World-Watching: Small Business and Food Waste: Not a Small Problem

[from APEC News]

by Aaron Sydor

Faced with a possible food crisis, economies must work together and take action on food waste … starting at the front line with MSMEs.

Conflict, supply disruption, rising prices, and shortages are all impacting food supplies globally. Just as we are nearing some form of recovery from the pandemic, we are now facing another global challenge in the form of a food crisis – and it’s likely to get worse.

The United Nations World Food Programme (WFP) tells us that 349 million people face acute food insecurity this year — an increase from 287 million people in 2021. It is a tragedy that when the world is “hungrier than ever,” as the WFP calls it, so much food goes to waste. One-third of food production, or 1.3 billion tons per year, goes to waste globally, according to the UN Food and Agriculture Organization. It is inconceivable, then, that we don’t make the most of the food that we have.

This is a regional problem that cannot be solved by individual economies acting on their own. It must be looked at with a wider lens, such as through bodies, like APEC, that promote regional economic cooperation. APEC members acknowledge that all areas of the agri-food value chain are interdependent and that there is a need for a whole-system approach.

Among the forum’s efforts to reduce food waste is the Food Security Roadmap Towards 2030 which aims to establish an open, fair, transparent, productive, sustainable and resilient APEC food system. This corresponds to the UN and other multilateral goals by taking action through the following avenues: digital transformation; productivity and international trade; sustainability; public-private partnerships; and inclusivity, especially in the inclusion of micro, small and medium enterprises (MSMEs) along the agri-food value chain.

For more on this topic, download “Enhancing Green MSMEs’ Competitiveness for a Sustainable and Inclusive Asia-Pacific: Food Sector Waste Reduction in Food Supply Chain.” [Archived PDF]

In my capacity as the Chair of APEC’s Small and Medium Enterprises Working Group, I’d like to stress the importance of the latter: inclusivity and small business. MSMEs account for over 97 percent of all business in APEC economies and employ over half of the workforce. Any strategy for reducing food wastage will have to involve the wholesale participation of the region’s smaller businesses.

This is easier written than done. For one thing, fit-for-purpose data is scarce. No APEC economy has food waste data that is specific to MSMEs. And while all have policies and measures to address the problem of food waste, there are no large-scale direct MSMEfood waste reduction targets, policies or plans. Few have tried to reduce MSME food waste in the retail food and food service industries. Supermarkets, food storage facilities or warehouses in many APEC economies aren’t required to donate excesses.

Most entrepreneurs aren’t even aware of the problem, or underestimate its true cost. Those who do understand have limited options or capital, and are unable to find cost-effective solutions to create value out of food waste, and face problems with logistics and transportation. On top of this, there are few to no regulatory frameworks to guide them. From a technology perspective, a majority of APEC economies utilize modern technologies, including mobile applications, to reduce or manage MSME food waste/surplus food, but these modern technologies are used only by large companies in big cities.

Amid these challenges are an abundance of opportunities to help MSMEs reduce food waste. Training, policies and guidelines can aid them in improving profits by reducing costs and increasing the value added of food. They can reduce their carbon footprint, which enhances consumer demand, and divert waste to new products or bioenergy.

A November study by the APEC Small and Medium Enterprises Working Group presents case studies, identifies the best available data on food waste for MSMEs, and identifies several best practices for economies in dealing with food waste through MSME policy.

In one section, the study’s authors analyze a case study of a successful MSME, and identify four key factors contributing to its successful reduction of food waste: 1) creating a network of people — e.g., a community surrounding a farm; 2) using innovation and technology to facilitate farming and save time; 3) producing knowledge and providing it through several channels — e.g., a learning and training center, friendly guide books; and 4) considering the environment at every step of the process.

The paper, called “Enhancing Green MSMEs’ Competitiveness for a Sustainable and Inclusive Asia-Pacific: Food Sector Waste Reduction in Food Supply Chain,” [Archived PDF] is extensive and easily doubles as a handbook for anyone interested in MSME food waste, or the problem of food waste in general. It is a great example of what can be achieved when economies combine knowledge and resources in the pursuit of keeping the region inclusive, prosperous, and fed.

Aaron Sydor is the Chair of the APEC Small and Medium Enterprises Working Group.

From ASEAN and G20 to APEC, as World Leaders Meet in Person Again, 3 Reasons to Root for Multilateralism

By Wang Huiyao | Founder of the Center for China and Globalization (CCG)

Over the past two weeks, Asia has played host to the most intense sequence of multilateral summits since the pandemic began, as national leaders gathered for meetings organized by ASEAN, the G20 and APEC. Although overshadowed by geopolitical tensions, the meetings marked a welcome return to in-person summit diplomacy, and the better-than-expected outcomes show hope yet for multilateralism.

The conclaves began in Phnom Penh with the annual summit of the Association of Southeast Asian Nations. At the first of such in-person events in almost three years, ASEAN leaders took the positive step of agreeing in principle to admit East Timor as the 11th member of the organization.

As leaders moved on to Bali for the Group of 20 summit, expectations were low after ministerial meetings in the run-up had failed to produce consensus. Earlier in the year, given fractures in the wake of Russia’s invasion of Ukraine, there was a question mark over whether the G20 could even go ahead or survive in its existing form.

In the end, the summit surpassed expectations by producing a joint declaration after intense negotiations, with leaders finding the compromises necessary to unite in declaring that “today’s era must not be of war” and pledging to uphold the multilateral system.

The summit also saw a positive face-to-face meeting between China’s President Xi Jinping and U.S. President Joe Biden, their first as leaders, signaling a willingness to halt the downward trajectory of China-U.S. relations.

In Bangkok, the 21 leaders of the Asia-Pacific Economic Cooperation forum also pledged to uphold and strengthen the rules-based multilateral trading system. Importantly, the group agreed on a multi-year work plan for an Asia-Pacific free trade area.

Reflecting on these three summits, three takeaways give reason for cautious optimism that multilateralism can yet be revived and play a major role in solving our challenges.

First, and perhaps most obviously, the return of in-person summit diplomacy is a welcome uplift for global cooperation. Virtual formats played a useful interim role at the height of the pandemic but were never a substitute for getting leaders in the same room. That is especially when it comes to interactions on the sidelines, often as important as the main event.

China’s return to diplomacy at the highest level was a further boost, both for the nation and the rest of the world.

In addition to Xi’s highly anticipated meeting with Biden, the Chinese leader met over a dozen other leaders at the G20 and APEC summits, including a warmer-than-expected first meeting with Japanese Prime Minister Fumio Kishida and his first meeting with an Australian prime minister since 2016.

Leaders got to meet their new counterparts for the first time or build on existing relationships, which can only help global cooperation.

The second takeaway is that as grave as our challenges are, the threat of escalating conflict and severe economic pressures on all nations seem to be focusing minds and increasing the willingness to engage and cooperate—out of necessity if nothing else.

The G20 summit was the second major one this year to surpass expectations after the 12th World Trade Organization Ministerial Conference in June surprised observers by agreeing on a plan to reform the organization and its dispute settlement mechanism. The G20 statement reiterated support for this WTO reform plan, which will be critical to get the free trade agenda back on track and provide a much-needed boost for the global economy.

Third, and perhaps most significantly for the long term, the recent summits marked an acceleration of the trend towards multi-polarization in international diplomacy, and in particular, the rising influence of non-aligned “middle powers” to shape multilateral outcomes.

The middle powers represented at ASEAN, the G20 and APEC have huge stakes in avoiding a bifurcation of the global economy that might result from a new cold war. They don’t want to be forced to pick sides and many show a growing willingness and ability to build bridges and restore positive momentum for multilateralism.

Indonesia is a prime example. The country’s strategic heft and non-aligned credibility make it well-placed to bridge different camps. President Joko Widodo made a big political bet on the success of the G20 and has won praise for the deft diplomacy that kept the organization alive and got it to a joint statement.

The Indian delegation reportedly also played a big role in achieving consensus on language in the statement, with the BRICS group (Brazil, Russia, India, China and South Africa)—as well as Indonesia—turning out to be crucial swing voters in securing the joint statement. One Indian official said it was “the first [G20] summit where developing nations shaped the outcome.”

There is scope for this trend to continue next year as middle powers continue to rise in stature, and India and Indonesia take over the presidency of the G20 and ASEAN, respectively. Brazil will host the G20 the year after.

Over in Sharm el-Sheikh at the COP27 UN climate summit, another middle power—the host Egypt—also won praise for helping to shepherd a historic financing deal for poor countries affected by climate change. But the ultimate failure to reach a commitment to phase down fossil fuels was a sobering reminder of the huge difficulties that remain in forging the global consensus needed to overcome our shared challenges.

Asia-Watching: New Studies on Tariffs; FDIs and Global Value Chains

[from Asia-Pacific Economic Cooperation, May 15, 2022]

Study on Tariffs: Analysis of the
Regional Comprehensive Economic Partnership
Tariff Liberalization Schedules

prepared by Carlos Kuriyama, Sylwyn C. Calizo Jr. & Jason Carlo O. Carranceja

RCEP is the largest regional free trade agreement (FTA) in the world. Its potential is huge, as its 15 members account for about 2.2 billion people (30% of the global population), a regional gross domestic product (GDP) of about USD38,813 billion (30% of global GDP), and 28.8% of global trade. This study examines market access commitments and comparing the extent of tariff liberalization within RCEP as well as the other major regional FTA in the Asia-Pacific, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Read the full article [archived PDF].

The FDI Network, Global Value Chain Participation and Economic Upgrading

by Luna Ge Lai, Nguyen Thu Quynh & Akhmad Bayhaqi

Foreign direct investment (FDI) represents an important internationalization pathway to global value chain (GVC) participation. APEC economies as a group have dominated as FDI recipients, accounting for nearly 52% of the global inward FDI stock. This study analyses the role of FDI in economiesGVC participation.

Read the full article [archived PDF].