Asia-Pacific Current Affairs - 2020

Asia Pacific Economic Cooperation: Economic Decline of 2.7% expected in the region

The Asia Pacific Economic Cooperation has stated that the APEC region is to face an economic decline of 2.7% in 2020 due to the impact of COVID-19. Also, the region is to face near growth rate. This will be the highest decline for the region since the 2008 financial crisis.

Highlights

The unemployment rate according to the report of APEC was 3.8% in 2019 and it is to increase to 5.4% in 2020. The region is also expected to face an economic rebound in the year 2021. The anticipated growth of the region in the 2021 is 6.3%.

APEC

APEC comprises of Vietnam, US, Thailand, Taiwan, Singapore, Russia, Philippines, Peru, Papua New Guinea, New Zealand, Mexico, Malaysia, Republic of Korea, Japan, Indonesia, Hong Kong, China, Chile, Canada, Brunei and Australia.

It was begun in 1989. The forum was formed to leverage the growing inter dependence of the countries in the region of Asia-Pacific. The region has now been renamed as Indo-Pacific.

The three major observers of APEC include ASEAN, Pacific Economic Cooperation Council and Pacific Islands Forum.

India and APEC

India is not a member of APEC. For the first time, India was invited to be an observer in the association in 2011. India has requested for membership in APEC and had received the support from Japan, US, Papua New Guinea and Australia. There are constraints faced by India to join APEC as India does not border Pacific Ocean.

China’s interests in the new country Bougainville

Recently, Bougainville, a chain of islands voted for a referendum of independence from Papua Guinea. The referendum saw 85% voter turnout choosing Papua Guinea as second option. The referendum was introduced because the peace agreement signed before 20 years ended. The agreement was signed to end nine year conflict or civil war that killed almost 10% of the country’s population. Employment and land acquisition in the island by copper mines (owned by Papua Guinea, Australia and other foreign countries) were the major reason behind the war.

Implications 

The independence of the country sends strong signals to other movements across the Pacific, especially New Caledonia (a French collectivity) that is preparing itself for the second referendum. The other important message that the independence sends is for the so-called traditional partners of the Pacific namely US, UK, Australia, France and Japan. The referendum has taken place during the period when the strategic anxiety among the traditional partners of the Pacific is at its peak.

China’s interests

The prevailing situation in the Pacific is advantageous to China. China seeks to influence an independent Bougainville. The political and economic presence of china in the country has increased already. China’s support to the island will increase its support among the Pacific islands against Taiwan. It is important to note that Taiwan recently lost two of its Pacific allies this year. Australia, UK and US believe that there are possibilities of China bringing Bougainville into its debt trap diplomacy. China is also interested in Bougainville for its rich fisheries, copper, gold and other resources. Building strong ties with the country will help China increase its presence in the Pacific.