APEC Expresses Concern over Rising Oil Prices
Saturday, September 23, 2000

The Third Senior Officials' Meeting of APEC 2000 concluded today (23 September) in Bandar Seri Begawan, Brunei Darussalam. During the two days of discussion, Senior Officials exchanged ideas over a wide range of trade and economic issues, including the question of maintaining the momentum for the early launch of a new round of multilateral trade negotiations in the WTO. Senior Officials also expressed great concern over the rising oil prices and agreed to pursue various actions to call for stability in its prices.

"Increase in oil prices will directly affect domestic consumption and will indirectly impact on the Hong Kong economy through our trade linkages with the rest of the world," said the Director-General of Trade and Industry, Mr. Joshua Law, at the meeting. "The combined direct and indirect impact of a 15% further increase in international oil prices is estimated to reduce Hong Kong's GDP by 0.4 of a percentage point."

"Many economies in the region have just started to recover from the Asian financial crisis. It would be very unfortunate if economic recovery is slowed down due to instability in fuel prices."

At the APEC meeting today, Senior Officials recalled that APEC Finance Ministers at their meeting earlier this month in Brunei called for "appropriate increases in supplies and other necessary measures to promote long-term price stability in the mutual interests of consumers and producers."

Senior Officials directed the APEC Energy Working Group to intensify its work when they next meet on October 19-20 in Peru. The Working Group is expected to draw up recommendations on energy efficiency, energy conservation, fuel substitution, etc.

"The rapid rise in fuel oil prices will remain a rising concern in the coming months. Impact on the APEC economies is likely to vary, with some being net consumers and others net suppliers of oil," Mr. Law said. It is expected that this oil issue will feature at the coming Economic Leaders' Meeting in November.

"Oil price movements will be closely monitored," Mr. Law said, "as Hong Kong has undertaken to be the coordinator for the 2001 Economic Outlook under the auspices of the APEC Economic Committee, we will invite individual economies to provide their impact assessment of the oil price hike on economic outlook for incorporation in the report."

During the two-day session, Senior Officials also discussed the rapid advancement in technology that brings about the new economy, the challenges and opportunities arising from this new trend, and how APEC could address the digital divide.