From the APEC Business Advisory Council
The Cebu Action Plan is a multi-year roadmap for reforms that focus on expanding funding of micro-and-small enterprises and infrastructure, increasing resilience of enterprises.
“Finance ministers and private sector leaders should collaborate more closely to expand funding for micro-and-small enterprises and infrastructure, increase resilience of enterprises and communities, and accelerate capital market development.” This is the main message in this year’s report of the APEC Business Advisory Council (ABAC) to Finance Ministers, according to Hiroyuki Suzuki, chair of ABAC’s Finance and Economics Working Group.
“These are the critical steps that APEC must take to catalyze the inclusive and broad-based growth that will transform our region into a strong and resilient engine of the global economy.”
ABAC’s report endorsed the Cebu Action Plan (CAP), a multi-year roadmap for reforms that Finance Ministers will announce at their annual meeting this coming September 10-11 in Cebu, Philippines.
Following these discussions, officials have identified concrete programs to expand SMEs’ access to finance, promote financial inclusion and improve the depth and liquidity of capital markets. They also agreed to launch initiatives to develop the pension and insurance industries, increase private sector investment in infrastructure and facilitate disaster risk financing.
The private sector is supporting the establishment of a network of experts from the financial industry, multilateral institutions and government to build credit information systems allowing more owners of small businesses to use their transaction records in obtaining loans. They will also help improve legal frameworks to enable SMEs’ wider use of movable assets as collateral.
The Asia-Pacific Financial Forum (APFF) will convene workshops under the CAP to promote policies and regulations that can facilitate trade and supply chain finance, as well as alternative financing mechanisms to spur investment in innovative start-ups. Experts from leading global banks, industry associations and multilateral institutions have committed to share their knowledge with policy makers, SMEs, lenders and investors.
Another initiative envisioned under the CAP is the holding of public-private dialogues to help officials design infrastructure projects that can attract private lenders and investors. These dialogues will also help identify regulatory disincentives that hinder pension funds and insurance firms from investing more widely in infrastructure.
The private sector will support governments’ efforts to develop capital markets, which are important for funding infrastructure and for increasing the diversity and stability of the financial system. APFF has developed self-assessment templates to assist governments in providing the information that investors need to increase their investments in the region’s capital markets.
The private sector will collaborate to identify reforms allowing investors to more effectively use risk management instruments such as repurchase agreements and derivatives that will help create deeper and more liquid securities markets. ABAC also called on governments to utilize APFF as a platform to support the successful launch of the Asia Region Funds Passport (ARFP), an initiative aimed at facilitating the cross-border flow of funds and regional financial integration.
Noting that the Asia-Pacific is the world’s most disaster-prone region, ABAC praised the CAP for including initiatives in microinsurance and disaster risk financing to help local communities and enterprises become more resilient. ABAC proposed that the CAP explicitly include concrete mechanisms for public-private collaboration in broadening access to microinsurance and developing effective financial instruments to support disaster risk financing.