on nuclear power seem higher than the economic un-certainties of weaning themselves off it.
This, then, brings us to the second nuclear problem Fukushima dramatically compounded—how liability for nuclear accidents is now viewed. Fukushima, which involved an advanced safety conscious country and U.S.-designed light water reactors, was not supposed to happen. That it did happen dramatically increased all nuclear liability calculations.
In the case of the l979 nuclear accident at Three Mile Island, the clean up cost less than $1 billion over 12 years. Indirect damages caused by the 1986 Chernobyl accident have been estimated at several hundred billion dollars but the actual amount paid out by governments over the last two decades was no more than $10 to 15 billion.
In contrast, the Japanese government already has pegged direct Fukushima damages at more than $50 billion and Merrill Lynch reported they could conceivably run as high as $130 billion. These numbers are ive to 10 times greater than the maximum amount of insurance coverage the U.S. government currently requires the U.S. nuclear industry to provide. Under current law, U.S. nuclear operators have put roughly $300 million aside to cover off-site damages. Industry can be required to pay out roughly another $12 billion over seven years for any speciic accident. But that is all. Anything more must be covered by the U.S. government. Before Fukushima, $12 billion seemed suficient, but not any more.
Now, the worry is that U.S. nuclear safety regulations are too relaxed. Industry knows that tighter safety rules will drive construction costs to record highs; it is already resisting such rule making. This may cheapen operation of existing plants but it is sure to delay agreement to new safety regulations, which will only put off new reactor
construction further.
Meanwhile, potential nuclear customers in developing states are becoming far more wary of American nuclear vendors who continue to insist, as they did with Japan, that U.S. irms be absolved of any liability in the case of a nuclear accident. In India, America’s insistence on this point has become a major political issue.
This, then, brings us to the inal reason Fukushima has dimmed nuclear power’s prospects. Having spooked the world’s established economies from pursuing major nuclear expansion, Fukushima’s negative nuclear market fallout is goading the world’s nuclear vendors to shore up sales by pitching their wares to potentially dangerous customers in the Middle and Far East and in Africa.
Saudi Arabia, whose leadership has announced that it must get nuclear weapons if Iran does and that it is willing to pay up to $300 billion to build 16 large nuclear power plants by 2030, is one such market. Turkey, which once toyed with using civilian power plants as building blocks for a possible bomb program and now faces a nuclear weapons-ready Iran, is another; it has plans to build 20 nuclear power plants. Syria, which was caught building a covert nuclear plant in 2007, still wants to build power plants, as do Egypt, Algeria, Iran, Nigeria, Vietnam, Bangladesh and Burma.
None of these states has anything approaching an independent nuclear regulatory authority. Many have harbored aspirations to acquire a nuclear weapons option and refused to forswear making nuclear fuel—a process that can bring them within weeks of acquiring a bomb.
Why does this matter? The answer is simple: one more Iraq, North Korea or Iran diverting a declared “peaceful” nuclear program to develop a bomb option, and nuclear power’s further expansion to developing states will be rightly viewed with the kind of suspicion that could jeopardize nuclear power’s development more generally. So far, the world’s nuclear vendors have effectively opposed proposals to tighten nuclear export rules signiicantly, but this is a short game. In the long run it is yet another key reason why banking on a massive expansion of nuclear power in the advanced world is now a bet against the house.
Henry Sokolski is executive director of The Nonpro-
liferation Policy Education Center in Arlington, Virginia,
and editor of “Nuclear Power’s Global Expansion:
Weighing Its Costs and Risks” (2010). He served on the
U.S. Commission on the Prevention of WMD Prolifera-
tion and Terrorism.
NUCLEAR SECURITY
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A Participatory Approach to Democratic Reform in the PhilippinesJohn D. Sullivan, Ph.D, Executive Director, Center for International
Private Enterprise (CIPE)
Elections are not the sole ingredient for democracy. In a genuinely democratic state, the policymaking
process must relect the desires and priorities of the citizenry, and the mechanisms of the state must be capable of responding to citizens’ needs. Considered to be among the world’s worst performers in several
areas of public governance, the Philippines continues
to struggle in consolidating democracy. Recognizing the need to strengthen governance on the local level, the
Center for International Private Enterprise has worked
with the Institute for Solidarity in Asia (ISA) since 2004 to reform and build the capacities of local governments
across the Philippines. ISA is led by Dr. Jess Estanislao, former Secretary of Finance under the government of
President Corazon Aquino.
The principle mechanism used to achieve reform in
the Philippines is the performance governance system
(PGS); adapted from the Balanced Scorecard approach. The process translates organizational strategy into concrete and quantiiable outcomes by measuring whether the operational activities of an organization are aligned with its larger-scale and longer-term objectives
and strategies. Utilizing the PGS as a management tool, the Philippines has seen dramatic results in recent years.
To keep up the momentum for change, ISA gathered
citizen groups early on in the project to chart out a broad vision and direction for the Philippines. Collectively, the coalition created a National Governance Roadmap to
instill shared values, a sense of community, and the hope
for prosperity and progress. The roadmap was the irst step in the Philippines 2030 Project, which addresses public governance at the national level.
In the city of San Fernando, inancial management training enabled the city to dramatically increase local
tax collection rates and decrease the length of time
required to register a business from two weeks to two
days. Furthermore, the volume of resources mobilized through public-private partnerships has more than
quintupled. This growth in the city’s own-source revenue contributed to the doubling of city spending on
elementary education.
The city of Iloilo also increased locally-generated
revenue and reduced the time required to process
business licenses by 86 percent. This healthier economic environment contributed to a quadrupling of
the city’s manufacturing output by 2010. Additionally, the average score of Iloilo public schools on the National
Achievement Test increased by over 20 percent.
Improved bureaucratic performance in the City of
Marikina is permitting more aggressive environmental
stewardship policies, including a new policy to plant
1,000 new trees every year and the renovation and con-
struction of ive water treatment facilities. Such improve-
ments in public governance are, in large part, made
possible by the enhanced capacity of local institutions
brought about by ISA training.
ISA is also broadening its public governance
program to include more low income local governments
and national agencies with similar success. Largely a result of automation systems introduced in 2006,
Calbayog, a small rural city in one of the least developed
regions of the Philippines, has experienced an increase
in property tax collection rates from 10 percent to nearly
70 percent.
Strengthening public governance is crucial to
strengthening participatory democracy in the Philippines
and beyond. The PGS process requires citizens and the private sector to take part in forming public policy,
increasing transparency, and holding local leaders
accountable. Technical and professional education facilitates organizational and budgetary reforms that orient public institutions towards results, strategic
plans, and real impacts. Scorecards make clear where progress is being made and toward what purpose, and
where purpose is lacking.
The success of this initiative is evidenced by the ac-
complishments of participating cities and by the growing
interest among Philippines cities and national public and
private institutions. Tellingly, in the May 2010 national elections, 83 percent of the mayors that enrolled their cities in the ISA program were either re-elected or their
chosen candidates won in their place. This project’s success gives reason to hope that democracy can work
in the Philippines.
John D. Sullivan, Ph.D is executive director of the
Center for International Private Enterprise, (CIPE) one
of the four core institutes of the National Endowment
for Democracy and a non-proit afiliate of the U.S. Chamber of CommerceApec CEO
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