Summary Conclusions of The

Summary Conclusions of the

APEC Budget and Management Committee Meeting

Singapore

16 February 2009

Introduction

1.  The APEC Budget and Management Committee (BMC) held its first meeting in 2009 in Singapore on 16 February 2009.

2.  The Meeting was attended by representatives from Australia; Brunei Darussalam; Canada; Chile; China; Hong Kong, China; Indonesia; Japan; Korea; Malaysia; Mexico; New Zealand; Peru; the Philippines; Papua New Guinea; the Russian Federation; Singapore; Chinese Taipei; Thailand; the United States of America (the United States); Viet Nam and the APEC Secretariat. The list of participants is in Annex 1.

3.  The Meeting was chaired by the Vice Chair, Mr Jaya Ratnam, from Singapore.

Agenda Item 1 : Chair’s Opening Remarks

4.  The Chair welcomed Senior Officials and BMC colleagues to the first BMC meeting of 2009. He conveyed the apology from the 2009 Chair, Mr Alberto Gonzales, for his absence at the BMC I due to prior commitments. Singapore, in the capacity of BMC Vice Chair, was happy to assist the BMC Chair in conducting the first meeting in 2009.

Agenda Item 2 : Adoption of Agenda

5.  The Vice Chair noted a revised draft agenda (2009/SOM1/BMC1/001) has been circulated on 11 February,. The Meeting adopted the revised agenda.

Agenda Item 3 : Remarks by the Executive Director

6.  The Meeting noted that the Executive Director (ED) had briefed the Senior Officials of the Work Plan at SOM 1 held earlier the day. BMC took note of the APEC Secretariat Work Plan (2009/SOM1/BMC1/002).

Agenda Item 4 : 2009 BMC Work Plan

7.  The Vice Chair introduced the proposed BMC Work Plan for 2009, which was drawn up based on the initiatives agreed by BMC at previous meetings and the follow-up actions on issues endorsed by the Ministers in 2008.

8.  BMC approved the BMC Work Plan for 2009.

Agenda Item 5 : Report of Small Working Group led by Singapore on Proposals to Strengthen the Budgetary Position of the APEC Secretariat

9.  The Meeting expressed appreciation to Singapore for leading the Small Working Group (SWG) to put up proposals to strengthen the budgetary position of the APEC Secretariat as outlined in 2009/SOM1/BMC1/004.

10.  In summary, the Meeting noted the following points –

o  The budget deficit faced by the APEC Secretariat was structural in nature. Members noted that the Secretariat strived to achieve a high level of efficiency in operation and was committed to continuous cost-saving. Notwithstanding vigorous austerity measures, the Administrative Account (AA) budget was still forecasted to run into deficit by 2010.

o  While it was important to ensure the Secretariat had the sufficient resources to provide the services as tasked by SOM and required by APEC fora, the Meeting emphasized that the Operational Account (OA) is an important part of the work of APEC. It is important to strike a balance in the appropriation of resources between the two accounts.

o  Apart from the OA, the Meeting noted that there were other funding sources for APEC capacity building activities such as Trade and Investment Liberalization Facilitation Fund and the APEC Support Fund.

o  Some economies raised the option of increasing members’ contribution in the medium- to long-term as a solution to the budget deficit. In view of the current economic climate and fiscal position of member economies, the Meeting agreed that any increase in members’ contribution would not be considered at this juncture.

11.  In the light of the above consideration, the BMC agreed to the SWG’s recommendations with a caveat that the impact on OA will also be taken into account in the periodic review. The recommendations in full are detailed below –

(i)  Forecasts of AA to be indexed for inflation of Singapore.

(ii)  Establish the principles for a sustainable and balanced AA budget for the Secretariat, i.e. contributions must be equal to expenditure.

(iii)  Institutionalise a periodic review mechanism of the APEC Secretariat’s budget. The needs of the AA budget can be reviewed against a Strategic Plan for APEC to be agreed by APEC economies.

(iv)  The budget review to take place every three years against the Strategic Plan. The impact of the exchange rate on the OA will also be taken into account in the review. The first three-yearly review will be initiated in 2010 for the period of 2011-2013 against the agreed Strategic Plan. In the interim, if the AA budget runs into deficit in 2010, it will be covered by drawing down the OA.

(v)  Starting in 2011, the AA and OA will be assessed and received in a mix of Singapore dollars (for AA) and US dollars (for OA). Member economies’ contributions will be allocated first to meet the AA budget requirements, while the remaining contributions will be allocated to the OA.

(vi)  If and when there is a shortfall in the OA, this will be funded through voluntary contributions by member economies, as deemed necessary.

(vii) The exchange rate of US$1=S$1.50 will be used in determining the allocation of contributions to the OA.

12.  As to Canada’s suggestion to consider a review of the membership contribution formula, the Meeting agreed that, as a separate exercise, Canada would provide a paper at the next BMC for further consideration.

Agenda Item 6 : Project Management Reform

13.  The Meeting agreed to form the Project Management Working Group. Australia; China; Japan; and Hong Kong, China expressed interests in participating in the group, under the chairmanship of the United States.

14.  Australia updated the BMC on the progress of two project management reform consultancies funded by the Effectiveness Grant, one on risk management in devolution of project management and the other on classification and ranking of projects. The selected consultants would work closely with Secretariat and the Working Group with a view to submitting the detailed recommendations to the BMC 2.

15.  In view of the on-going project management reform, the Secretariat proposed to re-scope the upgrade of the Project Database and APEC Information Management Portal to prevent unnecessary work/resources being expended on issues that might become obsolete, irrelevant and/or substantially changed. The Meeting took note and requested the Secretariat update the progress and costing of the relevant upgrade work at the next BMC.

16.  Australia announced during the Leaders’ Week in 2008 that she would provide A$1.3 million to the ASF, including A$1 million to the Human Security sub-fund and A$0.3 million to the ASF General fund, and an additional A$0.7 million to help build the project management system in APEC. The Meeting expressed appreciation to Australia for the contributions.

Agenda Item 7 : Other Business

7.1 Role and Status of BMC

17.  The Meeting reaffirmed that BMC should continue to receive the appropriate level of engagement from economies for it to progress effectively, as APEC works to manage the impending budget deficit and considers measures to further strengthen project management.

7.2  APEC Project Assessments – Strengthening the Policy Criteria

18.  Australia presented a paper on strengthening the SCE Policy Criteria (2009/SOM1/BMC1/006). The Meeting agreed that there would be value in strengthening the SCE Policy Criteria and the BMC would request the SCE consider prioritizing APEC’s capacity building priorities, preferably ahead of the 20 March deadline for project proposal submissions. The Meeting endorsed the paper with the following textual amendments –

o  To provide illustrative examples on the policy criteria of the relevant priorities

o  To delete “everything cannot be a priority” from the first principle proposed for considering the SCE Policy Criteria

o  To delete the relevant principle relating to AELM and ministerial declarations

19.  The endorsed BMC paper, which appears as Annex 2, would be submitted to the SCE for consideration at its coming meeting.

7.3 APEC’s accounting practice

20.  Upon member’s enquiry, the Secretariat confirmed that the Secretariat prepared its financial statements in accordance with Singapore Financial Reporting Standards which are in line with international best practices. The existing accounting standards and practices cater for the need of multi-year projects and project funds being dispersed all year round.

7.4 BMC Meeting Calendar

21.  The Meeting confirmed that the BMC would meet again at the margin of SOM II and some time well ahead of CSOM. Exact dates would be proposed by the Secretariat.

Agenda item 8: Classification of Documents

22.  The Meeting noted the classification list which appeared as 2009/SOM1/BMC1/000.

APEC Secretariat

February 2009

Annex 1

Delegates to BMC - Attendance at BMC 1

Singapore, 16 February 2009

Economy: Australia
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr Andrew Todd / Assistant Secretary / APEC Branch / Department of Foreign Affairs & Trade
2.  / Mr Quinton Devlin / Director / APEC Branch / Department of Foreign Affairs & Trade
3.  / Ms Gaynor Shaw / Director / East Asia Regional Section, / AusAID
4.  / Ms Leah Yeak / Executive Officer / APEC Branch / Department of Foreign Affairs and Trade
Economy: Brunei
1 / Md Hakashah Hj Abd Samad / APEC DESK / Foreign Affairs and Trade
Economy: Canada
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr John Sloan / Senior Official Director General / Economic Policy Bureau / Foreign Affairs and International Trade Canada
2.  / Mr Aaron Coe / Economic Policy Officer / International Economic Relations / Foreign Affairs and International Trade Canada
3.  / Ms Tara Preston / DOL / Foreign Affairs and International Trade Canada
Economy: Chile
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr Rodrigo Contreras / Senior Official / Director of Multilateral Economic Affairs / MOFA Chile
2.  / Mr Felipe Sandoval / CTI / APEC / MOFA Chile
3.  / Ms Kareen Garrido / Coordinator / APEC / General Directorate for International Econocmic Affairs/MFA
Economy: China
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr Ji Tao / Deputy Director / APEC Division, Dept.of International Organizations and Conferences / Ministry of Foreign Affairs
2.  / Mr Hong Xiaobing / Third Secretary / APEC Division, Dept.of International Organizations and Conferences / Ministry of Foreign Affairs
3.  / Ms Su Xu Dong
4.  / Mr Liu Xiaodong
Economy: Hong Kong, China
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr. Joseph YT LAI / Senior Official/ Director-General of Trade and Industry / Trade and Industry Department / The Government of the Hong Kong SAR
2.  / Miss Leonia TAI / Deputy Director-General of Trade and Industry / Trade and Industry Department / The Government of the Hong Kong SAR
3.  / Ms Eva Y L Yam / Assistant Director-General of Trade and Industry / Trade and Industry Department / The Government of the Hong Kong SAR
4.  / Ms Diana Lee / Trade Officer / Trade and Industry Department / The Government of the Hong Kong SAR
Economy: Indonesia
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1. / Mohammed Hamzah Thayeb / Director General/SOM Leader / Director General of Asia Pacific and African Affairs / Department of Foreign Affairs
2. / Mr Ibnu Hadi / Director / Directorate of Intra-Regional Cooperation for Asia-Pacific and African Affairs / Department of Foreign Affairs
3. / Ms Adelia Ogantini / Staff / Directorate of Intra-Regional Cooperation for Asia-Pacific and African Affairs / Department of Foreign Affairs
Economy: Japan
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr Takuya Sasayama / Director / APEC Division, Economic Bureau / Ministry of Foreign Affairs
2.  / Mr Mitsuhiko Sugita / Official / APEC Division, Economic Bureau / Ministry of Foreign Affairs
3.  / Mr Tetsuro Fukunaga / Director, / APEC Office, Trade Policy Bureau / Ministry of Economy, Trade and Industry
4.  / Mr Yuya Hasegawa / Deputy Director / APEC Office, Trade Policy Bureau / Ministry of Economy, Trade and Industry
5.  / Mr Yutaka Kadoya / Official / APEC Office, Trade Policy Bureau / Ministry of Economy, Trade and Industry
6.  / Mr Naoki Ida / Deputy Director / Office of Regional Customs Cooperation, Customs and Tariff / Ministry of Finance
7.  / Mr Kenichi Tagami / Section Chief / Office of Regional Customs Cooperation, Customs and Tariff / Ministry of Finance
Economy: Korea
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Dr Bek Bunhyum / Director / Regional Cooperation Division / Ministry of Foreign Affairs and Trade
2.  / Lee Soojin / 2nd Secretary / Regional Cooperation Division / Ministry of Foreign Affairs and Trade
3.  / Lee Hyunseung / Deputy Director / Ministry of Foreign Affairs and Trade
Economy: Malaysia
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1. / Ms Ho Soo Quen / Senior Principal Assistant Director / APEC / Ministry of International Trade and Industry
2. / Ms Faezatun Fazirah / ASSISTANT DIRECTOR / APEC
Economy: Mexico
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr Roberto Zapata / Director General for Multilateral Regional Negoti / Ministry of Economy
2.  / Ms Monica Contreras Rosales / Director for Multilateral Regional Negotiations / Ministry of Economy
3.  / Mr Jason Martinez Jurado / Deputy Director for Multilateral y Regional Negotiation / Ministry of Economy
Economy : New Zealand
Name / Designation/
Position / Department
Division / Ministry/
Organization
1 / Mr Stephen Payton / APEC Senior Official / Ministry of Foreign Affairs and Trade
2 / Ms Wen Powles / Deputy Senior Official designate / Ministry of Foreign Affairs and Trade
3 / Mr Philip Houlding / Policy Officer / Ministry of Foreign Affairs and Trade
4 / Ms Jennifer Wilton / Policy Officer / Ministry of Foreign Affairs and Trade
Economy: Papua New Guinea
Name / Designation/
Position / Department
Division / Ministry/
Organization
1 / John Michael Emilio / DIRECTOR (MULTILATERAL ECONOMIC AFFAIRS) / DEPT. OF FOREIGN AFFAIRS AND TRADE
2 / Mr Robert Gondo
Economy: Peru
Name / Designation/
Position / Department/
Division / Ministry/
Organization
1.  / Mr Luis Quesada / SOM Peru / Director General of Asia-Pacific Affairs / Ministry of Foreign Affairs