Building an Inclusive, Sustainable Post-COVID World: Insights from APEC CEO Dialogues Malaysia 2020
By Eric S Mosher
How will the Asia-Pacific region — and the world — respond to and recover from the COVID-19 pandemic?
What will COVID-19 mean for sustainable growth and social inequalities within Asia-Pacific Economies?
When will a vaccine be ready and how will companies and governments distribute it to people around the world?
How will the Regional Comprehensive Economic Partnership (RCEP) agreement affect trade and economics in the Asia-Pacific region?
What will the incoming Biden administration mean for future U.S. involvement in the region?
These are just a handful of the questions and urgent priorities explored during the APEC CEO Dialogues Malaysia 2020, held on 19–20 November 2020. Government and business leaders from the Asia-Pacific region and beyond gathered virtually for 25 hours of insightful discussions and debates, hosted from Kuala Lumpur and broadcast to thousands of attendees around the world.
Given the ongoing COVID-19 pandemic, travel restrictions and limitations on in-person meetings, the annual APEC CEO Summit was reimagined by its 2020 host, Malaysia, as a virtual APEC Dialogues series.
APEC’s GDP is projected to drop by 2.7% in 2020, threatening to disrupt business, trade and development around the world. What happens in the 21 APEC member economies can send ripples everywhere. That’s because APEC, the most dynamic economic region in the world, accounts for approximately 2.6 billion people (40% of global population), $19 trillion or 60% of GDP and half the world’s trade.
How will APEC leaders navigate a path forward, and what lessons can they provide for counterparts around the world?
“Times of challenge are also times of opportunity,” said Dato’ Sri Rohana Mahmood, ABAC Chair 2020, and Chairman and Founder of RM Capital Partners & Associates. “In this era of severe disruption to our lives and livelihoods posed by global pandemic, these Dialogues provide a shared vision and blueprint toward economic recovery and resilience based on integration, innovation and inclusion.”
“In this meeting, we wanted to focus on questions and issues that explore the future of the digital economy, lessons for the new normal and other urgent matters affecting people’s lives and livelihoods,” said Datuk Ruben Emir Gnanalingam, Chair APEC CEO Dialogues 2020; ABAC Malaysia Member; and Group Managing Director of Westports Holdings Berhad, in his opening remarks.
Sustainable Public Health for All, Supporting Economic Security
The specter of COVID-19 influenced each panel discussion and keynote address during the APEC CEO Dialogues Malaysia 2020. Leaders know the pandemic is a shared global public health issue and no region will get back to its feet until the whole world brings the novel coronavirus under control. Some of the most effective and impressive public health responses in the world have been from APEC Economies such as China, New Zealand, Singapore and South Korea. More than ever, cooperation will be necessary to overcome this challenge.
“We are not in a race against the competition, but in a race against the virus,” said Marc-Antoine Lucchini, Senior Vice President and Head of International General Medicines, Sanofi. Mr. Lucchini shared his thoughts on a panel exploring “The Economic Value of Modernizing Our Health System: Lessons Learned from COVID-19.”
Leaders also connected the dots between public health and economic health. “Health security is crucial, not only for people’s health and wellbeing, but also as a catalyst for the return of the economy to normality,” said Professor Panos Kavanos, PhD, Deputy Director, London School of Economics Department of Health Policy, on the “Modernizing Our Health System” panel.
COVID-19 is estimated to push an additional 88 to 115 million people into extreme poverty, according to the World Bank, raising the total to as many as 150 million people in 2021 and undoing years of hard-won economic and social progress. Because of COVID-19, “the world is going into a deep economic recession,” said Dr. Mari Pangestu, Managing Director, Development Policy and Partnerships, World Bank.
“The single biggest negative effect I worry about from this pandemic is the exacerbation of inequality,” agreed Fareed Zakaria, Host of “Fareed Zakaria GPS,” CNN, Columnist at The Washington Post and author of the new book, “Ten Lessons for a Post-Pandemic World.” Mr. Zakaria discussed what we can expect after the pandemic with Rana Foroohar, Global Business Columnist and Associate Editor at the Financial Times.
How should business and society look to the future? Dr. Pangestu emphasized that cooperation can help create solutions to shared problems. “There’s a lot of talk going on between the government and the private sector to help save people’s lives and livelihoods. I hope that this will transition into a continued conversation after the pandemic,” she said. Dr. Pangestu was joined by Professor Kishore Mahbubani, author of “Has China Won?” for a discussion on “Asia-Pacific’s Time.”
Simon Milner, Vice President of Public Policy APAC, Facebook, mirrored Dr. Pangestu’s sentiment on rebuilding and learning from the ongoing challenge of COVID-19. “We want to ensure that the world learns lessons from the pandemic through the digital pivoting that’s happened, particularly from small and medium-sized enterprises.” Milner spoke on a panel exploring “Resilience Through Digitalization, Innovation and Technology.”
Economy Leaders Commit to Partnership in Fighting COVID-19
Cooperation and innovation in combating the COVID-19 pandemic are as important for public sector leaders as for private sector executives, a commitment pronounced by the Economy leaders who addressed the APEC CEO Dialogues Malaysia 2020.
“All countries should act in the spirit of partnership and get through this tough time together,” said Xi Jinping, President of China. “We need to step up policy communication and coordination, intensify all-round global cooperation against COVID-19 and keep the global economy open. By doing so, we can defeat the virus at an early date and achieve robust, sustainable, balanced and inclusive growth for all.”
“The best way to protect the economy is to manage the health crisis,” agreed H.E. Justin Trudeau, Prime Minister of Canada, in conversation with Haslinda Amin, Chief International Correspondent for South East Asia of Bloomberg. “That’s the way we get to see things bounce back.”
H.E. Jacinda Ardern, Prime Minister of New Zealand, sounded a similar note. “As we look to build back better from COVID-19, we need to make sure growth is inclusive and sustainable. Our goal is to work together with other APEC Economies to show leadership and innovation toward the collective good,” she said. New Zealand will be next year’s APEC Host Economy, and they have already announced plans for all-virtual meetings in 2021, continuing the experiment started by Malaysia.
“Amidst a risk of inward-looking temptations in the face of the slump of the global economy, making rules for a free and fair global economy is critically important,” added Japan’s Prime Minister, H.E. Yoshihide Suga, warning against an isolationist response to global challenges. “Japan will, together with APEC, aim to realize a sustainable economy and society that is resilient against all kinds of crises, where all people flourish and reap the benefit of economic growth.”
Leaders did concede that the nature of cooperation and integration will likely change in the wake of COVID-19. “Admittedly, the pandemic has had a lasting impact on the way we view trade and economic priorities within APEC,” said Tan Sri H.E. Muhyiddin Yassin, Prime Minister of Malaysia. “While the core pillars that inform APEC work will likely remain the same, there is now a real and specific necessity to ensure a delicate balance between our health priorities and economic needs.”
But, overall, APEC’s goal remains the same: to create greater prosperity for the people of the region by promoting balanced, inclusive, sustainable, innovative and secure growth and by accelerating regional economic integration. Prime Minister Lee Hsien Loong of Singapore stated the current environment simply: “We are all trying to learn from one another.”
Other Economy leaders who addressed the APEC CEO Dialogues Malaysia 2020 include H.E. Joko Widodo, President of Indonesia; H.E. Prayut Chan-o-cha, Prime Minister of Thailand; and H.E. Sebastián Piñera, President of Chile.
Set Against Backdrop of Historic Trade Agreement
While COVID-19 was a consistent theme throughout the meeting, so was the historic signing of the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between Australia, Brunei Darussalam, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand and Viet Nam.
Creating the biggest trade bloc in history, the agreement was signed on November 15, 2020, just days before the APEC CEO Dialogues Malaysia 2020. Within two decades, RCEP is expected to eliminate the vast majority of tariffs on imports between its signatories and establish common rules for e-commerce, trade and intellectual property. The agreement offered a backdrop of inspiration to many of the APEC CEO Dialogues, representing the potential for continued cooperation between Economies seeking economic growth and better lives for their citizens.
Robert Moritz, Global Chairman, PwC, discussed the deal with Tian Wei, Anchor, “Global Insight,” CGTN. “RCEP is a very positive step forward in terms of easing the facilitation of trade across the Asia-Pacific region,” said Mr. Moritz. “I believe it will pay dividends in terms of contributing to future employment, future economic growth and Economies’ future ability to reinvest in their citizens and stakeholders.”
Leaders agreed that the sometimes tense relationship between the United States and China will not prevent strong bonds from growing among APEC Economies. “I don’t think we’re heading into an environment where everything looks like it’s tit for tat between Americans and Chinese,” added Ian Bremmer, President and Founder, Eurasia Group, as a general comment not specifically related to RCEP. “There are a lot of areas where we can cooperate.” Mr. Bremmer said in discussion with Michelle Caruso-Cabrera on the panel “Beyond the Pandemic: The World in 2021.”
Building an Inclusive Economic Future
How should CEOs and Economy leaders prepare their workforces and companies for the challenges of tomorrow, some of which are quickly becoming challenges of today?
One important step is to focus on human capital. PwC has committed $3 billion to upskill all 275,000 of its employees, encouraging them to learn new skills, adopt new technologies and innovate at the local level. “We hope the outcomes will be beneficial to our employees as people, beneficial to our clients and beneficial to our company as a whole,” said Mr. Moritz.
He also stressed that no government or business can take on this task alone. Governments, non-governmental organizations and the private sector all have a role to play preparing workers and young people with the right digital and technological skills for the challenges of the future.
Artificial intelligence (AI) is one technology that is expanding throughout APEC Economies particularly fast today. “We really view artificial intelligence as a transformative technology, and we’re seeing that it’s no longer a question of why it’s important; it’s a question of how to advance it,” commented Surina Shukri, CEO, Malaysia Digital Economy Corporation (MDEC), in a discussion of “APEC’s Artificial Intelligence Opportunity.”
“Our focus now is helping businesses do more and making sure we continue to thrive in the era of artificial intelligence,” Ms. Shukri continued.
A critical part of building an inclusive economy is ensuring women and girls can participate. Leaders across APEC are unlocking their potential, removing barriers to drive swift and sustainable recovery from COVID-19.
That was the message of a roundtable discussion on “Empowering Women for Economic Recovery,” moderated by Kawal Preet, Regional President of Asia-Pacific, Middle East and Africa, FedEx Express. “These tough times could be the greatest opportunity for innovation-led growth that we’ve had in decades,” said Ms. Preet, commenting on the importance of creating an inclusive response to mitigate the impact of the pandemic on women’s lives.
Sheryl Sandberg, COO, Facebook, was optimistic about APEC’s values of openness and inclusivity contributing to the region’s next phase of growth. “By protecting and enhancing the open internet and creating the conditions for a strong and inclusive recovery, I am confident that we can build a thriving digital economy that will power Asia-Pacific for years to come.”
Sustainably Meeting Tomorrow’s Energy Needs
Beyond human capital, the APEC CEO Dialogues also touched on environmental challenges. As population and living standards in lower-income countries continue to rise, so will demand for energy. How will those needs be met in a sustainable way?
“As we begin this decade, we’re talking about COVID-19 and the work ahead of us to recover economically from it. But this is a decade as a whole — and maybe an entire century — that will probably be defined by climate issues,” said Brad Smith, Microsoft’s President, in conversation with H.E. Prime Minister Ardern of New Zealand.
In a panel discussion, “Re-energizing APEC’s Economic Recovery,” moderated by Financial Times Energy Editor David Sheppard, leaders from the energy industry discussed the role of liquified natural gas to help economies transition away from coal. They also shared insights into hydrogen, biofuels, algae and other alternative energy sources that may help APEC and the global economy reach net-zero emissions in the future.
“We would like to create a virtuous cycle between economy and environment by utilizing policy measures to promote innovation and drive clean industry all over the world,” said Mr. Takeshi Soda, Director Oil & Natural Gas Division, METI.
Some positive environmental news has come out of today’s locked-down state of the world. At the start of the meeting, Mr. Gnanalingam noted that the APEC CEO Dialogues Malaysia 2020 has been the most climate-friendly APEC CEO Summit event to date. “In our original format we anticipated in-person attendance of 2,000 participants, generating 8,500 tons of CO2 emissions. 400,000 trees would need to be planted to make the Summit carbon-neutral, an average of 200 trees per participant,” he remarked. “Moving forward, climate change and the preservation of our environment has to be a priority for us all. I truly hope that future APEC events place sustainability at the forefront of their goals.”
Cooperation in the Next APEC Era
One of APEC’s flagship initiatives is the Bogor Declaration, which called on member economies to reduce barriers to trade and investment, with “the long-term goal of free and open trade and investment in the Asia-Pacific.” When the declaration was signed in 1994, the leaders set a deadline for results: 2020.
We have now reached that deadline, an opportunity for assessment and improvement. While considerable progress has been made — region-wide tariffs are close to 5% now, compared to almost 20% in the 1980s — significant work remains as Economy and business leaders look ahead to the next phase of the APEC experiment. The call to action of the APEC CEO Dialogues Malaysia 2020 was clear: Economy and business leaders must find ways to work together to defeat the virus and revive global economic growth. And although the creators of the Bogor Goals could not have anticipated COVID-19, the pandemic serves as a powerful backdrop to emphasize the cooperation that will be needed in the months and years ahead.
Will APEC Economies work together on the countless issues facing them, or will political considerations impede coordination and progress? While the details remain to be seen, the APEC CEO Dialogues suggest that APEC’s Economy and business leaders are committed to finding solutions together. If they can rise to the challenge, they will help not just the region sustainably grow, integrate and thrive — but the entire world.