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G20 Impact Day: Partner Consultation

07 July 2022

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Esther Wang

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11 min read

The G20 Impact Day: Partner Consultation, 20 June 2022, in Bali, Indonesia brought together different member organizations for roundtable discussions on the G20 Presidency Themes and Priorities agenda. Professor Bambang Brodjonegoro, Lead Co-Chair of the T20 Indonesia, gave the opening remarks outlining the economic challenges ahead for the ASEAN region.

Professor Bambang Brodjonegoro, Lead Co-Chair of the T20 Indonesia

As the G20 Presidency, Indonesia outlined the livelihood challenges faced by the tourism sector and the creative economy during and post pandemic. With the increased uncertainty from the ongoing Ukraine war, supply chain disruptions and looming recession on the horizon, the expected recovery will be a challenge. Nonetheless, Indonesia believes in ‘Recover Together, Recover Stronger’ for all sectors – and identified the importance to support local communities, such as the micro entrepreneurs and informal workforce amongst her people.

AVPN Chief Programme Officer, Mr Tristan Ace and AVPN Chief of Sustainable Finance, Ms Komal Sahu introduced the other speakers and handed over to Ibu Raden Siliwanti, Director for Multilateral Funding, Ministry of National Development Planning (Bappenas) for her introduction of the Development Working Group (DWG) for the G20.

Mr Tristan Ace, Chief Product Officer, and Ms Komal Sahu, Chief of Sustainable Finance, AVPN

 

Ibu Raden Siliwanti, Director for Multilateral Funding, Ministry of National Development Planning, Bappenas

Ibu Raden Siliwanti highlighted the three key pillars identified by her ministry (Bappenas), namely to strengthen ‘Global Health Architecture’, enable ‘Digital Transformation’ for all sectors, and establish stable infrastructure for growth including ‘Energy Transitions’ into sustainable sources. The G20 Development Working Group (DWG)’s mandate is to act as a coordinating body and policy resource for sustainable development across the G20, and thereby achieve the dual objective of narrowing the development gap and reducing poverty. The pandemic resulted in a higher level of inequality within and between countries, with many developing countries’ recovery delayed due to unequal access to vaccination and treatment.

She further highlighted the DWG Priority Issues: Develop a G20 Roadmap for stronger recovery and resilience in developing countries, least developed countries (LDCs) and small island developing states (SIDS) through strengthening micro, small, medium enterprises (MSMEs) with an adaptive social protection, and develop the Green Economy and Blue Economy through low carbon development. It is paramount to engage in concrete partnerships across public, private and civil societies. She mentioned AVPN’s support with practitioner insights and its contribution could be focused in bringing together diverse actors for blended finance opportunities and SDG investments and transforming MSMEs and entrepreneurs in developing countries into viable targets of investments.

Thereafter, there was a panel discussion on ‘Addressing the Financing Gap’ with a focus on blended finance with Ibu Vivi Yulaswati, Senior Advisor to the Minister of National Development Planning for Social Affairs and Poverty, and concurrently the Head of National SDGs Secretariat, Bappenas, Ms Krisztina Tora, Chief Market Development Officer, Global Steering Group (GSG) for Impact Investing, Ms Gauri Singh, Deputy Director-General for the International Renewable Energy Agency (IRENA), Professor Bambang Brodjonegoro, AVPN’s Ms Komal Sahu and moderated by Ms Tu Lianting, Managing Editor, Asia Stocks, Bloomberg.

Session 1 – Addressing the Financing Gap
Ibu Vivi Yulaswati, Senior Advisor to the Minister of National Development Planning for Social Affairs and Poverty, and concurrently the Head of National SDGs Secretariat, Bappenas

Ibu Vivi Yulaswati opened the panel and spoke of an underdeveloped ecosystem for blended finance and for the opportunity to leverage limited public funding strategically to attract private investment and mobilize domestic capital. Further, Ms Krisztina Tora highlighted from their learnings from the G7 Taskforce, a multisector collaboration is necessary to build a thriving impact investing ecosystem. This could take the form of the private sector providing professional services and public sector (governments) providing regulatory and policy to safeguard interests, civil societies with advocacy and building awareness of issues from the ground up.

Ms Krisztina Tora, Chief Market Development Officer, Global Steering Group (GSG)
Ms Gauri Singh, Deputy Director-General for the International Renewable Energy Agency (IRENA)

In consideration of energy investments, Ms Gauri Singh pointed out that renewables and electrification dominate energy transition. With growing awareness of climate change, the target to reach 90% of all decarbonisation in 2050 will involve renewable energy through direct supply of low-cost power, efficiency performance, electrification and bioenergy with carbon capture and storage (CCS) and green hydrogen.

In the afternoon, Mr Mark King, First Secretary of the Australian Embassy in Jakarta welcomed back the participants and set the context for the next panel on ‘Building Resilient Gender Diverse and Digitally enabled Micro, Small and Medium Enterprises (MSMEs)’.

Mr Mark King, First Secretary of the Australian Embassy in Jakarta

The afternoon panel consisted of Ibu Nurdiana Darus, Corporate Affairs and Sustainability Director of Unilever Indonesia, Mr Jonathan Wong, Chief of Technology and Innovation, from the United Nations’ Economic and Social Commission for Asia and the Pacific (UNESCAP), Dr Ahmad Dading Gunadi, the Director for SMEs and Cooperative Development, Bappenas, Dr Samanthi J. Gunawardana, Director, Master of International Development Practice in Monash University moderated by Ms Komal Sahu AVPN Chief of Sustainable Finance.

From left: Ms Komal Sahu, Mr Mark King, Ms Samanthi J. Gunawardana, Ibu Nurdiana Darus, Dr Ahmad Dading Gunadi and Mr Jonathan Wong.

Dr Ahmad Dading Gunadi spoke on the main challenges faced by MSMEs in Indonesia in three areas, majority (93%) of micro and small enterprises (MSEs) are not involved in partnerships or global supply chains, and there is low digital and financial literacy amongst MSMEs with more than 90% of micro and small enterprises (MSEs) without a computer nor internet to run a business, and a significant percentage (88% of MSEs) do not obtain nor apply for credit, with the credit ratio at around 20% (a stagnant number since 2014). Finally, two thirds (61.8%) of women entrepreneurs are in the informal sector, with 43.43% of female entrepreneurs with only primary school education. Particularly for women doing business, all interviewed by Bappenas indicated they had no support from their family or husband and they faced difficulty in obtaining licenses, accessing the market (due to ongoing competitors) and difficulty in finding workers.

In the COVID19 pandemic, it accelerated the adoption of digital service amongst consumers. Notably, merchants are now accepting digital payments and online groceries sales have doubled with 75% indicating they will continue using digital services post COVID19.

Ibu Nurdiana Darus, Deputy Chair for the Women in Business Action Council, B20

The Women in Business Action Council, Business 20 (B20), represented by Deputy Chair Ibu Nurdiana Darus, proposed a practical initiative known as the ‘One Global Women Empowerment’ (OGWE) with a mission to facilitate critical support in accelerating the impactful inclusion of women-led businesses in the global economy. It aims to aggregate existing capacities and networks to accelerate and scale impactful women empowerment efforts globally. They identified five key objectives: digital capability, knowledge sharing, funding and investment, technical support and supportive policy, which will be supported by five core services:

Crowdsource: For stakeholders to share, promote ideas and successful policies/programs to spur emulation and/or collaboration to scale up across markets and geographies.

Crowdfund: For like-minded funders/investors to support programmes of their choices. Women entrepreneurs can also reach out to funders/investors to scale their business.

Curate: One-stop shop for training programmes and guides on leadership, skills development

Clarify: Help women at work and women entrepreneurs navigate applicable laws, regulations and support programmes as they grow their career and business locally and overseas.

Communicate: To inform stakeholders and the public on OGWE’s initiatives and achievements. Finally, the OGWE welcomes interested participants (investors, governments, service providers, sponsoring business, civil society organizations and philanthropists) to join them in supporting women entrepreneurs and women in the workforce.

Emphasizing the need to support women-led MSMEs, Mr Jonathan Wong, Chief of Technology and Innovation, UNESCAP noted that women-led MSMEs have suffered disproportionately during the pandemic and advancing women’s equality in the Asia-Pacific region could add as much as $4.5 trillion, a 12 percent increase to the region’s GDP annually by 2025.

Mr Jonathan Wong, Chief of Technology and Innovation, United Nations’ Economic and Social Commission for Asia and the Pacific (UNESCAP)

Therefore, the United Nations ESCAP worked on several initiatives, such as solidifying partnership with the Reserve Bank of Fiji to unlock capital for women entrepreneurs. In Vietnam, a new Small Medium Enterprise (SME) Law; New Decree 80 for women-led enterprises, and in Bangladesh, the integration of gender perspectives into the Bangladesh Start-Up Framework. A ‘Women SME Toolkit’ will be launched at the ASEAN Summit in Cambodia.

A total of 43,291 women entrepreneurs have directly benefited from the UNESCAP ‘Women ICT Frontier Initiative (WIFI) Flagship Programme’ and the innovative financing initiatives have unlocked almost USD 65 million in capital to women entrepreneurs, through 6 policy implementations to support women-led and digital MSMEs, with 3 policy recommendations to support women-led and digital MSMEs in 3 intergovernmental forums.

The UNESCAP’s future focus will be on Gender Foreign Direct Investments (FDI) (for gender equality and women’s economic empowerment outcomes) and Digital FDI for the SDGs (in digital infrastructure development, the businesses’ adoption of digital technologies, and development of digital business ecosystem) He asked the audience to consider how to build on the momentum of gender equality and digital MSME agenda into the India G20 Presidency.

The audience also heard from Dr Samanthi J. Gunawardana, Monash Gender Peace and Security Center, who presented on ‘Gendered Impacts of Micro, Small and Medium Enterprise Policy Responses to COVID-19 in South East Asia’.

Amongst her conclusive findings, she noted that women owned/led enterprises reported a higher incidence of different obstacles (lack of cash flow, reduced opportunities to meet new clients, ongoing decline in demand etc.) than men owned/led enterprises. As a solution, women adapted by reducing expenses, using their own funds and pivot to online selling.

Broadly speaking, policy measures were gender-blind despite existing gender mainstream policies and laws. Due to the sudden onset of the crisis, gender responsiveness in entrepreneurial policy was not seen as a priority during the pandemic response. Further to that, in the government’s formulation of policy, there was minimal consultation with MSMEs (or any organization/associations they were part of) about policy responses. Amongst the three countries (Indonesia, Philippines and Vietnam) surveyed, it is noted that payment deferrals, reduction or exemption of taxes and fees were acknowledged to be helpful for MSMEs. Several points which differed amongst countries were, the upgrading of worker skill (Indonesia and the Philippines), tax incentives for digitization (the Philippines and Vietnam), regulatory support for digital payments (Indonesia) financial assistance with working-from-home arrangements (Indonesia) and support for childcare (Vietnam).

Collectively, the panel agreed that support for women-led MSMEs have great potential to uplift a community. On this note, VISA Foundation pledged their support to strengthen gender diverse MSMEs. The conversations that ensued informed the design of the MSME Taskforce and covered the issues that are relevant in a developing country context. The intention being to include the topic of gender diverse MSMEs to not just the Indonesian, but the following G20 Presidency in India as well.

Subsequently, the G20 Impact Day participants went into breakout groups discussions.


 
Given the range of practitioners in the room, the discussion focused on financing, access to funding both from the government schemes and from the financial services sector. Simplifying criteria for such funding and the need for innovative financial instruments to be more inclusive was repeatedly mentioned. A host of such instruments were debated including returnable grants, community level financing mechanisms, State-level or local financing hubs for women entrepreneurs. It was recognised there is a need for more patient capital for this sector and capacity building and education is essential for the demand and supply side of capital for MSMEs. The narrative that this sector is riskier needs to change and a recognition that private capital including family offices need to think about the strategic and catalytic aspect of their philanthropy as well as their investments. Policy and regulation can further bolster the funding and growth of this engine of developing economies that employ a large proportion of the working population.

Besides the esteemed panel of speakers and their insightful presentations, the biggest takeaway for me was hearing from the practitioners on the ground, with decades of experience channeling funds to solve their nation’s challenges. Here are two lessons which stayed with me.

‘Context Matters’

While one country’s working group mentioned the benefits of interest-free loans to uplift their local businesses with a reasonable repayment period, another country’s banker responded that it did not work for her region. The interest-free loan was misinterpreted as a business grant and she had to eventually write it off after multiple recovery attempts. Hence she emphasized that the principle of ‘interest-free loans’ was rooted in good intentions, but the (cultural) context of the market played a huge factor in its eventual success (or lack thereof).

‘Financial Inclusion’

Traditionally, a person’s credit worthiness will be evaluated based on their assets. However, this approach meant that micro-entrepreneurs, without any land or homes to their name, will have a difficult time securing a loan to invest in the necessary equipment for their business. One of the silver lining from the pandemic was the acceleration of the digital payments amongst the fishermen, hawkers and weavers (the ‘unbanked’). With mobile payments, it opened up new avenues to evaluate an individual’s credit worthiness by tracking their financial behaviors (eg. making timely payment for bills and responsible distribution of funds for their household needs). If the individual is faithful with the little, he/she is likely to be faithful with much.

While the above two examples apply to all genders, but traditionally for women – they will have a harder time building their nest egg because the ‘burden of care’ falls onto them. Specifically, this meant the caregiving responsibilities for their children, and subsequently elderly parents meant that a female’s career and leadership development are usually deferred for familial responsibilities. Therefore, it is paramount to include accessible caregiving to truly uplift a community.

Acknowledgements: This event was made possible by the G20 Indonesian Presidency and AVPN staff (past and present), Mr Tristan Ace, Ms Komal Sahu, Mr Sharman Pandian, Ms Jenny Kim, Ms Esther Wang, with thanks to our interns, Ms Ericka Wu, Mr Darshan Soni, and Ms Aaliya Vij.

References

A. Environmental Stewardship
To protect the environment, we organize programmes like mangrove nursery and Reforestation, Coastal and River Clean-Up, Community Based Environmental Solid Waste Management, Environmental IEC Campaign and Eco-Academy

B. Food Security and Sustainable Livelihood
To ensure a sustainable livelihood for the community, eco-tourism include Buhatan River Cruise Visitor Center Buhatan River Mangrove Boardwalk are run by the community. Others include Organic Vegetable and Root crops Farming, Vegetable and Root crops Chips and by-products Processing and establishing a Zero waste store.

C. Empowered Communities
To empower the community, we provide product and Agri-Enterprise Development Training, Immersion and Learnings Exchange Program, Earth Warrior Training and Community Based Social Entrepreneurship Training

Author

Esther Wang

Digital Transformation Manager at AVPN

Esther Wang joined AVPN as a Manager in the Digital Transformation team. She admires AVPN’s ecosystem approach to achieve social impact and is excited by the team’s capacity building work for the social and charity sector in the region.

Esther started her career as a social entrepreneur with her healthcare education company. Her flagship product ‘Rabbit Ray’ was adopted into the UK’s NHS pediatric toolkit and purchased by over 48 hospitals across 25 countries.

In recognition for her work, Swiss-American pharmaceutical company, Novartis AG (NYSE:NVS) has kindly invited her to be the opening day keynote speaker for a healthcare summit in March 2022. U.S. pharmaceutical company, Merck Sharp & Dohme (NYSE: MRK) awarded her social enterprise (Joytingle Pte Ltd) as winner, and judges’ pick for “Startup Spotlight” in Asia, 2016.

During the Covid19 pandemic, she was the Product Operations Lead for the national appointment system in Singapore’s vaccination programme (pro-bono services to the country). Concurrently, she was the coordinating secretariat for the ASEAN Youth Fellows (consisting of 10 member nations) as they worked quietly on a joint-response to the evolving humanitarian crisis in Myanmar (post 01 February 2021).

With her close network in the entrepreneurship circles, she provides fundraising advisory support for a Mental Health startup, and a Space company (the latter which led her to become a member of the Space Generation Advisory Council).

A triple patent holder, Esther was a Forbes 30 under 30 featured honoree (2018) in the ‘Healthcare and Technology’ category, ASEAN Youth Fellow (2019), and listed on Tatler’s Generation T (2019, Health & Education). Esther was also a panelist at the invitation of the Philippines government for the ASEAN 50th Anniversary for ASEAN Women Business Leaders in 2017. She was a TEDx Speaker and concurrently serves as a weekend volunteer teacher to a class of 70 kids for the past 7 years.

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We see social investment as a continuum that encompasses everything from philanthropy and venture philanthropy to impact investing, CSR and sustainable investment. We call this the “Continuum of Capital”.

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