JEJU, South Korea, 9 September 2005 — Finance ministers from Pacific rim nations agreed yesterday to step up joint efforts to cope with high oil prices and other challenges to their economies, with host South Korea calling for market transparency to fight speculative demand for energy. Surging oil prices cast a long shadow over the 21-member Asia-Pacific Economic Cooperation Finance Ministers’ meeting, which had convened here for a two-day session on the themes of “free and stable movement of capital” and “the challenges of ageing economies.”The ministers or their deputies also addressed concerns over the sizzling US property market, which, if the bubble bursts, would seriously hamper the growth potential of the global economy, sources close to the meeting said.
In a keynote speech, South Korean Finance and Economy Minister Han Duck-soo said rising oil prices are pressing hard on most APEC member economies, clouding the Asia-Pacific economic outlook. “Rising demand, despite supply constraints, is the main cause pushing oil prices up. However, those factors that undermine the efficiency of the oil market, such as speculative demand and lack of transparency in market information, are also contributing to the consistent rise of oil prices,” Han said.
He said there is an “urgent” need for oil-producing and consuming economies to strengthen dialogue channels to help bring demand and supply into balance and enhance the oil market’s efficiency. “Until now, dialogue between the two parties (oil-producing and consuming economies) was unsystematic and sporadic. It is time for us to come up with more concrete and practicable solutions,” Han said.
APEC members consume more than half of global oil output and include four of the world’s five biggest oil importers - the United States, Japan, China and South Korea. A draft joint statement for the meeting obtained by AFP suggested participants will stress the need for more investment in oil production and refining capacity, coupled with technology transfer for energy conservation.
They will also call for an end to “demand-distorting” fuel subsidies and price controls. International Energy Agency reports issued over past months suggest that China is in effect heavily subsidizing huge growth in demand for oil to feed its insatiable economy.
