Rising inequality belies APEC’s ‘prosperity’ rhetoric
Leaders and ministers from the 21 member economies of the Asia-Pacific Economic Cooperation (APEC) are convening in Manila, the Philippines, for the 2015 Economic Leaders’ Week. Wilson Fortaleza, a leader of the Partido Manggagawa (Labour Party – Philippines), argues that APEC’s achievements have primarily benefitted the rich.
----------
The Asia-Pacific Economic Cooperation operates as a powerful mechanism for accelerating regional economic integration. Established in 1989, APEC serves as a venue for its 21 member economies to leverage their interdependence. Its stated aim is to create “greater prosperity for the people of the region” by promoting balanced, inclusive, sustainable, innovative and secure growth.
There are around 2.8 billion people in the APEC region. It represents 57 percent of world GDP and 47 percent of global trade. For the past 26 years, APEC has boasted that it is a dynamic engine of economic growth. Growth, it claims, “has soared in the region”, real GDP doubling from just US$16 trillion in 1989 to US$31 trillion in 2013; trade has risen seven-fold to $22 trillion. All this, according to reports published on its website, was the result of APEC’s work.
Prosperity at the top
“Advancing Free Trade for Asia-Pacific Prosperity” is APEC’s tagline. A thorough analysis of its achievements, however, shows that APEC failed to create inclusive economies. Growth soared in the region, but instead of enjoying shared prosperity, people in this part of the planet live in two worlds – the 1 percent occupying the prosperous part at the top and the 99 percent at the bottom trapped in an endless hunt for crumbs.
The $31 trillion regional GDP, if shared equally, could easily translate to at least $11,000 per capita. That could have easily erased the number of poor people in this region. According to the United Nations Development Program, the Asia-Pacific region has already halved the proportion of people living below $1.25 a day. (This achievement, however, mainly came from China with more than 500 million people “lifted out of poverty”.) Yet the region remains home to more than 750 million poor people. The number increases if $2 per day is used as the poverty line.
The same conclusion was reached by the Asian Development Bank in its published reports on rising inequality in Asia. The ADB said that despite Asia’s prosperity, rising inequality has denied the benefits of growth to many millions of its citizens. It noted further that the problem “is worsening as the region’s rich get richer much faster than the poor”.
APEC has not defined a new strategy to combat this age-old problem of inequality, except by further accelerating free trade and facilitating the ease of doing business in all APEC economies.
All for business
Who is reaping the gains? APEC does not hide the fact that its agendas are business-focussed and were all crafted by top CEOs and select business executives under the APEC CEO Summit and APEC Business Advisory Council. These elite business bodies provide APEC leaders the expertise and perspective for many initiatives aimed at easing the way for business. And as trade and investment rules were freed, the maximum benefit went to business owners.
No wonder the Asia-Pacific now has the largest number of billionaires in the world. For a long time, most billionaires were found in the United States. Now it is Asia. The Hurun Research Institute’s Global Rich List 2015 shows that there are 943 billionaires in Asia, with total net worth of $2.5 trillion. North America has 589 with a total net worth of $2.4 trillion. Forbes estimates that the Philippines’ richest 50 have a combined wealth of $74 billion – which could provide the basic food and non-food requirements for 17 million of the country’s 22 million families for a year.
When Forbes started publishing the list in 1987, there were 140 billionaires in the world, 96 of them outside the US. Hurun’s 2015 list has a total of 2,089 billionaires, half coming from the US and China. They made their wealth from a range of industries such as technology, media and telecoms; real estate; manufacturing; investments; retail; food and beverages; energy; financial services; pharmaceuticals; logistics and shipping; automobiles; mining; luxury goods; and hospitality.
Workers left to themselves
The world’s “self-made” billionaires were supposed to have created their fortunes, but their wealth all came from what Karl Marx termed “surplus labour time”. In the APEC region, actual productive work is never done by the billionaires but by the 2 billion people at the bottom, most of them working in vulnerable conditions.
There are the clothes being made in Bangladesh’s deadly sweatshops; the first world’s electrical contact industry being outsourced to India and the Philippines for only a fraction of its cost; electronics parts created by export zone workers in China, Vietnam, the Philippines and Indonesia – where workers’ freedoms to organise and bargain collectively are prohibited. This is one reason why wages in the APEC region are at the bottom part of the global pay scale.
APEC has also made outsourcing global best practice, giving business the ease and freedom to hire and fire its workforce. The billionaire boss of Philippine Airlines, Lucio Tan, argued along this line to justify putting 2,600 regular workers on contracts in 2011, with another round of mass lay-offs to be implemented this month.
The International Labour Organization’s Asia-Pacific Labour Market Update for February 2015 indicated that finding decent jobs is a major challenge for youth in the region. Youth unemployment is above 10 percent in almost all APEC economies. Likewise, the ADB pointed to a lack of gainful employment in the 18 economies of Asia. Forty percent of the total are employed informally. In India and Bangladesh, the proportion is as high as 80 percent.
And what about the conditions in which these poor people live? They live in slums or far-flung housing areas because urban lands have been appropriated by developers for high-end clients, or in rural areas where people face environmental and health hazards from mining and power companies.
While APEC policies created wonders for business, the real creators of wealth are left to fend for themselves.
Inclusive economies?
APEC may have realised that, after almost three decades, it has failed to achieve shared prosperity in the region. Perhaps this is the reason APEC 2015 in Manila is held under the theme “Building Inclusive Economies, Building a Better World” – another catchphrase that has yet to assume a practical meaning for working people.Can they show this time a different strategy – something better than the Bogor Declaration, which focused primarily on eliminating barriers to free trade and investment?
I see none at this point. The Economic Committee had just been instructed to develop a policy framework on how structural reform can contribute to inclusive growth as well, as a set of indicators for evaluating the inclusiveness of structural reform policies. In short, there is still no new policy or strategy to talk about. It is an explicit admission that inclusiveness is a framework that APEC never had.
Nevertheless, APEC ministers have already identified some areas such as “fostering small and medium enterprises (SMEs)” and “investing in human capital development” in pursuing this track. But again, I cannot consider them a fresh approach to this lingering problem: I have seen SME development and skills training as part of the country’s development strategy since the time of Cory [Corazon C. Aquino, who was president from February 1986 to June 1992]. And I really doubt that her son, PNoy [Benigno Aquino III, the current president], is doing the right thing to make this country more inclusive.
As a matter of fact, by declaring a four-day holiday and road closures, and banning air travel and mass protest, PNoy has made this year’s APEC summit just another exclusive and highly secluded event for the capitalist class.
