At their meeting just concluded in Lima, Peru (Nov. 22-23), APEC Economic Leaders, in addition to their Annual Declaration, issued a separate Lima Statement on the Global Economy.

This reflects concerns expressed at and the outcomes of the 15th Finance Ministers' Meeting (FMM), which took place in Trujillo, Peru from November 5-6. In the midst of the global financial crisis, the gathering of Finance Ministers and representatives of key international financial institutions was able to assess measures taken around the region so far to address the current turmoil on global financial markets. The meeting also discussed the need for medium and longer term reforms of regulatory and institutional regimes for the world's financial sectors. A Joint Ministerial Statement issued by the meeting included the following:

• A strong endorsement of the recommendations of the Financial Stability Forum (FSF), the G7 Finance Ministers and Central Bank Governors Plan of Action and the G20 special session of Finance Ministers; and welcomed the convening of the G20 Leaders' Summit on Financial Markets and the World Economy held in Washington on November 15;
• A commitment to resist protectionist measures and a call for a prompt, ambitious, comprehensive and balanced conclusion to the WTO Doha Development Agenda negotiations, noting that the crisis has underlined the interdependence of markets and the importance to all inter-linked economies of continued trade liberalization and market reforms, including behind the border structural reforms; and
• Tasked the newly established APEC Policy Support Unit to undertake research into behind-the-border impediments within food supply chains, in recognition that, although food and commodity prices have fallen recently, their volatility continues to place pressure on APEC economies and their most vulnerable citizens;

Member economies and the partners in the FMP process, including the World Bank, the IMF, the Asian Development and Inter-American Development banks, and the APEC Business Advisory Council, presented papers and relevant case studies on the global and regional economic situation, as well as on the 2008 FMP policy themes:

• On the 2008 policy theme improving the quality of public expenditure, Ministers exchanged lessons learned and regional best practice on ensuring value-for-money for taxpayer funds, including use of a key tool in this area: results based budgeting.
• The second policy theme was capital markets. Since lack of transparency and inadequate regulation of capital markets is at the heart of the current financial crisis, Ministers agreed that cooperation on regulatory reform and a continued focus on strengthening capital markets together with efforts to broaden the institutional investor base, should remain priorities in 2009.

• There was recognition of the pressing need for infrastructure development in APEC economies and agreement to work on linkages between PPPs and capital market development.

  • Finance Ministers also agreed to a set of common principles to provide guidance in developing well-functioning and transparent markets for PPPs.

  • It was recommended that Leaders call on Finance Ministers to examine more fully the means to optimize linkages between private infrastructure finance and growth and development, and report back in 2009.

• It was also agreed that greater participation by emerging market economies in fora such as the Financial Stability Forum would enhance the effectiveness of such standard setting bodies, and that this should be looked at in the near future.

Ministers also endorsed continuing work in 2008-9 under the twelve policy initiatives of the FMP.

In 2008 Senior Finance Officials also worked closely with Economic Committee officials in preparing the inaugural APEC Structural Reform Ministers' Meeting, hosted by Australia in August 2008. This meeting addressed the benefits of structural reform, with a particular focus on regulatory reform; strategies for successful implementation of reform, including political considerations; and robust legislative and institutional frameworks. A key deliverable was endorsement of the Good Practice Guide to Regulatory Reform and agreement that FMP and EC should continue to work closely on matters of common interest.

In 2009 Singapore will host the SFOM and FMM meetings, under the overarching theme "Promoting Inclusive Growth," with the two policy themes for 2009 being Maintaining Social Equity and Resilience and Developing Capital Markets to Foster Growth.

Activities under the FMP Policy Initiatives in 2008-2009 will include:

• A timely APEC funded initiative, given the current global financial crisis: Training on Enhancing Risk Management & Governance in the Region's Banking System, to take place at the APEC Finance Development Centre (AFDC) in Shanghai from 8-12 December, 2008. The program, for invited senior policy makers and banking regulators from the APEC developing member economies, will consider the handling of liquidity pressures confronting global banking systems.
• A workshop on Building the Institutional Investor Base, to be held in Malaysia, in March 2009, and a seminar and workshop on the same topic to be held back to back with SFOM 6 in Singapore in July, 2009.