Vital For Apec To Support SMEs To Bolster Regional Economies, Says Abac

By Mikhail Raj Abdullah KUALA LUMPUR, Nov 8 (Bernama) -- Asia-Pacific Economic Cooperation (Apec) leaders, who meet in Hawaii for their summit soon, must demonstrate solidarity in helping small-and medium-sized enterprises (SMEs) by implementing policies and strategies to boost micro-finance development in the region. The move, crucial to bolster regional economies and expand global commerce, would push the fledgling global economy to recover from the recent slowdown, particularly with Apec dominating 44 per cent of the world's trade and 55 per cent of Gross Domestic Product(GDP). "SMEs remain the backbone of every economy in the region, but they only contribute 30 per cent to the region's exports, hence they need financial backing to develop and expand further," said prominent banker and chairman of the Ambank Group of Companies, Azman Hashim. "Therefore, a steady recovery of SMEs -- especially the micro-enterprises, from the recent world financial crisis, is a pre-requisite for strong and sustainable growth, given their predominance in creating job opportunities and innovation," he told Bernama in an interview on Sunday. US President Barack Obama would host leaders from the Asia-Pacific region including Prime Minister Najib Razak at the Apec Economic Leaders' Meeting in Honolulu on Nov 13. The leaders would also hold a dialogue with Apec Business Advisory Council (Abac) leaders during the meeting on the same day. Abac is a permanent high-level business advisory group created by Apec in 1995 as a direct channel for business input into the Apec work programme. Azman, who is the Co-Chair of the Small Medium Micro Enterprises and Entrepreneurs Working Group in Abac, said financial assistance was essential to help in the development of the SMEs and micro-enterprises sector. "SMES are the major driving force of the sector's growth, from start-up, expansion, modernisation, technological acquisition and entry into foreign markets (and they) need funding for both fixed and working capital," he said. SMEs, inclusive of micro-enterprises, account for over 90 per cent of all businesses in Asia and employ as much as 60 per cent of the workforce. Of this total, micro-enterprises account for 70 per cent of the total SMEs in the region. Azman described microfinance as an effective and powerful vehicle to stimulate economic development and enhance social cohesion for both developing and particularly, less developed countries. "We would like for Apec to implement policies and strategies to boost micro-finance development in the region," he said. In Malaysia, SMEs contributed about 31 per cent to gross domestic product (GDP), 56 per cent to the workforce and 19 per cent to the country's exports. Cognisant of their continuing importance to the economy, Najib, who is also Finance Minister, proposed the setting up of a syariah-compliant SMEs Financing Fund totalling RM2 billion in the 2012 Budget. (US$1=RM3.07) He also announced a RM100 million revitalisation fund giving soft loans for such entrepreneurs to revive their business and a RM500 million commercialisation innovation fund to help SMES commercialise research products. Abac brings together three senior business executives from each Apec economy that advise leaders and ministers on priority concerns for the private sector in trade and investment liberalisation and business facilitation. The private sector grouping meets three times a year to develop its report and recommendations to Apec, which it delivers to leaders at their yearly meeting. Azman, along with Muhammad Radzi Mansor, chairman of Kumpulan Fima Bhd and Dr Ahmad Tajuddin Ali, chairman of UEM Group Bhd, would attend the Abac meetings from Nov 7-10. They would thereafter participate in the Abac SME Symposium, Trans-Pacific Partnership Forum, Apec chief executive officers' summit and Abac dialogue with the leaders on Nov 13. In their 2011 report to Obama and other leaders, Abac recommended that regional economies enhance the lending environment for SMEs, establish easily accessible and comprehensive credit reporting systems and bolster support for public-private financing initiatives. A strong and unified stand by Apec leaders to help SMEs would be pivotal to regional commerce as its 21-member economies account for 40 per cent of the world's population besides their dominance of global GDP and world trade. Set up in 1989, Apec's member economies include Australia, Brunei, Canada, Chile, China, Indonesia, Hong Kong, Japan, Malaysia, Mexico, New Zealand, the Philippines, Singapore, South Korea, Thailand, Taiwan, United States, Papua New Guinea, Peru, Russia and Vietnam. -- BERNAMA Malaysia