group work report on laos sme swot in the context of asean economic integration “laos is ready for...
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ASEAN SME Regional Gateway-GMS SME BIZ Network Forum
Group Work Report on Laos SME SWOT in the context of ASEAN Economic Integration
“Laos is ready for Business”
Mekong Institute, Khon Kaen, Thailand 6-10 September, 2010
I. Country profile, economic performance and investment policy
II. SME situation and policyIII. SWOT Analysis of ASEAN Economic
IntegrationIV. Impact of ASEAN Economic Integration
Presentation Outline
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
I. Country profile
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
Export-Import
Export Import Export Import Export Import FY 2006/07 FY 2007/08 FY 2008/09
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
ASEAN ASIA+Oceania EU+America
ASEAN SME Regional Gateway-GMS SME BIZ Network
Source: MoIC 2010
GMS Trading
Export Import Export Import Export ImportFY 2006/07 FY 2007/08 FY 2008/09
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
ChinaThailandVietnamCambodiaMyanmar
Source: MoIC 2010ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
ASEAN SME Regional Gateway-GMS SME BIZ Network
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II. Situation of SMEs in the Lao PDR
Definition of SMEs
Note: USD 1 = Kip 8,200 (as of September 2010)
Classification of SMEs: 3 categories 1.SMEs operating in the production of commercial
goods 2.SMEs operating in the trade sector
3.SMEs operating in the service sector
Category Average annual No. of employees
Total assets in Kip
Annual turnover in Kip
Small 19 250 million 400 million
Medium 99 1.2 billion 1 billion
ASEAN SME Regional Gateway-GMS SME BIZ Network
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Number and Percentage of Enterprises by Size
<5 5-9 10-99Number of employees
Source: National Economic Census 2006
ASEAN SME Regional Gateway-GMS SME BIZ Network
100+
99.8% - SME
Distribution of employment (EBS2005, ES2007 and ES2009)
1.4% 1.2% 1.6%
19.3% 20.7% 22.9%
28.8% 24.1%
28.1%
50.5% 54.0%47.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2007 2009
Micro Small Medium Large
Source: GTZ/HRDME –ES 2009
ASEAN SME Regional Gateway-GMS SME BIZ Network
Type of enterprise (ES2005,ES2007,ES2009)
30.3%
18.5%20.0%
7.2%
12.3%
38.2%
16.7%
12.2%
9.8%7.8%
41.6%
17.6%16.6%
6.0%4.5%
0%
10%
20%
30%
40%
50%
Whole sale & retail trade
Manufacturing Accommodation, food service
Construction Transportation, storage
2005 2007 2009
Source: GTZ/HRDME –ES 2009
ASEAN SME Regional Gateway-GMS SME BIZ Network
1. Strengths: Located in the middle of GMS Rich of natural resources Large area of fertilize agricultural land Variety of tourism site Virtually no damaging disaster Politically stable Increasing GDP Inexpensive labor Special incentive for CLMV countries
III. SWOT Analysis of ASEAN Economic Integration
ASEAN SME Regional Gateway-GMS SME BIZ Network
III. SWOT Analysis of ASEAN Economic Integration
ASEAN SME Regional Gateway-GMS SME BIZ Network
2. Weakness: Land-lock country High cost of transportation Low population and competiveness
. Little purchasing power
. Competition for labor
. Lack of knowledge/skill labor
. Seasonal shortage of labor Lack of a business- & investment-friendly legal &
regulatory environment framework Lack of service -orientation of government
agencies and related capacities. Lack of freight infrastructure
I. SWOT Analysis of ASEAN Economic Integration
ASEAN SME Regional Gateway-GMS SME BIZ Network
2. Weakness ( con’t): Underdeveloped financial services sector,
particularly for long-term credit for small & medium-sized enterprises;
Low level of technology & small-scale of production
Lack of Business Development Service capacities to provide, i.a.., information on markets, standards & technology options, market opportunities and business strategies;
Underdeveloped inter-business linkages and value chains;
3. Opportunity: Land lock to land link country Ability development of infrastructure Battery of ASEAN Poverty reduction strategy ASEAN member
. Economic community
. Education
. Healthy , etc… Better access to supply chain mean more
business opportunities.
III. SWOT Analysis of ASEAN Economic Integration
ASEAN SME Regional Gateway-GMS SME BIZ Network
4. Threats: More competition impacts to small business Declining of national culture and identity Over exploitation of natural resources . Environmental issue
. Land concession
. Etc. Disparities between urban and rural areas More rely on foreign currency Social issues: human trafficking, drug
trafficking, etc….
III. SWOT Analysis of ASEAN Economic Integration
ASEAN SME Regional Gateway-GMS SME BIZ Network
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SME policy
Small and Medium Sized Enterprises are an important part of the national economy, able to integrate into the production and trade mechanism of the region and the world, operating under enabling conditions and benefiting from an efficient support mechanism.
ASEAN SME Regional Gateway-GMS SME BIZ Network
Vision (2007-2010)
33
Main Objectives
Contributing to proportional and stable economic growth
Creating opportunities for increasing employment Mobilizing assets and intellectual resources of the
people for production, trading and services Increase income and distribution in order to
increase the living standard of the people and to poverty alleviation
Contributing to the erection of the basis for industrialization and modernization of the country
ASEAN SME Regional Gateway-GMS SME BIZ Network
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Target Growth of output of SMEs by 12% p.a Increase of number of registered SMEs of
12% p.a. Increase of employment of 10% p.a. SMEs shall provide for approx. 50% of total
employment
ASEAN SME Regional Gateway-GMS SME BIZ Network
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SME policy (PM Decree 42/PM)
1. Creating an Enabling Regulatory and Administrative Environment
2. Enhancing Competitiveness3. Expanding Domestic and International Markets4. Improving Access to Finance5. Encouraging and Creating Favorable Conditions
for Establishment of Business Organizations6. Enhancing Entrepreneurial Attitudes and
Characteristics within the Society
ASEAN SME Regional Gateway-GMS SME BIZ Network
1. Positive impact Market expansion More competition-more joy for consumer Increasing of Supply chain
2. Negative impact Zero income tax Growth of SME’s may faced
competitiveness Change of everything
IV. Impact of ASEAN Economic Integration
ASEAN SME Regional Gateway-GMS SME BIZ Network
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THANK YOU
ຂອບໃຈ
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