Annex A: APEC Strategy for Strengthening Quality Growth

We, the APEC Leaders, reaffirm our commitment to the 2010 APEC Leaders’ Growth Strategy. We recognize its continuing relevance in guiding APEC towards its fundamental purpose of providing prosperity to the region through trade and investment liberalization and facilitation.

This year, in Manila, we reaffirm our aspirations towards a balanced, inclusive, sustainable, innovative, and secure growth in the APEC region, by agreeing on an APEC Strategy for Strengthening Quality Growth for the period until 2020 to bring greater focus to the importance of pursuing quality growth as envisaged in the 2010 APEC Growth Strategy.

We recognize the continued important contribution of the APEC region to global economic growth. We emphasize that liberalization and facilitation in trade and investment continue to be core drivers of economic growth and development in the region. Improving the quality of growth and ensuring that it remains dynamic requires greater impetus for a concerted effort among APEC members.

We recognize that global economic growth continues to face major challenges and note that regional growth remains moderate and uneven. The Asia-Pacific region is faced with such challenges as: 1) potential volatility in financial markets; 2) increasing inequality; 3) the gap in physical infrastructure; 4) the need to foster innovation and increase access to skills; 5) environmental concerns that include the impact of climate change; and 6) food security and sustainable management of agriculture. We support the APEC Finance Ministers’ work to strengthen economic growth and promote financial stability in the APEC region.

We welcome global efforts to lift economic growth, including the existing work of the G20 and the United Nations, which recently released the 2030 Agenda for Sustainable Development.  We reaffirm APEC’s commitment in complementing the global efforts in addressing the many challenges to sustainable economic growth. The APEC Strategy for Strengthening Quality Growth will bring more synergy between the APEC Growth Strategy and the Sustainable Development Goals.

The 2010 APEC Growth Strategy includes action agendas for each attribute. We welcome the effort to evaluate the progress of APEC member economies vis-à-vis the action agendas. While APEC as a region has made progress in achieving growth in all its attributes, much still remains to be done, particularly in making sure that the gains already achieved are further expanded and sustained. We enjoin APEC fora to continue their efforts, guided by their respective strategic plans, in contributing to the ultimate goals of the 2010 APEC Growth Strategy, as enriched by the 2015 APEC Strategy for Strengthening Quality Growth.

We endorse the agreement on the Renewed APEC Agenda on Structural Reform (RAASR) which covers the areas of inclusive growth, innovation, and services. The RAASR builds on APEC New Strategy for Structural Reform (ANSSR), which we endorsed in 2010, to help economies attain high quality growth and become more resilient. This initiative encourages APEC economies to implement structural reforms in priority areas, and also provides the chance for APEC economies to participate in capacity-building programs and other technical cooperation activities to train government officials in the implementation of those reforms.

We also endorsed in 2014 the Accord on Innovative Development, Economic Reform and Growth which aims to promote closer cooperation in five areas: 1) economic reform; 2) new economy; 3) innovative growth; 4) inclusive support; and 5) urbanization. We reaffirm the commitment to accelerate the pace of reform and innovation, and explore new growth areas. We note that this Accord includes policy actions in each of the five Growth Strategy attributes and thus provides strong support to the implementation of the Growth Strategy.

The APEC Strategy for Strengthening Quality Growth builds on the 2010 APEC Growth Strategy by strengthening and sustaining quality growth as expressed by the Key Accountability Areas (KAAs) of institution building, social cohesion, and environmental impact. Without institution building, social cohesion, and addressing environmental impacts, we will not be able to sustain quality growth. The KAAs are also intended to give more traction to the five attributes and help align the Growth Strategy with the Sustainable Development Goals.

We agree to strengthen cooperation that directly relate to and contribute to the achievement of the KAAs.

1. Institution Building

   Institutions matter for economic growth and development because they shape the incentives of key economic actors in society; in particular, they influence investments in physical and human capital and technology, and the organization of production.

   We recognize that different development levels and economic conditions affect the prioritization of the various aspects of institution building.  Some of the more important economic institutions are: (i) rules-based economy that promotes legal certainty and reduces the cost of doing business; (ii) a market-based economy supported by sound public institutions and regulations; (iii) deep financial markets that efficiently intermediate savings combined with effective regulatory systems that promote financial stability; iv) a shareholder-oriented corporate governance system; (v) mechanisms that support trade and investment liberalization and facilitation; and (vi) a labor market that allows re-allocation of labor in response to market demand but at the same time protects the welfare of workers.

   The action agenda in the area of institution building should recognize different levels of development and therefore feature a multi-track and multi-speed program.

2. Social Cohesion

   We see social cohesion as both an end and a means to achieve economic growth and development.  We see the role of society in working cohesively towards the well-being of all its members by fighting exclusion and marginalization, by creating a sense of belonging, by promoting trust, and by offering to its members the opportunity of upward mobility.

   Public policies are often more effective in socially cohesive societies resulting in greater poverty reduction and a more stable growth process. Lack of social cohesion hampers the ability to implement efficient fiscal policy aimed at reducing inequality. Social cohesion also reduces transaction costs, that is, the costs incurred in making economic exchanges, such as information gathering, communications, and contract enforcement. Finally, social cohesion enhances growth by facilitating collective action, that is cooperation among individuals in pursuit of shared objectives.

3. Environmental Impact

   Responses to climate change include measures to reduce greenhouse gas emissions, to increase carbon sequestration, and to adapt to the effects of climate change. Measures to reduce emissions will encourage economies to move toward low carbon societies. Meanwhile, we emphasize the need to adapt to climate change through disaster preparedness and risk reduction. Adaptation entails investments in science and technology, disaster resilient infrastructure, and eco-system based adaptation, among other strategies. Both adaptation and mitigation measures will be important for agriculture, fishery, forestry and industrialization policies. We reiterate the call of Leaders through the 2010 APEC Growth Strategy to develop more resource-efficient economies that will enable us to prosper as low-carbon and resilient societies. We continue to encourage new green industries and jobs.

We recognize that the private sector plays an important role in economic growth and development, especially in achieving ‘growth that matters’ – as they foster innovation, create employment, and promote corporate social responsibility. We encourage private sector participation in developing whole-of-economy, whole-of-society approaches towards ensuring dynamic and quality growth.

We resolve to implement the APEC Strategy for Strengthening Quality Growth, building upon our commitment to the 2010 Growth Strategy and bearing in mind the commitments in past and ongoing APEC initiatives in various APEC fora. We commit to work to support individual economies in their implementation of the APEC Strategy for Strengthening Quality Growth – consistent with the KAAs as presented in the Annex which we adopt as a living document – by sharing experience and capacity building.

We instruct the Senior Officials to commission the PSU to report in 2020 on the impact of the extensive APEC work program on improving growth, and to report to Leaders, for their review, on APEC’s progress in promoting the APEC Strategy for Strengthening Quality Growth. At that point, Leaders may consider the future direction of this Strategy.