How will APEC benefit the poor?

Amid all the road closures, work and school breaks, no-fly zones, and other schemes that have virtually driven Metro
Manila to a standstill, many Filipinos are asking, “Is APEC worth all the trouble?”

While some describe as “overkill” or “overacting” the extensive preparations leading to the ultimate APEC Economic
Leaders’ Meeting (AELM) that was preceded by many technical working group discussions, ministerial meetings, and
high-level policy dialogues here, many view our hosting as a great honor and precious chance to show our vaunted
Filipino hospitality and promote our products and culture to policymakers whose decisions affect the lives of millions.

And as host of APEC 2015 that has the theme “Building Inclusive Economies, Building a Better World,” the
Philippines has all the right to prod APEC economies to address widespread poverty and make economic growth
inclusive and bring relief to those still living in abject poverty despite our country’s economic performance.

“As the clamor for progress that leaves no one behind resounds the world over, the Philippines has the opportunity to
set a global example of inclusivity this year,” President Aquino said at the start of our country’s hosting year for APEC
which accounts for approximately 40 percent of the world’s population, 54 percent of world’s GDP, and about 47
percent of world trade.

But how exactly could APEC 2015 build inclusive economies to alleviate poverty which remains a daunting challenge
here, with one in four Filipinos extremely impoverished?

Among many APEC initiatives, answers could be found in a framework expected to be endorsed at the AELM that
recognizes the need to “harness opportunities for businesses particularly for micro, small, and medium enterprises
(MSMEs).”

Trade and Industry Undersecretary Adrian Cristobal Jr. was a recent guest in my teleradyo program Sagot ko ‘yan
(DZMM, 8 a.m. Sundays) and he said that the Philippines will urge APEC to boost the participation in global trade of
MSMEs, which comprise about 99.58 percent of all the 944,897 enterprises in our country and contributes 64.97
percent of total jobs, according to latest (2012) statistics of DTI. Across the Asia Pacific region, MSMEs make up 97
percent of all enterprises and provide 67 percent of all jobs.

To help MSMEs’ participation in global trade including “access to finance, e-commerce, and markets,” APEC trade
ministers have developed the Boracay Action Agenda to globalize MSMEs, along with an implementation plan to
work with APEC’s private sector arm known as APEC Business Advisory Council on “complementary projects and
efficient use of resources in implementing MSME initiatives.”

I believe strengthening MSMEs to attain its full potential is indeed essential considering its tremendous capacity to
help solve the country’s most daunting problem of widespread joblessness and its capability to bring forth a more
equitable distribution of wealth across broader sections of society especially the poor. With strong MSMEs, the ranks
of the poor could decrease as the middle class expands.

Another way to alleviate poverty is for government policies and programs to be “complemented by business-driven
solutions to poverty” particularly by what is known as “inclusive business (IB)” whereby “companies engage the poor
and low-income communities as partners, customers, suppliers, and employees in their supply chains not out of
charity, but because it makes good business sense.”

At last week’s APEC High Level Dialogue on Inclusive Business, Cristobal cited IB models like that of Kennemer
Foods’ cacao growership program wherein small farmers supplying cacao beans are set to achieve a seven-fold
increase in annual income that will lift them out of poverty. “The farmers also saw a four-fold increase in crop yield,
making them more productive contributors in the growing economy, while ensuring for Kennemer a reliable supply of
cacao in the long term to satisfy orders from global customers. Kennemer is looking to integrate a total of 35,000
farmers into the program by 2020.”

He also cited Nestlé’s program providing training and technical support to Filipino farmers so they become direct
suppliers. ‘Through a combination of direct buying and capacity building, Nestlé is hoping to grow local sourcing from
30 percent to 75 percent of total supply, while engaging over 83,000 farmers as suppliers, by 2020. This is expected
to result in significant supply chain cost savings for Nestlé, as well as new competitive advantages from the use of
Philippine Robusta coffee beans, which offer superior yields in instant coffee processing,” Cristobal said.

Should our MSMEs and these IB programs reap success, the Philippines can indeed “set a global example of
inclusivity” that would make all our efforts and sacrifices in hosting the 2015 APEC events really worthwhile.