Source: Pacific Islands Forum Secretariat
Secretary General of the Pacific Islands Forum, Dame Meg Taylor
27 June 2020
The Pacific Islands Forum Secretariat, in its role as the Regional Focal Point (RFP) on Private Sector Development, recognises the power of big ideas driven by small Pacific businesses. Today the world celebrates the power of businesses who range from a single trader to those who employ less than 250 workers, and we join the Organization of the African, Caribbean and Pacific States (OACPS) regions to wish all ACP Micro Small and Medium Enterprises (MSMES) a happy and prosperous World MSME Day.
2020 has been marked by the unprecedented and evolving COVID-19 pandemic, which has caused an unparalleled global health crisis and economic slowdown. It has impacted millions of MSMEs across the Blue Pacific continent and many more worldwide. The pandemic continues to affect Pacific MSMEs – impacting our agriculture and food supply chains, manufacturing, hospitality sectors, and transport industry.
Pacific leaders of micro, small and medium businesses are the backbone of our national economies. They are major employers of our women and young people, and are a key driver of innovation.
Many MSME leaders depend on domestic and international trade for their activities, importing products for manufacturing and domestic consumption. MSMEs have borne the brunt of the COVID-19 pandemic’s economic impact. Many face limited access to scarce financial resources, and lack borrowing capacity. MSMEs are also particularly exposed to trade restrictions on agricultural products.
MSMEs face ongoing trade obstacles encountered prior to COVID-19, which undermine their progress towards more inclusive trade. The latest survey by our Pacific Trade and Invest Network (PTI) indicates the COVID-19 pandemic has negatively impacted a massive 88% of the MSMEs surveyed, with 66% reporting a significant decline in sales/revenue.
Nearly all the survey respondents believe the crisis will have a negative impact on their local economies, and although 70% are confident of their survival post-COVID-19, half of them do not expect revenue to return to pre-COVID levels until 2021 or later. 40% of businesses need support to access new markets, locally and overseas.
In addition to negative revenue impacts, nearly two-thirds of business decision makers are reporting that COVID-19 is having a negative impact on their mental health, with nearly a quarter reporting a very negative impact.
It is crucial that all micro, small and medium sized businesses have better access to regulatory and market information and access to finance. They also require easing of customs procedures and requirements, to facilitate imports and exports of their products. They could also make better use of the digital economy, particularly e-commerce, to facilitate the movement of goods through the global lockdown.
For the private sector to recover from the impact of COVID-19, the Intra-ACP Private Sector Development Programme needs to reprioritise access to finance.
It is crucial to facilitate and adopt flexible rules and procedures to enable ACPS to access finance under the Intra-ACP Private Sector Development Programme. This will ensure the survival of our indigenous private sectors and in turn contribute to achieving the SDGs.
Once again – Happy World MSME Day.