Strengthening Comprehensive Connectivity and ...



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2013/ISOM/005

Agenda Item: 3

Background Paper: Strengthening Comprehensive Connectivity and Infrastructure Development

Purpose: Information

Submitted by: China

|[pic] |Informal Senior Officials’ Meeting |

| |Beijing, China |

| |10 December 2013 |

Background Paper

Strengthening Comprehensive Connectivity and Infrastructure Development

I. Background

In the aftermath of the international financial crisis, efforts to facilitate world economic recovery have led the international community to explore connectivity and infrastructure development as an important new area of growth with enormous economic potential. The World Bank has launched the Global Infrastructure Facility. Major economies in the world give priority to infrastructure projects as they draw up fiscal budgets and long-term economic plans.

The ADB estimated investment demand for infrastructure development of the Asian economies between 2010 and 2020 at 8 trillion US dollars with an additional 290 billion dollars for regional projects. Studies by the World Tourism Organization and the World Travel & Tourism Council also suggest that visa facilitation alone could create 2.6 million jobs and 89 billion dollars of tourist revenues.

The merits of promoting growth in this area are two fold. Behind the borders, infrastructure development facilitates job creation and poverty reduction, thus creating a strong base for domestic demand, which in the long run contributes to industrial upgrade and economic structural reform. Beyond the borders, high-performing connectivity and infrastructure contributes to a more streamlined global supply chain and deeper international cooperation by accelerating trade and investment and the movement of people.

To fully realize these potential benefits, it is essential to leverage the existing favorable resources on all three fronts of connectivity: physical, institutional, and people-to-people. For the physical connectivity, multiple economies have prioritized infrastructure in their respective long-term economic development strategy. The issue has also gained increasing significance in multilateral settings such as the G20 and the World Bank, which has launched a Global Infrastructure Facility.

On the institutional front, globalized trade and investment activities have increasingly made all actors of the global economy recognize the benefits of lowered barriers and streamlined rules and regulations, gathering strong resolve and momentum of the international community to push forward enhanced institutional connectivity.

On the people-to-people level, advancements in infrastructure and communication and transportation technologies have made it easier for our citizens to connect with one another. The resulting emotional bonds formed among the population and the expertise gained through the exchanges in business, finance, education, arts, science and technology will contribute tremendously to the overall economic development and greater understanding and trust among our citizens.

In the Asia-Pacific region, the vibrant economic growth has greatly out-paced progress in connectivity and infrastructure development, presenting tremendous opportunities for growth and improvement. Given its high relevance to the region and the huge economic potential, China believes that work in strengthening comprehensive connectivity and infrastructure development will contribute substantially to the realization of the Bogor Goals, the Asia-Pacific economic integration, and other important objectives of APEC.

II. Continuity of the APEC Agenda

APEC's commitment to promoting connectivity in the Asia-Pacific dates back to the very beginning of the organization's founding in 1989, as recorded in the Chair's Summary of the 1st APEC Ministerial Meeting in Canberra, Australia. The summary stated that there would be merit in seeking to develop techniques which might help economies in the region to better address the kind of bottlenecks which might occur as a result of rapid growth. There was general support for work to explore further cooperation in specific areas relating to infrastructure, including telecommunications, maritime transport and aviation.

In 1993, in Seattle, the United States, the 1st APEC Economic Leaders' Declaration identified the goal of enabling our people to share the benefits of economic growth through higher incomes, high skilled and high paying jobs and increased mobility.

Since 2009, APEC members have been dedicating significant efforts to improving supply-chain connectivity. In 2010, the APEC Supply-Chain Connectivity Framework Action Plan was adopted to address impediments to moving goods and services through the region, and to achieve an APEC-wide target of a ten percent improvement in supply-chain performance by 2015. In recent years, more and more APEC members have recognized connectivity and infrastructure development as an issue of great significance.

In 2013, connectivity and infrastructure development was identified as an APEC priority and gained substantial representation in the APEC Economic Leaders' Bali Declaration as two annexes were respectively entitled the APEC Framework on Connectivity and the APEC Multi Year Plan on Infrastructure Development and Investment. Recognizing the requirement for long-term commitment in promoting connectivity and infrastructure, APEC members have agreed to continue discussions on this issue for the following years.

The Chinese side proposes that strengthening comprehensive connectivity and infrastructure development be listed as one of the priorities for APEC 2014. Under this priority, the Chinese side proposes efforts to promote APEC cooperation in hardware, software, and people-to-people connectivity, to explore ways to anticipate bottlenecks that restrain connectivity and infrastructure development, and to formulate work plans on cooperation projects.

III. Suggested issues and areas for cooperation, including but not limited to:

• Comprehensive Asia-Pacific connectivity: an all-directional, multi-tiered approach;

• The development of an APEC connectivity blueprint;

• Contribution by the APEC Public Private Partnership (PPP) Experts Advisory Panel and Pilot PPP Center in Indonesia;

• Expanding investment and financing channels for connectivity and infrastructure development in the Asia-Pacific;

• Asia-Pacific Infrastructure Development Partnership;

• Regional financial cooperation on connectivity and infrastructure development;

• Software connectivity: enhancing institutional connection and regulatory cooperation;

• People-to-people exchange and travel facilitation;

• Cross-border education promotion;

• Progress review on the target of intra-APEC university students exchange.

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