APEC Ministers Call for Strengthening Markets
Hon Lockwood Smith
Minister for International Trade, New
Zealand
Chair APEC Ministerial Meeting
APEC Ministers
have strongly endorsed the importance of working together to
strengthen markets in the region, according to Lockwood
Smith, Chair of the APEC Ministerial Meeting and New Zealand
Minister for International Trade.
"Strengthening markets
is one of New Zealand¡¦s key policy themes for APEC 1999,"
Dr Smith said.
"APEC Ministers agreed that a durable
recovery and a return to sustained economic growth will
require ongoing commitment to broader economic reform, in
addition to trade and investment liberalisation.
"Minister¡¦s also stressed that as the region emerges
from its recent period of economic difficulty, there was a
real risk of complacency, and that APEC could play a central
supportive role to keep the reform effort on track," Dr
Smith said.
"Ministers also recognise that there is a
need now to bring together APEC¡¦s work across key areas
such as trade and investment, competition and regulatory
reform, economic and corporate governance, trade
facilitation and efforts to reduce administrative compliance
costs on business. The strengthening markets initiative
provides such an approach.
A core element of the
approach is the APEC Principles to Enhance Competition and
Regulatory Reform. Ministers have referred these principles,
which are central to APEC¡¦s work to strengthen markets, for
consideration of APEC Leaders.
"Ministers also approved a
forward looking work programme which will see the
strengthening markets approach underpin the full programme
of APEC work," Dr Smith concluded.
ENDS
Inquiries Ben
King 025-514-790 (c)
Attached: Highlights of economies¡¦
efforts to strengthen their markets.
Attachment
APEC
STRENGTHENING MARKETS HIGHLIGHTS
While the starting
points, starting dates, the pace reform, and specific
measures, vary considerably from one member to another, some
general observations stand out:
„h reform, or measures
which make broad changes to institutions and the overall
framework in which economic activity takes place, continues
apace in the APEC region and is a driving force for economic
growth in the region.
„h reform measures are generally
aimed at strengthening the role of markets in the region.
The state is pulling back from directly providing goods and
services, and paying greater attention to its role in
setting the broad framework within which economy activity
takes place.
„h increasingly policy frameworks recognise
the need to improve the quality of government regulations,
thereby enhancing the conditions for competition in each
economy.
„h financial sector reform features
prominently, especially in those economies most affected by
the recent economic crisis.
The following provides a
snapshot of some of the reform activities underway in the
APEC region.
Australia
„h Competition Policy: Under
Australia¡¦s National Competition Policy, Australian
Governments (federal and state) are reviewing all laws and
regulations to minimise restrictions on competition.
„h
Transparency: Australia has prepared and publicly released a
progress report on Australia¡¦s compliance with a range of
international "best practice" codes, such as the IMF Code of
Good Practice on Fiscal Transparency.
„h Reform of State
Owned Enterprises: Australia has deregulated its
telecommunications market to allow broader participation,
including on the part of foreign players. The previously
state-owned enterprise has been corporatised and a large
portion of the Government¡¦s shareholding divested. A
further portion will be divested in 1999.
Brunei
„h
Reform of State Owned Enterprises: Brunei is embarking on
coporatisation/privatisation of public services and
utilities.
Canada
„h Financial Sector Reform: On
June 28, 1999, the foreign bank branching legislation and
its related regulations came into force. The legislation
permits foreign banks to establish specialised, commercially
focused branches in Canada, whereas previously only
separately incorporated subsidiaries were permitted.
Branches will have essentially the same powers as domestic
banks, except for restrictions on their ability to take
deposits.
„h Legal Reform: Firm enforcement of Canada¡¦s
Competition Act, one of the key framework business laws in
Canada, has created a competitive marketplace in Canada. The
Act is regularly scrutinised through the permanent
Competition Bureau¡¦s Amendments Unit in order to ensure
that it remains abreast of domestic and international
developments.
Chile
„h Reform of State Owned
Enterprises: Privatisation of the management of Chile¡¦s
ports recently completed. Plans are underway to privatize
Chile¡¦s water and sewage utilities.
„h Regulatory
Reform: Revised regulations introduced to enhance
performance in the electricity sector.
China
„h
Reform of State Owned Enterprises: Programme underway to
revitalise major state owned enterprises.
„h Financial
Sector Reform: Asset management companies are being
established to take over and recover the non-performing
loans of the four major state banks.
„h Competition
Policy: Enactment and implementation of the Law to Combat
Unfair Competition.
Hong Kong, China
„h
Telecommunications Services: Subject to legislative
amendments, implement measures to strengthen the regulatory
framework for ensuring effective competition, streamline the
licensing framework to cope with development in the
telecommunications industry and improve interconnection and
access arrangements to telecommunications services.
Progressively liberalise the facilities based external
telecommunications market, and further enhance competition
in the local fixed telecommunications network services
market.
„h Financial Sector Reform: Supervisory regime
brought fully into line with Basle Committee¡¦s Core
Principles for Effective Banking Supervision. Retail banking
restrictions on foreign banks being relaxed. Policy
initiatives to further promote competition and enhance
safety and soundness in the banking sector. Comprehensive
reform of the regulatory framework, market infrastructure
and market structure applying to futures and securities
trading.
Indonesia
„h Reform of State Owned
Enterprises: The Indonesian Government continues to reduce
its share in ten state enterprises in the short term and
restructure all state enterprises in the medium term.
„h
Financial Sector Reform: Restructuring of state owned banks
and banks controlled by the Indonesian Bank Restructuring
Agency. Recapitalisation and restructuring of private banks.
Regulatory and supervisory framework revamped. Easing of
limits on foreign ownership of financial institutions.
Creation of an independent central bank solely responsible
for monetary stability.
„h Legal Reform: Bankruptcy law
rewritten and commercial court created to improve
implementation. Anti-monopoly and consumer protection
legislation adopted.
Japan
„h Financial Sector
Reform: "Big Bang" Reforms. 12% GDP set aside to support
banks with detailed restructuring plans. Nationalisation of
Nippon Credit Bank. Three second-tier regional banks placed
under government administration. Creation of the Financial
Supervisory Agency to strengthen bank supervision.
„h
Corporate Sector Reform: Recently amended the Commercial Law
establishing the system of Stock Exchange / Transfer and
enacted laws to streamline procedures for disaggregating
companies to aid corporate restructuring. Also, the Law on
Special Measures for Industrial Revitalisation was enacted
in August 1999 to support business in the areas of strategic
restructuring, new business development and enhanced
research and development.
„h Legal Reform: Bankruptcy
code for corporate rehabilitation.
Korea
„h
Financial Sector Reform: Completed first round of financial
sector restructuring in September 1998. This involved
recapitalising banks to put them on a sound footing.
Non-viable financial institutions were closed (including 16
merchant banks, 5 commercial banks, 6 securities companies
and 4 insurance companies). Major programme underway to
strengthen prudential regulation and supervision of the
financial sector.
„h Corporate Sector Reform (with a
particular focus on Korean chaebols): Measures to enhance
transparency; resolve cross-debt guarantees; improve
corporate financial structures; streamline business
activities; and, strengthen accountability.
„h
Regulatory Reform: 5,430 or 48 per cent of existing
regulations abolished. Another 800 modified and/or
simplified. A further 345 have or will be abolished and/or
streamlined.
Malaysia
„h Financial Sector Reform:
Bank consolidation programme under way to create six large
domestic financial groups as well as measures to dispose of
non-performing loans and recapitalise banks. Initiatives to
strengthen bank supervision/management, including tightening
loan classification requirements, increase the frequency of
on-site examinations, augment supervisory staff and move
toward consolidated supervision.
„h Corporate Sector
Reform: The Government has signalled its commitment to
implement the recommendations of the Report of the Finance
Committee on Corporate Governance, released in March 1999.
Key recommendations include: measure to strengthen the
statutory and regulatory framework for corporate governance;
the introduction of the Malaysian Code on Corporate
Governance to promote good governance through self
regulatory mechanisms; and, training and education to ensure
that the framework for the proposed corporate governance
framework is supported by necessary human and institutional
capital. Notable measures undertaken before the release of
this report include: a revised Take-over Code which now
requires higher standards of, and more timely, disclosure
strengthening the position of minority shareholders; revised
listing rules for the Kuala Lumpur Stock Exchange; and,
amendments to the Companies Act to strengthen creditors¡¦
rights.
Mexico
„h Legal Reform: Legislation
introduced to promote competition and allow increased
private sector participation in a number of sectors. The
Federal Competition Commission has reviewed arrangements for
participation in auctions of national assets, including
public service assets and public entities.
„h Financial
Sector Reform: Restrictions on foreign investment in
commercial banking, holding companies of financial groups,
securities broking firms and securities market specialists
eliminated.
New Zealand
„h Insurance Markets:
Workers¡¦ compensation was opened up to competition from
commercial insurers from 1 July 1999.
„h Agricultural
Marketing: Legislation restructuring the regulatory
framework for key agricultural producer boards (dairy,
apples, and kiwifruit) has recently been passed.
„h
Competition Policy: The Copyright Act was amended in 1998 to
remove the prohibition on the parallel importation of goods
prohibited by copyright.
„h Postal Services: The Postal
Services Act 1998 removed New Zealand Post Limited¡¦s
monopoly on the carriage of standard letters. Any company,
individual or organisation may now compete in all sectors of
the postal market. There are no foreign ownership or market
access restrictions on postal operations.
PNG
„h
Reform of State Owned Enterprises: Privatisation of a range
of public institutions over the medium term with a
Privatisation Commission established to manage the process.
„h Financial Sector Reform: A stock exchange has been
established to develop capital markets in PNG and provide
opportunities for the public to invest in PNG companies.
Peru
„h Reform of State Owned Enterprises:
Privatisation of two major railway networks complete. Plans
underway for the involvement of the private sector in the
provision of sea and airports.
Philippines
„h
Financial Sector Report: Tightening of prudential standards
related to loan classification and provisioning, thus
bringing the Philippines broadly in line with international
norms. Strengthening banking supervision through the
adoption of consolidated supervision (which will be fully
implemented once legislation currently before Congress is
enacted) and the implementation of a risk management
approach to supervision. Measures to raise minimum capital
requirements, encourage the faster recognition of impairment
of assets, and require higher general and specific loan-loss
provisioning.
Russia
„h Reform of State Owned
Enterprises: Undertaken major reforms to privatise formerly
centrally-planned economy. 70 per cent of Russian GDP is now
produced by the private sector.
„h Corporate Sector
Reform: Special programme for the development of small and
medium enterprises, including the establishment of a
Ministry for Antimonopoly Policy and Support of SMEs.
Singapore
„h Financial Sector Reform: Announced in
May 1999 a three-pronged programme to:
„h liberalise
Singapore¡¦s financial sector by implementing a five-year
liberalisation programme improving access for sound and
well-regulated managed banks to the Singapore retail market;
„h improve corporate governance practices; and
„h
lift the 40 percent aggregate foreign shareholding limit,
although the Monetary Authority of Singapore will continue
to approve increases in the individual shareholdings above
prescribed limits.
Chinese Taipei
„h Reform of State
Owned Enterprises: Programme underway to privatise 47 state
owned enterprises by 2002. To date, 10 have been privatized
and 2 closed.
„h Legal Reform: Task force established in
1996 to promote competition. Since this time, the
transitional period for public enterprise exemptions under
the Fair Trade Law has lapsed and the Fair Trade Commission
has initiated a systematic review of exemptions and
exceptions to competition rules as well as laws regulating
anti-competitive practices.
Thailand
„h Reform of
State Owned Enterprises: Programmes underway to privatise
and restructure energy, telecommunications water, and
transportation agencies. Introduced new corporatisation law
to facilitate privatization of SOEs.
„h Financial Sector
Reform: Viable financial institutions segregated from
insolvent institutions. This resulted in the closure of 56
financial institutions and the establishment of a mechanism
to dispose of these institutions¡¦ assets. Measures have
been implemented to strengthen the remaining financial
institutions. Banks have been recapitalised and
consolidated. Supervision has been improved and the
regulatory framework strengthened.
„h Legal Reform:
Bankruptcy Court established and Bankruptcy Act amended.
Adopted tightened bankruptcy laws
United States
„h
Deregulation: Deregulation of the electricity sector, last
of the utilities to deregulate and following deregulation of
airlines and natural gas, creating competitive markets for
electricity supplies.
„h Financial Sector Reform:
Maintaining open capital markets to expose the market place
to competition. Using market incentives to bring capital and
private entrepeuirship to distressed urban and rural areas
that mainstream business investors might otherwise have
overlooked through the President¡¦s New Markets Initiative.
Vietnam
„h Legal Reform: Enterprise Law adopted in
May 1999, to take effect from January 2000, is expected to
provide a major boost to the private sector in Viet Nam by
codifying the legal framework for its development. It:
„h permits the formation of new companies, and
simplifies establishment and registration procedures;
„h
introduces modern concepts of corporate governance, with
improved transparency in accounting requirements and
ownership disclosure;
„h encourages informal businesses
to become properly registered and structured;
„h allows
new forms of business entities, such as single member
limited liability companies and partnerships;
„h
facilitates the transformation of companies from one form of
business entity to another; and
specifies what business
activities and practices are not allowed, rather than
seeking to define those that are.