ASEAN to strengthen SMEs towards building regional economic bloc

HANOI, Vietnam (MindaNews/29 October) – Southeast Asia has agreed to pool its resources in developing further the region’s small and medium
enterprises (SMEs) to help fast-track the ongoing integration of the 10-nation regional bloc’s economies.

Heads of states of the Association of Southeast Asian Nations (ASEAN) on Thursday issued the commitment following a dialogue with leaders of
various national chambers of commerce across the region.

Jose Concepcion Jr., chair of the ASEAN Business Advisory Council (ASEAN-BAC)-Philippines section, said ASEAN leaders agreed to include
the development of the SME sector in their respective national agenda and adopt them as among the key components of ongoing initiatives
leading to the planned establishment of a regional economic community by the year 2015.

“They essentially recognized the need to engage more with the SME sector being the backbone of Southeast Asia’s economy,” he told MindaNews.

Concepcion, who represented the Philippines’ business sector in the dialogue, said a recent survey made by the ASEAN-BAC showed that the SMEs comprise at least 96 percent of the existing businesses in Southeast Asia.

But he said most SMEs in the region remained unaware of the possible benefits from the ongoing regional integration efforts within ASEAN.

“We conducted consultations among SMEs across the region last month  and we found out that majority of them have no idea about the ASEAN
economic community and other related programs being undertaken by ASEAN for the business sector,” Concepcion said.

During the dialogue, which was attended by President Benigno Simeon Aquino III and the nine other ASEAN leaders, ASEAN-BAC cited in its three-page report presented to the region’s heads of states that “a significant number (of SMEs) lack both ability and interest to engage in intra-ASEAN trade and investment activities.

“It is recommended that ASEAN intensify its efforts to disseminate information to SMEs around the region on how they could benefit from ASEAN policy initiatives and develop policy measures to help SMEs grow more (at the regional and global level),” the report said.

ASEAN-BAC said such findings were based on the initial results of an ongoing survey initiated by the group regarding ASEAN’s competitiveness for trade and investments.

It said the survey, which is being conducted by the Lee Kuan Yew School of Public Policy of the National University of Singapore, “gathers the views of businesses across ASEAN countries on their investment strategies in a post-crisis global economy, assesses the pace of ASEAN’s economic integration and its importance to investment decisions as well as identify priority policy measures that ASEAN can undertake to improve the region’s competitiveness.”

ASEAN-BAC’s report to the region’s heads of states mainly highlighted the issues and concerns raised by the more than 100 delegates from various parts of the region that joined the two-day ASEAN Business and Investment Summit here.

The regional trade gathering was among the sidelights of the 17th summit of ASEAN leaders and heads of states, which formally opened
Thursday at the National Convention Center here. To facilitate the integration of the SME sector in to the “ASEAN platform,” Concepcion said they formally “embraced the SMEs to become a part of ASEAN-BAC.”

“They’re (SMEs) not going to be just a part of ASEAN-BAC but we will initiate programs that will help the sector to further develop and possibly expand later on within the region,” he said.

Antonio Sayo, chair of the Supply Chain Academy of the Philippines, told MindaNews that the attention being given by ASEAN to the SME sector is a major step towards the realization of is regional integration targets but cited that they should also consider going down to the level of the micro enterprises.

“These smaller and largely unnoticed businesses are very important because they’re the ones that are really on the ground or deeply-rooted within our local communities. The (ASEAN) integration process needs to go deeper at this level to enable a real, integrated, economy community for the region,” he said.

In his presentation at the ASEAN Business and Investment Summit, Sayo cited the case of the Philippines wherein micro and small enterprises comprise 91.5 percent of the existing enterprises.

The medium enterprises account for 7.7 percent while the large ventures are only pegged at 0.4 percent, he said.

He said micro, small and medium enterprises (MSMEs) are mainly concentrated in Luzon at 68 percent followed by Mindanao at 18 percent
and Visayas at 14 percent.

For the MSMEs to become a factor in the regional economic integration process, Sayo said governments in Southeast Asia must provide the
necessary assistance to the sector such as access to financing, markets and initiatives that will help improve their productivity and

“Much work has to be done in ensuring that MSMEs are given equal share of opportunities to develop and link up within the economic community framework of ASEAN,” he said.

Sayo said ASEAN must also mainstream the implementation of its policies, specifically the Strategic Action Plan for SME Development
for 2010-2015.

Such plan covers the implementation of policies and programs that would help enhance the “internationalization” of SMEs and SME
Marketing Capabilities, improving SME access to finance, strengthen  SME human resource development and capacity building, incubator and
local SME development, establishment of an SME service center or ASEAN SME service desk and the setting up of an ASEAN SME regional
development fund.

“There’s a need for greater interface and the mainstreaming of the efforts towards the enhancement of a competitive environment where MSMEs even in the farthest areas in Mindanao and other parts of the country can participate effectively and benefit from,” he added.
(Allen V. Estabillo/MindaNews)