Spotlight on Barriers to Investment in APEC Region

The Hon Warren Truss MP
Minister For Trade
Deputy Leader Of The Nationals

Putting the Spotlight on Barriers to Investment in the APEC Region

Australian Minister for Trade, Warren Truss, today released a report on investment in member economies of the APEC region. Reducing Behind-the-Border Barriers to Investment has been prepared for the APEC Investment Expert Group by the Canberra-based Centre for International Economics.

"Investment is crucial to economic growth and to help reduce poverty for people across the APEC region," Mr Truss said.

"This report will inform APEC's growing work on investment and structural reform. Ministers will discuss these issues at the APEC Ministerial Meeting.

"Because most investment in member economies is sourced domestically, the reduction of these behind-the-border barriers to investment offers considerable potential for economic growth," Mr Truss said.

"I welcome the report and note that it reinforces the message from APEC Finance Ministers in August that continued structural reform is needed to tackle investment barriers in the region.

"It is the APEC way to encourage change rather than be prescriptive and this report is a store of valuable information that can be adapted to meet local conditions in member economies."

The report has found that restrictions to investment are greater in lower-income APEC economies than in the more prosperous ones and that domestic savings in the lower-income economies tend to be invested abroad despite ample investment needs and opportunities at home.

It identifies behind-the-border barriers to investment as encompassing domestic policies, rules, procedures and laws which may include excessive regulation, unclear property rights and poor legal systems. They increase costs and risks and limit business competition leading to lower productivity and growth.

The report concludes that if investors in APEC economies faced fewer barriers, investment would be higher and of a better quality, economic growth would rise and the incidence of poverty across APEC would fall.

Reducing Behind-the-Border Barriers to Investment is the second of two APEC complementary reports prepared by the Centre for International Economics for APEC on investment. The previous study - released in 2006 - looked at barriers to cross-border foreign investment.

ENDS

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