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thesundaytimes November 15, 2009
SUMMITSCENE
Asia-Pacific Economic Cooperation leaders attending a luncheon at the Istana, where they had gathered for Day One of the two-day Economic
Leaders Meeting.
APEC
SPEAK
It has been almost impossible
to read about the Apec
meetings without tripping
over some jargon. So here is a
daily selection of key words
and acronyms that may have
cropped up and slowed you
down during the week.
Trans-Pacific
Partnership (TPP)
What it is: Short for
Trans-Pacific Strategic
Economic Partnership
Agreement, the TPP is the
only regional free trade
agreement (FTA) that spans
both sides of the Pacific,
linking Asia with the
Americas.
The TPP is actually not an
Apec initiative. The
multilateral FTA was signed in
2005 by Brunei, Chile, New
Zealand and Singapore.
Apec sees the TPP as a
possible building block for an
FTA covering the Asia-Pacific.
A key breakthrough came
yesterday when United States
President Barack Obama
announced that the US would
restart talks about joining the
grouping.
The US had indicated
interest in joining the TPP last
year but later put talks on
hold as the Obama
administration reviewed its
trade policies. Vietnam,
Australia and Peru are also
prospective members.
The TPP’s goal is to
eliminate all trade tariffs
between member countries by
2017.
Make like an (Singapore)
Apec official: President
Obama is finally here! He
took the ECP, then the AYE.
Tomorrow, he’ll go on the PIE
and the CTE. But not the BKE
or the KJE. TPP? Yes, he may
be headed there too.”
Singapore Minister for Foreign Affairs George Yeo and US Secretary of State Hillary Clinton
meeting at the Ministry of Foreign Affairs yesterday morning.
(Seated from left) Australian Prime Minister Kevin Rudd, Sultan of Brunei Hassanal Bolkiah, Canadian Prime Minister Stephen Harper, Chilean
President Michelle Bachelet, Chinese President Hu Jintao and Hong Kong Chief Executive Donald Tsang on Day One of the leaders’ retreat.
Investing in
the future
The Apec CEO Summit yesterday also focused
on lingering concerns amid the economic
recovery, such as climate change and the role
of sovereign wealth funds.
SWFs’ IMPORTANT ROLE
Alvin Foo
Sovereign wealth funds (SWFs) have an im-
portant role to play in the global recovery
as long-term suppliers of capital, but will
need open markets to do so effectively.
These points were made by Dr Tony
PHOTO: LIANHE ZAOBAO
Tan, Government of Singapore Investment
Corp (GIC) deputy chairman and execu-
tive director, during a panel dialogue on
SWFs yesterday at the Apec CEO Summit.
SWFs are state-owned investment
funds. They have gained in financial clout
worldwide in recent years.
Dr Tan said: “SWFs can play a construc-
tive role in the global recovery as they are
long-term, commercially oriented suppli-
ers of capital. But to do so effectively, capi-
tal markets will need to be open.”
He was on a panel of four representa-
tives of high-level SWFs from Singapore,
China, Norway and Kuwait.
In recent years, SWFs investing outside
their home base have faced pressures for
governments in target markets to raise pro-
tectionist barriers, especially over high-pro-
file deals such as buying hefty stakes in
Western banks.
Dr Tan highlighted the grave threat that
financial protectionism could pose in de-
railing world recovery. He said: “If govern-
ments closed their capital markets to SWFs,
recipient countries will face higher capital
costs while SWFs will see their opportunity
set decrease.”
PHOTO: REUTERS
Government of Singapore Investment Corp deputy chairman Tony Tan speaking at the Apec CEO
Summit. He says he expects the global economic recovery to extend into next year.
RISING TO NEW CHALLENGES
Rachel Chang
In the 1970s, California became the first
American state to implement energy effi-
ciency standards for refrigerators.
This was enforced despite concerns that
manufacturers could not meet the stand-
ards and sell refrigerators at prices afforda-
ble for consumers.
Today, the average refrigerator in the
United States is 10 per cent bigger, half as
expensive, and uses two-thirds less energy
than before.
The anecdote was cited by US Secretary
of Commerce Gary Locke yesterday when
he argued the need for governments to lead
in the development of innovations in
clean technology through regulations and
investment.
Speaking as a panellist at the Apec CEO
Summit on the theme, The Shape Of
Things To Come, he noted that the tele-
phone and computer were dismissed as un-
important when they first appeared.
“Who is to say we are not at that
junction with clean energy?” he asked. “If
ST PHOTO: NG SOR LUAN the government sets aggressive standards
on clean energy, I have complete confi-
dence in the human spirit, the entrepre-
neurial spirit to innovate and meet those
standards.”
Exxon-Mobil chief executive and chair-
UNCONVENTIONAL WISDOM
Jessica Cheam
How’s this for a “politically incorrect” view- fossil fuels anyway. When that happens,
point?
A controversial climate expert declared make sense to cut emissions. Now, that’s a
yesterday at the Apec CEO summit that cut- smart investment,” he said.
ting carbon emissions is going
to cost countries a lot but
achieve fairly little good.
Dr Bjorn Lomborg, director
of the Copenhagen Consensus
Centre, said smarter policies
should be adopted to tackle glo-
bal warming, not “inordinately
expensive” ones that will ulti-
mately have little effect.
“By the end of the century,
the cost of cutting emissions
would be US$40 trillion (S$55
PHOTO: BLOOMBERG
trillion), and we’re not sure it Dr Lomborg, director
will even work to reduce tem- of the Copenhagen
peratures,” said Dr Lomborg in Consensus Centre.
an interview with The Straits
Times.
Instead, he suggested that countries fo-
cus on policies such as spending at least 0.2
per cent of their gross domestic product felt that it was a dangerous path to take due
PHOTO: AFP
(GDP) on clean energy research and devel- to the lack of documented research and un-
opment.
Panel members were quick to stress that
SWFs are not investing vultures out to
make a quick buck.
Mr Jin Liqun, China Investment Corp
(CIC) supervisory board chairman, said:
“They’ve not been part of the problem. In-
stead, they’ve been part of the solution.”
Dr Tan noted: “SWFs want to be respon-
sible market participants and are not out to
make quick returns by cutting corners or
seeking to contravene legal and regulatory
regulations.”
All panellists agreed SWFs can aid recov-
ery by being a long-term provider of capi-
tal.
Mr Yngve Slyngstad, chief executive of
Norges Bank Investment Management,
said SWFs did not contribute to the crisis,
but instead made the crisis less severe by in-
jecting capital.
The sustained rise of emerging markets
will require a big capital injection and infra-
structure investments.
SWFs can also finance investments relat-
ed to dealing with an ageing population
and coping with climate change. They can
also offer credible analysis of issues about
the restructuring of the global financial
landscape.
Dr Tan expects the global recovery to ex-
tend into next year, and this will be strong-
er particularly in Asian and Latin American
countries with lower debt levels: “In the
short-term, the bounce could surprise on
the upside.”
man Rex Tillerson said, however, that the
development and deployment of clean en-
ergy technology would be a long and costly
process – much longer than policymakers
think.
“Policy has to be grounded in reality,”
he said, arguing that the consequences of
policies to curb emissions must be taken in-
to account by officials.
Singapore Community Development,
Youth and Sports Minister Vivian Balakrish-
nan said countries like Singapore could not
make a huge difference on their own.
But what would help is for all govern-
ments to have the political will to take
measures such as scrapping subsidies in
place for fossil fuel use, he added.
The importance of joint action was high-
lighted by Mr Locke, who reminded the
panel that “Mother Earth will not care who
has contributed to this, the industrial na-
tions or the developing countries”.
Other issues raised as looming challeng-
es for the future included the impact of an
ageing population on economic growth,
and protectionism.
Other panel members were Mr Anand
Mahindra, vice-chairman and managing di-
rector of Indian conglomerate Mahindra &
Mahindra; Mr Peter Loescher, president
and chief executive of mobile phone maker
Siemens; and Mr Stephen Roach, chairman
of Morgan Stanley Asia.
“The idea is to make clean energy so
cheap that everyone will switch over from
maybe in the middle of the century, it will
Dr Lomborg gained international atten-
tion in 2001 after publishing
The Sceptical Environmental-
ist, a controversial book which
asserts that many of the
most-publicised claims and pre-
dictions on environmental is-
sues are wrong.
He was among four panel-
lists that spoke in a lively
one-hour session yesterday.
The audience also debated
the issue of geo-engineering
with the panellists.
Geo-engineering is a way of
manipulating the earth’s cli-
mate artificially to counteract
the effects of global warming.
While Dr Lomborg supported the idea
of geo-engineering, such as marine cloud
whitening to reflect more sunlight, others
derstanding of the consequences.