Hawaii taxpayers foot the bill: Is APEC business our business?

Beth-Ann Kozlovich

with Beth-Ann Kozlovich

HONOLULU—Last year we all learned, or became reacquainted with, a set of letters: A-P-E-C, short for the Asia Pacific Economic Cooperation (APEC). You’ve probably got that acronym under your belt as well as the fact the 21 members are economies, not nations. (Think Taiwan for the reason why.) Regardless of all the talk about what the APEC summit will or won’t generate in hard, immediate cash for the state, the biggest global PR campaign from the State of Hawaii is about to go prime time. 

Anyone watching from afar will witness Hawaii doing its job of just being pretty. Many of the attendees may see that as well. Those who live in Honolulu who even now have little insight as to how the beefed-up security will impact their lives may also be treated to a heap of inconvenience with the raision d’etre that they need to take this one for the Home Team. Public sentiment, to hear some tell it, strongly supports the City and State in hosting APEC, despite the fact that there is no real quanitfiable measure of the meeting’s success.

Outsiders looking for some hard policy or real producibles to emerge from the meetings would best be advised to severely mitigate their great expectations—members know most of the real business of the gathering won’t reach the public any more than the real plans for the meetings’ security are being divulged. According to University of Hawaii Economic Research Organization (UHERO) economist, researcher, and professor, Sumner La Croix, APEC meetings are rarely about big agreements or changes in economic policy.

APEC meetings are rarely about big agreements or changes in economic policy.

“The work that APEC is supposed to be doing is facilitating trade, investment, and business,” La Croix says. “[APEC] succeeds marginally every year at its task. It really doesn’t have big accomplishments. It has very small ones and it’s not the kind of stuff that makes for big increases in growth rates.”

Some of those small accomplishments include making it easier for business people to go through customs. While that’s appreciated by the folks who travel extensively and would rather be on their way to getting businesses done than languishing in airports, the real work of APEC is adjunct to the job of the World Trade Organization (WTO).

“The WTO is where the main trade negotiations go on and those have been stalled for several years,” La Croix says. “One good thing APEC can do, even if it doesn’t necessarily come out with big, tangible results, is it can put some pressure on the WTO to come up with a better trade deal if APEC announces it’s thinking more about an APEC region.”

The Honolulu APEC summit marks the State’s entrance onto the world stage, La Croix explains, and will be a huge networking session and an unprecedented opportunity for Hawaii companies.

“It’s very rare that Hawaii hosts a conference of this magnitude,” La Croix says.

CEOs of global companies and ministers for the economies will rub shoulders, talk some business, and make contacts. But later, will they remember Hawaii? Will APEC members actually spread good tourism word-of-mouth and do business with its companies?

Right now, the message boils down to the firm assertion that if Hawaii shows well while the world is watching, the state can’t help but come out the winner ... eventually. So we shouldn’t worry about tiered discounts, rooms sans hotel tax, and personal purchases minus the general excise tax—or what a pain in the purse and the posterior it may be for merchants to make less plus meet the mandate to photocopy all those cute little animal coupons presented by APEC members. 

La Croix says we’d do better not to get excited about the State’s tax take because that, too, may not live up to expectation. And then there are the security costs. Spending estimates total at least $45 million. And while La Croix says that figure is nowhere near the $150-180 million Sidney spent in 2007, we’re still talking about 45 million real dollars needed to cover real expenditures now.

Still, when losses are subtracted from gains, we’re told, the net gain will show itself well worth footing the bill, even if we’re doing it on the come.

All of this is rather reminiscent of those backstage goodie bags given to celebrities in hopes they’ll be spotted wearing some of the usually trendy and expensive trinkets by brands hoping, in effect, that the public will be influenced. Only in our case, “Brand Hawaii” is also forking over taxpayer dollars to do it.

When the final accounting is done—and it will be if only for the sake of corroborating the honor bestowed on it—it will be tough to directly correlate a bottom line representing hard measurable results. Most of what data can be derived from the APEC experience will depend on two variables: the sensitivity of mechanisms to measure the spin-off, and the willingness of those involved to respond to them. Then there is the issue of what the public will really see and whether that will make most feel it was money well spent.

Should we be glad of APEC in our fair City, that our Hawaii is on parade in full view of the global business community? Sure. Should we be helpful, courteous, and kind ambassadors? Of course. Many of us do that anyway whether a tourist is from Paris or Peoria. But let’s be realistic: This is the APEC’s gig and most of us will be watching from the very far wings and kept out of the way.