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SINGAPORE: The global economy will be the topmost concern of Asia Pacific leaders as they gather for meetings in Singapore next week.
While there are signs of an upturn, analysts said on Friday there are still concerns that the global economic recovery is not on a solid footing.
Song Seng Wun, regional economist, CIMB-GK Research, said: "Basically, (they have to work on) how to get the global economy back on track, to 4 to 5 per cent growth, which the economy experienced prior to the Lehman collapse. These are essentially issues which will be on the agenda.
"It's all about banking sector reforms, about what people and the government will do if the US economy enters into a period of patchy growth, etc. Essentially, (it's about) governments working together, closely together, and more coordinated efforts to ensure speedy, sustainable recovery."
David Cohen, director of Asian Economic Forecasting, Action Economics, said: "I think we'll hear a number of issues that are likely to get discussed. One will be just reassuring the world that the leaders will cooperate to promote the continued recovery in the global economy from the downturn that we experienced in the past year. The recovery seems to be starting, but people are still afraid. They don't want to derail it."
With the outlook for Asian exporting economies still uncertain until their key markets in the United States and Europe are back in strength, analysts said they expect APEC members to reach an understanding on the issue of not withdrawing stimulus policies too early.
At the same time, they would explore how the large savings pool in Asia can be utilised to drive demand.
APEC may only comprise 21 members, but they represent some 54 per cent of the global economy, including the three biggest economies – the US, Japan and China.
Analysts said they will also push for world trade talks to continue, although any specific progress on that front might be unlikely.
"The only thing these gatherings produce is really, a nice photoshoot, a commitment to open borders, to increase trade because the general statement will be: Open borders lead to increased economic activities, therefore leading to overall well-being and improvement for all. But we all know that there are always barriers, always issues on micro level which could prevent that," said Mr Song.
Mr Cohen said: "I doubt we'll see much in the way of concrete measures. There might be some new bilateral trade agreements announced and perhaps, (they will) try to have APEC evolve into a broader free trade agreement, more like the EU, but that will take awhile."
The APEC meetings take place annually, with the members taking turns to play host. This is the first time Singapore is hosting the event.
- CNA/so
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