OBG talks to Muhamad Noor Yacob, Executive Director, Asia-Pacific Economic Cooperation (APEC)

Interview: Muhamad Noor Yacob

To what extent does massive investment in the development of infrastructure broaden Latin America as a gateway for APEC investment?

MUHAMAD NOOR YACOB: Governments must take two important actions to foster development. One is to focus on infrastructure, as you have noted, and the other is human resources. With regards to infrastructure, it is not just about roads and bridges. Equally important is economic infrastructure: the legal and economic institutions such as planning and delivery units and the rule of law. Only when these are in place can people go to a country and undertake business confidently. For us at APEC, in contrast to other development agencies that focus on physical infrastructure, economic infrastructure is of paramount importance.

We are trying to exchange our ideas concerning what is required to reach a satisfactory level of economic infrastructure, as well as sharing know-how on how to build this institutional capacity. We focus a lot on human resources, which we see as a top priority in country development. We hold regular ministerial-level meetings with member countries focusing on this issue, such as the meeting in May 2012 at the Ministry of Education in Korea. We have an exchange of know-how between developed and developing countries with APEC on how to unlock human capital.

What is your vision for integrating the economic community of the APEC bloc through the TransPacific Partnership (TPP)?

YACOB: The TPP is being negotiated among nine economies. It just so happens that they are all APEC members, but these negotiations are taking place outside of APEC at World Trade Organisation (WTO) level or in other organisations. APEC is not a negotiating forum, it is a forum for building consensus and exchanging ideas. APEC is interested in the TPP for two reasons. It has long been our goal to establish a free-trade area in the Asia-Pacific region. One way is to build on existing free-trade agreements (FTAs) such as the Association of South-East Asian Nations (ASEAN), ASEAN+3, the North American Free Trade Agreement (NAFTA) and bilateral FTAs, and to use these as building blocks.

We are also interested because APEC traditionally acts as an incubator of ideas. The TPP countries want to achieve a high standard agreement that addresses next generation trade issues. Given the challenge of negotiating less traditional issues in trade we have a natural complementary role to play as an incubator and a forum for these next generation trade issues. Specifically these refer to innovation policy and participation of small and medium-sized enterprises in the global production chain.

How can the technological know-how of many APEC countries contribute to developing technology and downstream industries in Latin America?

YACOB: This goes back to what I said about innovation policy among APEC members. It is a new item on our agenda and was added last year. One thing that members agree on is that this process must be market based and secondly, that there is an urgent need to invest in research and development. They agree that they need to protect intellectual property rights so that people who invest in research and talent development are properly rewarded.

Which areas of economic activity between APEC members and South America do you see as having the biggest potential?

YACOB: Historically, Latin America’s focus has been North America. There is very little trade between Asia and Latin America because of geography. That is where the great potential lies for future expansion. It is hard to pinpoint in which precise sectors this expansion will take place because we are talking about two very diverse and large areas. This diversity makes these two regions very conducive to trade. APEC is working to build a network between Asia and Latin America, because networking these days is critical for trade development.