MANILA - Vice President Leni Robredo on Friday called on Southeast Asian governments to give priority to supporting micro, small and medium enterprises (MSMEs) towards promoting inclusive growth, calling it “the challenge of our time.”
In a keynote speech at the Prosperity For All Summit, Robredo urged the Association of Southeast Asian Nations (ASEAN) to exert greater effort in developing businesses initiated by the poor, identifying MSMEs as key in addressing poverty.
She noted how power has shifted over recent years: whereas before, the powerful created “extractive” institutions that served their interest, “the voiceless and powerless are now raring to be heard.”
“[W]ith technology and social media, their frustrations are being felt on a global scale. They are rejecting globalization, democracy, traditional media, economic blocs—things we never thought would be questioned during our time. We woke up one day to find that social media could give rise to massive global power shifts, upending long-held beliefs about how nations should be run,” Robredo said.
“This is why putting the welfare of MSMEs at the center of ASEAN’s agenda—essentially inclusive growth—is the challenge of our time,” she said.
She cited the stratified ASEAN economy: as wealth is divided among a few, the region continues to grapple with high poverty rates.
“While the number of Asian billionaires are growing, ASEAN is still home to many of the world’s poor. Small businesses are not graduating into big ones on a scale that can move the needle enough to change our future,” Robredo said.
The MSME sector itself is dealing with a major hurdle towards inclusivity: “middlemen” who “take advantage” of business savvy of small entrepreneurs, including farmers and businessmen.
“If we wait for growth to trickle down in this difficult environment, the rate by which poverty is growing will outpace us,” she warned
For instance, in the town of Siayan, Zamboanga del Norte, poverty incidence is at a staggering 97.5 percent, Robredo said.
Robredo called on ASEAN governments to promote an “inclusive business environment” to enable MSME development.
“The usual conditions need to be present: transparent and accountable governments, progressive taxation, level playing fields, and open markets,” she said.
Robredo said MSME development efforts must focus on industries that directly impact the poor, such as agriculture.
She cited farmers, a sector for which she had acted as counsel before her entry to politics, would often fall victim to abusive middlemen who get a chunk of profits out of their produce.
This had inspired Robredo to initiate a zero hunger program during her time as Camarines Sur Representative, where she encouraged the Department of Social Welfare and Development to tap local farmers for supplies for their feeding program.
“There are several lessons to be learned from this practice: one, convergence is critical. Poverty and support for small entrepreneurs are complex problems and require multi-faceted solutions. The second lesson is that innovation and financing are very important components of turning farmers into wealthy entrepreneurs,” she said.
The job will never be done unless progress has reached the poorest and remotest villages, Robredo said.
“As we go back to our drawing boards to think about coming up with inclusive business models, or how to rethink our structures and institutions, let us all remember that the final scorecard is what happens to the last, the least, and the lost,” said the Vice President.
“Prosperity for all and inclusive growth will heal our conflicted world,” she added.