EXECUTIVE SUMMARY

This third Policy Report of the APEC International Assessment Network (APIAN) assesses the strengths and weaknesses of APEC as an institution and proposes reforms to enhance its efficiency and effectiveness.

We fear that APEC, despite its many accomplishments, has been losing ground. Yet, many of the reasons that drove APEC's creation remain valid today. Therefore, we urge APEC to do much more to get its own institutional house in better order.

Structures that may have been adequate in 1989 for an infant organization are now insufficient as APEC enters into its adolescence. Norms that were practical a decade ago are now damaging constraints that are preventing APEC from adjusting to new realities.

APEC's management structures have grown both too complex and too weak to meet the needs of a growing organization and requires a thorough overhaul.

APEC's decision-making rules, which require 100 per cent agreement, often producing paralysis, should be made more flexible.

APEC's outreach, which in earlier years was a source of strength, has languished, precisely when the private sector, academic experts, and other civil society actors are gaining weight in global diplomacy.

APEC's product has become scattered. APEC needs to clarify its roles in market liberalization, in economic co-operation, and in policy development. APEC's financial structure is woefully inadequate in comparison with APEC's goals and objectives.

Without reform, APEC will lose its competitiveness vis-à-vis alternative multilateral forums towards which APEC constituents will shift their energies. With reform, APEC will be better positioned to fulfill its promise and to help restore dynamism and confidence to the Asia-Pacific region.

Management Reform

To strengthen APEC's management and its Secretariat, we propose these options for consideration:

1. • The Executive Director should be a prominent figure that speaks for APEC, and who serves a multi-year term.

2. • Internal management of the Secretariat could be strengthened by creating a permanent senior level position responsible for management, possibly supplemented by a new level of permanent middle manager specialists.

3. • Experts should be hired on a multi-year basis to organize the critical tasks of research and evaluation. A renowned scholar should lead an economic research division capable of mobilizing the research skills of academics and experts from the region.