APEC 2017: Delegates laud Vietnam’s financial cooperation initiatives

Delegates at the APEC Finance and Central Bank Deputies’ Meeting (Source: VNA)

Quang Nam (VNA) - International delegates attending the APEC Finance and Central Bank Deputies’ Meeting (FCBDM) spoke highly of four priorities for APEC cooperation initiated by Vietnam in 2017, including Long-term Investment in Infrastructure, Base Erosion and Profit Shifting, Disaster Risk Financing and Insurance and Financial Inclusion.

In an interview with Vietnam News Agency reporters on the sidelines of the FCBDM, Sebastian Eckardt, Lead Economist and Programme Leader at the World Bank Group, stressed that the priorities are important to many APEC economies.

He emphasised the significance of the avoidance of Base Erosion and Profit Shifting (BEPS) in the Asia-Pacific. He said “BEPS is an important topic in the region that is very strongly integrated, where you have a lot of companies operating across borders.”

In that context, corporate tax across border plays an important role for Vietnam as the country is currently home to a line-up of multinational corporations. Thus, it is crucial to set up a legal investment framework, including transfer pricing, Eckardt added.

[APEC 2017 Finance and Central Bank Deputies’ Meeting kicks off]

The Southeast Asian nation has experienced numerous climate change shocks, which have resulted in 0.5 percent loss in the national gross domestic products as estimated by the WB, he noted.

It is necessary to put in place efficient ways to ensure finance safety so that in case of disasters, finance can be mobilised quickly to support relief and promote the recovery of related construction.

Regarding financial inclusion, Eckardt said achieving financial inclusion will ensure that population and all enterprises can access to a wide range of financial resources and it is good for economic growth and alleviate poverty.

Michelle Theresa Curry, CEO at the Foundation for Development Cooperation, University of Sydney, also lauded Vietnam’s four priorities. She said that financial risk management tools should be prioritised, especially training for rural women in using credit services through commercial banks.

In a bid to promote financial inclusion, APEC economies should further connections, seek solutions to improve capital access for people living in rural and remote areas as they are playing an increasing role in sustainable agricultures, she added.

Under the national theme of APEC 2017 “Creating new dynamism, fostering a shared future”, the APEC Finance and Central Bank Deputies’ Meeting in Nha Trang in February 2017 has agreed on the four policy priorities in 2017.

On Long-term Investment in Infrastructure, the focus is the mobilisation of long-term capital from the private sector for infrastructure projects, especially protection of interests and risk mitigation for private investors in public-private partnership (PPP) projects.

Base Erosion and Profit Shifting is the topic of great concern of APEC member economies and strongly supported by international organizations, especially OECD and WB. Upon discussion in the Workshop on BEPS Action Plan Deployment in APEC (February 2017), FCBDM, and SFOM, the finance officials agreed on the necessity of strengthened knowledge and practice sharing, regional cooperation in training activities for awareness raising on BEPS and active participation in the BEPS project of G20/OECD.

On Disaster Risk Financing and Insurance, the topic focuses on financing regimes and insurance for natural disasters and subsequent compensation.

On Financial Inclusion, the discussion focuses on credit market and financial services products in order to serve the agriculture and rural development, for sustainable poverty reduction, reform and development of the agriculture sector.-VNA