SPEECH BY
DR. SUSILO BAMBANG YUDHOYONO
PRESIDENT OF THE REPUBLIC OF INDONESIA
“ECONOMIC SECURITY THREATS :
ARE RESPONSES ADEQUATE?”
AT THE APEC CEO SUMMIT
HANOI, VIETNAM, 17 NOVEMBER 2006
Bismillah Hirrahmanirrahim
Excellencies,
Ladies and gentlemen,
I am pleased to be here to address business leaders and captains of industry at this APEC CEO Summit. This is my third address to the APEC CEO Summit, and to be honest I was running out of things to say to you, so I thank the organizers for assigning me a topic today.
I have been asked to speak to you about “Economic security threats of the future”, whether today we are responding adequately and whether we can do better.
The short answer to that is easy : of course, we can always do better.
The long answer is that we can do better only if Governments and businesses can muster the political will to respond more effectively, allocate the necessary resources and improve how they work together to address our common challenges.
This is certainly a relevant question because today we face an array of pressing and emerging issues that APEC economies need to seriously deal with.
Indeed, when APEC was formed in 1989, the term “economic security threats” was not in our vocabulary. It was the Asian Miracle hey days, we were somewhat euphoric about the end of the Cold War, and oil prices were low.
Even when APEC leaders signed off on the Bogor Declaration, which committed our economies to open and free trade and investment by 2020, we all had a bullish sense of where APEC economies was heading.
None of us even predicted that a financial crisis were to hit us a few years later.
That was then, this is now. As we approach two decades of APEC, the term “economic security threats” is very much at the back of our mind. We witnessed and experienced a series of events that severely awakened our sense of economic insecurity.
The financial crisis. Terrorists attacks. Dangerous infectious diseases such as SARS, the avian flu and who knows what next. Natural disasters such as the tsunami, earthquakes and forest fires.
Many of us in this region have had our own experience in dealing with these threats to economic security.
And believe me, we in Indonesia know this because we have gone through all of them, and some of which were in the last two years of my administration.
We were a country worst hit by the region-wide financial crisis in 1998.
We suffered from terrorist attacks, including the Bali bomb of 2002.
We suffered the most casualties in the tsunami--In Aceh alone, we lost over 200,000 people in a matter of minutes. And presently, we also suffering most casualties in terms of avian flu human victims.
Indeed, our experience has rudely awakened us to the fact that our enemies today have different faces and come in many forms but they are very much lethal in their impact, and these threats are certainly more real and immediate to our well-being than conventional threats to national security.
They also reminded us no country can cope with these threats alone, simply for the fact that they have trans-boundary character.
It is therefore very much to APEC’s credit that economic security threats are now very much a central part of APEC Leaders’ Agenda. In fact, all these challenges have drawn us together and have contributed to a stronger sense of just what an APEC community means. However, we are still most reacting to these security threats, and we certainly need to come-up with long-term measures to cope with them.
How then should APEC be more forward looking and be focused not just on reacting to today’s list of economic security threats but also on anticipating tomorrow’s list of economic security threats?
Let me highlight several economic security threats, not just for APEC but also for the international community, which in my view require the attention of policy-makers and business leaders.
I would say that foremost of them is the enduring threat of poverty. We all know the grim statistics : nearly three billion people all over the world living on less than two dollars a day. 790 million people in the developing world suffering from chronic undernourishment, almost two-thirds of them live in Asia and the Pacific.
Over the years, the APEC region, especially its developing economies, has been much more open to international trade than the rest of the world.
But although we live in a region that commands 61 percent of the world’s GDP and 57 percent of world trade, we have much to do to spread the fruits of that expanding wealth to the bottom of the economic spectrum.
It is said that the wealthiest 20 percent of humankind enjoy 82 percent of the world’s expanding trade and 68 percent of foreign direct investments — while the poorest 20 percent have barely more than one percent of both world trade and foreign direct investments.
Since 1989, we in APEC have demonstrated that we are capable of serving as the engine of global economic growth. From 1989 to 2003, the GDP of the APEC region increased by 46 percent, with the lower income economies enjoying an even higher increase at 77 percent, while the rest of the world averaged only 36 percent.
Some of our regional economies are on course toward achieving their Millennium Development Goals, but on the whole our progress has been mixed and uneven. The region has halved the proportion of APEC population living in poverty, but in some economies, unemployment only slightly improved and some even deteriorated.
I am glad that last year, the economies of the region met in Jakarta to push for earnest action toward the fulfillment of the MDGs. Through the Jakarta Declaration on the Millennium Development Goals in Asia and the Pacific: the Way Forward 2015, we made poverty reduction the overarching objective of the partnership for development in Asia and the Pacific.
We pledged to promote regional partnership and cooperation in the field of trade, investment, capacity building and technology support, and infrastructure development. We must exert every effort to fulfill that pledge.
APEC can be a potent force to help achieve the targets of MDGs. APEC must succeed in pulling down protectionist barriers that distort international trade.
Another economic security threat that we have to grapple with is avian flu together with the threat of pandemic influenza.
Humankind have known several pandemics before. In the last century, we witnessed the Spanish flu killing between 20 to 50 million people, and then the Hong Kong flu and Asian flu also killed untold millions. Scientists have told us that the next terrible pandemic is a question of when, not whether.
The most pressing challenge is the avian flu virus, which fortunately have not shown signs of human-to-human transmissions but have the potential to do so. Since 2003, a total of 152 persons in 10 countries have died of avian flu. Many of them lived in the world's most densely populated and deprived areas.
For this purpose, we must develop comprehensive national preparedness plans, strengthen surveillance systems, build laboratory networks, and intensify regional and international cooperation.
APEC is in an excellent position to bring about the capacity building and sharing of best practices that will enable regional economies to effectively cope with this threat.
And we must not limit ourselves to fighting the disease itself. We must find ways of ensuring that economies affected by the disease will still have access to export markets. In brief, APEC should prevent avian flu from becoming another non-tariff barrier.
We must also be prepared to deal with any harsh economic impact should an epidemic come to life. We can do this by beginning to develop contingency plans and cooperative measures to secure the sustainability of economies affected by avian flu.
The next economic security threat is : corruption. We in Indonesia have made corruption public enemy number one.
In APEC, we have begun important steps to make our region a corruption free zone, through the 2004 Santiago Commitment and the APEC Course of Action (COA) to Fight Corruption and Ensure Transparency.
To achieve this goal, we must closely cooperate among ourselves and with partners in the region and all over the world. It is a very positive development that 27 countries of the region, including 12 APEC economies, have joined the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific.
And I am glad that we are working closely with the ADB/OECD in stocktaking on bilateral and regional anti-corruption arrangements between and among APEC member economies, including in the areas of mutual legal assistance, extradition of fugitives from justice, asset tracing and asset recovery.
I regard this as a promising step in the fight against corruption in the region. It is important for our people, it is important for business, and therefore it must be important to APEC.
Another source of threat to our economic security comes from unstable and un-secure environment. Inter-state conflicts, intra-state violence, terrorism, intolerance, extremism—these are all things that are bad for business, undermine productivity, and stand in the way of common prosperity.
There are many cures to these ills. We need to spread and strengthen tolerance through intercultural and interfaith dialogue in the APEC region. This will not only promote a secure and stable multicultural environment, but will also encourage economic interaction. The Asia-Pacific is home to a variety of cultures and all the major faiths.
Our strength as a region is that our various cultures and faiths all advocate peace, compassion and mutual tolerance. We must tap this strength through dialogue so as to build mutual trust and confidence, which will help us attain our trade, development and human security objectives.
In short, we must make every effort to make APEC a region of moderation, tolerance and cooperation.
Through dialogue and diplomacy, we can also address the proliferation of nuclear weapons in Asia. This should remain a top priority issue for all of us. We must strengthen the Non-proliferation Treaty (NPT) as the cornerstone of disarmament.
For the long-term survival of humankind, we must work for the abolition of all weapons of mass destruction.
Finally, we must continue to be vigilant against the most cunning and unpredictable of economic security threats : natural disasters.
Many of us in the Asia Pacific have become too accustomed with the wrath of nature : tsunamis, earthquakes, forest fires, volcanic eruptions, floods and typhoons. In fact, it is said that we account for some 70 percent of the deaths from the world’s natural disasters.
APEC can very much be a part of the region-wide efforts to cope with this problem. Most of the times, we cannot control natural disasters. But we can minimize casualties by having a better early warning system, and by having some kind of a contingency arrangement to help disaster zones that urgently need outside help.
In Aceh, we saw not just global compassion at work but also Governments, militaries, volunteers and NGOs putting all their resources and know-how together to help the worst natural disaster in living memory. The Aceh tsunami relief operation is the finest example of regional cooperation.
I am therefore glad that APEC is also focusing on ways to cope with natural disasters and to ensure preparedness for emergencies.
All these economic security threats require our region to work closer, and require Governments and business to come together. It also requires us to start thinking and acting as a community—a community with a shared future.
As we meet these challenges, there are many ways for Governments and businesses to work together.
At the most basic level, APEC Governments need business’ very practical approaches that it uses in every day logistics and getting goods to markets : the management of cooperation. This has proved to be critically important in natural disasters and in the way we think about “secured” trade to guard against security threats.
Next, Governments need to tap into and foster the innovation and technology that business develops and uses. Business can help us all to address challenges like pandemics and environmental issues at frontier with innovation and technology.
Governments also need to give business the right signals. We need to hear from business about whether governments are providing the right environment for this.
Businesses can also help by practicing corporate social responsibility with vigor. Your role to help empower the local community is essential to stability, progress and growth, which in turn will benefit business. I appreciate that more and more businesses are seeking profits with a sense of conscience and responsibility, and Governments should do all they can to encourage and facilitate this corporate social responsibility.
Finally, we need our business leaders to work in partnership with APEC governments with the same strategic vision they use for their own businesses. But we need to do this with our eyes beyond balance sheet to the future of our APEC community. The role of the CEOs and ABAC are vital in this. No matter if you are Government leaders, social leaders, business leaders--we all need to be more visionary, we all need to think and act as a community.
It is important for an organization like APEC to provide the solutions to our new economic challenges before they become threats and to ensure APEC does not have solutions imposed on us from outside.
Like other economies, Indonesia is challenged by all of these issues. Indonesia is committed to play its part as an APEC citizen to overcome the threats of economic security. We have tremendously valued the cooperation that have been given to us as we coped with these economic security threats. And we hope that our experience in dealing with them will be useful to others and will help strengthen the economic resilience of our region.
Thank you for inviting me here today, and I wish you all every success as we work together to tackle the challenges of our common future.
Hanoi, 17 November 2006
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