As the global economic landscape continues to face economic, financial and environmental challenges, APEC Finance Ministers from across the region are working together under this year's theme to promote a more sustainable, digital and resilient future. In 2024, the Finance Ministers' Process (FMP) seeks to address economic integration, digital transformation and the broader social dimensions of growth.
APEC Finance Ministers met in Lima, Peru on Monday where they were joined by representatives of international organizations and the private sector to discuss policy responses and future prospects for the region. Setting the tone for the meeting, Erick Lahura, Chief of Cabinet of Peru's Ministry of Economy, opened the session and highlighted the imperative for APEC economies to collaborate closely in achieving the vision for a more resilient and inclusive Asia-Pacific.
"To ensure the long-term prosperity of the Asia-Pacific, we must focus on sustainable practices, digital transformation and building resilience across our economies," said Lahura. "This year, our work within the FMP will guide us toward a region that is stronger, more connected and better prepared to face future challenges."
A key topic was the importance of sustainable finance, with a special focus on the implementation of the four policy areas: domestic carbon pricing and non-pricing measures, sustainable energy transitions, sustainable infrastructure financing, and the sustainable finance initiative. Members emphasized the significance of resilient finance, particularly in enhancing policies related to hydrometeorological risk.
Along this line, Finance Ministers announced the launch of Sustainable Finance Initiative (SFI) as a flexible, voluntary and non-binding collaboration tool between the public and private sectors and international organizations to promote the development of voluntary information sharing tools and capacity building resources on sustainable finance issues. The SFI was designed to empower financial institutions, regulators and investors to develop expertise in sustainable finance, ultimately contributing to the promotion of green and inclusive economic growth while addressing pressing global challenges such as climate change and social inequality.
Besides, in a region where nearly 40 percent of the world's disasters strike, with over 140 of those affecting more than 64 million people in 2022 and economic costs reaching USD 65 billion in 2023, APEC member economies committed to enhance their resilience by building deeper financial markets. Finance ministers are confident that resiliency can be bolstered through the development of innovative disaster risk financing and insurance mechanisms, and other risk transfer instruments available through capital markets.
Members also emphasized the significance of digital finance, highlighting the progress made this year in two key policy areas: open finance and digital financial inclusion. Ambassador Carlos Vasquez, the APEC 2024 SOM Chair, noted the transformative impact of Peru's FinTech sector in driving financial inclusion and the small business empowerment. He pointed out that Peru now hosts over 237 FinTech companies, with digital payment transactions increasing by 113 percent over the past year. "Our collective efforts to harness technology for the benefit of all ensures that everyone benefits from the growth opportunities we are working towards", Vasquez indicated.
Dr Rebecca Sta Maria, executive director of the APEC Secretariat, highlighted the need for a whole-of-APEC approach to ensure that the social dimensions of economic growth are addressed, particularly in improving the quality of life through decent jobs, sustainable private investment and inclusive financial systems.
"Our work makes a meaningful impact when we focus on improving the quality of life for our people," Dr Sta Maria explained. "Whether it be through regional economic integration or digital transformation, we must ultimately emphasize social inclusion and equity."
Other measures in the spotlight included strategies to combat rising protectionism and promote trade facilitation. The need for continued vigilance in monetary policies was highlighted, especially in light of recent interest rate adjustments and their potential impact on currency valuations and inflation.
Carlos Kuriyama, director of APEC Policy Support Unit, reported a steady GDP growth of 3.6 percent in the APEC region for the first half of 2024, a slight increase from the previous year.
"Economic recovery has been bolstered by improving consumption rates and easing inflation, although risks such as protectionism, supply chain uncertainties, and geopolitical tensions remain critical concerns," Kuriyama concluded.
Finally, the Minister of Economy and Finance of Peru, José Arista, concluded the meeting highlighting that Peru proposed a very ambitious plan for this year, with the most number of decisions, innovations and documents adopted in all the history of the Finance Ministers' Process, and appreciates the work of all APEC economies, APEC Secretariat, APEC Business Advisory Council and international organizations for making this possible.
