Jakarta - Micro, small and medium-sized enterprises (MSMEs) play a significant role in transforming the ASEAN bloc towards a circular economy and prepare the region for sustainable future, Kao Kim Hourn, Secretary-General of the Association of Southeast Asian Nations (ASEAN), said in an article published on Monday.

The Vietnam News Agency (VNA) quoted Kao as saying that deeply rooted as part of local society, MSMEs are frequently regarded as vital enablers of socio-economic development. In ASEAN, MSMEs account for 85 percent of employment and 44.8 percent of the region’s GDP. They provide primary sources of income and livelihoods for a significant number of individuals and households.

His writing titled “Empowering ASEAN MSMEs to embrace circular economy” marks the UN’s MSME Day (June 27) in recognition of the tremendous contributions of MSMEs to the achievement of the UN Sustainable Development Goals (SDGs).

The ASEAN leader said in the last three years, the region witnessed many businesses, particularly MSMEs, rapidly adopting innovative technologies and practices to remain relevant and competitive.

Additionally, in building a circularity ecosystem, technology adoption also plays a crucial role in enabling better tracking and traceability while supporting innovative business models, the article further explained.

He said that those developments resulted in reduced physical resource requirements, decreased commuting-related emissions and sharing economy being enabled through digital platforms. The development illustrates how an MSME sets sail on their journey towards the circular economy.

The Secretary-General of ASEAN said that to build an enabling environment for MSMEs to thrive in a circular economy, governments must put in place a long-term strategy and implement balanced actions that create strong economic incentives. This endeavour should be supported by good governance and close stakeholder engagement, investment in infrastructure and technology, as well as human resource development.

Kao emphasised that it is imperative that ASEAN, across all sides, whether public or private sector, work closely together to support and nurture more MSMEs.

“As we honour the importance of MSMEs and the role they play in the economy, let us also recognise the challenges that they face, particularly in accessing financing and technology. By addressing these challenges and creating a conducive environment for MSMEs to thrive, we can unlock their full potential and contribute to sustainable economic growth,” he said, in conclusion.