THE convergence of a high-pressure area over the Pacific Ocean could result in Peru being engulfed by low clouds and fog.

Minister counsellor at the Peruvian embassy in Kuala Lumpur, Carlos Vasquez Corrales, said the low clouds and fog usually cleared by this month and the capital, Lima, would bathe in spring sunshine.

But when the 21 leaders of the Asia Pacific-rim economies converge on the land of the Incas this week for the Asia Pacific Economic Cooperation (Apec) meeting, a different kind of fog could engulf the country.

They will have to find ways to save the region from a global economic slowdown.

Apec finance ministers met in Trujillo, Peru, in August, recognising that the US sub-prime mortgage crisis and the resultant credit crunch threatened global economic activity.
Apec has provided its 21-member economies many advantages. Since its founding in 1989, per capita gross domestic product (GDP) in Apec economies has increased by 26 per cent compared with an average of eight per cent for non-Apec countries.

The Apec region represents 41 per cent of the world's population, almost 50 per cent of world trade and 55 per cent of the world's GDP.

Apec countries have 2.7 billion consumers.

The global economic downturn could reverse all these positives, which makes this week's meeting in Lima crucial.

In their meeting in August, the finance ministers said they were determined to respond to any deterioration in their economies by reacting quickly, decisively and responsibly.

They came out with a statement on how they should respond to the global economic crisis.

"We recognise the need to put in place policies that will restore financial systems and support economic activity."

Malaysia has just announced a RM7 billion stimulus package to boost its domestic economy.

Exporting its way out of the crisis like it did in 1998 is no longer a workable option.

China, one of Apec's most powerful members, recently launched a US$586 billion (RM2 trillion) economic stimulus package.

Critics, however, said prevention was better than cure and they had pointed out to where the troubles first started and wondered why it took so long for the developed world to recognise the problem.

Even the recently-concluded G20 meeting in Washington failed to come up with concrete measures to ensure that the world economy would never again be put at risk. There was a sense of reluctance among the leaders to correct the world financial system, now dominated by rich nations.

It is baffling how a nation such as the US failed to notice its sagging credit market and its loose supervision of its mammoth financial system.

More so because the Bretton Woods institutions, which supposedly keep the world economy on an even keel, is located in Washington.

However, it is a welcome change for the G20 to recognise that there should be more democracy in the world's financial system.

But how this will be followed through remains to be seen.

Diplomats in Lima said Apec had a chance to step up the pressure in making the global financial system more democratic, especially given that at least three of the world's economic superpowers are in the grouping, plus the fact that several of the Asia-Pacific nations that have administered their financial systems with tighter rules are also members.

Apec must act for it is also in danger not only because the developed world is its vital market but also because its member countries' preoccupation with shoring up their domestic economies could risk the grouping's own initiatives.

Apec officials said the grouping would not achieve its Bogor Initiatives to free trade and investments in Asia Pacific by 2010 for developed economies and 2020 for developing economies.

This year's meeting in Lima is expected to be more interesting than the one in Sydney last year. It is also set to become the one with the highest turnout.

Deputy Prime Minister and Finance Minister Datuk Seri Najib Razak, who arrives today, will head the Malaysian delegation.

International Trade and Industry Minister Tan Sri Muhyiddin Yassin and Foreign Minister Datuk Seri Rais Yatim arrived yesterday.