APEC BUSINESS ADVISORY COUNCIL

REMARKS TO APEC SME MINISTERIAL MEETING

9 OCTOBER 2021

JULIA TORREBLANCA

CHAIR, ABAC INCLUSION WORKING GROUP

Honourable Stuart Nash, Chair of the APEC SME Ministerial Meeting

SME Ministers from the APEC Region,

Colleagues from the APEC Business Advisory Council,

Representatives of all the 21 APEC economies,

Good afternoon,

It’s a great honor for me to be addressing the APEC SME Ministerial Meeting today in my capacity as Chair of the ABAC Inclusion Working Group. 

On behalf of all my ABAC colleagues, I’d like to make use of these few minutes to report on our work during this year and the main topics that we – as business representatives – find critical for the sustainability and growth of micro, small and medium sized enterprises (MSMEs).

MSMEs are and will remain a source of economic and social progress throughout region. 

They represent roughly 97% of all businesses in APEC and provide over half of employment. 

By supporting MSMEs, we are supporting millions of families, contributing to the development of entrepreneurial communities and fighting against poverty with the most powerful tools available: the creation of opportunities and social capital. 

Giving MSMEs new opportunities and greater support is not optional, but essential – especially as the COVID-19 pandemic has badly hit these businesses, presenting them with novel challenges that include reduced cash flows and a widening digital divide.

Under our overarching theme of “People, Place and Prosperity – Tāngata, Taiao me te Taurikura”, we in ABAC have focused on three key areas we would like to bring to the attention of the SME Ministers today, with the aim of creating a more enabling environment for MSMEs and strengthening the collaboration among different groups across the APEC fora.  

You have before you our written advice which I would like to summarise.

First, we would like to highlight the importance of boosting digital transformation in the region. 

The COVID-19 pandemic has accelerated the digitalization of business models and the business environment by around a decade in our region. 

However, small business lag behind larger enterprises when it comes to digital processes, business models such as e-commerce, and digital tools that help firms to be more productive and innovative.  

Many small businesses lack the skills and confidence they need.

We accordingly urge APEC economies to develop a new digital ‘one stop shop’ platform to enable MSMEs to access the best that the region can offer in digital capability-builiding throughout their digitalization journeys. 

Both governments and private sectors can contribute resources to this platform.

That platform could perhaps replace the current, poorly resourced APEC SME Marketplace.  

As it currently stands, the Marketplace falls short of its potential and does not serve MSMEs as well as we need it to at this challenging time. 

While it is true that empowering MSMEs with new skills and knowledge will provide them with better opportunities and greater competitiveness in local and international markets, they will not be able to obtain the full benefit without a more business-friendly environment.  

ABAC urges APEC economies to focus its work in three areas in particular . 

First, we need to help small businesses to make use of digital tools – specifically e-invoicing. 

E-invoicing can make a real difference in the cashflow and back-office operations of small businesses, allowing them to focus on growing their businesses rather than chasing outstanding payments. 

However, this will require economies to collaborate on standards, regulations, and policies to enable e-invoicing to operate seamlessly across the region.  

We also need to encourage businesses to adopt this tool.

This is complemented by our second area of focus: seeking to create a more interoperable digital environment more generally. 

Currently, the digital landscape is fragmented in the Asia-Pacific region with different standards, policies and regulations across the 21 economies.  

We can help small businesses to be more successful if we streamline our approaches to paperless trade, e-signatures and the tax treatment of low-value e-commerce shipments.

Lastly, we have proposed the sharing and promotion of other best practices in support of MSMEs. 

We are proposing targeted APEC-wide research that help policymakers to identify just what these best practices are, and tailor their interventions accordingly.   

One very practical area where policymakers should take action is in relation to timely payments to MSMEs.   

A payment may only be a modest impost on a big firm or a government finance department, but may be critical to the survival of a small business.  

We urge APEC economies to commit urgently to establish timely payment policies for all government purchases, and to encourage and facilitate their business community to make the same commitment. 

We applaud those APEC economies who have already made this commitment.

Ministers, this year ABAC has had a strong focus on MSMEs and inclusion under the great leadership of our New Zealand colleagues. 

You heard from our Chair Rachel Taulelei earlier about our work in respect of the empowerment of women and Indigenous people. 

We hope that the recommendations I have outlined will contribute to your continuing attention to the sustainability of MSMEs in the years to come. 

Thank you for inviting us today to report on our work and for teaming up with us in benefit of those smaller businesses that need it the most. 

Thanks again and good afternoon to you all.