Global MSMEs necessary to boost overall economic welfare
CEBU CITY – Dr. Ramon Clarete, former Dean and current Professor of the University of the Philippines (UP) School of Economics, presented benefits of engaging MSMEs in international trade as well as the necessary measures to facilitate their participation in the global market. He said, “Encouraging businesses, particularly micro, small, and medium enterprises (MSMEs) to participate in global trade appears to be the new frontier in expanding regional and global trade, with larger gains in efficiency. “
Dr. Clarete joined Department of Trade and Industry (DTI) Assistant Secretary Ceferino S. Rodolfo, Philippines’ APEC SOM Lead for Trade, during the Asia Pacific Economic Cooperation (APEC) Third Seniors Officials Meeting (SOM3) on 05 September 2015.
In fact, a modeling study published by the Asian Development Bank Institute (ADBI) indicates that having more MSMEs in export markets pushes overall economic welfare. “Economic welfare gains are higher with global MSMEs. There will be more variety of products as more MSMEs become exporters, average productivity will rise as more resources get allocated to exporting enterprises, and competition in the global market will intensify which, in turn, will lower the average costs of products. Thus, it is only reasonable to seek trade reforms, policies, and regulations that will engage more MSMEs in the global market,” explained Dr. Clarete.
“There is an added advantage to adjusting policy reform lenses towards addressing the barriers that particularly impinge on the participation of the largest group of businesses – the MSMEs. Inclusiveness does not only distribute the gains from trade more equitably among trading partners, it also increases the pie significantly,” said Dr. Clarete.