AEC, Initiatives in SME AEC, Initiatives in SME Cluster Development and Cluster Development and

Export Consortia Export Consortia FormationFormation

Dr. Nittana SouthisengTrade and Investment Facilitation Program

Mekong InstituteKhon Kaen, Thailand

Overview of GMS countries

• Linking the Mekong region members of ASEAN (Cambodia, Laos, Myanmar, Thailand and Vietnam) with two provinces of the People’s Republic of China

• GMS– Population - 300 million people -

Geographic spread - 2.6 million square kilometers

– Gross Domestic Product - US$ 300 billion -

– Substantial population living in poverty on less than the equivalent of one dollar a day (50 million people out of total population of 300 million

• GDP growth rate 8% - Increased FDI – Growth of exports – Growth of tourism industry - Dramatic increase in the interregional trade

Pop: 48.3 milGDP per capita: 742 $GDP per capita in PPP: 1,197 $

Pop: 69 milGDP per capita: 4,613 $GDP per capita in PPP: 8,086 $

Pop: 14.2 milGDP per capita: 901 $GDP per capita in PPP: 2,100 $

Pop: 45.9 milGDP per capita: 2,320$GDP per capita in PPP: NA

Pop: 6.5 milGDP per capita: 1,004$GDP per capita in PPP: 2,300 $

Pop: 90.5 milGDP per capita: 1,191$GDP per capita in PPP: 3,129 $

Pop: 90.5 milGDP per capita: 2,300$GDP per capita in PPP: NA

Diversity of GMS Countries

Role of SMEs in ASEAN

SMEs are the backbone of ASEAN and SME development is integral to achieving long-run sustainable economic growth

of the region.

SMEs comprise about 99% of all enterprises, Account for 50% of manufacturing outputs

Employ 44%-70% of employment Contribute19%-31% to exports

Contribute between 30%-53% to the country GDP

1,600

300

1,200

3,211

819

2,533

Achieving ASEAN 2015 is Constrained by “The Prosperity Gap”

2003 2009

Source:–AEC Chartbook 2010

Per Capita GDP – US$

“One Vision, One Identity, One Community”

ASEAN GMS Countries - 2010

Land area: 1.94 M sq Km

Population: 232 M

ASEAN Countries - 2010

Land area: 4.48 M sq Km

Population: 614 M

AEC 2015

Goal :Regional economic integration by 2015.

AEC envisages :

(a) a single market and production base,

(b) a highly competitive economic region,

(c) a region of equitable economic development, and

(d) a region fully integrated into the global economy.

AEC 2015To transform ASEAN into a region with free movement of

goods, services, investment, skilled labour, and freer flow of capital.

Areas of cooperation include :

• human resources development and capacity building;

• recognition of professional qualifications;

• closer consultation on macroeconomic and financial policies;

• trade facilitation measures

• enhanced infrastructure and communications connectivity;

• development of electronic transactions through e-ASEAN;

• integrating industries across the region to promote regional sourcing;

• enhancing private sector involvement for the building of the AEC.

ASEAN Economic Community

(AEC)

ASEAN Socio-Cultural

Community (ASCC)

ASEAN Political-Security

Community(ASC)

ASEAN Community in 2015

1. A Single Market and Production Base 1. A Single Market and Production Base

Free flows of goodsFree flows of goods

Free flows of servicesFree flows of services

Free flows of investmentFree flows of investment

Free flows of skilled laborsFree flows of skilled labors

Freer flows of capitalFreer flows of capital

AEC

ASEAN Economic Community: AEC

2.A Highly Competitive Economic Region 2. A Highly Competitive Economic Region

e-ASEAN (e-commerce)e-ASEAN (e-commerce)

TaxationTaxation

Intellectual Property RightsIntellectual Property Rights

Competition PolicyCompetition Policy

Infrastructure DevelopmentInfrastructure Development

Consumer ProtectionConsumer Protection

3.A Region of Equitable Eco. Development 3. A Region of Equitable Eco. Development

Development of SMEsDevelopment of SMEs

Narrowing Development GapNarrowing Development Gap

4. A Region fully integrated into Global 4. A Region fully integrated into Global

Arrangement of FTAs with non-ASEANArrangement of FTAs with non-ASEAN

Involvement in global supply chainInvolvement in global supply chain

Year2015

Major issues faced by CLMV countries that hinder narrowing development gaps and economic

integration into AEC include:

Underdeveloped public human resource capacities and institutional support systems to develop and implement trade and investment policy and regulatory framework

Lack of industry clusters and facilities that can

provide SMEs access to regional and global value

chains

Identified Issues of SMEs

Small and Medium Enterprises

Capacity Development Issues

Limited entrepreneurship development

Limited SME ability to integrate into RVC and GVC

Limited capacity to implement FTAs and trade and investment policies

Capacity Development for Integrating CLMV Economies into

AEC 2015Outcomes:

Increased Understanding of Value of SME Clusters and Export NetworkIncreased understanding and utilization of FTAs by SME exporters

Capacity development of business development services (BDS) providers and SME exporters

5 Components: A. Gap and Postharvest PracticesB. Agriculture Policies and CBCFC. SME Cluster and Export NetworkD. FTAs and Trade PoliciesF. Capacity Building of Young Professionals

Duration: 3 years (2012-14)Partners: Ministry of Industry, Commerce, Industry and Trade associations, SME associations in Cambodia, Lao,

Myanmar and Vietnam.

C. SME Cluster and Export NetworkD. FTAs and Trade Policies

Approach:Modular Capacity Development

Do to Learn

C. SME Cluster Development and Export Network

C. SME Cluster Development and Export Network

Training on SME cluster and Export consortia

Training on SME cluster and Export consortia

Investor Forum

a. Modular Training Programs a. Modular Training Programs

b. Action Plan b. Action Plan

Implementation of action plan to form cluster and export consortia

Implementation of action plan to form cluster and export consortia

c. Action Researchc. Action Research

Process documentation of action research

Policy Briefs on SME cluster development

Process documentation of action research

Policy Briefs on SME cluster development

d. Investor Forumd. Investor Forum

Market access to SME consortia Market access to SME consortia

Implementation Strategy

SME Cluster and Export Consortia Formation

Capacity Building

Group

Capacity Building

Group

Identify Sector/Product Identify Sector/Product

Action Plan Preparation for Capacity Building

Action Plan Preparation for Capacity Building

Coaching for Export Consortia Formation

Coaching for Export Consortia Formation

Implement Action Plan on SME cluster development Consortia

Implement Action Plan on SME cluster development Consortia

SME Consortia Group SME Consortia Group

Value Chain Actors Identification

Value Chain Actors Identification

Action Plan Preparation for Export consortia

Action Plan Preparation for Export consortia

Implement Action Plan Coaching Value Chain

Implement Action Plan Coaching Value Chain

Export Consortium Formed

Export Consortium Formed

Export Consortium Formed

Export Consortium Formed

Market Linkage Market Linkage

Investor Forum

Investor Forum

Action Plans

1Cambodia Capacity Building (CB) - Milled Organic Rice ClusterGroup: Lun Yeng, Lay Navinn, Yun Sovanna, Ek Shopheara

2Cambodia Consortia Group (CG)- Instant Noodle Export ConsortiaGroup:Linh Thorn&Pok Mony

3

Laos CB- Silk ClusterGroup:Malaykham Philaphone, Phetanong Insarn & Somthong Philavanh,Philayhack Phothisane

4Laos-CG-Furniture Export ConsortiaGroup:Vannitha Phommavong, Phithikone Vilaithong

5Myanmar CB Dehydrated Vegetable ClusterGroup:Aung Win, Tin Htay, MuMu, Phyu Sin Thant

6Myanmar CG Plastic Export ConsortiaGroup:Aung Myint, Aung Myo

7Vietnam CB Silk and HandicraftGroup:MaiDieuHuyen, NguyenMinhHien,NguyenMinhHai

8Vietnam CG Organic Tea Export ConsortiaGroup:HoangCongMinh, ThanVanSuu

MI Initiatives of TF ………………...

C. SME Cluster Development and Export

Network

Needs Assessment of SME status, SME export status and

FTA utilization in CLMV

Training on SME cluster development and Export

Consortia

Implementation of action plans in CLMV to conduct national workshops

on SME cluster development

Provide coaching and hand holding support by national teams to form SME Export

consortiums

Action Research

…Jan-Feb 12

…14-25 May 2012

Aug-Oct 12

…Oct 12-Feb 13

Action Research:Action Research:

SME Clusters and Value Chain Integration in CLMVTSME Clusters and Value Chain Integration in CLMVT

Training on Action

Research Methodology

on SME Clusters and Value Chain Integration

(VCI)

Field Action Research and

Document Process of the

Identified SME Clusters and VCI as per research plan

Write Report on each of the

Product Cluster

19-21 Jan

Analyze Data on SME

Cluster and VCI on

identified SME Clusters

14-18 Jan

12-16 Nov12 17 Nov-31Dec 13 14-18 Jan 13 19-21 Jan 13 22-23 Jan 13 24 Jan-5 Feb 13

Mr. Madhuriya Kumar Dutta (India)Program Manager

Ms. Sweety Soe Nyo Nyo (Myanmar)Program Facilitator

Dr. Nittana Southiseng (Laos)SME Development Specialist

Ms. Huyen Nguyen

(Vietnam)Program

Facilitator

Action Research TeamTF Team

Ms. Hyun Ah Yi(Korea)Intern

Thank You