Jakarta (VNA)💛 – Micro, small and medium-sized enterprises(MSMES) play a significant role in transforming ASEAN towards a circulareconomy and prepare the region for sustainable future, Secretary-General of ASEAN Kao Kim Hourn said in an article published on June 26.

Hiswriting titled “EmpoweringASEAN MSMEs to embrace circular economy” marks the UN’s MSME Day (June 27) in recognitionof the tremendous contributions of MSMEs to the achievement of the UNSustainable Development Goals (SDGs). Kao said that deeplyrooted as part of local society, MSMEs are frequently regarded as vitalenablers of socio-economic development. In ASEAN, MSMEs account for 85% ofemployment and 44.8% of the region’s GDP. They provide primary sources ofincome and livelihoods for a significant number of individuals and households. Through partnerships with other local businesses, MSMEs are an integral part ofthe value chain, enabling access to a variety of products for their customersand servicing the local community. Due to their lean structure andversatile business model, MSMEs have the ability to embrace new developments,such as the circular economy and digital technologies. The ASEAN leader said in the last three years, the region witnessed many businesses, particularly MSMEs, rapidly adopting innovativetechnologies and practices to remain relevant and competitive. Additionally,in building a circularity ecosystem, technology adoption also plays a crucialrole in enabling better tracking and traceability while supporting innovativebusiness models. He saidthat those developments resulted in reduced physical resource requirements,decreased commuting-related emissions and sharing economy being enabled throughdigital platforms. The development illustrates how an MSME sets sail on theirjourney towards the circular economy. The secretary-general of ASEAN saidthat to build an enabling environment for MSMEs to thrive in a circulareconomy, governments must put in place a long-term strategy and implementbalanced actions that create strong economic incentives. This endeavour shouldbe supported by good governance and close stakeholder engagement, investment ininfrastructure and technology, as well as human resource development. He said ASEANare committed to promoting circularity in MSMEs across the region. Throughcollaborative efforts, ASEAN member states are working towards achieving acircular economy that is inclusive and bring benefits to all sides. One of thekey approaches is to promote MSME understanding and upskill them to embracecircular business practices through various initiatives and activities. He added that one important initiativeis the Framework for Circular Economy for ASEAN Economic Community (AEC), whichwas adopted in 2021, that created a structured pathway for a supportiveecosystem for circular business models. It builds upon existing initiatives andintroduces new activities to accelerate the region’s transition to circulareconomy. A number of engagements involvingthe government and the private sector are also taking place this year, offeringa platform for sharing best practices and ensuring inclusivity as part of thepolicy-making process. Kaoemphasised that it is imperative that ASEAN, across all sides, whether publicor private sector, work closely together to support and nurture more MSMEs. “As wehonour the importance of MSMEs and the role they play in the economy, let usalso recognise the challenges that they face, particularly in accessingfinancing and technology. By addressing these challenges and creating aconducive environment for MSMEs to thrive, we can unlock their full potentialand contribute to sustainable economic growth,” he said./.