APEC "Pandemic Response Fiscal Policies Must Consider Long-Term Sustainability"

Joint Declaration of the APEC Finance Ministers' Meeting

[Sejong=Asia Economy Reporter Son Seon-hee] The Asia-Pacific Economic Cooperation (APEC) stated that fiscal policies responding to the pandemic should be adjusted to sustain economic recovery while considering the 'long-term sustainability' of fiscal health.

According to the Ministry of Economy and Finance on the 22nd, a joint declaration containing this content was adopted at the APEC Finance Ministers' Meeting held via video conference on the same day. APEC is the largest economic cooperation body aiming for economic growth and prosperity in the Asia-Pacific region, with 21 member countries including Korea, the United States, and China. The meeting was attended by finance ministers and government representatives of member countries, as well as officials from major international organizations such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD).

APEC member countries analyzed the current economic situation, noting that although the economies within the region rebounded due to the release of COVID-19 vaccines and the lifting of lockdowns in various countries, they remain exposed to downside risks such as the ongoing pandemic, inflationary pressures, and global supply chain instability.

Accordingly, the joint declaration included efforts to share and cooperate on policy experiences in fiscal and monetary policies and to maintain macroeconomic and fiscal stability by utilizing the IMF's Special Drawing Rights (SDR), among other measures.

Regarding budget and fiscal policies, the declaration emphasized the transparency and stability of fiscal policies in a direction that secures short-term stability while considering the 'long-term sustainability' of fiscal health. Furthermore, there was a consensus on the need to respond to long-term and structural threats and changes such as digitalization, productivity enhancement, welfare, climate change, and future shocks.

Yoon Tae-sik, Director General for International Economic Affairs at the Ministry of Economy and Finance, who attended the meeting representing the government, said, "It is time to proactively accelerate economic and social structural transformation in response to the rapid digitalization triggered by the COVID-19 crisis," adding, "Measures to bridge the information gap and inequality in the process are also important." He also emphasized, "We must resolve the deepened inequalities within and between countries caused by the shock of the COVID-19 crisis," and stressed the need for expanding employment and social safety nets for vulnerable groups, strengthening the free trade order, restoring global supply chains, and ensuring equitable access and distribution of COVID-19 vaccines.