APEC 2013

APEC › THOUGHT LEADERSHIP › Nusa Dua / Bali. Indonesia ❙ October 2013

The APEC Publication 2013

› Food: A World of Adundance

APEC

› Cybersecurity: Public Data

THOUGHT LEADERSHIP

INSIDE APEC

› WELCOME: WISHNU WARDHANA

› Trade: Trans Pacific Partnership

› Nusa Dua/Bali ❙ Indonesia ❙ October 2013

The APEC Publication 2013

SPONSORED BY

CATCOMPANYInc Publications

theapecceosummit.com

waters.com

What happens in laboratories becomes part of our lives.

The development of new, ground-breaking medicines that make us healthier. Quality control for the food we eat, the beverages we drink and the water we depend on. Solutions for the safety of plastics, polymers and synthetics that become the clothes we wear, the toys our children play with. Early detection and treatment of diseases.

Higher standards for a cleaner environment. It all begins with the analytical technologies from Waters—and the science of what’s possible.

To discover what’s possible in your world, visit waters.com.

Pharmaceutical & Life Sciences | Food | Environmental | Clinical | Chemical Materials ©2013 Waters Corporation. Waters and The Science of What’s Possible are registered trademarks of Waters Corporation.

The APEC Publication 2013

October 2013

Contents & Contributors Features

26

CovEr StorY: 26 / PACIFIC SUNrISE: A focus towArds AsiA viA trAde After the often failed attempts of reaching a consensus on the Doha Rounds, a new free trade pact, called the Trans Pacific Partnership, has emerged.

Masthead CATCOMPANYInc APEC › THOUGHT LEADERSHIP › Nusa Dua / Bali. Indonesia ❙ October 2013

By Oscar Montealegre

The APEC Publication 2013

› Food: A World of Adundance

APEC

› Cybersecurity: Public Data

THOUGHT LEADERSHIP

INSIDE APEC

› WELCOME: WISHNU WARDHANA

› Trade: Trans Pacific Partnership

› Nusa Dua/Bali ❙ Indonesia ❙ October 2013

20 / Moscow’s Mayoral Elections: A Win Win for Putin The APEC Publication 2013

By Andrew Tytarenko

SPONSORED BY

CATCOMPANYInc Publications

theapecceosummit.com

32 / Colombia’s Future as it Masters Renewable Energy

By Bryce Bytheway

52

40 / Resilience: Growth with STEM Innovation

By Edie Fraser

Publisher: Chris Atkins Editor-in-Chief: Ana C. Rold

47 / Foreign Investment in Georgia: Opportunities Abound

By Alexander Botting

Managing Editor: Chrisella Sagers Herzog

52 / A World of Abundance

Creative Director: Christian Gilliham christian@cgcreate.co.uk T: (+44) 7951 722265

By Dr. Scott T. Massey

54 / Russia’s Energy Policy

By Dr. Richard Rousseau

60 / APEC and Small, Medium and Micro Enterprises

WELCOME NOTES: Publisher’s Note

By Chris Atkins

By Manny Menendez

62 / Rushing Backwards: Why Hastening the Trans Paciic Partnership Agreement Will Hurt Us

86

By Akela Lacy

82 / All along the Watchtower: Our data is public, should we get over it?

Editor’s Note

By Ana C. Rold Welcome by Wishnu Wardhana, APEC CEO Summit 2013 Chair Yu Jinzhen Vice Chairman, CCPIT

By Akela Lacy

86 / Why do people protest?

By Vahram Ayvazyan

Contributors: Vahram Ayvazyan; Alexander Botting; Ryan Burkhart; Bryce Bytheway; Edie Fraser; Dr. Orji Uzor Kalu; Akela Lacy; Dr. Scott T. Massey; Manny Menendez; Oscar Montealegre; Dr. Richard Rousseau; Andrew Tytarenko

90 / The Oil Crisis in Nigeria

By Dr. Orji Uzor Kalu

96 / The U.S., China, and the Trans Paciic Partnership

By Ryan Burkhart

News 68 / Support for Good Regulatory Practices in APEC will Foster Growth

By Irvina Falah

70 / APEC Economies are Improving Border Entry for Air Travelers

By Irvina Falah

75 / Opening the Services Sector Ofers Big Gains, Say APEC Oicials

By Irvina Falah

Sponsored Features 12 / BKPM: BKPM’s Mission 24 / 30 / 36 / 38 /

soneva thailand: Soneva Kiri Resort Korean Airlines: Leading the way in Business Travel Becamex: Becamex ICC Corporation intel: Improving lives, communities and economies through technology 50 / soneva Maldives: Soneva Fushi Resort

76 / Bali tourism: Welcome to Paradise 04 ❙ theapecceosummit.com

Advertisers Index 02 05 06 09 11 15 17 18 29 34 43 46 57 58 59 65 66 69 71 72 74 77 79 80 89 93 94 98 100

Waters Corporation Westin Nusa Dua BKPM Accenture Garuda Airlines Grand Hyatt Bali CAT Company & CGcreate Design Heifer International University of Washington Becamex Tufts University Invest in Turkey ICC Indonesia Imirus ICC G20 Advisory Group Caterpillar Inc RCCL RCCL United Airlines Caterpillar Inc McGraw Hill Bali Toll Marathon Bali Tourism Soneva Fushi Resort Ettinger Diplomatic Courier Brisbane Economic Development Board Nusa Dua Beach Hotel & Spa Korean Airlines

Publishing Firm: The CAT Company, Inc. Chris Atkins, President Global Advisory Group: Chris Atkins, Peter Atkins Jennifer Latchman, Manuel C. Menendez III (Chairman & Strategic Advisor) Keith Foote Nyborg (United States Ambassador (Ret.) President of Sales: Mike Nyborg Sales Executives: Ray Baker, Guy Furl, Tony Royle, Juan Hierro, Amelia de La Cruz, Don Stauber Special thanks: Diplomatic Courier for their editorial direction and strategy To contact the editors please email us at: editors@diplomaticourier.org

BALI INTERNATIONAL CONVENTION CENTRE

The APEC Publication 2013

Welcome

Wishnu Wardhana APEC CEO Summit 2013 Chair

Dear Leaders Salam sejahtera from Indonesia.

ON BEHALF of the Indonesian business community, Indonesia is delighted to be hosting APEC once again, at a time when the global economy is at a pivotal juncture, almost 20 years on from the Bogor Goals when the leaders of Asia-Pacific first envisioned free and open trade and investment.

The aim of the Summit is to create a unique platform to discuss the future of the Asia-Pacific and to contribute to achieving sustainable inclusive growth globally. As a key stakeholder in our future, I invite you

to join us to work together towards a more resilient world and to build bridges to growth to create more opportunities for trade and investment for the benefit of the people in our economies.

The Summit program will be exceptional and will include the Presidents and Prime Ministers of the Asia-Pacific–some of whom are new, CEOs of global corporations, as well as thought leaders in a dynamic interactive format. Through the discussions on stage, and through the high quality networking, we want to ensure that you will gain the latest insight and perspectives on the issues that matter most to your business and the region.

I am confident that with your support,

The aim of The SummiT iS To creaTe a unique plaTform To diScuSS The fuTure of The aSia-pacific and To conTribuTe To achieving SuSTainable incluSive growTh globally.

08 ❙ theapecceosummit.com

we can reshape our future to make our economies more resilient and fully open for business. At the same time, there is no better chance to discover emerging Indonesia–projected to be the 7th largest economy in the world in the next 20 years– while enjoying the beauty and serenity of Bali.

I look forward to welcoming you to the Summit. Selamat datang to Indonesia.

Yours sincerely,

Wishnu Wardhana APEC CEO Summit 2013 Chair

The APEC Publication 2013

Welcome

Yu Jinzhen

China Council For The Promotion Of International Trade

Vice Chairman, CCPIT

Dear Government officials, Business & Industry leaders and Friends WE WARMLY WELCOME you to attend the 2014 APEC Summit to be held in Beijing, the People’s Republic of China.

The APEC Summit will offer an unparalleled opportunity to showcase China’s and our fellow APEC member economies and the strength of our cooperation. The APEC 21-member economies are home to nearly half of the world’s population, 55% of the world’s GDP, and 45% of the world’s trade.

Our goal must be to strengthen our relationship, deepen our understanding with each other while respecting our differences and in doing so we maintain stability, peace and national prosperity.

We welcome you to Beijing in 2014.

Best Wishes, Yu Jinzhen Vice Chairman, CCPIT

THE APEC SUMMIT WILL OFFER AN UNPARALLELED OPPORTUNITY TO SHOWCASE CHINA’S AND OUR FELLOW APEC MEMBER ECONOMIES AND THE STRENGTH OF OUR COOPERATION. 10 ❙ theapecceosummit.com

The APEC Publication 2013

Sponsored Feature / BKPM

BKPM’s mission

The Indonesian Investment Coordinating Board (BKPM) with its long and successful experiences as the primary interface between business and government has an important role to boost domestic and foreign direct investment in Indonesia to help maximize benefits and returns for businesses, consumers and investors.

Indonesia’s immense and growing consumer market, macro-sustainability and fantastic demographic dividend were some of the reasons why we chose to invest in Indonesia,” says Seung Hwa Suh, Vice Chairman and CEO at Hankook Tire.

Hankook is just one of many global players that has seen the potential of investing in Indonesia. It is one of the fastest-growing tire companies in the world, and its US$1.1 billion investment in Indonesia will cement that position. But it wasn’t just the market potential that convinced Hankook.

“We were also extremely encouraged by the Indonesian government’s support and commitment during our initial fact-finding and feasibility stage,” says Seung. “BKPM advised us through every step of our investment decision process, which gave us the confidence to make the final decision to invest in Indonesia.”

BKPM’s Mission Indonesian government has mandated BKPM to seek out and encourage both local and regional investors as well as major corporations looking at 12 ❙ theapecceosummit.com

investing in Indonesia’s growing markets. It must be a proactive advocate for investments and a matchmaker for investors. BKPM is also tasked with making sure a conducive and reassuring investment climate helps convince potential investors that Indonesia is the place to be in Southeast Asia. BKPM is more than an advisory board; it was given ministerial status in 2009, with its Chairman reporting directly to the president of Indonesia. Its results are as strong as its mandate.

“Through cooperation and coordination between BKPM, other ministries and local governments, investment services are going to be improved continuously and significantly,” says M. Chatib Basri, Minister of Finance. The Q2 Domestic Direct Investment (DDI) and Foreign Direct Investment (FDI) realization figures for 2013 bear this out. Investment realization in Q2 (April-June) 2013 was US$96.8 billion (Rp99.8 trillion), an increase of almost 30% compared to the same period in 2012. Taken from January 2013 right through to June 2013, the figures are even more

impressive, with a 30.2% increase. More than two-thirds of that came from FDI alone.

Chatib notes that new regulations are being introduced to simplify investment. “[Using] new investment regulation, the realization of foreign and domestic investment will increase and will support and contribute to the national economic growth target of 6.3% this year,”. He also says that currently Japan is the number one FDI contributor in Indonesia, followed by Singapore and South Korea respectively in second and third position in terms of overall FDI value.

More than Money Beside looking for investor and help them to establish their business in Indonesia, BKPM has an additional role to seek sustainable investment that improves social equality and reduces unemployment.

It promotes and reinforces Indonesian government development goals, which have been stated as pro-poor, pro-growth, pro-jobs and pro-environment. “Indonesia needs long-term and value added investment, or smart capital investment,” says Chatib.

Transport is one of the sectors that the Indonesian government has targeted for

The APEC Publication 2013

ThoughT LeadershIP

BKPM HAS ALREADY SCORED SOME BIG SUCCESSES IN THE INFRASTRUCTURE, CONSUMABLES AND RAW MATERIALS MARKETS. investment, says Herry Bakti S. Gumay, Director General of Air Transport at the Transportation Ministry. He notes that the plan to build 24 new airports across the country by 2017 will not only extend the country’s infrastructure and assist the aviation industry, but will also promote business and tourism.

Last year 12 new airports were completed at locations as diverse as Jambi, Maluku, Papua, West Sulawesi and Bengkulu, each with a minimum investment of US$21 million (Rp200 billion).

High-Tech Focus BKPM has already scored some big successes in the infrastructure, consumables and raw materials markets. But one area that is still worthy of attention is the high-tech sector. According to a report from International Data Corporation (IDC), the value of Indonesia’s broadband market could double this year, reaching US$1.16 billion, up from a mere US$650 million last year.

Sudev Bangah, Associate Research Director and Head of Operations at IDC Indonesia, estimates that subscriber numbers are set to rise by 28% this year, on top of an 80% rise (to 31 million users in total) last year. Given the number of potential subscribers, this is low. Bangah suggests that a

primary reason could be higher utilization rates among existing users, rather than growth in penetration, because broadband availability is relatively poor in Indonesia. To remedy this low penetration and to take advantage of the potential market, chip-maker Intel has teamed up with state-owned telecom company PT Telekomunikasi Indonesia Tbk (Telkom) to boost broadband subscriber numbers. Together, they will ofer notebooks and laptop package discounts along with low-cost Internet services provided by Telkom.

By bringing down the cost of Internet access, both Telkom and Intel hope to expand market share. To further help boost market opportunities, the government has prioritized broadband expansion as part of its long-term economic master plan. One of the central elements of this is the US$1.5 billion fiber-optic broadband network Palapa Ring. “The exponential growth of Internet users and proliferation of smart mobile communication devices are driving strong demand for data center services in Indonesia,” said Marina Budiman, President Director of PT Data Center Infrastructure Indonesia. Partnerships with the public sector as well as local private companies will provide future opportunities for foreign players to tap into this growth

Solid figures Corporations aren’t the only ones that are bullish about Indonesia’s investment prospects. The recent Asian Development Outlook (ADO) report published by the Asian Development Bank (ADB) estimates Indonesia’s economy will grow by a significant 6.4% in 2013 and 6.6% in 2014. Both these figures are the highest in the Southeast Asian region. In the report, the ADB says robust private consumption and improving investment performance are the key factors for Indonesia to reach its predicted growth levels. The ADB points principally to private consumption as a wealth generator, fueled by rising employment, wage increases and a boost to disposable incomes. In addition, investment will continue to expand, says the ADB, in parallel with improved ratings from credit agencies, lower interest rates, increased government infrastructure spending and continued overall growth. According to a 2012 report from the McKinsey Global Institute, “Unleashing Indonesia’s Potential,” this positive investment environment is likely to continue in the future. The report states that Indonesian business could benefit by up to US$1.8 trillion by 2030, with significant market opportunities in consumer services, agriculture and fisheries, resources and education. “With an additional 90 million consumers expected, consumer spend in urban areas could increase at 7.7% a year to become a US$1.1 trillion business opportunity by 2030,” it states. McKinsey estimates that with agriculture and fisheries providing another US$450 billion, and a surge in resources to US$270 billion (also by 2030), the workforce will rise to the challenge with a near doubling of skilled workers to 27 million.

The report sums up by describing Indonesia as being “on the cusp of a new era of sustained growth with the advantage of a following wind from major domestic and international trends.”

The ADB is likewise positive about long-term trends in Indonesia. “On the back of robust consumption, rising investment and increased intraregional trade, Southeast Asia’s growth momentum continues. Indonesia is on a more sustained path of long-term growth,” says Jon D. Lindborg, ADB Country Director for Indonesia.

Under BKPM’s stewardship, Indonesia has seen continuing gains in direct investment over the past years–and it is not just a recent blip that has made the figures look good. DDI realization in Q2 2012 increased by 10.1% compared to the same period in 2011, while FDI realization increased by an impressive 30.2% compared to the same period in 2011. And as Chatib says, with better coordination among ministries and institutions, the provinces and districts will likely see a much wider and bigger distribution of investment in the future. wSo it is not surprising that some investors describe their ventures into the Indonesian investment sector as “world class.” ■ Nusa Dua / Bali. Indonesia 2013 ❙ 13

The APEC Publication 2013

Editor’s Note

Towards Resilience and Growth

Ana C. Rold Editor-in-Chief

FOR THOSE OF YOU ATTENDING the 2013 APEC CEO Summit in Indonesia this autumn, welcome! Our editorial and production team is honored to be part of this significant gathering for the third year in a row.

As the world continues to face challenges in the financial realm, the APEC bloc has managed to stay strong and the business community is at the helm of this resilience and growth.

This year the Summit features several of the APEC nations’ leaders as well as CEOs of global corporations and innovative thought leaders. The way with which the business community and the policy community have joined forces is a testament to the role that public private partnerships have played and continue to play in improving trade relationships and relations in general.

As I’ve said at the onset of this publication, APEC’s major strengths of building capacity through the sharing of experiences and best practices is a plus in the next wave of trade reforms. APEC’s main strength is that it is voluntary and non-binding and its unique approach enables smaller groups of like-minded economies ready and willing to undertake reforms to go ahead first, allowing others to join later when they are ready. If APEC leaders continue with this approach, the bloc will continue to record concrete achievements, year after year.

APEC leaders can take pride in what their countries have achieved.

Cooperation between APEC members has resulted in more goods, services, capital, and people moving freely around the region–more so than ever before.

Border barriers, tariffs, and customs measures have been streamlined to give way to practical procedures that save billions for businesses and economies.

The fact that the Summit takes place in an emerging Indonesia is particularly important.In a world of increasing financial uncertainty, Indonesia has enjoyed unprecedented growth and stability and is a model for the group and the region.

This autumn more than 1200 leaders will be attending the Summit and they will discuss their business priorities directly with decision makers, lending a hand to the solutions that will shape the future of the region. We will monitor as always and look forward to recording their achievements and debating their issues well after the meeting has ended.

We hope you enjoy the selection of articles and thoughtful opinion editorials in this annual edition of the APEC CEO Summit magazine, and we hope you will share your thoughts or questions with us at any time.

Sincerely, Ana C. Rold Editor-in-Chief

14 ❙ theapecceosummit.com

Grandeur Tropical Beauty. Natural Splendour.

Graceful Elegance. Lasting Impressions.

Hyatt. You’re More Than Welcome.

HYATT name, design and related marks are trademarks of Hyatt Hotels Corporation. ©2013 Hyatt Hotels Corporation. All rights reserved.

The APEC Publication 2013

Publisher’s Note

Dear Heads of State, global business leaders, and distinguished guests welcome to the APEC CEO Summit.

Christopher Atkins Publisher and Founder Cat Company, Inc.

We are thrilled to be part of this significant gathering, doing our part to enhance the dialogue between leaders for regional and global solutions.

The third annual APEC CEO magazine provides a unique forum for thought leaders, journalists, and opinion makers to air important issues connecting the region and the group. Well after the summit has ended, this platform will continue to serve and connect these thought leaders. We are proud to be a part of the platform.

I would like to take this opportunity to thank all those involved in producing yet another first class informative publication. The CAT Company is the only enduring publishing company in the field of high-level summit publications, having been publisher and consultant to the G8 Summit magazines, the G20 Business Summit magazines–the official publication for the ICC G20 Advisory Group. CAT Company was the first publisher to be recognized as the “Official Publisher” for the APEC CEO Summit in 2010, a distinction we are very proud of.

I wish Mr. Wishnu Wardhana all the best in chairing this year’s APEC CEO Summit. I sincerely hope business leaders convening at this event can come to together and help to improve the Asia–Pacific region’s trade relations and consequently achieve sustainable inclusive growth globally.

We look forward to seeing everyone next year in China.

THE THIRD ANNUAL APEC CEO MAGAZINE PROVIDES A UNIQUE FORUM FOR THOUGHT LEADERS, JOURNALISTS, AND OPINION MAKERS TO AIR IMPORTANT ISSUES CONNECTING THE REGION AND THE GROUP.

16 ❙ theapecceosummit.com

Please go to the APP Store to download.

The CAT Company looks forward in working with CCPIT for APEC CEO Summit 2014

› Global Development: Future of Agriculture

› Conflict: Balkan Peace and Prosperity

G

TOUGH DECISIONS AHEAD: THE FUTURE OF EUROPE

› INTERVIEW: Sir Peter Westmacott British Ambassador to the United States › Global Development: Future of Agriculture › Northern Ireland: Conflict Resolution › Conflict: Balkan Peace and Prosperity

G

The APEC Publication 2013

INSIDE APEC

› WELCOME: WISHNU WARDHANA › Food: A World of Adundance › Cybersecurity: Public Data › Trade: Trans Pacific Partnership

APEC THOUGHT LEADERSHIP › Nusa Dua/Bali ❙ Indonesia ❙ October 2013

AFTER LIBOR AnD ICAP, WHAT’S nEXT FOR FINANCIAL TRANSPARENCY REFORM?

Powered by Imirus

www.g20g8.com

CATCOMPANYInc Publications

The APEC Publication 2013

CATCOMPANYInc Publications

The G8 Publication 2013

The Official ICC G20 Advisory Group Publication

Powered by Imirus

g20g8.com

The G8 Publication 2013

InSIDE G8

APEC › THOUGHT LEADERSHIP › Nusa Dua / Bali. Indonesia ❙ October 2013

› WELCOME: Vladimir Putin / A.N. Shokhin

› ICC G20: ICT for a Better Tomorrow

G8 › THOUGHT LEADERSHIP › Northern Ireland ❙ United Kingdom ❙ June 17/18 ❙ 2013

G20 › THOUGHT LEADERSHIP › St Petersburg ❙ Russia ❙ June 20 ❙ 2013

The Official ICC G20 Advisory Group Publication

INSIDE G20

SPONSORED BY

CATCOMPANYInc Publications

theapecceosummit.com

The CAT company is the proud publisher of the G8 Summit publication and the official G20 Summit publication for the international Chamber of Commerce G20 Advisory Group.

The CAT Company Inc. Contact: Chris Atkins on 1-801-783-5120 catkins@thecatcompanyinc.net

/MAGAZINES//ANNUAL REPORTS///BROCHURES////CATALOGUES /////IDENTITY//////BRANDING///////DIRECT MAIL////////WEB DESIGN /////////POS//////////PRESS & MAGAZINE ADVERTISING

m.+44 7951 722265 e.christian@cgcreate.co.uk w.cgcreate.co.uk

DESIGN+ART DIRECTION

THE AGENCY OF CHOICE FOR CAT PUBLICATIONS LET CGcreate YOURS FOR YOU [CRAFTED SOLUTIONS]

NOW I HAVE A VOICE

In Borachi Village, Bangladesh, women like Mossamat Renuke Begum receive animals and technical training to improve their income, enabling them to feed, clothe and educate their families. They also have access to group savings and loans to give them more financial stability and a way to grow their businesses. Now they have a voice, positions of leadership and dignity.

Since 1944, Heifer International has provided livestock, tools and training to more than 18.5 million families. We’re working to END hunger and poverty around the globe. Join us.

Learn more at Heifer.org

888.5HUNGER 888.548.6437

The APEC Publication 2013

Feature / Moscow’s Mayoral Elections Editorial by: Andrew Tytarenko, Diplomatic Courier Guest Contributor

Moscow’s Mayoral Elections:

20 ❙ theapecceosummit.com

The APEC Publication 2013

ThoughT LEaDERShIP

B

Y APRIL 2013, the population of Moscow had surpassed 12 million people, adding 500,000 since 2010 and 2 million since 2002. Another 1.5 million commute to Moscow for work every day, and yet almost 10 percent of all Russians live or work in in the capital today. Moscow has changed since the moment the curtain on the USSR dropped, with the sounds of Tchaikovsky’s “Swan Lake” on all four existing TV channels during the 1991 coup. The Red Square, the Kremlin, and vivid colors of the Saint Basil’s Cathedral are still the calling card of Moscow for foreigners, but the real Moscow is much more than that. Only five miles away from Kremlin one finds the new business district–Moskva City, with 19 skyscrapers built in 17 years. Among them, the Mercury City Tower is the tallest in Europe; the Federation Tower will take the lead upon completion.

It is only five miles from Moskva City to the Kremlin, but good luck making it in twenty minutes, even at low-traffic times of the day.

Traffic is terrible; it is a by-product of the way new Moscow was built. The building permits were handed out by a corrupt Moscow government, regardless of the inability of the city’s infrastructure to sustain the added load, and the city could not cope with the new demands.

Moskva City and many other smaller construction projects throughout Moscow were built mostly by migrant workers, many of them illegal.

Labor migration is still the driving force of the Moscow’s population growth: last year Moscow’s population increased by 123,000 people, which includes 107,000 migrants. Migrants are not just general laborers or construction workers. Some areas of Moscow’s life are controlled by non-Russian diasporas, and some of these diasporas are very wealthy and very well connected. The influence of the Dagestani diaspora goes all the way to Prime Minister Medvedev’s office, according to Russian press.

Georgian expatriates dominate Moscow’s organized criminal underground. On the criminal side, the entire megalopolis is divided into zones of the criminal control based on ethnicity. The by-products of the massive labor and business migration to Moscow are ethnic tensions, which from time to time escalate to open violence.

Moscow is as different from the rest of Russia (except maybe for Saint Petersburg) as New York is from the rest of the United States.

It was this way during Soviet times, and it remains this way now, even after Russia entered the “new brave world” of the free market economy. >

GeorGia currently ranks 9th out of 185 countries in the World Bank’s ‘ease of doinG Business’ rankinGs – ahead of all But 3 memBers of the G20.

a Win-Win for Putin

Nusa Dua / Bali. Indonesia 2013 ❙ 21

The APEC Publication 2013

Feature / Moscow’s Mayoral Elections

moscoW is as different from the rest of russia (eXcePt mayBe for saint PetersBurG) as neW york is from the rest of the united states. >The divide is natural: according to Mercer’s 2013 survey of the cost of living for expatriate employees, Moscow surpassed Tokyo, and took second place worldwide, trailing only Luanda, Angola. Russians do not face the high costs which foreigners have to pay, but still wages in Moscow are about four times higher than in the north Caucasus republics. The average wage in Moscow is roughly $1900 (about 56,000 rubles) per month, while universityeducated professionals can expect to be paid $3000 to $5000 per month. This immediately places Moscow apart from the rest of Russia.

Deep down inside many Muscovites despise the rest of the country, and even casually use the term zamkadie (which translates to “The Land beyond the Beltway”); the rest of Russia reciprocates this feeling.

Nevertheless, everything in Russia must be processed through Moscow. There is no regional business or political clan which can exist without having “their man,” or better, their lobby, somewhere in the Moscow corridors of power; even purchase orders for Gazprom divisions in west Siberia are approved by 22 ❙ theapecceosummit.com

Gazprom’s Moscow office.

The situation is the same with Russian politics. All of the essential politicking is done in Moscow, and Moscow politics reverberate across all nine time zones of Russia. The Russian system of power is corrupt and ineffective, so this reverberation is often more sound than action, but it is only the sound that matters.

All one needs to get involved in practical politics in Russia is to get plugged into Moscow elites; however, if you want to know what Russians think and feel, you need to leave Moscow and travel across the country. (This is the secret of Vladimir Putin’s support: he did not get the real majority in the capital in the 2012 elections, but still won the presidency because of the support of the silent majority of Russians.) The Russian government appreciates the importance of Moscow and Muscovites for political stability in Russia, and spends about seven times more per capita in Moscow then in a Siberian city like Irkutsk or Novosibirsk. Yet the government still faces the strongest opposition in Moscow. Needless to say that massive budget spending in Moscow widens

the gap between the capital and the rest of the country, both materially and emotionally.

This is the backdrop to the upcoming Moscow mayoral elections. The vote will take place on September 8, 2013, following the June 2013 decision of Moscow Mayor Sergey Sobyanin to resign his position and to run for the job in democratic elections. Vladimir Putin supported this decision. It is, in fact, Putin’s move to win Moscow—Sobyanin is reliably the Putin’s man, and is among contenders for the succession of Dmitry Medvedev as prime minister, but as a serial political appointee, he has never been elected to any office, including the position of the mayor of Moscow. He needs public exposure, while Putin needs to deal with claims about an undemocratic power grab, loudest in Moscow. Nevertheless, a voluntary resignation and running in democratic elections is a very bold move for a Russian politician.

The elections will not necessarily be truly democratic, and timing is carefully chosen: the city is melting from summer heat, voters are either on vacation or at their dachas (rural cottages), and there will be no time for the opponents to prepare. If Sobyanin wins, the ultimate goal of winning the support of Moscow will be accomplished by Putin.

Meanwhile there is a side effect of Sobyanin’s move: Putin’s opponents jumped at the opportunity to run in open elections. The Moscow elections are an event of national significance, so exposure is also nationwide.

So far (according to semi-independent LevadaCentre polls in May 2013) only 41 percent of Russians know of the Western “darling”, Yale-trained opposition figure candidate Alexy Navalny, and only 6 percent of those support him. Government-funded WCIOM data is more favorable for him: 53 percent of Russians know who Navalny is, while veteran opposition leader Boris Nemtsov is known among 78 percent of Russians. Running for Moscow’s mayor gives the opposition an opportunity to break out of the confining political circles of Moscow and Saint Petersburg, and get Russians to know them better.

Leading opposition candidate Alexy Navalny had built his reputation on the fight against corruption (a kind of a Sisyphusian task in Russia, which is only the fifth priority for most politicians). In 2007 he was expelled from the opposition party Yabloko for nationalism. He later denied his nationalist views, but his TV appearances and some speeches tell a different story.

At the time when the 2013 mayoral election was announced, he was being prosecuted for corruption and embezzelment, but he decided to run anyway. He was nominated by the Russian right-wing party RPR-PARNAS >

The APEC Publication 2013

ThoughT LEaDERShIP

>(Republican Party of Russia–People’s Freedom Party) and started to collect signatures in his support on June 14th. This is when odd things started to happen. In order to become the official candidate, the nominee has to present 73,000 endorsements by the regular citizens, and more than 110 endorsements by the members of the Moscow legislature. Navalny did well with the regular folks, but failed to get enough endorsements from the legislature members; other candidates besides Sobyanin found themselves in the similar situation.

Sobyanin (surely cleared by Putin to do so) came to the rescue and convinced the United Russia faction in the Moscow legislature to support his opponents. With no hesitation, Navalny accepted help from United Russia, a party he has referred to as the “Party of Crooks and a Thieves. He got his registration documents on July 17th, but was sentenced to six years of hard labor on July 18th. He was arrested immediately. The next day the state prosecutor’s office protested the arrest and Navalny was released, but a written order not to leave Russia remains in force. Such a “catch and release” game is very unusual, where the

judicial branch is de-facto controlled by the Kremlin. It does not really matter whether it was the result of behind-the-scenes political fights or whether it was a planned action by Putin directly. What matters is that Putin came out as the unbiased arbitrator who kept Navalny in the game. Later Putin commented on the “excessive sentence” for the opposition candidate. Navalny continues his campaign, and is likely to have a decent showing in September.

In the case that Navalny (or another opposition candidate) will not win, Sobyanin wins as the clean, democratically-elected mayor with a public mandate to govern, and as the one who did all in his power to level the playing field and keep elections fair. Putin comes out as a supporter of fair democratic elections, while the lack of the public support for the opposition will be demonstrated in elections. A bonus for Putin is a squabble among the opposition which will take years to heal.

At the same time, a “built in feature” of fair elections is that sometimes the underdog wins.

Navalny’s campaign is going well and unopposed by the establishment, so he has a

theoretical chance to become such an underdog.

However, Navalny’s only experience in the executive branch was the role of the adviser to the governor, which almost landed him in jail.

As a winner he would take on the responsibility for the management of a city of 12 million, which has a decades, if not centuries, long tradition of corruption. His job will be not to criticize the United Russia and Putin, but to keep the lights on, water running, sewer system working, and streets clean. This is an impossible task to do without cheap migrant labor—and Navalny has promised to deport all illegals. There is a very slim chance that if elected Navalny will become a successful mayor, and a very solid chance that he will fail, or will become a part of the corruption. In any case, it will be a heavy blow to the opposition, and Putin wins again.

This win-win situation for Putin is the result of 13 years of a “managed democracy” policy in Russia, which has left a scorched field for the opposition. There is simply no suitable mid-level figure available to assume the role of mayor of a city like Moscow or Saint Petersburg. ■ Nusa Dua / Bali. Indonesia 2013 ❙ 23

The APEC Publication 2013

Sponsored Feature / Soneva Kiri

Soneva Kiri Ancient Siam meets privacy and ‘intelligent luxury’ on Koh Kood, an untamed island far beyond the tourist trail.

Remote yet accessible, Soneva Kiri sits on Thailand’s fourth largest but least populated island, Koh Kood, in the Gulf of Siam. Surrounded by lush, vibrant tropical vegetation and white beaches, fringed with palm trees, the resort has been tastefully and cleverly designed to complement the landscape and blends seamlessly into the outstanding natural beauty.

Soneva Kiri epitomises the Soneva concept of ‘intelligent luxury’. Only an hour’s flight in the resort’s private plane from Bangkok, it feels a million miles from the real world. The sense of tranquillity, seclusion and harmony with nature is second to none. Far away from the beaten track and well-trodden tourist attractions this is Thailand as it used to be thirty or even fifty years ago, genteel and untainted. And also just one hour by boat from the wonders of Cambodia.

Twenty-seven villas and eight private residences - sitting either on the beach or sunny 24 ❙ theapecceosummit.com

slopes in the rainforest, gazing across the sea – have been built with sustainable materials, including local timbers, in keeping with the Soneva SLOW LIFE philosophy. They ofer complete privacy, every possible five-star comfort and luxury and are among the most spacious in all South East Asia. All have large wrap-around pools and generous grounds for reading, relaxing, sunbathing or simply gazing out to sea. Several have private spa areas and each has its own dedicated private butler or Mr/Ms Friday.

Each villa comes complete with its own electric

buggy, as well as bicycles, to make getting around the extensive resort easier. That might be to the Six Senses Spa, where expert therapists perform a wide range of wellness, holistic, rejuvenating and relaxing treatments. Or to the manta ray shaped Den, to drop of the children into their own private fantasy world overseen by experienced child-minders.

Then there are the idyllic beaches, with snorkelling, diving, sailing, wind-surfing and boat trips on the ultra glamorous, Riva-inspired motor launch, Aquasense.

The Beach, a stretch of palm-fringed white sand as fine as any in Thailand, has its own Snack Bar complete with wood fired ovens, pit cooking and seats sunk into the cool sand.

Food is always a Soneva highlight. At Soneva Kiri it reaches new heights, quite literally in the

The APEC Publication 2013

THOUGHT LEADERSHIP

TwENTY-SEVEN VILLAS AND EIGHT PRIVATE RESIDENCES - SITTING EITHER ON THE BEACH OR SUNNY SLOPES IN THE RAINFOREST, GAZING ACROSS THE SEA. Contact Information: Reservations-kiri@soneva.com www.soneva.com

Treetop Dining Pod, a can’t-miss experience in which diners are hoisted high into the jungle canopy to enjoy a view that lives up to the finest dishes. Authentic Thai cuisine is available too. Khun Benz, a gifted cook, runs a restaurant built on stilts over a mangrove forest, lit by torches and fireflies each evening. Accessible (mainly) by boat she serves arguably the best Thai food in Thailand, made from ingredients personally selected every day at market.

The View is the fine dining option, with a changing daily menu reflecting the tradition of slow-food and organic ingredients grown or caught locally. The Dining Room, with relaxed day beds and jaw-dropping views, serves dishes freshly baked in its tandoor, wood-fired, or hot and cold smoke ovens.

‘So Delicious’ has an extraordinary range of cold cuts, cheeses and other deli oferings – ideal for a restorative glass of wine. Even cooler is the Ice Cream Parlour with over sixty diferent flavours, while the Chocolate Room ofers every chocolatey treat imaginable from brownies to bon-bons and, for sophisticated chocoholics, irresistible slivers of chocolate from 95% cocoa slabs.

Good food needs great drinks. The subterranean, climatically controlled wine cellar has over five hundred labels, with a sommelier to help your choice and ofer tastings. There are also numerous bars in which to sample a sundowner complete with unrivalled views across the Gulf.

After dinner there’s usually time for stargazing at the Observatory or watching stars of the silver screen at Cinema Paradiso where classic movies

are shown outdoors, only the moon and stars above for company.

And all the time a sense that Thailand, the real Thailand of remote fishing villages, colourful boats, epic waterfalls for swimming and gourmet picnics, beguiling smiles and indomitable spirituality is right there, just around the bay, willing you to uncover its ancient secrets. Cambodia is also on the doorstop with temples galore for exploring.

Barefoot Intelligent Luxury at its best. No news, no shoes, Thai style. ■

Soneva Kiri is committed to the Soneva Group’s SLOW LIFE philosophy: Sustainable-Local-Organic-Wellness Learning-Inspiring-Fun-Experiences.

Nusa Dua / Bali. Indonesia 2013 ❙ 25

The APEC Publication 2013

Cover Story / Trans Paciic Partnership Editorial by: Oscar Montealegre

Ater the oten failed attempts of reaching a consensus on the Doha Rounds, a new free trade pact, called the Trans Paciic Partnership, has emerged, bridging U.S. economic inluence to Asia, with the possibility of boosting exports and raising not only U.S. GDP, but also the world’s GDP. The TPP is on the cusp of being something special, harboring tremendous economic and political implications for the 21st century.

26 ❙ theapecceosummit.com

The APEC Publication 2012

THOUGHT LEADERSHIP

A

FTER THE OFTEN failed attempts of reaching an a consensus on the Doha Rounds, a new free trade pact, called the Trans Pacific Partnership, has emerged, bridging U.S. economic influence to Asia, with the possibility of boosting exports and raising not only U.S. GDP, but also the world’s GDP. The TPP is on the cusp of being something special, harboring tremendous economic and political implications for the 21st century.

In November 2011, Former Secretary of State Hillary Clinton wrote an op-ed piece for Foreign Policy Magazine declaring that the future of politics will be decided in Asia, not the Middle East, thus declaring it imperative that the U.S. pivot it’s economic, political, diplomatic and strategic resources and investments to the Asia-Pacific region. If this transformation of policy and perspective should come to fruition, then the negotiated Trans Pacific Partnership (TPP)-essentially a free trade agreement-is not only fundamental, but virtually necessary if the U.S. were to succeed in cementing it’s presence not only in the East, but also the Pacific region.

As emerging markets have become the hottest flavor of the month-or the 21st centurythe concentration of these new booming developing markets are undoubtedly in Asia.

For what it’s worth, Latin America can be considered a distant second in categorizing popular emerging market destination, but it still pales in comparison to Asia when evaluating economic strength, education and innovation.

The TPP has presence in both aforementioned regions and beyond, facing many geographic trade flows, covering extensive land and penetrating an array of diverse markets. As of now, it consists of 11 members: Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, U.S. and Vietnam.

With this current roster, it has a market of approximately $25 trillion and encompassing roughly 800 million people. However, in Mid-April 2013, a politically and economically powerful participant has joined the fold at the table of the TPP negotiations…Japan. >

Nusa Dua / Bali. Indonesia 2013 ❙ 27

The APEC Publication 2013

Cover Story / Trans Paciic Partnership

THE GOAL OF THE TPP IS TO REMOVE ALL TARIFFS ON TRADE BETWEEN MEMBER STATES, AND FOCUS ON NEW EMERGING TRADE SPHERES OF INFLUENCE. >Currently Japan is the world’s third largest economy and its GDP exceeds the amount of the combined total of all the other TPP nations, not including the U.S. Now, if Japan were to be approved admittance by all existing members (the U.S. has okay its participation in the negotiation process), the TPP bloc would account for almost 40 percent of global GDP and one-third of world trade. As Japanese Prime Minister Shinzo Abe suggested, “Japan could either be part of a global trend towards more open trade, or it could retreat into isolation.”

Recent actions have indicated that Japan has opted for the former, with an added presupposed motive that Japan perceives the TPP as a vehicle to counteract China’s economic rise and influence in the region.

What exactly is the TPP? To start, the TPP was originally concocted by New Zealand, Chile, Singapore and Brunei in 2005, calling it the Trans-Pacific Strategic Economic Partnership Agreement. Fast-forward to 2008, the U.S. requested and eventually became an official participant in the negotiations with the founding members, and after that, the other 28 ❙ theapecceosummit.com

existing members saw the potential and the rest is history. The goal of the TPP is to remove all tariffs on trade between member states, and focus on new emerging trade spheres of influence such as investment, labor and environmental standards, government procurement, agriculture, intellectual property and state-owned businesses. The trade bloc has aroused interest from many other countries, such as Colombia, Costa Rica, Laos, Taiwan and the Philippines. Just imagine if they all were to join, the implications would be outstanding, outmaneuvering BRICS-Brazil, Russia, India, China and South Africa-with an extra incentive to either participate directly or indirectly, or either expedite their solidarity and quickly implement real institutions and reforms. To make matters more appealing, after the inclusion of Japan, experts predict South Korea can soon express interest in joining the TPP. In short, free trade among nations is still a robust want and need, rebutting the notion that protectionism remains a viable alternative.

However, the TPP does face many obstacles abroad and in the U.S. For instance, in the U.S.

there must be a strategic plan by the executive administration and the private sphere to win over certain domestic opposition. In addition, it is important that trade leaders address domestic critics (and abroad if possible) on intellectual property demands. Right now, the interpretation of the limited information that the public has is that the TPP will enforce policy that will make it a criminal act if copyright and patent laws were violated. Moreover, transparency of the negotiation process has been under attack by the U.S. congressional and Senatorial leaders, not to mention the public, arguing that the TPP summits are held in secrecy with minimal information leaked to the public. It must be noted, that absolutely no trade deal in the U.S. or abroad is enacted without much resistance, i.e. NAFTA and the 2012 Free Trade Agreements between the U.S. and Colombia and South Korea. Thus, albeit they are major obstacles, it shouldn’t be enough of a deterrent to erode the execution of the TPP. Ironically the TPP is seldom debated and discusses in the news media cycle. Many have pinpointed this lack of attention to President Obama’s administration lack of importance towards trade and influence in Asia and Latin America. For example, Senator McCain has described President Obama’s record on trade as “shameful” and too slow, especially with the TPP, Taiwan and India. Although under President Obama, trade pacts with Colombia, South Korea and Panama were finalized, the majority of the credit is given to former President Bush, who ignited the free trade agreements. However, as mentioned in the introduction, pivoting U.S. attention to Asia and away from the Middle East and Europe is through and through an Obama initiative, shouldering the likelihood of determining his foreign policy legacy. Moreover, President Obama has focused his attention to free trade, exerting extra energy to the TPP and beginning the talks to a potential unprecedented U.S.EU trade liberalization.

But for President Obama and the U.S., the stakes are higher. The TPP opens the door to dramatically increase exports to Asia, especially to tariff ridden Japan. As a result, more jobs can be created and politically speaking, it can reinvigorate U.S. influence in the Asian and Latin American region, ridding the thorns of the often spoken U.S. decline. Also, the TPP can be introduced as a re-vindication of free market capitalism, countering the growth and increasing influence of state-run capitalism spearheaded by China. In short, the TPP is a game changer for all the member states, harnessing the recipe of the being–the most transcending free trade pact of the 21st century, especially for the U.S. ■

CREATING FUTURE GENERATIONS OF

Global Leaders Today’s students are part of an increasingly interconnected society. More than ever, they need an education that prepares them to become globally minded, engaged citizens and leaders.

At the University of Washington, we provide educational opportunities—in and out of the classroom, both in the U.S. and abroad—that empower UW students to expand their worldviews. Whether working with communities across the street or around the globe, UW students are actively pursuing a better tomorrow.

discover more

uw.edu

The APEC Publication 2013

Sponsored Feature / Korean Air

Korean Air: Leading the way in Business Travel

In today’s business climate of globalization, business travel is more important than ever and business travelers today expect plenty of room in which to work, relax and play. Korean Air with excellent service, comfort and convenience in mind, is now one of the world’s leading global airlines, ofering customers a premium flying service.

Comfort In The Skies Korean Air’s Kosmo Suites in First Class brings passengers an ultra-luxurious journey where they experience a living room, ofice, bedroom and cinema all in one space. Privacy is ensured for all passengers whether they are working or resting with the seat that converts into a very spacious 79” bed, with an electronic privacy cocoon and complimentary Gianfranco Ferre pyjamas for a sound sleep.

For those looking to take a break from working inflight, Korean Air ofers cutting-edge personal entertainment systems. Kosmo Suites seats feature large 23 inch screens and passengers can pick from more than 60 movies, 40 short features, 300 CDs, 40 games and 15 audiobooks to keep them entertained.

30 ❙ theapecceosummit.com

With the sky ofice “Prestige Sleeper Seat”, business travelers can experience maximum comfort and a convenient business environment throughout their flight. All Prestige Class passengers can also enjoy 180-degree full flat seats which previously were only available for First Class passengers.

To further enhance the business traveler’s experience, Korean Air ofers delectable in-flight cuisine. Delicious and healthy meals are served on Wedgwood China with elegant place settings, synonymous with the quiet beauty of Korea.

Repeatedly awarded with the prestigious Mercury Award for its in-flight meals, including its signature dish, Bibimbap (a nutritious rice, vegetable and beef medley), Korean Air has a team of culinary experts to create meals that reflect the tastes of

travelers from many regions of the world.

Wind down after a session of working inflight with the finest wines from around the world including France, the USA, Italy, Australia, New Zealand and South Africa selected by Korean Air’s celebrated sommelier. The airline has a worldwide reputation as having one of the best ‘Cellars in the Sky’, as well as numerous international awards.

Meanwhile, Korean Air has partnered with DAVI, the skincare branch of the world renowned Mondavi wine family, for its inflight amenity kit featuring DAVI’s unique cosmetic products for men and women. The cosmetics are made of grape and wine extracts from California’s Napa Valley, and include a variety of natural extracts.

When Korean Air launched its A380 service in 2011, it added further sophistication to inflight comfort. Configured in a three-class layout with just 407 seats in total, the lowest configuration of any A380 operator so far, Korean Air’s doubledecker A380s feature cutting-edge amenities, with 12 ultra-luxurious First Class Kosmo Suites and 301

The APEC Publication 2013

THOUGHT LEADERSHIP

KOREAN AIR IS THE FIRST AIRLINE IN THE INDUSTRY TO HAVE A ‘DUTY FREE SHOWCASE’ ON ITS A380 AIRCRAFT. Economy Class seats on the first floor, and 94 full-flat Prestige Sleeper seats in Prestige Class (business class) upstairs.

Korean Air is the first airline in the industry to have a ‘Duty Free Showcase’ on its A380 aircraft.

Featuring a great variety of duty-free products, such as cosmetics, perfumes, liquor and accessories, with a dedicated cabin crew member on hand to assist and advise passengers with all their shopping needs. Also onboard is a bar and lounge area which ofers the premium class flyers the ultimate in in-flight style and relaxation. The ‘Celestial Bar’, a dedicated lounge, located at the rear of the upper deck, is a unique mix of Asian aesthetic and functionality and is equipped with a stafed bar serving a range of signature cocktails exclusively created for Korean Air. Flexibility At Your Finger Tips For those whose travel schedule demands flexibility and comfort, Korean Air’s Private Jet Service is the ideal choice. Business travelers can

enjoy a premium ofice and home experience on the go for the best utilization of travelers’ time.

Korean Air is regarded as one of the leading pioneer airlines in the private jet market, credited for its unique oferings such as adding the state- of-the-art Boeing Business Jet to its fleet in 2010.

One of the few full-service carriers tapping into global private jet charter market, Korean Air ofers a wide range of premium aircraft and services that have been catering for diferent travelers’ needs.

The notable Korean Air fleet includes the state-of-the-art Boeing Business Jet (BBJ) which carries the distinctive luxury and spacious features of a customized version of the B737, with a total capacity of sixteen to twenty eight passengers for long-distance flights under 12 hours. The Global Express XRS, equipped with wireless internet, iPads and comfortable sofa-beds, is a good choice for journeys up to six thousand miles non-stop from an Asian hub to Europe or the United States.

Alternatively a Sikorsky 76C+ can empower business travelers with high mobility for travel

within South Korea. The personalized jet charter service efectively reduces transit time allowing business travelers to enjoy ultimate privacy to long-haul destinations where direct flights are not available.

Furthermore, Korean Air’s Flexjet Connect Service significantly increases customer travel flexibility and reduces flight distances by connecting passengers from Korean Air’s 115 weekly transpacific flights with a private jet service, and more than 5,000 jet terminals in the United States, Central America and South America.

Korean Air, known as one of the world’s top 20 airlines, has diferentiated itself by integrating the best practices of its renowned premium service into its private jet service ofering. Passengers of its private jet charter service are well served by a dedicated crew and care service from check-in to landing and are ofering a privileged flexible travel schedule, exclusive terminals which allow access to more airports and other airlines VIP lounges in ultimate privacy and comfort. ■ Nusa Dua / Bali. Indonesia 2013 ❙ 31

The APEC Publication 2013

Feature / Trans Paciic Partnership Editorial by: Bryce Bytheway , Diplomatic Courier Contributor_Photos: Gordon Dam and Jepirachi from WikiMedia

Colombia’s Future as it Masters Renewable Energy Colombia’s oil boom could prove to be the means for the country to gain world recognition, as well as provide the boost that its economy needs in the ight to overcome poverty.

W

HAT WILL PAVE the road to Colombia’s future? The country has been experiencing what some are calling an oil bonanza, its oil production having surged 80 percent in the past seven years. It is estimated that the country will be extracting upwards of 1.6 million barrels of crude oil per day by 2016.

Colombia’s oil boom could prove to be the means for the country to gain world recognition, as well as provide the boost that its economy needs in the fight to overcome poverty.

Short-term investors will discover Colombia to be fairly lucrative; but it is not oil that will pave the road to Colombia’s prosperous future.

As concerns about the environment rise around the globe, many countries are looking to abandon fossil fuels in favor of clean, renewable energy sources. The Obama Administration in the United States has been preaching clean energy since day one, and many steps have been taken in the US, as well as in many other first world countries, to reduce their carbon footprint. It is Colombia however, that could have the brightest future concerning renewable energy.

32 ❙ theapecceosummit.com

Colombia’s Energy Sector According to a recent study by The World Bank, 70 percent of Colombia’s power generation is through hydropower. Even though hydropower is the most popular power source in the country, it remains largely untapped. The total hydropower potential within Colombia is estimated at 93GW, enough to generate sufficient power to meet the national demand 7 times over.

The current hydropower usage sits at 9GW. It is important to note however, that the potential for that much hydropower faces difficulties. Many of the best areas that could support dams and hydropower plants have already been developed, and the social and environmental costs associated with hydroelectric power are increasing.

Colombia’s other power sources include natural gas which provides 26 percent, coal at 3 percent, and other/wind power at 1 percent.

The Future of Wind Power Colombia’s wind power remains largely untouched, and yet it’s wind power that could have the greatest potential. Of all South America, Colombia has the best geological conditions to provide stable wind power.

Off shore regions of northern Colombia have been classified with class seven winds (winds over nine meters per second). The only other region in South America that has such potential is the Patagonia region of Chile and Argentina.

The Guajira Peninsula on the north-eastern tip of the country alone has the potential to generate 21 GW, enough power to provide for the country two times over. However, even with this rare wind potential Colombia has an installed capacity of only 19.5MW, a measly 0.4 percent of Guajira’s potential.

Why all the hype about wind power? It is arguably one of the most effective renewable energy sources; it is completely renewable by Mother Nature alone and can never be depleted.

It is cost competitive to other fuel sources, such as natural gas, and is the least expensive of all renewable energy sources. Once erected, wind energy systems require very minimal maintenance, and general up-keep on the turbines is incredibly cost effective.

Environmentally speaking; wind energy is clean. Wind turbines don’t pollute the air or emit other harmful pollutants like fossil fuels.

Just one wind turbine can displace over two thousand tons of carbon dioxide each year, the equivalent amount of one square mile of forest.

Needless to say, Colombia could have a very bright future with hydro and wind power.

The APEC Publication 2013

ThoughT LEADERShIP

ACCordING To A rECENT STUdY BY THE WorLd BANK, 70 PErCENT oF CoLoMBIA’S PoWEr GENErATIoN IS THroUGH HYdroPoWEr.

Colombia’s Future as it Masters Renewable Energy Using solely hydro and wind power Colombia could supply the energy necessary to provide for itself, as well as many of its neighbors in South and Central America. As Colombia taps into its unique natural resources its economy will receive a much needed long term boost, and its GDP has the potential to rise significantly. Renewable energy is t

he key for outside investors interested in Colombia.

Renewable energy is also the key for the Colombian people. As the government invests in renewable energy the country will have the means it needs to finally prosper. Once all of Colombia’s citizens have uninterrupted access to reliable energy, their economy will boost significantly and they will be well on their way to defeat poverty. With Colombia as an

example, its neighbors which seem to be endlessly locked in political unease will also reap the benefits. Colombia’s growing economy will quickly cross borders. Reliable energy will finally bring light and knowledge to those who have never had access, and citizens will gain a better sense of their world identity.

Colombia could become a world power; not through its current oil boom, but rather by mastering their renewable energy sources. ■ Nusa Dua / Bali. Indonesia 2013 ❙ 33

MY PHUOC INDUSTRIAL CITY

INTEGRATED AND SELF-CONTAINED INDUSTRIAL CITY With strategic location contiguous to National Highway 13 and My Phuoc - Tan Van Expressway, My Phuoc Industrial Park is uniquely built with the concept of Integrated & Self-contained Industrial City to welcome not only the manufacturing projects but commercial & residential activities as well. Along with the investment & development of complete, sufficient, modern infrastructure and facilities (Industrial hardware) to host domestic and foreign investors, Becamex IDC Corp., as a main Developer, also focuses in building infrastructure for social welfare & communities, carrying out lots of favourable policies and programs with respect to the material and spiritual improvement for the laborers in the park. My Phuoc Industrial City is also being seen as a Model Industrial Park for its environmental-friendly, green, clean and nice -looking features.

Come to My Phuoc Industrial Park, investors will find confidence for a long term & sustainable development.

INVESTMENT AND INDUSTRIAL DEVELOPMENT CORPORATION (BECAMEX IDC CORP).

230 Binh Duong Boulevard, Thu Dau Mot town, Binh Duong Province Tel: + 84650-3777777, Fax: + 84650-3811666, Email: vninvest@becamex.vn, Website : http://www.becamex.com.vn BECAMEX IDC CORP

VIỆT NAM

Contact person:

Mr. Vo Son Dien (Steve Vo):

+84 90 3 903804 Email: vsdien@becamex.com.vn (English)

The APEC Publication 2013

Sponsored Feature / Becamex

Becamex IDC Corporation

Becamex IDC Corp. is Vietnam’s largest industrial park developer/operator, Vietnam’s largest infrastructure company and one of the country’s largest real estate firms. Binh Duong province has currently over 2,000 foreign - invested projects with a total capital investment of nearly USD 15bn and over 13,000 domestic enterprises under operation with total investment of VND 95,000bn (USD 4.5bn). Major investment countries include Japan, Korea, Singapore, Thailand plus growing investment by North American and European companies.

Vision: › To create a prosperous, eicient and sustainable Binh Duong that through our company’s hard work, innovation and teamwork, enhances the lives and the livelihood of Binh Duong citizens and makes Binh Duong the ideal place in Vietnam and Southeast Asia to live, work. learn and play.

Mission: › Provide opportunity through proper planning, infrastructure and modern technology for the province and Binh Duong New City and help to set the standard for other cities in Vietnam Mandate: › one person, one district, one city, one province at a time

36 ❙ theapecceosummit.com

Company Facts: Established: 1976 Key area: Investment and development of industrial, residential, urban and transportation infrastructure.

Subsidiaries: 28 sole and joint eforts covering areas of securities, finance, insurance, banking, construction, trading, real estate, services, telecommunication - information technology , concrete production, construction materials, mining, pharmaceuticals, healthcare and education Charter Capital : 5.500 Billion VND Total Business Capital: 100.000 Billion VND Total employees: Approx 4,000 of which Management stafs: 230, Engineers: 90, Foreign experts: 30 people

Main fields of operation: › Investment in construction and trading infrastructure of industrial parks › Investment, development and sales of residential areas › Real Estate trading › Civil Construction, industry and transportation › Investment in infrastructure in the form of B.O.T, and other mechanisms Mega-Project Becamex Industrial Investment and Development Corporation (Becamex IDC) has invested in Binh Duong New City. The project has been under construction for nearly 3 years creating a modern urban area with comfortable, convenient facilities for learning, working, and entertaining. Along with investing in complete infrastructure ranging from trafic, water, electricity, telecommunication to parks, ecological lakes, waterfalls, Becamex as an investor also pays much attention to constructing universities, high schools, kindergartens, commercial and sports areas, convention and event centers, low cost housing and many other

The APEC Publication 2013

THOUGHT LEADERSHIP facilities in order to meet the diverse demands of residents. The project will contribute to the sustainable development of Binh Duong province which is a short drive northeast of Ho Chi Minh City. Upon completion, the city will become the new economic and political center of Binh Duong and have 125,000 residents and 400,000 migrant laborers.

New University and Hospital Eastern International University is one of Vietnam’s newest and most modern and well laid out Universities. EIU which now has over 10 buildings in a landscaped campus of over 26 hectares is a US$100 million project new with teaching classrooms, dormitories, administrative and support buildings that would not look out of place in Singapore, the U.S. or Europe. The University also supports additional Universities by providing facilities and other services.

Eastern International General Hospital in Binh Duong Province is part of the Binh Duong’s New City mega-project, run and built by Becamex IDC. The project development costs are estimated at over US$ 74 millions on a 12 ha site (5 phases), which is part of a 52 ha urban development. This modern Vietnamese hospital which is substantially constructed at this point, meeting international standards, is aimed for both domestic patients as well as expatriates and other patients from neighboring countries.

Social Housing Project Becamex believe corporate and social responsibility can through innovation also be good business and lead to a happier and more productive community. As part of this, Becamex is building or will build within next 5 years through out Binh Duong province ( phase 1) 64,700 housing units in 37 locations ( for about 164,000 residents) at an investment of USD 500 million.

Vietnamese banks have agreed to finance purchase on terms for up to 15 years by new tenants. Every location has approx. 2,000 units.

Currently, more than 5,000 units have been constructed and more than 1,300 have been delivered. General design is a block of 5-stories with no elevator. Price is from ~ 5,000 USD/ unit of 30 sqm.

Becamex Tokyo Garden City Becamex Tokyu Co. Ltd. is building a US$1.2 billion property project to build a New International Garden City on about 71.5 hectares in the southern province of Binh Duong, marking the involvement of a first Japanese firm in urban development in Vietnam. The joint venture between Japan’s Tokyu Corp. and Vietnam’s Becamex IDC Corp. has financial support from the Bank of Tokyo Mitsubishi UFJ. The project will develop about 7,500

apartments and houses, plus recreational and service facilities, and ofices for lease.

Toshiaki Koshimura, Chairman of Tokyu Corporation noted, “Tokyu was the first Japanese company to export expertise and technology for urban development into Vietnam. “We will try our best to build a multi-functional and high quality city to be abreast with the development of Binh Duong Province when becoming the Metropolitan City in 2020.” The town will be built in a Japanese style, so it will be environmentally friendly. Nguyen Van Hung, Becamex Chairman and CEO responded,

“With experience and financial potential from the two corporations, beside Tokyu Binh Duong Garden City, we will weigh developing other projects to meet the expansion needs of this City in the coming years”. Becamex and Tokyu, continue to explore the possibility of developing satellite urban areas in the province’s industrial development zones. The two companies are also studying public transportation work such as bus and metro routes to connect the transportation networks of Binh Duong, HCMC and other cities in the Southern Key Economic Zone. ■

BINH DUONG PROVINCE, VIETNAM For more information: T: +84 650 3 777777 F: +84 650 3 811666 M: +84 1222 666 777 E: vninvest@becamex.vn www.becamex.com.vn

Nusa Dua / Bali. Indonesia 2013 ❙ 37

The APEC Publication 2013

Sponsored Feature / Intel

Improving lives, communities and economies through technology

At Intel, we strive to make the best silicon and technology products in the world, and through their application, to create a better future for all. We believe that technology plays a fundamental role in finding solutions to the world’s great challenges. We know that embedding corporate responsibility and sustainability into our vision and strategy helps us make better, more secure products and create value for Intel, our customers and society.

Technology has improved the lives of so many people on our planet–from quality education and health care to energy and water conservation and management. Policy that enables the internet to reach people around the globe has been at the forefront of advancing these and countless other benefits of technology.

A decade ago, Intel created the mobile computing category with its large investments in a wireless infrastructure and its Pentium M processors paired with Wi-Fi connectivity through the company’s Centrino® mobile technology. The result has been a wireless computing revolution, with almost ubiquitous availability of Wi-Fi connectivity and the creation of new mobility solutions built for low energy consumption and high performance.

Today, our computing platforms supporting the digital economy are used in a wide range of 38 ❙ theapecceosummit.com

applications, such as PCs (including Ultrabook™, detachable, and convertible systems), servers, tablets, smartphones, automobiles, automated factory systems and medical devices. We also develop software and services primarily focused on security and technology integration.

Enhancing Productivity and Innovation in All Economic Sectors The use of information and communication technology (ICT) products and services can dramatically enhance productivity and innovation in many industrial sectors. Governments should work to remove trade barriers that prevent people from obtaining the best ICT products at the lowest cost possible. For example, expanding the WTO Information Technology Agreement (ITA) so that it covers new ICT products developed since the ITA became efective in 1997 could remove tarifs on

an additional $800 billion in global two-way ICT trade – a 20 percent increase over the $4 trillion in annual trade under existing ITA product coverage.

Inspiring the Next Generation through Education Transformation The rising generation’s success in today’s innovation economy depends on access to a quality education, which is more easily achieved by the use of technology. Technology enables an unprecedented opportunity to advance student achievement. Intel brings the expertise, technology and a robust ecosystem that can provide the foundation for educators and governments to transform education. Powerful and energy-eficient Intel-based PCs and servers, combined with software and fast internet access, help students acquire 21st century skills and help educators teach more efectively. Through the Intel World Ahead Program, Intel has worked with more than 70 countries on programs aimed at making technology more available, afordable and understandable to first -time users. Intel-funded PC purchase programs enable governments to provide computers at a more afordable price,

The APEC Publication 2013

THOUGHT LEADERSHIP

allowing thousands of teachers and students access for the first time.

Intel also works with telecommunications providers to connect millions of people to the internet with high-speed wireless technologies.

Government policies that encourage the deployment of wireless and wired broadband services play a significant role in supporting student and teacher development worldwide.

Driving Innovation across Healthcare Efective use of ICT products and services in healthcare saves lives. Technology improves access and quality of care, reduces costs and improves satisfaction among both patients and providers. Intel is making great progress, collaborating with healthcare providers, other companies and policymakers on innovative new products and solutions aimed at improving global access to quality, afordable healthcare. The “Citizen Telecare Service System” (CTCS) used in Chinese Taipei, where 600,000 seniors with chronic conditions are remotely monitored through technology to help them reduce their blood pressure, showed a significant decrease

blood pressure and helped them maintain healthy levels. CTCS uses biometric measurement, hypertension risk assessment, video communication, education programs, and other tools to change the behavior of high-risk seniors so they maintain their wellness.

The technological tools that improve care delivery continue to advance at a steady rate.

But in most countries, the development and implementation of policies to govern the use of these technologies in healthcare lags behind.

It is more often policy barriers, rather than technological barriers, that stand in the way of greater progress in e-Health. Interoperability standards among data systems and between technologies will help reduce these barriers, while assuring privacy and security of online health data.

Digital Literacy Mission, which seeks to proliferate digital literacy across the country. As a result, the Indian government announced an ambitious information technology (IT) policy mandating that one citizen per household be digitally literate by 2020. The success of this program depends not only on the availability of cutting edge products available at the lowest cost possible, but also on widespread broadband penetration.

We have an ambitious vision for the next decade: Create and extend computing technology to connect and enrich the lives of every person on earth. Policy makers around the world are in a unique position to facilitate innovation and afect change by allowing broad dissemination of ICT goods and ICT-enabled services. ■

Closing the Digital Divide Policies that expand the allocation of universal service/access funds to include broadband internet access, especially in remote regions where broadband has previously been cost-prohibitive, are key to bridging the “digital divide.” In India, Intel contributed to the creation of the National

KEY LINKS: Intel Policy Web Site: http://www.intel.com/ about/companyinfo/policy/index.htm Intel Policy Blog: http://blogs.intel.com/policy/ Corporate Responsibility at Intel Web Site: www.intel.com/go/responsibility Nusa Dua / Bali. Indonesia 2013 ❙ 39

The APEC Publication 2013

Feature / STEM Innovation Editorial by: Edie Fraser, Founder and CEO, STEMconnector

Resilience: Growth with STEM Innovation, Technology and Job Creation New jobs need trained workers supported by advanced technology and an increasing focus on low-cost technology requires participation from a workforce with broader skills.

40 ❙ theapecceosummit.com

The APEC Publication 2013

THOUGHT LEADERSHIP

T

HIS YEAR’S APEC SUMMIT will provide critical recommendations regarding how the Asia-Pacific Region will continue to secure sustainable growth, development and innovation given a growing world population. The focus is on innovation, technology, economic development and job creation supporting economic prosperity, all of which are central to global development. New jobs need trained workers supported by advanced technology and an increasing focus on low-cost technology requires participation from a workforce with broader skills.

Innovation continues to play a crucial role in both the world economy and the economies of APEC members. In the past few years, China, Japan, and Korea have shown their commitment to innovation by spending 1.7%, 3.36%, and 3.74% of their yearly GDP respectively on Research and Development.

In 2011, there were 415,829 patent applications in China, 287,580 in Japan, and 138,034 in Korea, another strong indicator of their interest in innovation. As major corporations and economies are investing in R&D and technology, they focus on STEM job creation in Asia-Pacific.

APEC’s Industrial Science and Technology Working Group (ISTWG) contributes best practices in the collaboration of global economies in the development of STEM human capital. As the ISTWG pointed out, our countries will have to work together to build R&D environments adapted to our increasingly globalized world by supporting the overseas work of STEM researchers and establishing/ enforcing rules for intellectual property protection.

While Asia-Pacific is facing serious challenges, such as a China’s more than $17 trillion in debt, there are also several reasons for optimism. One positive example in China, Science and Industrial parks are key venues for high tech research and development (R&D) and 54 parks. The IT industry is a cornerstone in the parks. Firms are required to create or apply technology in high tech fields, committing to a minimum 3% of gross revenues to R&D, employing at least 30% of college degreed workers. The data are clear—technology, engineering and economic growth is often led

by APEC countries, and not just in the APEC region. The world is global and Asian nations are playing a key role in world investment. Last year, China invested around $6 billion in the U.S, $11 billion in Latin America, $12 billion in Europe, and China’s Commerce Minister, Chen Deming, in summer, 2012, said the number “exceeded $14.7 billion, up 60% from 2009” and the estimates are even higher.

STEM Innovation leadership for us is driven

by economics and strong human capital success with strong jobs in technology and science, engineering and math. “Economies in markets around the world are expanding and maturing, with technology and innovation acting as a catalysts to fuel growth. Countries need to prioritize their investments to create a workforce that has the requisite technology skills and innovation capabilities, in addition to cultural competencies to compete in a global economy” states Balaji Ganapathy, Head of Workforce Effectiveness, North America, Tata Consultancy Services (TCS).

We need skilled workers and they need to be tech-savvy. Two strong statements from STEMconnector’s 100 CEO Leaders in STEM report follow. John Chambers, CEO of Cisco, states it clearly: “I believe the Internet and education are the two greatest equalizers in life.

With access to technology and the right skills and training, the next “killer app” could come from San Antonio, Texas, or Shanghai, China.

It could come from Peru or Palestine. There are pockets of innovation around the world, and the countries that best capture the talent and ingenuity of their people will lead in the 21st century.” As the global leader in innovation R&D, the United States has a strong interest in the APEC members’ increased contributions to global R&D. As the CEO of Caterpillar, Douglas Oberhelman, comments, “Our world is more competitive than ever. Today there are more than 100 Chinese companies looking to be the next Caterpillar. And that’s just one country.

Caterpillar is competing with these companies not just for customers, but also for talent. We want the best talent in the world working at our global R&D headquarters near Peoria as well as at our design centers around the world. We have to innovate to be competitive and that takes the best people.” Many companies– especially those operating on the forefront of technological innovation–are concerned with the need to focus on skilled talented workers and that it takes commitment. He says, “Get involved.” Collaborations are essential.

Corporations emphasize the importance of innovation to their business in the APEC region.

Jean Spence, the Executive Vice President for Research, Development & Quality at Mondelèz International’s, recently outlined the importance of innovation by claiming that Mondelèz is already “investing in our Suzhou R&D Center to increase its capacity–strengthening our biscuit innovation and technology capabilities for Asia Pacific and adding new labs to drive innovation and technology platforms in China.”

“Investments like this one in Suzhou – behind our Power Brands and global technology platforms –” Spence explained “will drive

INNovATIoN CoNTINUES To PLAY A CRUCIAL RoLE IN BoTH THE WoRLD ECoNoMY AND THE ECoNoMIES oF APEC MEMBERS.

profitable growth at Mondelèz International for many years to come.”

Major corporations from TCS to Cisco, or growing ones such as UST Global, will ultimately drive significant job growth in the APEC region. Sajan Pillai, UST’s CEO, conveys passion “to be a part of the explosive growth in the Asia-Pacific.” Furthermore, Pillai announced that “we are committed to the region and will continue to invest in it to show our commitment”, pointing to UST’s offices in Malaysia and Taiwan in addition to its plans to open offices in Singapore in the near future.

UST’s APEC offices “are delivering IT and BPO services for the local economies, while creating jobs and fostering innovation.” Pillai also expressed UST’s commitment to change Asia-Pacific’s role as “an exporter of goods but an importer of technology expertise” by focusing on building up “local knowledgeable teams that can service the technology needs locally.” Echoing the ISTWG’s findings, Pillai called on the global business community to “come together, share their vision and work together to achieve common goals” in APEC’s economic growth.

STEMconnector is focused on the global development of human capital in STEM. As the chair of our STEMconnector’s Innovation Task Force, PepsiCo’s SVP, R&D, Dr. Heidi Kleinbach-Sauter, pointed out, the global business community should prioritize “the> Nusa Dua / Bali. Indonesia 2013 ❙ 41

The APEC Publication 2013

Feature / STEM Innovation

MAJoR CoRPoRATIoNS FRoM TCS To CISCo, oR GRoWING oNES SUCH AS UST GLoBAL, WILL ULTIMATELY DRIvE SIGNIFICANT JoB GRoWTH IN THE APEC REGIoN.

>preparedness of the upcoming young talent pipeline in STEM scientific fields as well as in Innovation Excellence, demonstrating entrepreneurial attitude and culture, cross border talent mobility, alignment of education with the needs of business and the public sector and visibility of our young talent in pathways into well-paid jobs.” By raising awareness around these priorities, we will create a more talented and productive global STEM community.

Wal-Mart’s Vice-President of International Integrations, Fumbi Chima, also highlighted the role of developing human capital in the global STEM community as it catalyzes innovation, saying “STEM knowledge gives our business a competitive edge by finding new and innovative ways to grow our business and continue serving customers around the globe. Our technology investments have improved the shopping experience for our customers. We owe these accomplishments to the people that work for our company.” On the importance of internationalizing human capital, Chima added, “while we want to be leaders in the retail 42 ❙ theapecceosummit.com

industry and develop our people internally, our international operations position the company to support STEM initiatives for people around the world.”

It’s a matter of engagement and partnership.

John Veihmeyer, KPMG Chairman & CEO, shares a strong message: “Get involved. When business collaborates with academia on STEM, we can identify and help build the skills that are most needed in an increasingly STEM focused global economy.”

At STEMconnector®, we are deeply invested in these issues, as demonstrated by our strategic partnership with the Global Action Platform of Cumberland Center in systemic work to create abundance through innovation in food, health, and prosperity around the world. As the business leaders featured in this piece attest, STEM is at the heart of the global community and will play a pivotal role in any conversation on global growth and development. Success requires “Resilience” coupled with growth through STEM Innovation, technology and new job creation. ■

Edie Fraser is CEO of STEMconnector®.

(Thanks for support on this article from summer intern, Oliver Paprin).

“GMAP’s first rate curriculum and faculty have refreshed and sharpened my world view” – Mark Mullinix, (GMAP 2011) First Vice President and Chief Operating Officer, Federal Reserve Bank of Richmond

One-year Master of Arts Degree.

At the nexus of international a airs, business, law, and development.

Three 2-week residency sessions, 33 weeks of internet mediated learning.

A network of over 700 distinguished international leaders and executives.

Join us today.

GLOBAL MASTER Courses Include: Corporate Finance and Global Financial Markets International Business and Economic Law International Negotiation

OF

A RT S P R O G R A M

International Organization International Politics International Trade Leadership and Management Security Studies Transnational Social Issues

CLASSES BEGIN IN MARCH AND JULY.

Visit us at letcher.tufts.edu/GMAP or call +1 617.627.2429

The APEC Publication 2013

Sponsored Feature / Turkey

Turkey: An Attractive Investment Destination for APEC member countries

In 2013, Turkey will mark its 90th anniversary as a demographic and secular nation. Over the last nine decades, the country has grown to become the 16th largest economy in the world, and its location at the crossroads of Europe and Asia has long made Turkey a bridge between the continents and an important regional point. Today, it is home to 76 million people.

Turkey is now focused on achieving an ambitious set of goals by 2023, set out by Prime Minister Recep Tayyip Erdoğan’s administration. These targets include expanding the economy to rank among the global top ten; securing full European Union membership; installing new energy facilities nationwide; rolling out enhanced rail, road and port networks; providing a universal healthcare system; and becoming the world’s fifth most visited tourism destination.

Turkey has undergone a transformation into a fast-growing, free-market economy in recent years.

While agriculture remains an important employer, industry and services account for the bulk of output and export earnings. The Turkish economy has tripled in size since 2002, and exports have grown fourfold in the same period. The most spectacular figure is the amount of FDI that has flowed in the country in the last decade: USD 123 billion -- eight times the total Turkey had received 44 ❙ theapecceosummit.com

in the previous eight decades. According to A.T. Kearney Foreign Direct Investment Confidence Index, Turkey ranked 13th worldwide for FDI as of 2012. More than 70 percent of Turkey’s FDI originates from EU neighbors, which is well ahead of the Middle East and the APEC member countries.

The Investment Support and Promotion Agency of Turkey (ISPAT) provides assistance to investors before, during and after their entry into Turkey and welcomes the APEC member countries to invest in Turkey.

Access to Multiple Markets Like investors from the other countries, investors from the APEC member countries are also using Turkey as a hub for their investments and business operations in the region. While they are impressed with Turkey’s robust domestic market, economic growth, young and dynamic population, they are also using Turkey’s geostrategic location

to access markets in the Middle East, North Africa, Central Asia and the Caucasus, surrounding Turkey. However, geographic location by itself is not enough. The local qualities and capabilities in Turkey are also very important. In this regard, the political and economic stability has been securing confidence in Turkey. Moreover, Turkey is also actively supporting and encouraging companies of the APEC member countries to invest in Turkey.

To this end, the Investment Support and Promotion Agency of Turkey has its resident country advisors in Tokyo, Seoul, Beijing, Moscow, Toronto, New York and San Francisco serving and assisting the investors from the APEC member countries.

Companies from APEC are investing in Turkey Investors from the APEC member countries should not miss important trends taking place in Turkey. Actually they have already started to benefit from ample opportunities in Turkey. Today, in Turkey, there are around 4,200 companies from the APEC member countries and they been increasing their investments in Turkey in recent years, investing around USD 22 billion as of the

The APEC Publication 2013

ThoughT LeadershiP end of 2012, constituting 12 percent of the whole FDI stock in Turkey. For example, very recently, Bank of Tokyo-Mitsubishi UFJ, Japan’s largest bank, has decided to establish a subsidiary in Turkey, seeking to take advantage of Turkey’s booming economy to strengthen its global presence. Many global companies are using Turkey as an investment platform to grow globally. Companies from the APEC member countries are more than welcome to invest in Turkey. We will be at their disposal at every stage of their investments.

“Free Trade” Opportunities Since foreign investors are coming to Turkey both for domestic market and surrounding markets, it is important to have a liberal trade policy. To this end, Turkey has signed a customs union agreement with the European Union and free trade agreements (FTA) with around 20 countries. These countries include Norway, Switzerland, Iceland, Lichtenstein, Macedonia, Bosnia-Herzegovina, Albania, Israel, Palestine, Morocco, Tunisia, Egypt, Syria, Georgia, Serbia, Montenegro, Chile, Jordan, Mauritius and the

Republic of Korea. Additionally, the FTA signed with Lebanon is in ratification process. FTAs are important in developing foreign trade with the neighboring countries, ensuring exporters compete at more advantageous or at least under equal circumstances with other countries’ exporters and increasing bilateral investments.

Meanwhile, there are 21 countries and 5 blocks that Turkey has started FTA negotiations; (Ukraine, Colombia, Ecuador, Malaysia, Kosovo, Moldova, Dem. Rep. of Congo, Ghana, Cameroon, Seychelles, the Gulf Cooperation Council, Libya, MERCOSUR and Faroe Islands) or has launched initiatives to start negotiations (Canada, Japan, India, Indonesia, Vietnam, other ASEAN countries, Peru, Central America Community, other Africa-Caribbean countries, Algeria, Mexico and Republic of South Africa).

Turkey as an investment hub With its competitive business environment and skilled labor force, Turkey ofers many advantages for global manufacturing companies.

Global manufacturing companies are well cognizant of that too, for example, Foxconn,

manufacturing computers for the global IT giant HP, has recently inaugurated a facility in Turkey.

The site will produce more than 2 million computers for HP in Turkey, while HP will export those computers to the markets in the Middle East, North Africa and other markets in the region. Toyota has been another successful example in Turkey. With a USD 1.5 billion investment, today it employs around 3,000 people. Similarly, with an annual production capacity of 150,000 motor vehicles, Toyota Turkey is one of the ten largest overseas manufacturing operations of Toyota, and one of the biggest manufacturing companies of Turkey.

Toyota is an excellent example of using Turkey as a hub to access surrounding markets, as around 90 percent of Toyota’s production in Turkey is being exported to diferent markets around Turkey. Toyota’s success is a clear indicator of Turkey’s unique advantages from qualified labor to technological skills. Turkey combines low-cost large-scale production, good use of technology to ofer the highest quality. As such, the Turkish automotive sector has been creating a benchmark for quality. ■ COUNTRY

NUMBER OF FOREIGN COMPANIES IN TURKEY

ausTraLia BruNei CaNada ChiLe ChiNa hoNg KoNg iNdoNesia JaPaN MaLaYsia MeXiCo NeW ZeaLaNd Peru PhiLiPPiNes russia siNgaPore souTh Korea TaiWaN ThaiLaNd usa VieTNaM Total

145 1 236 9 476 52 8 158 29 9 16 2 11 1457 64 226 17 16 1275 1 4208

LIKE INVESTORS FROM THE OTHER COUNTRIES, INVESTORS FROM THE APEC MEMBER COUNTRIES ARE ALSO USING TURKEY AS A HUB FOR THEIR INVESTMENTS AND BUSINESS OPERATIONS IN THE REGION. Nusa Dua / Bali. Indonesia 2013 ❙ 45

The APEC Publication 2013

Feature / Investment in Georgia

ThouGhT LeaDeRShIP

Editorial by: Alexander Botting, Diplomatic Courier Guest Contributor

Foreign Investment in Georgia: opportunities abound Georgia ranks 9th out of 185 countries in the World Bank’s ‘Doing Business Rankings’, yet levels of Foreign Direct Investment (FDI) remain signiicantly below what they should be, at $1 billion. Having overseen a peaceful transition of power and with relations with Russia improving, Bidzina Ivanishvili’s government has set an ambitious goal of doubling FDI by the end of the year. With major investment funds already looking to invest in energy, agriculture and transportation, however, they are on track to achieve meet their target.

W

HILE GEORGIA’S influence in the South Caucasus region is largely dwarfed by that of its energy-rich neighbor, Azerbaijan, positive relations between the two countries have ensured that Georgia has benefitted from significant inflows of foreign investment. Owing to recent political and military conflicts with Russia, however, levels of FDI in Georgia remain significantly below what they should be.

For the past 9 years, Georgia has been led

by President Mikhail Saakashvili–Georgia’s charismatic and combative President.

Saakashvili won in 2004 with 96% of the vote and even his most ardent opponents would be hard-pressed to say that Georgia has not benefitted from his leadership, with GDP growing from $14 billion to $26.2 billion.

Nevertheless, his eagerness to raise tensions with Russia and his unwillingness to combat corruption have eroded popular support for his Presidency over this time.

As a result, Bidzina Ivanishivili’s Georgia Dream party won the 2012 Parliamentary elections, on a platform which emphasized the need to end the endemic corruption of the Saaskashvili government and improve relations with Russia.

From an outsider’s standpoint, the maturity with which the original transition was handled was more important than the election results.

By handing over power peacefully to the opposition, Saakashvili assuaged one of the greatest fears of foreign governments and > Nusa Dua / Bali. Indonesia 2013 ❙ 47

The APEC Publication 2013

Feature / Investment in Georgia

GEORGIA CURRENTLY RANKS 9TH OUT OF 185 COUNTRIES IN THE WORLD BANK’S ‘EASE OF DOING BUSINESS’ RANKINGS–AHEAD OF ALL BUT 3 MEMBERS OF THE G20.

>investors –whether stability could be maintained while respecting the democratic wishes of the Georgian people.

If Georgia does continue along its positive path towards development, it is likely that this will be Saakashvili’s most valuable contribution to his country.

Georgia’s Investment Environment Georgia currently ranks 9th out of 185 countries in the World Bank’s ‘Ease of Doing Business’ rankings–ahead of all but 3 members of the G20. This is a remarkable achievement for a country which emerged from the state-run economy of the Soviet Union less than 22 years ago.

What makes Georgia particularly attractive to foreign investors, however, is its high ranking 48 ❙ theapecceosummit.com

on the criteria of ‘Protecting Investors’ – ahead of many of the success stories for international investors such as Chile, Saudi Arabia and Taiwan. Perhaps more surprisingly, it ranks above many major developed countries such as Japan, Norway and Sweden in this category.

Investment under Georgia Dream Having made his billions in post-Communist Russia, questions were raised as to Ivanishvili’s commitment to maintaining a free market economy underpinned by the rule of law.

In addition, Saakashvili has attemtped to characterize his eagerness to rebuild economic and political ties with Russia as a potential threat to the Georgian people.

As we have seen over his short time in power, however, such statements are a flagrant

misrepresentation of Ivanishvili’s intentions.

Economic best practices have continued unabated and he has spent more time courting western governments and investors than those in Russia.

There is little reason to doubt Ivanishvili’s motives for attempting to thaw relations with Russia. Given the size of its economy, developing bilateral trade with Russia is a nobrainer and will bring substantial benefits for the Georgian economy. Georgians are not in a position to choose their neighbors and would be foolish not to establish trade links with the major economic power in their region.

Moreover, a major reason for the positive political and economic climate in Georgia is the desire of the Georgian people to emulate the systems of their Western allies. Were any government to reverse this progress, they could expect to be sharply rebuked for it by the electorate in subsequent elections.

In Georgia’s Past, a Vision of their Future The current government showed its commitment to developing foreign investment by establishing a national investment authority, charged with doubling Georgia’s FDI this year, to $2 billion. While this is an ambitious goal, it is by no means unrealistic with a number of investors already taking a significant interest.

Moreover, rhe focus of this investment will largely be within sectors where Georgia has a proven track record of success: energy, agriculture and transportation.

Hydroelectric Energy Despite significant government investment in hydropower since its independence, Georgia still only utilizes only a small proportion of its potential.

With significant domestic demand, as well as persistent energy shortages in neighboring Turkey, the privatization of this sector has caught the interest of a number of major foreign investors. At this year’s Davos forum, India’s Tata Group agreed to invest in the $600 million Adjaristskali hydropower plant. They are unlikely to be alone.

Traditional Energy At its peak, Georgia produced 20,000 barrels of oil per day, mostly drilled from the upper Jurassic formation. Owing to mismanagement under the Soviet Union, however, this level has been almost entirely drained. As such, any new drills would need to target other levels.

Georgia’s complex geological formations have in the past discouraged large scale investment in its energy sector. Successful attempts at drilling similar geological formations in the Baltics, however, have emboldened would-be investors. Moreover, with the potential to sell

The APEC Publication 2013

ThouGhT LeaDeRShIP

the resulting oil into European markets at over $100 per barrel, there are substantial incentives with which to offset any perceived risk.

Agriculture The Georgian government has put the agricultural sector at the top of its list of areas for investment and has accompanied its rhetoric with financial incentives for investors.

Beyond the need for increased domestic meat production, the agricultural product with the best potential for export is wine. Georgia first started producing wine around 8000 years ago, making it the longest known producer in the world. The quality of its Saperavi and Tsinandali wines, in particular, has lead to a significant growth in regional and international exports.

With Ivanishvili having also secured approval

for exports to Russia there is substantial room for growth in Georgia’s wine production.

Transportation Georgia’s greatest inheritance from its Soviet days was a comprehensive modern system of roads and railways. Moreover, Georgia’s location at the axis of East and West makes it an ideal hub for the transit of goods from Asia to Europe.

While the maintenance of this infrastructure has suffered a little from under investment over recent years, rising levels of trade between Europe and Asia are providing the necessary incentives for investment. With more pipelines from Azerbaijan to Europe also being planned, Georgia looks set to establish itself as a major regional hub. ■

Biography Alexander Botting works for a Washington, DC-based international government afairs irm, where he provides political and business consultancy services to clients from the Europe and Eurasia regions. Prior to this, Mr. Botting worked as a Political Risk Analyst for a private investment fund and as an Equity Research Intern for Fidelity Worldwide Investment.

Mr. Botting received his B.A. in Politics and International Studies from the University of Warwick and is studying for a Master’s in Political Management at George Washington University, where he has been awarded an Academic Fellowship.

Nusa Dua / Bali. Indonesia 2013 ❙ 49

The APEC Publication 2013

Sponsored Feature / Soneva Fushi

Soneva Fushi The original Soneva, the blueprint for all desert island hideaways, with a pristine Maldivian reef and legendary service.

Soneva Fushi is the original desert island hideaway. Everything about it feels right. The seaplane arrival. Picture book palm trees. Perfect white sand. Secluded beachside villas within touching distance of pristine reef. Nesting turtles and bunny rabbits co-habiting happily on a jewel of emerald green in a vast ocean of turquoise.

It’s the kind of place that makes you feel like a child again. Every guest has a bicycle to explore the island. At a kilometre long by half a kilometre wide with sandy paths criss-crossing dense jungle, the island is big by Maldivian standards. Whereas some Maldives islands can be toured in seconds, Soneva Fushi is a proper island with hidden treasures to explore at every turn.

The unique sense of discovery, optimism and innocence begins the moment you arrive at ‘Soneva Fushi International Airport’, a floating pontoon no bigger than a small living room. You 50 ❙ theapecceosummit.com

are met by smiling hosts, arriving in a traditional Maldivian dhoni boat with cold towels to wipe away the dust of the real world. Once your shoes are handed over, the ‘no news, no shoes’ philosophy kicks in and your whole being relaxes.

Accommodation fits the idyll. Fifty five villas and private residences are hidden away behind dense foliage a few steps in soft white sand from the warm sea and three or four strokes from pristine coral reef, the villas are located sunrise or sunset side of the island. Their style defines the efortless, rustic chic synonymous with Soneva. Luxurious

yet understated. Vast, sigh-inducing beds with a choice of four duvet types as well as an extensive pillow menu. Open-air bathrooms and a selection of showers with Bose sound systems, intoxicating jungle aromas, waterfalls and sounds. Organic amenities that smell good enough to eat.

Impeccable, intuitive service courtesy of Mr./Ms. Fridays who know what you want before you want it.

Many guests stay ‘home’, enjoying unrivalled peace and privacy with the best ‘takeaway’ food in the Indian Ocean. Others head out to explore the nine diferent dining options. To breakfast at Mihiree Mitha, the social hub of the island, restaurant Nine on the beach, or dine in Fresh In The Garden, a restaurant cooled by breezes above the heady scents of the famous organic herb (delicious rocket)

The APEC Publication 2013

THOUGHT LEADERSHIP

THE UNIQUE SENSE OF DISCOVERY, OPTIMISM AND INNOCENCE BEGINS THE MOMENT YOU ARRIVE AT ‘SONEVA FUSHI INTERNATIONAL AIRPORT’, A FLOATING PONTOON NO BIGGER THAN A SMALL LIVING ROOM. Contact Information: Reservations-fushi@soneva.com www.soneva.com

and vegetable garden. The spa is always a great temptation. Watching movies at Cinema Paradiso, the open-air movie theatre with only the starlit sky above, is not to be missed. Nor is counting Saturn’s rings in the world class Observatory in the company of Dr Parag Mahajani, one of India’s leading astronomers.

Opportunities to venture beyond the island including games in (the soon-to-be launched) children’s Den, sunset dolphin cruises, picnics on the island’s own private sandbank or three deserted islands, breathtaking diving such as watching the majestic rays feed at Manta Point, or fascinating cultural visits to nearby islands. Soneva Fushi is the ultimate pioneer of memory-making experiences.

Choices abound. How do you decide between sixty flavours of ice cream? Eleven types of pillow.

Five hundred wines. Umpteen freshly squeezed juices. The freshest line-caught tuna prepared in a hundred diferent ways.

As is the Soneva way, all this is ofered while treading as lightly as possible on the earth. Sonu and Eva Shivdasani’s passion for enriching lives while protecting nature’s precious resources pervades every aspect of this magical island. At the heart is Eco Centro, proving ground for the sustainable culture Soneva extols, where everything from the sun’s rays – the island is part powered by solar panels – to fallen timber and driftwood is re-used.

Serious goals for sustainability do not repress Soneva Fushi’s sense of fun. They enhance it. The proximity to nature, the innate respect for the ocean’s wonders, 24/7 bare feet, all help to

enhance a feeling of liberation and inner peace.

Pleasure goes hand in hand with respect for the planet. Lounging on the nets at Bar(a)bara sipping cocktails as dolphins scoot by in front of the setting sun is hedonism of the best kind.

Snorkelling the house reef in the company of the resident marine biologist before enjoying a Kurumbaa Kaashi rub with coconut oil, milk and flesh harvested minutes earlier from a freshly fallen nut simply restores your long forgotten sense of wonder.... Nothing else compares. ■

Soneva Fushi is committed to the Soneva Group’s SLOW LIFE philosophy: Sustainable-Local-Organic-Wellness Learning-Inspiring-Fun-Experiences.

Nusa Dua / Bali. Indonesia 2013 ❙ 51

The APEC Publication 2013

Feature / Global Action Platform Editorial by: Dr. Scott T. Massey

A World of Abundance Building a Global Action Platform to Create Abundance Through Innovation in Food, Health and Prosperity.

F

ROM PROTESTS IN BRAZIL and Europe over rising costs, to the bankruptcy of Detroit, to sluggish growth in the US and EU, and the potential slowing and rebalancing of the Chinese economy, there remain clear challenges to stimulating and sustaining a new round of economic growth in the Asian-Pacific region and the world. The diverse challenges, like those just mentioned (among many others that could be listed) may appear disconnected, but in fact, are not. Instead, the various economic challenges we face are interconnected

52 ❙ theapecceosummit.com

symptoms of an underlying economic dynamic.

Simply put, the world now faces an intensified need to create sustainable prosperity built on platforms of opportunity open to every person. The combination of globalization, mobile technology, free markets, global capital markets, and the increased speed of competition and change have created vast new opportunities for corporations and individuals, but this perfect storm of change has also disrupted economic systems “close to home” in which a majority of the world’s population lives. Because of this, and as the human population grows toward

nine billion, it is now urgent to put strategies in place that “re-localize” economies and create “new growth” at the regional level, like the new growth vegetation in an old growth forest.

In short, to move beyond the current spiral of economic crises, we need to take steps to create sustainable, shared, long-term prosperity; and to do this, we need to build dynamic innovation hubs in regions all around the world. Regionally based innovation hubs are the new engines of prosperity and platforms for expanding, broad-based economic opportunity.

One new global effort to move toward this goal has been recently launched. In November 2012, four hundred leaders from ten nations, representing the corporate, research, government, finance, media, foundation, and NGO sectors convened at the Global South Summit in Nashville, Tennessee USA. The goal of this international gathering was to begin framing an agenda for abundance with a focus on three interconnected issues–food, health, and prosperity. At the conclusion of the inaugural Summit, an integrated approach to these three issues was defined as an urgent priority needing attention over the coming three to five years.

The APEC Publication 2013

ThouGhT LeAdeRShIP Why Food, Health and Prosperity?

Founding leaders in this new global initiative started with an economic concern--how to advance sustainable economic growth and prosperity for a growing world population. The organizers found strong interest in mobilizing cross sector leadership to find new paths and models for economic development aimed at sustainable prosperity. Further, it became clear that the growing global challenges of food and health–basics for human capital–had to be addressed while developing ways to expand shared prosperity.

This vision of an economic future of sustainable growth and expanding opportunity for everyone requires a special lens. To balance growth, sustainability, and opportunity leaders identified a need for an adaptable model and tools, a nimble, neutral infrastructure wellsuited for the fast-emerging, complex conditions of the 21st century.

The elements of this model include industry clusters, disruptive innovations, regional economies, platforms for collaboration, and strategy for competitiveness. New technologies, the Internet, pervasive knowledge/training, and mobile devices are also key to the mix.

A Vision of Abundance Instead of a focus on scarcity and conflict, this new initiative focuses on the creation of abundance as the central organizing idea. How can we focus economic activity in regional innovation hubs to expand opportunity and unleash innovation? How can the whole human population flourish–while also allowing the environment and ecosystems that make life possible also flourish?

Key drivers for innovation and prosperity are food and health. If economic growth requires a broad base of talented, innovative people working together, then food and health are critical. In fact, food and health are baseline measures of the asset strength of the major economic driver of today’s economy–human capital.

Between the current state of affairs for healthcare and a major transformation of health systems lie thorny issues of realigning financial incentives while managing the demographic shifts toward an older population with greater health needs and while integrating large new populations to modern healthcare. As with economic and food issues, time is running out to address changes in healthcare; and under this pressure there is a growing sense of urgency to

THE GLOBAL ACTION PLATFORM HAS BEEN CREATED AS A MECHANISM TO CONNECT AND ALIGN EFFORTS TO CREATE ABUNDANCE THROUGH INNOVATION.

find transformative healthcare solutions and new financial models.

In terms of food, while the world currently produces enough food to feed everyone on the planet, the logistics and political consensus are missing to distribute what is produced. Food reserves have not been replenished since the 2010 drought, which puts the world on the brink of food shortages. Disputes are raging over the role of genetically modified foods, the composition of a healthy, nutritious diet, and the role of government to enforce diet, food policies, food safety, and government’s role in funding research and food relief efforts.

Building a Global Action Plan The challenge the world faces now is to frame long term solutions and innovations that have the capacity and promise to create abundant food, health, and prosperity for everyone on the planet. Solutions are simultaneously local, regional and global. In short, solutions require local cross-sector leaders to imagine, to explore– and to specify–how innovation can create abundance, and how we can efficiently and much more effectively connect and network invested leaders, research institutions and innovators to collaborate in fulfilling the promise of abundance.

The Global Action Platform has been created as a mechanism to connect and align efforts to create abundance through innovation. The Platform is built around four interconnected functions: Convene, Challenge, Connect, and Communicate. Through the Platform, an integrated series of financial investments, tied to leadership summits, action plans, and global multimedia communications are being implemented over the next five years.

Innovation for Abundance The future welfare of both human beings and the planet depend on a distinctly human resource– innovation. Our emerging economies demand more timely solutions, access to innovation, improved efficiencies and high impact results.

On this there is broad consensus. In order for societies to be innovative, people must be able to thrive; they need food, health, and the tools and systems of innovation that produce sustainable prosperity.

As we strive to achieve sustainable, shared prosperity, leaders and innovators will need to collaborate together to create a shared platform for clear, more efficient decision-making and informed actions to guide our future. With wa growing network of university-businessgovernment-NGO-media partners, the Global Action Platform aims to become a primary distribution channel and change agent for a world of abundance. ■ Nusa Dua / Bali. Indonesia 2013 ❙ 53

The APEC Publication 2013

Feature / Energy Policy Editorial by: Dr. Richard Rousseau, Diplomatic Courier Contributor

Russia’s Energy Policy Expanding Influence As the world’s leading supplier of natural gas between 2003 and 2009–the U.S. surpassed Russia as world’s leading producer in 2010–and the seventh largest supplier of oil, Russia occupies a formidable position as an energy exporter.

D

ISQUIET OVER EUROPE’S reliance on energy from Russia has intensified efforts to find new suppliers. The politicization of energy security in Europe has diverted parties from the threat posed by a continued reliance on hydrocarbons.

In January 2009, the supply of energy to a number of European states was disrupted following a price dispute between Ukraine and Russia. Although Vladimir Putin, president at the time, claimed that Russia would not behave as an energy superpower, the Kremlin’s decision to suspend gas supplies to Ukraine increased European anxiety over Moscow’s willingness to use energy as a tool in foreign policy.

As the world’s leading supplier of natural gas between 2003 and 2009–the U.S. surpassed Russia as world’s leading producer in 2010–and the seventh largest supplier of oil, Russia occupies a formidable position as an energy exporter. In contrast, many of the surrounding states of the European Union and the former Soviet Union are major importers of Russian energy. The media coverage of this ‘gas crisis’ highlighted the growing politicization of energy security within the region and on the international level. However, the focus on Europe’s access to a reliable (and relatively cheap) supply of energy, coupled with growing Russian adventurism, obscures the threat that a continued reliance on hydrocarbons has on the future of international energy security.

Russia’s growing international prominence is inextricably linked to its natural energy resources. Rapid increases in oil and gas prices in the mid-2000s enabled Russia to progress from a position of near financial collapse in 1998 to successive years of economic growth. The growing demand for Russian energy has been helped by the country’s position outside the Organisation for Petroleum Exporting Countries (OPEC) and the Middle East, where ongoing conflict undermines the reliability of supply. Europe currently relies on Russia for more than 40 percent of its gas and a third of its oil supplies–figures that are expected to increase.

Meanwhile China imports approximately 10 percent of its gas from its northern neighbour.

Yet, there are key differences between eastern and western Europe in their dependency on Russian energy. Although the total amount of gas consumed by the Eastern European states is relatively small in comparison to that of Germany or Italy, they are much more dependent on Russia for their supply.

Ukraine is particularly vulnerable to

The APEC Publication 2013

ThoughT LEADERShIP

disruptions from Russia. Not only is it a pivotal state in the transit of gas towards Europe, accounting for approximately 80 percent of supply (even though this is bound to decrease in the mid and long term, as new transit routes are put into service) it is also dependent on Russian gas for its own energy needs and the revenues generated from transit fees. Although the Kremlin always cites commercial reasons for the suspension of oil and gas to clients, there is growing concern in the West that Europe’s and Asia’s energy dependency is increasingly being used by Moscow as a tool to exert political pressure to bring commercial partners ‘to heel.’

represent the only route that does not cross Russia or Iran. However, these transit states, as well as the oil-rich Central Asian states of Kazakhstan, Azerbaijan, Turkmenistan, and Uzbekistan, fall within what Russian foreign policy has identified as a sphere of influence.

Numerous U.S. and Chinese officials’ visit to these countries signal America’s and China’s “deep interest” in the energy security of the region. It reinforces the perception expressed by former Russian Minister of Defence Anatoly Serdyukov that the U.S. and China are looking to ‘muscle in’ on energy and mineral resources in the former Soviet countries of Central Asia.

A Case for Diversification The prospect of a Russian stranglehold on Europe’s energy supply has strengthened the case for diversification of the energy supply in Europe. While there are efforts to circumvent Russia, the long lead-in to viable alternative energy sources and constructing supporting infrastructure will see continued reliance on Russia for the immediate future.

Securing the future of Europe’s energy supply is complicated by the tenuous nature of Moscow’s relations with transit countries.

This was highlighted by the Russian invasion of Georgia in August 2008, where security of oil and gas transit pipelines came under the spotlight. Georgia’s transit pipelines are of particular importance to Europe as they

A New Energy Charter for Europe In addressing Europe’s energy needs, the EU has continued to push for the liberalization of energy markets and Russia’s ratification of the Energy Charter Treaty (ECT) and the Transit Protocol. Even though Russia signed the treaty in 1994, it officially opted out of it on October 18, 2009 and informed the depository that it did not intend to become a Contracting Party to the Energy Charter Treaty or the Protocol on Energy Efficiency and Related Environmental Aspects. It argued that ratifying it would undermine the country’s national interest, and acceding to the Transit Protocol would allow Central Asian states access to Russia’s gas and oil transit pipeline network without any agreement with

Moscow. Former Russian President Dmitry Medvedev called for the negotiation of a new energy charter for Europe, one that would focus not only on consumers of energy, but also on producers and transit countries.

While Europe is dependent on Russian energy exports, Russia’s national budget is reliant on revenue raised from the sale of its oil and gas to Europe. With evidence suggesting that Russia’s resources are reaching their peak, the bilateral agreement between Moscow and China to secure a significant increase in oil trading volumes has underscored a growing concern regarding Russia’s over-extension and future energy capacity. The country also faces a growing domestic demand for energy, while the doubling of the gas price over the last 10 years has placed an additional burden on lower-income families.

Internationally, the soaring cost of energy and the move towards reducing greenhouse gas emissions has resulted in increased financial support for the research and development of alternative energy sources, including renewable sources like solar, wind, and hydropower. With significant fossil fuel reserves, there has been little investor incentive to fund finance studies to develop technology and diversify energy sources within the Russian federation, leaving the economy dangerously dependent on hydrocarbons.> Nusa Dua / Bali. Indonesia 2013 ❙ 55

The APEC Publication 2013

Feature / Energy Policy >The global financial crisis has taken a toll on revenue from energy exports. In a presentation to the 2009 UN Conference on Trade and Development (UNCTAD), Ivan Korolev, Deputy Director of the Institute of World Economy and International Relations, Academy of Science of the Russian Federation, indicated that Russia’s growth rate for 2009 was flat. During the next three years growth in Russia also lower than expected. This is linked to a dependence on the export price of hydrocarbons, which account for 70 to 80 percent of all export earnings. In addition to its impact on the state budget, Tatiana Mitrova, Head of Global Energy at Skolovovo Energy Centre, told at the Russia Forum in early 2012 that the financial crisis, and the rapid depreciation in oil prices, has reduced the resources available for investment in energy infrastructure modernization projects and the development of new oil and gas fields.

In response to oil prices falling from a high above $140 a barrel in July 2008, and in an effort to ensure its own energy security, Moscow has indicated a willingness to work closely with OPEC in an effort to stabilise the market. The Kremlin has also been at the forefront of plans to form a gas cartel modelled after OPEC, but so far to no avail.

To this end, Moscow has been in talks with Iran and Qatar—and if the three joined forces they would control more than half of the world’s natural gas resources.

Through Gazprom, the Russian energy giant, Russia is expanding its energy network internationally. Indeed, there are indications that the state-run monopoly has set out to acquire a share of Africa’s energy assets (including nuclear), with the opening of its first African office in Algeria in June 2008.

Following this was a flurry of meetings with a number of countries, including Angola, Egypt, Namibia, Nigeria, and South Africa. Before the Libyan civil war and Western military intervention, Gazprom had offered to buy all of Libya’s spare oil and gas exports. It equally expressed an interest in buying exploration licences in Nigeria, as well as the building of gas pipelines between Nigeria and Algeria and Europe and Libya.

Internationally, oil and gas have been the fundamental drivers of economic growth and development. As these hydrocarbons become increasingly scarce, competition for energy resources in Russia and the Central Asian region will result in rising tension between both the energy exporting and energy importing states. This is reflected in the new “Foreign Policy Concept of the Russian Federation” signed by Putin on February 12, 56 ❙ theapecceosummit.com

BY PLACING ACCESS TO HYDROCARBONS AT THE CENTRE OF THE FEDERATION’S ENERGY SECURITY, RUSSIA WILL CONTINUE TO REMAIN DEPENDENT ON FOSSIL FUEL, NOT ONLY FOR ITS ENERGY BUT AS A SOURCE OF REVENUE.

2013. The document establishes the basis of Russia’s external action at least until 2018, with a focus on the importance of access to energy resources globally and the potential for military conflict. It replaces the one endorsed

by Dmitry Medvedev in July 2008.

By placing access to hydrocarbons at the centre of the federation’s energy security, Russia will continue to remain dependent on fossil fuel, not only for its energy but as a source of revenue. The sustainability of this approach needs further consideration, especially in light of the decreasing price of energy resources and its subsequent impact on the national budget, modernization projects, and the exploration and development of future gas and oil fields.

Although diplomatic efforts saw the supply of gas restored to Ukraine and other Eastern European countries, the European Commission has prioritized the connection

of the vulnerable Eastern European states of Lithuania, Latvia, and Estonia to European power grids, as well as the development of the southern Gas Corridor.

Turning to alternative oil and gas exporting countries may provide a short to mediumterm solution; however, Europe’s focus on reducing its dependence on Russia diverts attention from the region’s continued reliance on hydrocarbons. The southern Gas Corridor may bypass Russia and Iran, but by all indications Europe would remain overly dependent on hydrocarbon energy exports from a region that remains within Russia’s sphere of influence, although less of a firm hold than previously. Rather than the continuing prioritization of energy security linked to the export and import of oil and gas, the future of energy security for both Europe and Russia lies in the diversification of energy resources and in moving away from a dependence on fossil fuels. ■

Biography Richard Rousseau is Associate Professor and Chairman of the Department of Political Science and International Relations at Khazar University in Baku, Azerbaijan.

His research, teaching and advisory interests include Russian politics, Eurasian geopolitics, international political economy and globalization.

Indonesia International Chamber of Commerce

The world business organization

JOINT ICC MEMBERSHIP THROUGH ICC INDONESIA to keep you ahead on International Trade Opportunities

OVERVIEW International Chamber of Commerce (ICC) was founded in 1919 to promote international trade and investment as vehicles for peace and prosperity. Its most valuable role remains as leading global rule making body for international trade and mostly use by banking industry and trader. ICC has network in more than 120 countries in the world through its national committee. ICC Banking Technique & Practice and Arbitration & ADR Commission, major areas where ICC made a lot of contribution to the business world.

ICC COMMISSION ON BANKING is a leading global rule making body for banking industry and it produces universally accepted rules and guidelines for international banking practice. There are several ICC Rules and standard use globally such as UCP 600 for L/C , INCOTERM for Buyer & Seller responsibilities, ISBP, URDG, UR Forfaiting etc.

FIND OUT MORE ON NEXT COMMISSION ON BANKING GLOBAL MEETING , VIENNA 22 – 25 October 2013

ICC COMMISSION ON ARBITRATION AND ADR ICC'S rule making and research body in the field of international dispute resolution. The global forum comprises more than 700 members from over 90 countries and include lawyers, in house counsel, arbitrators, mediators law professors and experts in various dispute resolution fields. The commission addresses how new practices, policies and legislative developments affect international arbitration and other dispute resolutions services.

ICC Indonesia is ICC national committee in Indonesia, representative of the Republic of Indonesia to ICC and membership coordinator of Indonesian business enterprises and practitioners. ICC Indonesia is a multilateral committee of KADIN Indonesia.

Main focus of ICC Indonesia is to provide enrichments programs to business communities in Indonesia to master the knowledge of international trade rules and standard, in order to increase Indonesian product competitiveness.

Currently, we are supporting Indonesian Customs & KADIN Indonesia to benefit from ATA Carnett AVAILABLE NEW ISBP 2013 – BILINGUAL VERSION, ENGLISH & INDONESIA. Contact : ICC INDONESIA

ICC Indonesia | Tempo Pavilion 1 building 8th Floor Jl. HR. Rasuna Said Kav. 11 Jakarta T: +62 21 29667914 | F: +62 21 29667915 | E: icc@iccindonesia.org | W: www.iccindonesia.org

The APEC Publication 2013

Feature / Global Trade By: Manuel C. Menendez III

APEC and Small, Medium and Micro Enterprises APEC’s 21 member economies, themselves powerhouse economic players constituting the majority of the world’s GDP, have created a unique opportunity for Small, Medium and Micro Enterprises.

60 ❙ theapecceosummit.com

The APEC Publication 2013

ThOUGhT LEADERShIP

S

INCE 1989, the Asia-Pacific Economic Cooperation forum has become a key venue for the global dialogue on international trade. Its 21 member economies, themselves powerhouse economic players constituting the majority of the world’s GDP, have created in APEC a unique opportunity for Small, Medium and Micro Enterprises (SMMEs) to have input in the shaping of an interdependent Pacific economic structure. More than 50% of all private sector employees earn their living in SMMEs, which have generated an astounding of all new private sector jobs in the United States since 1981. Therefore, the leaders of the APEC member economies are in a powerful position to utilize the strength of SMEs by allocating sufficient resources and attention to this extremely productive area and therefore encouraging economic growth.

The Power of SMME’s SMMEs, as a major driver of significant economic progress and growth, are a prime target for partnership by the unique combination of leaders and experts at APEC. The challenge, then, for APEC member economies, is to better integrate SMMEs into the global economic dialogue. APEC members, as some of the strongest players in the world economy today, have the economic wherewithal, global influence, and wealth of expertise needed to best make use of the power of SMMEs while helping them to develop into the economic dynamos they have proven to be during both stable economic conditions, as well as, having great resiliency in times of economic crisis.

It behooves the leaders of the APEC member economies to deeply consider the potential benefits of stronger ties with SMMEs. APEC is one of the most uniquely successful communication forums in existence. In its own words, it exists in part “to develop and strengthen the multilateral trading system between members” and “to increase the interdependence and prosperity of member economies”. Communication has proven to be a great force for

achieving these goals, particularly between member economies and business leaders, who often benefit greatly from wide-open channels of communication with one another. The leaders of the APEC member economies would do well to reflect on how strong ties and open communication between member economies and SMMEs could benefit both parties.

The diversity of interests present in the Asia Pacific region can present a challenge for those who wish to create interdependence between nations.

SMMEs, being smaller and more adaptable than larger firms, are in a unique position to address the myriad needs and interests of APEC member economies by adapting to the specific situation. Only the immense influence of APEC member economies and their leaders can open the gates for SMMEs to efficiently address such unique interests by making it easier for SMMEs leaders to get involved at APEC, interfacing with member economy leaders and large business leaders alike. The formation of the Small, Medium and Micro Enterprises (SMMEs) & Entrepreneurship Working Group of APEC’s Business Advisory Council (ABAC) is a step in the right direction but much more can be done and should be done to enhance, expand and make meaningful the SMMEs partnership with APEC…one immediate idea would be to devote ample time and provide a platform to SMME’s to play a larger role at the APEC CEO Summit meetings.

As the Asia Pacific region endeavors to secure the future, it would be mistaken in ignoring the obvious economic potential of SMMEs. As US Secretary of State Hillary Clinton said at APEC in 2011, “this Summit ‘just might’ make the history books. But it will do so only if we make history by empowering our rhetoric with concrete action.” The

Biography Manuel ‘Manny’ Menendez III is former Director of Economic & Business Development and International Protocol Oicer for the City and County of Honolulu and Founder & CEO of MCM Group Holdings Ltd. – 8M8 LLC an international advisory service organization specializing in business development, government relations, trade and investment focused on the Asia Paciic region with special emphasis on the People’s Republic of China since 1978.

leaders of APEC member economies and industry experts alike can take further concrete actions to benefit immensely and mutually from a closer and more robust partnership with Small, Medium and Micro Enterprises (SMMEs) & Entrepreneurs. ■

APEC IS ONE OF THE MOST UNIQUELY SUCCESSFUL COMMUNICATION FORUMS IN EXISTENCE. Nusa Dua / Bali. Indonesia 2013 ❙ 61

The APEC Publication 2013

Feature / Trans Paciic Partnership Editorial by: Akela Lacy, Diplomatic Courier Contributor

Rushing Backwards: Why Hastening the Trans Paciic Partnership Agreement Will Hurt Us The proposed decreases in barriers to trade and foreign investment have a historically exhibited tendency to lood domestic markets with cheap foreign goods.

62 ❙ theapecceosummit.com

The APEC Publication 2013

THoUgHT LEADERSHIP

F

ORMAL NEGOTIATIONS on the Trans Pacific Partnership Agreement began in 2010 and as of 2013 officially include Australia, Brunei Darussalam, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam. There has been a growing global opposition to the agreement as leaked versions of the document reach the public sphere, suggesting extreme overhauls to corporate-domestic relationships abroad and diminished power of democratic publics to exercise their rights to provide input for domestic policy. As other nations like Japan and Malaysia begin the process of entering these negotiations, their publics have also expressed extreme concern at the requirements facing their governments. President Obama has expressed a desire to finalize negotiations by 2013, but there are provisions of the agreement

that deserve close reconsideration before then.

As the only non-governmental official overseer of the APEC CEO Summit’s operating process, Pacific Economic Cooperation Council co-chair Jusuf Wanandi is forewarning of a “dilemma” at this year’s meeting in Bali stemming from debates over competing regional trade agreements, mainly those surrounding the Trans-Pacific Partnership (TPP).

Over the past few years the proposed agreement has attracted international criticism concerning lack of transparency surrounding its negotiation and drafting, especially in Japan’s agricultural and food safety sectors and most recently in the U.S. Congress; earlier in June Senator Elizabeth Warren (D-Mass.) sent a letter to the newly-elected U.S. Trade Representative Michael Frohman asking if in his term he would disclose a copy of the sweeping regulatory agreement to the public.

Senator Warren is one on a long list of actors in the U.S. including public health organizations, public interest lawyers, state leaders and representatives alike who are vocalizing concern about the potentially negative effects that the TPP could have on domestic industries and regulatory policies in participant nations. Those critiquing the agreement are doing so from allegedly leaked documents and therefore unconfirmed sources, but abridged versions of the agreement that have been confirmed and released to global businesses and state leaders as well as certain members of Congress deserve a thoughtful and critical assessment in terms of their stipulations which extend far beyond the traditionally simplified definition of trade.

Nations participating in TPP negotiations are expected upon its finalization to conform to domestic policy standards governed by those members leading the discussions. This requirement, though aimed at economic reinvigoration, instead effectively circumvents the people of countries in negotiation from exercising their democratic rights to have a say in domestic policy. The TPP’s projected structuring would give transnational corporations the power to sue national governments in countries where they operate for non-compliance with regulatory provisions mandated by the country from which the company operates. A foreign company operating overseas would have the legal option and the power to overturn domestically agreed-upon policies in order to operate in a more efficient and lucrative manner. These corporate-nation suits would be tried in international tribunals with the power to override domestic environmental, health, and intellectual property regulations to further the interests of foreign corporations.

Beyond these somewhat morally-founded concerns, there are also those more basically grounded in economics. In theory the Trans Pacific Partnership Agreement has the potential to cement the emerging and mutually beneficial trade bloc between Australia, Brunei Darussalam, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam. However the proposed decreases in barriers to trade and foreign investment have a historically exhibited tendency to flood domestic markets with cheap foreign goods, decreasing demand for domestically produced goods and threatening jobs at home.

These consequences may not necessarily be expressly intended by the powers in negotiation, but they cannot be ignored. Although the TPP’s publicized aims are to eliminatie barriers to trade in order to further integrate economies in the largest proposed trade bloc in the world, its provisions for conformity to a certain standard of policies amount to a somewhat misguided one-size-fits-all approach to economic integration. Although similar free trade agreements in the past have increased participant nations’ GDPs with foreign investment, there is also evidence of job displacement, decrease in national investment, and socioeconomic inequality perpetuated by a shift of demand from labor-intensive goods to capital-intensive goods – decreasing wages for laborers and increasing profit for those already gaining it.

And then there are the copyright issues.

Given recent public dismay with online privacy breaches and federal disposition towards the issue in the U.S., the TTP provisions for intellectual property are surprisingly and a bit disproportionately strict. Many critics of the TPP agreement contend that pharmaceutical,>

There has BeeN a GrOWING GLOBaL OPPOsITION TO The aGreeMeNT as LeaKeD VersIONs OF The DOCUMeNT reaCh The PUBLIC sPhere.

Nusa Dua / Bali. Indonesia 2013 ❙ 63

The APEC Publication 2013

Feature / Trans Paciic Partnership

>computer and entertainment companies will benefit more from the pact than the publics of participating nations. The TPP’s intellectual property provisions would require member nations to adopt many strict copyright laws and effectively criminalize minor infractions with jail time rather than liability to the copyright owner. It would also give internet service providers (ISPs) the ability to track even blurred instances of user copyright infringement with a “three-strike” test, allowing the ISP to bar the customer from service after three recorded “violations”.

Given the modernly lowered barriers to content sharing and a general public desensitization to exactly what behavior counts as infringement and what is considered legal for one-time use versus repeated illegal reproduction, these provisions allow for extremely disproportionate responses to minor violations of inextricably complicated laws imposed by foreign governments.

These intellectual property laws also extend beyond the sphere of internet usage and privacy into the pharmaceutical world, producing relevant concerns for public health. If member nations are required to conform to a standard set of copyright laws based on the domestic protectionist policies of leading negotiators, they 64 ❙ theapecceosummit.com

UPON TheIr eLeCTION OUr LeaDers aCCePTeD resPONsIBILITY TO DO WhaT Is BesT FOr The PeOPLe; rUshING TPP Is NOT The aNsWer.

are effectively barring their own domestic pharmaceutical companies from reproducing drugs at appropriate prices for their consumer bases and relegating the public’s only choice to expensive and therefore out of reach drugs produced by foreign companies. Both the UN Development Program and UNAIDS have issued reports urging global powers not to joing the TTP under these terms, specifying “financing policies and intellectual property standards that inflate the price of medications… granting pharmaceutical companies long-term monopolies on livesaving medications” which leave “poor citizens…denied [of] lifesaving treatments” (Zach Carter, Huffington Post).

Those invovled in TPP negotiations are calling for a finalized agreement by the end of this year. Given the ever-growing public concern over the pact’s implications for democratic practices, individual internet use and global access to medicine, there seems to be an evident need for further deliberation.

The last thing our global community needs is a rushed agreement that will set the educated and affluent further and further apart from those struggling to survive. Upon their election our leaders accepted responsibility to do what is best for the people; rushing TPP is not the answer. ■

R

S A Y ‘ B O N V O Y A G E ’ T O ORDINARY… AND ‘WELCOME ABOARD’ TO EXTRAORDINARY.

M E M O R A B L E E V E N T S , M E E TIN G S A N D IN C E N TIV E S B E GIN WIT H A N U N F O R G E T T A B L E V E N U E .

Amazed. Engaged. Rejuvenated. When was the last time you felt that way about an event or conference?

You will on a Royal Caribbean cruise. Let us help plan your program. Our innovative turnkey solutions will dazzle you with everything from complimentary fine dining and state-of-the-art conference rooms to spectacular Broadway-style shows. And all for one very affordable price. The only thing cookie-cutter about our events… is the mold we use to create your logo-inspired desserts.

G R E A T V A L U E Cruising is virtually all-inclusive. Take a look at what’s included: Complimentary conference and meeting space Venues range in size from 20 to 1,394 guests.

Complimentary AV Equipment Dedicated Meeting Incentive Service Team

Charter Sales

Spacious accommodations including around the clock Stateroom Attendant luxurious bedding interactive TV, safes, voice mail services and more!

Onboard Group Coordinator All meals

including complimentary room service

Specialty Dining Options great for company buy outs or VIP dinners Choose from Chops Grille steakhouse Central Park Giovanni s and more Award winning entertainment options including Broadway-style review shows, comedy shows, ice shows, live music and dancing… and more State of the art fitness center and spa Signature onboard activities such as Rock climbing FlowRider® surf simulators, ice skating, mini golf, chef demos and more!

E N D L E S S D E S TIN A TIO N O P TIO N S Royal Caribbean travels the globe sailing to over destinations in countries covering six continents Choose from 3, 4, 5, 6, 7 night or longer voyages — from the rugged beauty of Alaska, Canada, and New England to the charm of Europe and the lush landscapes of Mexico Hawaii the Caribbean the Panama Canal Bermuda, and the Bahamas.

E A S E O F P L A N NIN G Cruising is a turnkey operation! You’ll save time and energy organizing a meeting or incentive program.

There’s no need for meal planning, entertainment planning or staging and décor arrangements… it’s all done for you!

C U S T O MIZ A TIO N O P TIO N S If you want to deliver the wow cruising offers a number of options to customize a meeting or incentive program. Enhance your program with team building events, private receptions, award ceremonies, a variety of beverage package options specialty restaurant buy outs private group shore excursions and more

F U L L S HIP C H A R T E R Have an entire ship at your command A full ship charter is the ultimate in privacy and exclusivity When you charter you are in charge and have the freedom to customize the entire experience

HIG H S E R VIC E S T A N D A R D S The standard of service onboard a cruise surpasses those of land based resorts Service levels on our ships even exceed those in most luxury resorts Onboard Royal Caribbean s ships this is known as Gold Anchor Service Our unique style of service will enhance every aspect of your cruise No matter where you are the pool, the dining room, the spa or your room - get ready to be WOWed!

F o r m o r e i n f o r m a ti o n c a ll 0 0 1 - 9 5 4 - 6 2 8 - 9 7 0 1 o r e - m a il i n t e r n a ti o n a l M I C E @ r c c l . c o m

The APEC Publication 2013

News / Regulatory Practices Story by: Irvina Falah

Support for Good Regulatory Practices in APEC will Foster Growth

A

PEC ECONOMIES are taking steps towards reducing technical barriers to trade by monitoring and improving the implementation of good regulatory practices, according to a number of public and private sector experts.

Regulatory officials and business representatives shared experiences and explored ways to enhance internal policy

coordination, regulatory impact assessment and public consultation during an APEC conference that concluded on Thursday in Medan.

“Regulatory cooperation has become an important area of focus for APEC economies,” said Professor Bambang Prasetya, the Chairman of Indonesia’s National Standardization Agency.

PRIVATE SECTOR REPRESENTATIVES DESCRIBED THE IMPORTANCE OF EFFORTS TO FACILITATE AN IMPROVED APPROACH TO REGULATION AND THE SCOPE OF ITS POTENTIAL BENEFITS. 68 ❙ theapecceosummit.com

“It is a self-fulfilling paradigm that better regulation and the improved alignment of regulatory practices will bring economies closer together and foster increased growth.”

Professor Prasetya noted that this approach can help to ensure effective regulation while minimizing the burden on manufacturers and industries across the Asia-Pacific region.

“It is important to reduce duplicative testing and certification which can add time and other costs to the export of goods,” said Tony Sinambela, the Director of Standardisation at Indonesia’s Ministry of Industry. He cited an APEC mutual recognition arrangement on conformity assessment of electrical and electronic equipment as an example of APEC’s work to drive sectoral growth through measures that support increased regulatory convergence.

Private sector representatives described the importance of efforts to facilitate an improved approach to regulation and the scope of its potential benefits.

“Good regulatory practice is the primary route to safer products without adding unnecessary costs or creating barriers to trade,” said Al Kaufman, Senior Vice President of Technical Affairs at the USbased Toy Industry Association. “Ultimately, consumers are the ones who benefit from a wider variety of safe products at cheaper prices.”

Delegates updated one another on the baseline survey of actions taken by APEC economies to implement and advance regulatory convergence and cooperation.

“The vision of a seamless regional economy has been taking shape over the last few years through the specific initiatives underway within APEC to implement good regulatory practices,” said T.A.R. Hanafiah, Chair of APEC Subcommittee on Standards and Conformance.

“APEC economies’ work to address good regulatory practices is vital to advancing our broader agenda to lift trade and investment barriers, and move us towards a more integrated and prosperous region,” he concluded.

The conclusion of the 7th APEC Conference on Good Regulatory Practices sets the stage for aseries of meetings of APEC standards officials in Medan that will continue through Saturday. ■

Discover the ultimate corporate escape.

Hold your next corporate event aboard a Celebrity Cruises ship. Enjoy world-class dining and a wide variety of activities on your own; then, meet as a group to accomplish your business objectives. You can even customize everything about your event with a full ship charter. And our onboard coordinator will take care of all the details, so you can relax completely.

On board, enjoy the following—and more: • Award-winning cuisine with menus crafted by James Beard-featured chefs, plus complimentary 24-hour room service • Extensive activities and entertainment that make it possible to do as much (or as little) as you choose • State-of-the-art facilities, including conference/meeting rooms with complimentary use of A/V equipment

Full Ship Charter: Have an entire ship at your command. A full ship charter is the ultimate in privacy and exclusivity. When you charter, you are in charge and have the freedom to customize the entire experience.

Celebrity’s Gift Card Program: Discover how you can reward your top performers with a getaway of their own.

Experience a luxurious escape where business and pleasure blend seamlessly.

That’s modern luxury.SM

call 001-954-628-9701 or email internationalMICE@rccl.com

Alaska • Asia • Australia/New Zealand • Bermuda • Caribbean • Europe • Galapagos • South America Modern luxury is a trademark of Celebrity Cruises Inc. ©2013 Celebrity Cruises Inc. Ships’ registry: Malta and Ecuador. 13035424 • 8/2013

The APEC Publication 2013

News / Border Entry Story by: Irvina Falah

APEC Economies are Improving Border Entry for Air Travelers

A

PEC MEMBER ECONOMIES are making air travel easier for the increasing number of passengers in the region. Further improvements to a scheme that expedites travel and border entry for businesspeople across the 21 APEC economies was the focal point of discussions by immigration and security officials who met on Monday in Medan.

“The APEC Business Travel Card is a globally unique initiative designed to encourage business growth within the APEC region,” said Agnieszka Holland, Convenor of the APEC Business Mobility Group. “The Business Mobility Group is committed to

expanding and improving the scheme.”

“Our goal is to simplify things as much as possible for those who conduct business between Asia-Pacific economies,” Holland explained. “This means seeking out opportunities to improve efficiency and service for businesspeople.”

Through a single application, the APEC Business Travel Card, or ABTC, scheme offers businesspeople a three-year, multiple, short-stay entry and express lane access at key immigration checkpoints in Asia Pacific economies.

The development of the scheme is a component of APEC’s broader efforts to

Our gOal is tO simplify things as much as pOssible fOr thOse whO cOnduct business between asia-pacific ecOnOmies.

70 ❙ theapecceosummit.com

build greater connectivity in the region to drive growth.

“Strong regional growth of the scheme and commitment of participating economies make this initiative a scheme of choice for regional business,” Holland said. “This is evidenced by the ascension of Russia to full membership on 1 June 2013 and the continued work of Canada and the United States towards full membership.”

Collectively, APEC officials continue to engage in a dialogue on emergency response travel facilitation for personnel and equipment in the Asia-Pacific Region in times of disaster.

“We need to consider working in partnership with the aviation industry to optimize emerging technologies such as advanced passenger information or automated border control systems,” Holland noted.

“Partnerships in enhancing our collective capabilities will ultimately help us to achieve faster, smoother travel and allow us to continue to expand benefits to increasing numbers of businesspeople,” she concluded. ■

© 2013 United Airlines, Inc. All rights reserved.

Nonstop sleep.

More flat-bed seats than any other U.S. airline.

SM

Fly in comfort and rest easy in United Global First or United BusinessFirst® with the most fully flat-bed seats of any U.S. airline. And while you’re awake, enjoy some of the best amenities in the sky, including hundreds of hours of entertainment choices and in-seat power. For reservations and information, go to united.com.

Flight schedule and equipment subject to change.

At Caterpillar, we believe trade liberalization and infrastructure investment are important contributors to solving the global problems of hunger, poverty and disease.

From growth economies where new infrastructure is required, to developed areas where aging networks need improvement, Caterpillar people and Cat products are built to meet the challenge. We’re in it for the long haul– for our customers and our world. ®

See what you can build with Cat. Cat.com/BuiltForIt

© 2013 Caterpillar. All Rights Reserved.

CAT, CATERPILLAR, BUILT FOR IT, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

YOU’RE WORKING TO SUPPORT SUSTAINABLE ECONOMIC GROWTH. WE’RE BUILT TO HELP.

McGraw Hill Financial delivers

ESSENTIAL

INTELLIGENCE. Vital insights that help shape what’s possible.

Essential Intelligence

mhfi.com

The APEC publication 2013

News / service sectors

ThoughT Leadership

Story by: Irvina Falah

opening the services sector ofers Big gains, say apeC oicials

T

HE PROJECTED GAINS of opening services sectors are almost twice as big as the gains from the liberalization of merchandise trade. The potential benefits for the Asia-Pacific region were examined by APEC Senior Officials, business representatives and academics during an APEC a services dialogue this week in Surabaya.

Liberalizing services could stimulate growth, create jobs, make small and medium enterprises more competitive and lower prices for consumers, speakers explained. By lowering business costs, it was noted that freer services sectors could also enhance companies’ ability to export and compete in international markets. Discussion of these issues helped to set the tone for the opening of the APEC Senior Officials’ meeting here on Thursday and Friday.

“More open services sectors are critical to enhancing economic growth,” said Ambassador Yuri Thamrin, Chair of the APEC Senior Officials’ Meeting, which is tasked with pushing forward member economies’ agenda for ensuring a resilient Asia-Pacific.

“A better understanding of the challenges and opportunities in further expanding trade in services through public-private dialogue can help to identify practical ways forward.”

Trade in commercial services increases around seven percent annually among APEC economies, noted Ambassador Thamrin. But unlike manufacturing in the region, restrictions remain in some sectors such as energy, transportation and telecommunications.

Structural reforms in these sectors alone could generate about US$175 billion in savings a year, according to research by the

STRUCTURAL REFORMS IN THESE SECTORS ALONE COULD GENERATE ABOUT US$175 BILLION IN SAVINGS A YEAR, ACCORDING TO RESEARCH BY THE APEC POLICY SUPPORT UNIT.

APEC Policy Support Unit.

“Services are critical to achieving the Bogor Goals to achieve accelerated, balanced and equitable economic growth not only in the Asia-Pacific region, but throughout the world,” said Dr Djisman Simandjuntak, of the Pacific Economic Cooperation Council, which is an official APEC observer.

“There is now substantial evidence that regulatory clarity and a competitive environment will lead to big benefits for consumers. For example, the reduction of freight rates by 20 percent and the reduction of electricity prices by 23 percent,” he noted.

APEC economies’ engagement with the private sector is playing a role in their work to promote structural reform.

“Regulatory reform and the opening up of services brings huge benefits to economies and more importantly, to consumers,” said Anthony Nightingale of the APEC Business Advisory Council.

“We are very pleased that APEC is devoting increased attention to this vital sector of economic activity,” he added. “By putting our heads together with leaders in government, we can come up with ideas and initiatives that can help to address such issues constructively.” ■ Nusa Dua / Bali. Indonesia 2013 ❙ 75

The APEC Publication 2013

Sponsored Feature / Bali Tourism

Bali: Welcome to Paradise

“Bali Tourism Promotion Board directs all of Bali’s tourism promotion. A think tank of the Government of Bali Province, the board functions as a coordinator to seamlessly orchestrate the private and public sectors’ efforts to promote Bali as a tourism destination of the world.”

One of the most popular tourist destinations in the world, Bali is often voted as the world’s best island by readers of international travel magazines from across the globe. It is no wonder that many people are still intrigued to find out in depth about the uniqueness of Balinese culture. Life in Bali is always related to a philosophy of “Tri Hita Karana” or a tripartite concept that encompasses the spiritual relationship between humans and God, the communal relationship amongst human beings and the ever-giving understanding between humans and their environment. The rapid growth of development in tourism has had a big impact on and influences the Balinese lifestyle. Interestingly, Balinese culture is still as what it was, growing along with the globalization. This makes the island different, when compared to many other tourism destinations around the world.

The island of inspiration Perhaps no place else on earth holds as magical an attraction as Bali. Generations of travelers have come to our island on journeys of discovery, stepping back in time to where the pace is easy and the spirit of life is nourished. On this legendary island, the best of many worlds blend, creating a colorful kaleidoscope of culture, art and adventure. Bali is Indonesia’s only majorityHindu island. Its tradition of social harmony ensures that it remains safe and friendly to visitors. The Balinese grace is legendary, and it is this special island charm that ensures a warm welcome for guests from around the world.

76 ❙ theapecceosummit.com

Bali is renowned for having maintained its traditional culture against the sweeping tides of the modern world. In many parts of the island, life goes on as it has for centuries, with rhythms of ritual, creativity and culture still serving as a community compass. Here the arts are woven into everyday life, making Bali a world center of music, dance, visual arts and of course, shopping!

Bali also preserves another important tradition: the fine art of relaxation. Whether one chooses to laze on a palm-fringed beach or sink into the serenity of one of the island’s spas, a Bali vacation is a sure cure for a stress-laden life.

Balinese Hindus are famous for their spectacular celebrations of life, which combine artistry and spirituality in unforgettable display of devotion. The Balinese believe that their gods love beauty, and their religious rituals are feasts for the senses as well as the soul, earning Bali its name as “the island of the Gods”.

One of the most important principles in Balinese culture is the harmony between humans, nature and divinity. The island itself is considered to be a spiritual inheritance, and Balinese takes pride in conserving it culturally and ecologically as a sacred trust for generations to come. Visitors are invited to share in the wonder of nature by witnessing the majestic grandeur of Bali’s mountain landscape, the lust green of its fertile rice fields and the unspoiled richness of its ocean world. Bali also boasts a wealth of modern tourism facilities, from luxurious resort and villas to professional travel and transportation services to high-quality, well-managed attractions.

With something for everyone, Bali is an ideal vacation choice for family fun, honeymoon romance, youth tourism, adventure travel and cultural artistic explorations. >

Bali Highway Half Marathon

Make History at Sunset in Bali Run the New Bali Toll Highway Sunday, November 17, 2013

A BaliSporti Event somewhere

Register Now: balisporti.weebly.com Follow us:

Sponsored by:

The APEC Publication 2013

Sponsored Feature / Bali Tourism

One Of the mOst pOpular tOurist destinatiOns in the wOrld, Bali is Often vOted as the wOrld’s Best island By readers Of internatiOnal travel magazines frOm acrOss the glOBe. History Bali has a long chain of history from the pre-historic era to modern, global civilization era. With a dynamic characteristic indicating selectivity and flexibility, the Balinese culture initially reflects a configuration of an expressive culture dominated by religious, solidarity and aesthetic values. Nowadays, it develops along with the adoption of foreign values especially in the aspects of the economic, science and technology, as a result of the global modernization.

In general, the history of Bali is divided into three diferent eras including the pre-historic, the Hindu-Buddhist era and the modern culture.

The pre-historic marked the oldest and simplest way of life, an era of hunting and food-stuf gathering, verified by the discovery of several tools and hunting equipments. In the following era there were also building construction system and a particular communication system. These were just proofs of the existence and further development of Balinese culture. The Balinese culture flourished that nowadays one can indicate a perfect bond between religion, tradition and culture to become 78 ❙ theapecceosummit.com

the identity of the Balinese community.

The Dutch seamen were the first Europeans to arrive on Bali and started to introduce western culture in 1597, though they had not discovered any appealing aspect until 1800s. Around 1846 the Dutch returned with colonization in their minds, having established a strong political base as majority of the Indonesian islands were under their control since the 1700s. The military campaign embarked from the northern coast of Bali. With the help of Sasak people of Lombok, by 1911, all Balinese principalities were under the Dutch control.

The sense of Indonesian nationalism began to grow after the World War I, with the young generation declaring the national language in 1928, known as Bahasa Indonesia. During the height of World War II the Japanese arrived, expelling the Dutch and ruled the country for about 3.5 years, which ended later in 1945 when Indonesia declared independence led by its very first president, Sukarno. Yet the new-born nation was only recognized by the international community as an independent country in 1949. ■

FasT FacT Bali is one of the thousands of islands that together constitute the Republic of Indonesia. Because of its unique features, Bali has become a primary destination for tourists from all over the world, who have chosen to travel to the Asian tropics.

GEOGRAPHICAL › The province of Bali is situated between 8°03’40” - 8°50’48” of the south latitude, and 114°25’53” - 115°42’40” of the east meridian.

The west border is marked by Bali strait, separating the island from Java Island and Java sea while Lombok strait lies along the eastern part of Bali, separating the island from the Lombok island. Then the Indonesian Ocean and Java sea each lies on the south and north of Bali. The mountain that stretches out from west to east uniquely divides the island into two.

AREA › The island of Bali is approximately 153 km wide and 112 km north to south (95 by 69 miles, respectively), with a surface area of 5,632 km².

POPULATION › Based on 2000 survey on Bali’s population, the island had 3,146,999 citizens.

Capital: Denpasar.

People: Balinese (89%), Javanese (7%), Baliaga (1%), Madurese (1%).

The APEC Publication 2013

Feature / Public Data Editorial by: Akela Lacy, Diplomatic Courier Contributor

All along the Watchtower: Our data is public, should we get over it?

82 ❙ theapecceosummit.com

The APEC Publication 2013

ThOuGhT LEADERShIP

A

LLSTATE’S SENIOR VICE PRESIDENT of Public Relations Marci Kaminsky opened the floor at the Newseum’s Knight Conference Center for a discussion on “Transparency in the New Economy” by reassuring the audience that the talk was planned in advance of the recent privacy debacles concerning the IRS and the NSA. The irony of the lecture’s scheduling serves as a reminder that the issue of privacy in a technology-driven world, although more or less physically intangible, gains momentum and yields real repercussions for Americans every day.

In a capstone to illustrate the growing importance of the issue of privacy, the headlining debut of Heartland Monitor’s 17th quarterly poll disclosed a prevailing discomfort among Americans about information sharing, as well as the lag time in innovation between increasingly “smarter” technology and adequately stringent privacy measures. In presenting the data, Edward Reilly, global CEO of Strategic Communications at FTI Consulting, highlighted a key finding of a “negative gut reaction to big data” among 1000 respondents surveyed between May 29th and June 2nd of 2013just 4 days before the controversial release of Edward Snowden’s report on the government’s PRISM program in The Washington Post and the Guardian.>

Nusa Dua / Bali. Indonesia 2013 ❙ 83

The APEC Publication 2013

Feature / Public Data >A “Toolbox” for Data Control Before Reilly presented the headline polling data, Ronald Brownstein, Editorial Director at Atlantic Media, facilitated two one-on-one interviews with the Honorable Jon Leibowitz, Former Chairman of the Federal Trade Commission, and Representative Marsha Blackburn (R-TN). Brown elicited their perspectives on privacy from two ends of the debate: that of those who tackle privacy law-breakers in the FTC, and that of those who struggle to initially create those laws in Congress.

Leibowitz focused on the need for companies to begin designing products that give consumers more control over their information from the start, citing Microsoft and Mozilla as two actors on the frontier of a new “competition in privacy” and touting browsers with a default do-not-track setting. Upon being asked how organizations and institutions in the world of digital media can most effectively maintain customer bases amidst dropping levels of confidence and increasing sensitivity to information sharing, Leibowitz encouraged incorporation of this new privacy-by-design as a top priority. For the former FTC Chairman, the commercial sector has more to worry about in this realm than the government sector, an observation later supported by the Heartland Monitor’s poll data.

Representative Blackburn spoke from a different end of the spectrum, presenting her solution to concerns through a Secure IT Act, which supports added layers of federal security rather than company-based reform. Straying from Leibowitz’s critique of the middleman institutional design, she laid responsibility instead at the feet of consumers and government actors to not only make responsible decisions, but also to create meaningful legislation to protect information from the outside in. Blackburn continually emphasized the importance of protecting the “virtual you” in the digital world with what she called her “toolbox” for data control and privacy, encouraging the public to understand their rights and autonomy in forming relationships and sharing information with certain organizations, online or not. Blackburn made an important point that we as individuals have the power to make choices about whom we form relationships or share information with, and to remember these mindful choices when our information shows up somewhere we may not have intended it to.

Before PRSIM Revelations, Internet Monitoring Lowest Concern After hearing from Leibowitz and Blackburn on prescriptions for maladies of today’s 84 ❙ theapecceosummit.com

technology-privacy relations, Edward Reilly reviewed the major points from the Heartland Monitor’s Poll XVII. Reilly reported findings of mostly negative reactions to information collection, and major concern with the amount and type of information used. Survey questions aimed to measure whether respondents felt a positive or negative impact from “Big Data”; whether they felt comfortable or concerned regarding collection of personal information; and their levels of trust in different institutions and organizations. Throughout all categories. older generations exhibited more pronounced concern.

Considering the explosive response to recent revelations on the government’s PRISM

program, the data interestingly showed sparing concern among respondents with regard to phone calls, e-mail, and internet use– respondents ranked this their fourth concern.

Information concerning children was ranked third; personal financial information second; and home address and social security number ranked as top most concerning in regard to privacy. If Americans were relatively unconcerned about collection of information shared online mere days before PRISM became common knowledge, is our response to revelations about the program now warranted or naïve?

When asked about trust in organizations and their activity in collection and use of data, respondents displayed trust in employers, law

The APEC Publication 2013

ThOuGhT LEADERShIP

Whatever the motive, our information is being used “someWhere, by someone”–and We are partially complicit. enforcement, and healthcare providers–those institutions which provide “direct services”.

Least trusted were media outlets and social media platforms, while financial institutions, health insurance companies, cell phone providers. and the government were trusted but also perceived as most active in collection and use of personal data. The IRS notably fell just outside of this “active but trusted” category.

Given the data, it is reasonable to assess that the country has a solid sense of who has access to our information and when it is being used.

There are differences in level of concern about these activities among different generations, but most everyone agrees that we lack control over

them. We are well aware of our own vulnerability to be “collected on” when we are online, but we are ambivalent on whether or not the added ease of life is worth a breach of what Marcia Kaminsky called our “fundamental right” to privacy. The survey’s particular question on this ease-risk balance actually revealed a 47/47 percent split among Americans, with younger respondents leaning more toward the benefits and older respondents feeling more threat.

Your Data Being Used– “Somewhere, by Someone” We know what is going on when we go online, but we do not really know if that means we

should change it. Perhaps the most surprising– and maybe even reassuring–statistic of the day showed an overwhelming 79 percent of Americans believe that the recent IRS scandal is only a reflection of a “typical or ongoing practice” among various administrations on each side of the political bar. Only 16 percent really thought it was a “first time occurrence”.

It seems that we have a practical tolerance for a certain level of surveillance at an organizational level, but a hypersensitivity to reports of constant collection of mass data by the government through consumer services like Verizon and Google. Perhaps it is the idea of the behavior that scares us more.

We have though, for the most part, already objectively come to understand that privacy can never truly be all-encompassing in today’s reality. Whatever the motive, our information is being used “somewhere, by someone”– and we are partially complicit. The question now rests in our wherewithal to take some responsibility for what we have already put out into the public domain, and whether or not the government will choose balanced parameters and standards for accountability. ■ Nusa Dua / Bali. Indonesia 2013 ❙ 85

The APEC Publication 2013

Feature / Global Unrest Editorial by: Vahram Ayvazyan, Diplomatic Courier Guest Contributor

Why do people protest Recent public upheavals in Brazil and Turkey; the ouster of Mohamed Morsi; riots by Muslim Brotherhood supporters in Egypt–it all begs the question: why do people protest?

R

ECENT PUBLIC UPHEAVALS in Brazil and Turkey; the ouster of Mohamed Morsi; riots by Muslim Brotherhood supporters in Egypt–it all begs the question: why do people protest? People tend to form groups of more developed organisms– societies which have governing bodies. But today modern societies everywhere are rapidly maturing both in political and economic terms everywhere on Earth, and oppression is no longer good business. The modern individual is educated enough desire a more reliable society, and the new middle classes will work to replace failed government with more robust ones.

“Today, efficacy is the challenge,” as Tony Blair puts it vis-à-vis recent protests in Cairo.

When governments do not deliver, people protest, but 17 million people in the street is not the same thing as an election. However, it is an incredible manifestation of people power. “I am a strong supporter of democracy,” Blair continued. “But democratic government

86 ❙ theapecceosummit.com

alone does not guarantee effective government.

When governments do not deliver, people protest. They don’t want to wait for an election.

In fact, as Turkey and Brazil show, people may protest even when, by any objective measure, their countries have made huge progress.”

It is clear what people in the developing world want from their governments: better conditions, good infrastructure, human rights, etc. Brazil’s case is particularly interesting, as the country is the second largest developing economy in the world after China. However, the Rousseff administration is failing to improve critical infrastructure and the business environment. On the World Bank’s Ease of Doing Business Index, Brazil is ranked 130 out of a total of 185 countries. Inflation is on the rise, and the cost of living is absurdly high for a developing nation.

“This isn’t Turkey, I don’t think we’ll see daily or even weekly protests in the near future, but with the election next year and the World Cup, that could change. People won’t lack for reasons to protest.” says Rafael Cortez to TIME.>

The APEC Publication 2013

THOUGHT LEADERSHIP

IT IS CLEAR WHAT PEOPLE IN THE DEVELOPING WORLD WANT FROM THEIR GOVERNMENTS: BETTER CONDITIONS, GOOD INFRASTRUCTURE, HUMAN RIGHTS. Nusa Dua / Bali. Indonesia 2013 ❙ 87

The APEC Publication 2013

Feature / Global Unrest

ABOUT 96 PERCENT OF POPULATION GROWTH TODAY IS OCCURRING IN DEVELOPING COUNTRIES.

>As the populations of developing countries continue to growing, outstripping the ability of governments to provide, we are witnessing an unprecedented increase in demands of their governments. About 96 percent of population growth today is occurring in developing countries, and Asia accounts for 54 percent of that growth. This growth gives rise to many tough issues such as employment, delivery of basic services to citizens, infrastructure, and education, but it also creates many opportunities for emerging markets in business, innovation, and investments. As the population grows, the emerging middle class also grows, thus challenging the foundations of old regimes in developing world as the historically driving force for sociopolitical and economic reforms.

This population growth has important effects on global trade. In 2010, emerging markets represented 36 percent of global GDP, the majority of global oil and steel consumption, 46 percent of world retail sales, 52 percent of all motor vehicle purchases, and 82 percent of mobile phone subscriptions. According to the International Monetary Fund (IMF), the emerging markets’ share of GDP will rise to 55 percent by 2018. The U.S. National Intelligence Council singled out the growth of this global middle class from these markets as a “tectonic shift,” valued at a $30 trillion market opportunity by McKinsey. It is an open secret that economic wealth brings political leverage with it. For example, by 2020 the number of middle-class and affluent Indonesians may double to more than 141 million, so an “Indonesian Spring” in near future could be a possible scenario.

The role of urbanization is highly significant in forming a general “protest mood” in 88 ❙ theapecceosummit.com

societies. Usually, a large middle classe willing to protest is found in large cities, as recent protests in Cairo, Rio de Janeiro, Sao Paulo, Istanbul, Moscow, and elsewhere will show. A recent study by Jeremy Wallace of Ohio State University on the interdependence between urbanization and regime changes shows that “[f]or the 237 regimes with urban concentration levels above the mean level in the data, the mean duration is 8.6 years and the annual regime death rate is 9.2 percent. For the 198 regimes characterized by low levels of urban concentration, the incidence rate is only 5.6 percent and the mean duration is 12.4 years.

Regimes with capital cities that dominate the urban landscape fail nearly four years sooner and face 60 percent greater death rates.”

Information is more accessible to the vast majority of city dwellers; technological advancements open new horizons for innovative ideas; and already-established infrastructure and transportation ease people’s movements. That is why the city is “the right place to protest”.

Finally, the role of social media and ICT boom are of paramount importance as people interact over social media networks. For example, Twitter users in the Arab world almost doubled, from 2 million to 3.7 million, in the past year as Arabic-language tweets ballooned.

“With more than 55 million active Arab users of Facebook and 3.7 million of Twitter, social media is already playing a growing role in formal and informal education, on-demand training, and in-capacity building,” said Fadi Salem, the director of the governance and innovation program at Dubai School of Government and co-author of the latest Arab Social Media Report. The emerging middle class

is no longer tolerating a vertical governmentsociety structure, and are using technology to share knowledge and strategies.

It is another question whether people who protest eventually succeed in their endeavors.

As Sheri Berman explains, “The fundamental mistake most commentators on the Arab Spring make is underestimating the scale, scope, and perniciousness of authoritarianism. Tyranny is more than a type of political order; it is an economic and social system as well, one that permeates most aspects of a country’s life and has deep roots in a vast array of formal and informal institutions.” Change requires time and a strong will. Years, and even generations, are required for firm changes in traditionally non-democratic societies. A new way of thinking will eventually change not only the minds of the governed but also of the govermnent. For a positive large-scale change in society, a revolution in people’s minds is a prerequisite. ■

Biography Vahram Ayvazyan is a 2012 graduate of the Genocide and Human Rights University Program at the International Institute for Genocide and Human Rights Studies in Toronto. He can be found on Twitter @VahramAyvazyan.

TAILOR-MADE TRAVEL Luxury leather goods and accessories hand crafted in the United Kingdom

Canvas and Leather Bags for the Elegant Traveller www.ettinger.co.uk Tel: +44 (0)20 8877 1616

The APEC Publication 2013

Feature / Nigerian Oil Editorial by: Dr. Orji Uzor Kalu, Diplomatic Courier Guest Contributor

The oil crisis in Nigeria As we bear witness to a steadfast “rise of the rest” within the global marketplace, Nigeria has proven to be not simply geopolitically ambitious, but also boasts a competitive advantage early in the contest.

W

E HARBOR A BEVY of natural resources that should draw reverence in the international community and earn the admiration of our esteemed colleagues within the nations of the BRIC. This would-be envy might even lead to resentment, were it not for the oft-unspoken reality that precautions are seemingly in place at home and abroad to ensure our highest peaks in sustainable development are not met.

Though there is much to be accomplished in fortifying our national infrastructure and in fostering a climate of political unity, crude oil theft no longer occupies a low rung on the priority ladder for reform in Nigeria.

This widespread larceny, occurring through various innovative and even entrepreneurial methods, collectively tarnishes our GDP as well as our reputation as an able host for energy procurement, refinement and export.

Today, Nigerian oil is absurdly exported in crude form from the shores of West Africa, shipped for distillation and then imported back to us. One reason why this is the case?

Because today, almost three years since amnesty was agreed to with Niger Delta militants, crude oil theft, commonly referred to as “bunkering”, is on the rise again. >

90 ❙ theapecceosummit.com

The APEC Publication 2013

THOUGHT LEADERSHIP

Nusa Dua / Bali. Indonesia 2013 ❙ 91

The APEC Publication 2013

Feature / Nigerian Oil

ShELL, ThE BIGGEST OPERaTOR In ThE REGIOn, haS SaID ThaT nIGERIa LOSES OVER $1.6BILLIOn annUaLLY TO OIL ThEFT. >Shell, the biggest operator in the region, has said that Nigeria loses over $1.6billion annually to oil theft–that equates to approximately 150,000 barrels per day stolen from Nigeria. The international ramifications are indeed immediately obvious; earlier this year, increasing oil thefts prompted multinational corporations–including Shell, AGIP and Eni–to close down outright in certain parts of the country.

Although the illegal refiners only make up for a small portion of the theft, their environmental impact is also vast. The destructive methods of the thieves have helped to further ruin fishing habitats and contaminate water and arable lands already degraded by decades of oil production in the area.

92 ❙ theapecceosummit.com

The majority of the theft is on a larger scale however, when coordinated groups of workers tap into oil infrastructure, siphoning crude into barges before transporting the oil onto larger crafts for refining in volatile ‘firewood’ distilleries offshore.

The complicity of security officials and often even executive political authorities means that there is little will to find a lasting solution. Although the government allocated a portion of the budget to regenerating the Niger Delta after the amnesty agreement, many local politicians have not delivered on their promised jobs, roads, schools and hospitals. Unemployment has therefore not fallen and has begotten further poverty and crime.

President Goodluck Jonathan’s

administration has pledged to crack down on oil theft but this ambitious initiative so too has failed to bear fruit. No sooner is one hole on a pipeline shut or one illegal distillery closed down than two others arise in their place. Over a three-week period, the Navy blocked 600 illegal distilleries, only to find that 400 new ones had been established around them.

While I do laud the Joint Task Force (JTF) and indeed the current administration’s own efforts to deal with oil theft, I believe that we will continue to see limited success in the fight until we secure the support of forward-thinking international businesses, business men and women that have the innovative minds to realize that Nigeria presents unprecedented opportunities that are, yes, complex, but at the same time, too worthwhile to pass up as a result of misplaced fears or stereotypes.

But there is another viable solution to prosperity–building a major refinery industry in-country is vital for Nigeria’s future.

Many would challenge the notion that Nigerians can together foster an infrastructure conducive to deterring corruption, adhering to best practices and effectively refining autonomously. However, I am an example of but one entrepreneur who was able to succeed by staking his bets not on what most people do but rather on the right thing to do.

If we refined our own oil we would not be at the mercy of import prices and fuel subsidy scams. If neighboring communities were regenerated we would reduce criminal activity. If people had jobs they would not be stealing.

Nigeria has two refineries in the Port Harcourt area, for example, but neither runs close to full capacity. And whilst I support steps undertaken by everyone interested in investing in refining – my own SLOK Group are currently exploring options - I am aware that similar efforts have been wrecked to protect the interests of powerful fuel importers.

It is a scandal that, for all of these reasons, our nation has to import more than threequarters of its own fuel despite being the continent’s biggest producer, serving to douse the hopes of many for a new Nigerian century.

If we fail to invest in our refining sector, if we fail to effectively deter massive theft, if we fail to provide jobs and if we fail to advance our local communities then we will only increase insecurity in the Delta region and perpetuate Nigeria’s reputation as a nation abundant in potential however mired in mismanagement. ■

BRISBANE FACTS is Australia’s New World City, • Brisbane with a $US118 billion economy.

London Financial Times fDi Magazine • named Brisbane is one of the

Top 10 Asian Cities of the Future. economy benefits from • Brisbane’s a strong mining and energy sector, servicing many countries with coal and other commodities. economic growth is fuelled • Brisbane’s by a competitive base for doing business,

trade and innovation.

• Brisbane is a multicultural society with • one in four residents born overseas.

The population is expected to reach • 3.9 million by 2056.

A population of 2 million call Brisbane home with a median age of 35.

Australia’s new world city ready to welcome you in 2014 By the Lord Mayor of Brisbane, Graham Quirk

Australia’s sub-tropical capital, Brisbane, is looking forward to throwing open its doors to the world at the 2014 G20 Leaders Summit.

change, developing treatments for cancer and other diseases, clean coal technology, nanotechnology, renewable energy, infrastructure, emergency services, community development, the environment and agriculture.

For those who haven’t been to Brisbane for a few years or are yet to visit, allow me to introduce our city: Brisbane is Australia’s new world city - unashamedly ambitious, embracing the digital age and hot-housing an entrepreneurial culture.

Many of the 72,000 international students who attend Brisbane institutions each year stay on to embrace local employment opportunities.

Unburdened by pretension or an age-old history that can weigh down traditional mega cities, Brisbane is synonymous with opportunity.

We’re the closest Australian capital city on the eastern seaboard to Asia and we’ve set a course to become an economic powerhouse in the Asia Pacific Region. We were recently named one of the Top 10 Asian Cities of the Future by the London Financial Times fDi Magazine.

In fact, we’re regularly singled out as a city to watch with our optimal location, growing depth of talent, innovation and diverse economic growth potential.

Brisbane is a major hub for large resource and energy companies, a significant centre for research and innovation, and the engine room of much of Australia’s continued economic growth, in defiance of the global downturn of the past five years.

The 2013 World Bank Doing Business Annual Report, named Australia one of the most “business friendly” countries in the world and Brisbane was recently rated as on par with Zurich and Moscow as a global innovation leader as part of the 2thinknow Innovative Cities Index.

Our investment opportunity growth industries include: biotechnology, aviation, food and agribusiness, hotels, manufacturing and construction.

Brisbane’s population of two million is on the rise. With one in four residents born overseas and a median age of 35, we are a young, innovative, bold and multicultural city.

Our $US118 billion economy is predicted to almost double to $US223 billion by 2031.

Highly-qualified professionals are our workforce’s largest single employment category. Many investors are attracted by the quality of our skills-base and our world-class universities, including The University of Queensland which regularly rates in the top 100 universities in the world.

Over the past 10 years Queensland has pursued a research and development agenda that has driven hundreds of millions of dollars of investment in the research sector and allowed the creation of significant research institutes attracting prime talent.

The work of their scientists and researchers is further bolstered by several new science precincts that have attracted international collaborations from industry and research institutes.

Brisbane’s three major universities have important international research links across areas including climate

We enjoy an enviably relaxed lifestyle in a sub-tropical climate with yearround sunshine, the world- renowned beaches of both the Gold and Sunshine Coast within an hour’s drive south and north and the Great Barrier Reef within our state of Queensland.

Brisbane’s lifestyle and international appeal is enriched by a burgeoning local arts and music scene.

Our South Bank precinct includes the southern hemisphere’s largest gallery of modern art: GOMA as well as our world-class Brisbane Convention and Exhibition Centre.

We are a city with a lifestyle obsession, global ambitions and a contagious energy and entrepreneurial spirit that lubricates the business environment.

This, coupled with a single local council that governs the entire city and a strong economic development focus, is giving Brisbane a bright glow on the international radar.

Brisbane is casual but caring, progressive but green, successful but unpretentious.

We can’t wait to show you around.

G20 LEADERS SUMMIT Brisbane, host of 2014’s gathering of world leaders.

With 4000 delegates converging on Brisbane for the world’s premier forum of global economic cooperation in 2014, the stage is set for collaborative decisionmaking – and what a stage it is. Brisbane has a unique, natural beauty, sub-tropical climate, state-of-the-art

facilities and recent infrastructure growth, making it an attractive place to do business. Cultural attractions abound and a welcoming multicultural society makes this new world city the ideal place for business leaders to make decisions that affect the world.

C H OO S E B R I S B A N E .C OM

The APEC Publication 2013

Feature / Trans Pacific Partnership Editorial by: Ryan Burkhart, Diplomatic Courier Contributor

I

The U.S., China, and the Trans Pacific Partnership TPP has become the capstone of the U.S.’ rebalance to the Asia-Pacific and will be the largest free trade agreement (FTA) in the world.

96 ❙ theapecceosummit.com

N LATE 2009, U.S. President Barack Obama announced the United States’ intention to participate in the Trans Pacific Partnership (TPP) negotiations. The TPP has become the capstone of the U.S.’ rebalance to the Asia-Pacific and will be the largest free trade agreement (FTA) in the world. The TPP will set a new a standard for FTAs and consists of 11 member states. However, the world’s second largest economy, China, has not been a part of the negotiations. There have been voices calling for China’s inclusion and also exclusion. After the informal U.S.-China summit in Sunnylands, both leaders recognized the need for continued cooperation and economic integration. But is the time right for China to join the talks? Both the U.S. and China have goals and objectives that will prevent China from joining the TPP in the short term, but both countries should strive for further trade liberalization and economic integration.

The 17th round of TPP negotiations concluded in May and the 18th round has been for late July 2013. According to a Congressional Research Service (CRS) Report for Congress, “U.S. negotiators describe and envision the TPP as a comprehensive and high-standard FTA that aims to liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO).” U.S. representatives intend the rules being negotiated to be more rigorous than similar rules in the WTO. TPP negotiations include controversial rules that cover intellectual property rights, regulatory coherence, environmental standards, labor, and state-owned enterprises. If agreed upon and implemented, there will be majoring restructuring of economies by some member states.

The TPP is central to several strategic U.S. goals. Primarily, it is the manifestation of the Obama Administrations “rebalance” to the region and could undergird the existing security alliance structure in the Asia-Pacific. Also, the

The APEC Publication 2013

THOUGHT LEADERSHIP

GIVEN THE U.S. PREFERENCE FOR QUICK COMPLETION, IT WOULD BE UNWISE FOR CHINA TO ATTEMPT TO JOIN AT THIS LATE STAGE OF NEGOTIATIONS.

TPP allows the U.S. to play a major role in developing new rules on emerging trade issues, across the rapidly developing region.

After Tokyo announced it would join the TPP trade talks, Beijing indicated it would study the possibility of joining as well. Beijing is at an immediate disadvantage of joining simply because of how many negotiations have already occurred. Of the 29 chapters being negotiated, many have been agreed upon by the U.S. and other member states. Much of the TPP talks have occurred behind closed-doors. Also, the U.S. hopes to conclude the TPP by the October 2013 APEC summit in Indonesia. Given the U.S. preference for quick completion, it would be unwise for China to attempt to join at this late stage of negotiations. China cannot make an accurate assessment of the immediate and potential wide-ranging impact of the TPP. After the disastrous effects of “shock therapy”

economic policies in the Former Soviet Union (FSU) states, the Chinese Communist Party (CCP) decided that slow and gradual reform economic reform was the best bath for China.

Once again, the TPP will be a high standard FTA. TPP negotiated issues such as regulatory coherence, state-owned enterprises, labor issues, and intellectual property would have a huge effect on the economy. Further, lowering trade barriers will expose nascent Chinese industries to global competition. However, these standards should be an economic goal for Chinese leadership.

After completing domestic reforms to join the WTO, China experienced enormous economic success. China has been active in creating and joining many FTA’s, but none will have the vertical and horizontal cross-cutting rules the TPP could have. However, domestic economic and trade liberalization will be necessary.

China’s involvement in the TPP would similarly create many opportunities.

China does have political reasons not to join the TPP. First of all, much of the rules and regulations would benefit American companies.

Also, many prominent voices in China perceive the TPP as an American effort to contain China’s rise.

After the “shirtsleeve summit”, both U.S. and Chinese leaders recognized that cooperation is extremely necessary for the future of Sino-American relations. Some have even called for increased economic integration in order to create “mutually assured economic destruction.” Regardless, the U.S. should be transparent as possible with the TPP and invite China to observe the next round of talks.

Furthermore, Chinese leaders should prime their economy to eventually join the TPP or similar trade agreement in the future. ■

Nusa Dua / Bali. Indonesia 2013 ❙ 97