Doing business in the region is becoming less difficult as APEC initiatives bear fruit

Like most entrepreneurs, Port Moresby-based Sharon Kentasi says owning a small business isn’t easy.

“There are challenges with getting exposure and funding is always an issue,” she said. “But we’re still able to push through. It has improved over the past couple of months leading up to APEC.”

Kentasi’s family-run operation has been transporting woven baskets, jewelry, dyed fabrics, soaps and other locally crafted products from her nearby home in Bougainville to the capital for seven years.

Lately Papua New Guinea’s hosting of APEC 2018 has given her wares some welcome exposure.

Among Kentasi’s merchandise are high-quality, hand woven shoulder bags locally known as bilums. Coming from multiple provinces and produced in many styles, they enjoy status as a flagship product representing Papua New Guinea’s richly diverse culture. As simple they are in design they are distinct—once introduced to them, someone will easily recognize a Papua New Guinean bilum.

Kentasi recognizes her products’ appeal and hopes to eventually expand her enterprise across borders through the digital economy. “I’m not online as yet, but I’d like to be soon,” she said. “Those are the little things that we are still working on—trying to get the products online to advertise.”

One of APEC’s initiatives is to make sure the careers of enterprising individuals like Kentasi are not entangled in red tape, or an abundance of regulatory requirements that would make it difficult to put up and operate a small or medium-sized enterprise.

At its first meeting for 2018, APEC’s Economic Committee conducted a policy dialogue on ease of doing business, wherein officials from APEC’s member economies update each other on their progress in promoting reforms that facilitate entrepreneurship and improve the competitiveness of SMEs, specifically through lower costs to doing business and by giving entrepreneurs access to credit, added opportunities to engage in international trade, and more efficient regulatory institutions, among others.

“Many of the world's people work in the informal sector as opposed to the formal sector,” said Robert Logie, Chair of the APEC Economic Committee. “Many businesses find it difficult to meet the requirements needed in setting up businesses, such as getting access to credit. APEC’s ease of doing business initiative will be important in getting more business registered. It also ties in to Papua New Guinea’s priorities related to inclusion and the digital economy.”

During the dialogue, officials shared success stories and best practices in making business easy to build and maintain in their respective economies. New Zealand, for example, presented on how they made their economy one of the easiest places to start a business.

Helena Roberts—a Policy Officer of New Zealand’s Ministry of Foreign Affairs and Trade, and one of the presenters during the dialogue—said her home economy is “one of the few places in the world where you can literally incorporate and register a company during your lunchbreak.” 

According to Roberts, business owners used to go through manual, paper-based processes that attracted poor compliance and a lack of engagement with the people who actually used the services. New Zealand has since reformed the operations of its company office from one that is paper-based to an almost entirely digital system.

New Zealand's original 1955 Companies Act was complex and in many respects geared to large companies rather than to SMEs. Its requirements were often so onerous that “businesses often hired an agent to do the work for them, which added to the time and cost obviously,” said Roberts. “So we cut the red tape, and brought in the new Companies Act of 1993, which changed the way companies were formed, managed and liquidated, and it removed some of the hurdles to starting a business.”

They have been fully online since 2002, and now have a single window on their Companies Office website.

“The key is getting everything online,” said Roberts. “We put everything in one place, and we thought about it from the perspective of the end users, which are the businesses themselves.”

According to the APEC Policy Support Unit (PSU), APEC economies have, on average, been performing better than the rest of the world in ease of doing business, especially in terms of the time needed to start a business.

“Many governments have been eliminating registration procedures or streamlining business processes by integrating procedures into just one interface,” said PSU Senior Analyst Carlos Kuriyama. “Many have taken up electronic platforms to process business permits. Some governments are establishing online platforms to ease the process of applying for construction permits.”

But Kuriyama stressed that there is still more work that APEC can do, even in areas where economies have shown improvement, and that it is important for the forum to emphasize capacity building, which has played a key role in its current progress.