31 August 2012
The world’s economy is at a crossroads. On one path, the problems plaguing our planet—food insecurity, population growth, climate change, resource limitations, security issues—threaten to overwhelm our increasingly beleaguered institutions. On the other path, thought leaders from all walks of life innovate solutions and models to address the global shift brought about by the Technology Revolution, and in the process, find new opportunities in previously intractable problems.
Global leaders, from both the public and private sectors, are acutely aware of the fine line we tread, but opportunities to address such issues at the international level are not always forthcoming. Too often, the summits designed to make progress on these issues are interrupted—the Euro crisis has been quite the distraction at the last few G8 and G20 meetings—or caught up in other concerns. The Asia-Pacific region, with the exception of a few major economies, has largely remained on the periphery of this economic drama, the 54 percent of the global GDP represented affected somewhat more lightly by the downturn.
Russia’s focus at this year’s APEC Summit of “Addressing Challenges, Expanding Possibilities” is not only a reflection of its own vision for its future, but also a vision of a grander, region-wide effort towards integration and cooperation. As one of the largest economies in the world and the fastest-growing consumption levels per capita among BRICS nations, Russia brings a unique perspective to this APEC Summit as a developing economy working through the challenges and opportunities such a position brings. How does a country with a long history of state-controlled industry adjust to an era of trade liberalization, economic integration, and pervasive interconnectedness?
Russia’s leaders are not alone in the Asia-Pacific in believing that modern-day capitalism is not the whole answer for developing economies. Several panels at the CEO Summit will discuss the future of capitalism, globalization, and the global financial system in a new generation of international political economy. Upheaval and uncertainty triggered by the 2008 financial crisis, and spurred by a continued slowdown in international trade (that is beginning to cut into the Asia-Pacific economies), capitalism is facing a legitimacy crisis, and APEC leaders will have to find innovative new models for a polished, reformed capitalism if it is to be considered the system of choice for the billions of new middle class workers in growing economies.
Who makes up this new middle class? Emerging economies globally are increasingly being targeted as the new wave of consumers. This middle class is well educated, and works with governments to improve education in their communities to ensure that their children are given even better opportunities. They are extremely tech-savvy, and it is highly likely that the biggest technology developments yet to come—the “next Facebook,” if you will—will be thought up in an emerging economy. Perhaps most importantly, this new middle class will see a role for women as the decision-makers unmatched at any point in history, and how women chose to care for their families and communities will have a ripple effect on international trade.
In the end, however, these momentous opportunities will come full circle, as APEC’s Russian hosts have pointed out, and return to the challenges of the modern age. Fresh water supplies are threatened by industry, climate change, and population growth; meanwhile, some of the most extreme weather on the books threatens our food supply. As cities become centralized hubs of economic innovation, the challenges of prophetic yet functional urban planning runs up against increasingly complicated issues of supply chains and waste disposal, not to mention the scores of public health issues and non-communicable diseases that seem to be the mark of modern living. Opportunity must be balanced with challenges; innovation with caution will be the motto of a new model of global trade. This year’s APEC Summit sits at a critical juncture, and the delegates must rise to the challenges of the new era.
This article was originally published in the CAT Company's special annual APEC Summit 2012 edition. Published with permission.
Image courtesy of the APEC Secretariat. Copyright 2012.