Ms YAP Lai Peng

ASEAN Secretariat

2nd OECD-ASEAN

REGIONAL SME POLICY ROUNDTABLE

25 November 2014

1

Vision, Strategy and Actions for SMEs

Integration into the AEC

Content

I What is the AEC?

II Where are we now?

III The Potential of AEC

IV SME INTEGRATION INTO THE AEC

V What comes next after 2015?

2

AEC 2015 - What we set out to do

ASEAN ECONOMIC COMMUNITYSTRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)

Pillar 1Single Market

& Production Base

• Free flow of goods• Free flow of services

• Free flow of investment

• Freer flow of capital

• Free flow of skilled labor

• Priority Integration Sectors

• Food, agriculture and forestry

Pillar 2 Competitive

Economic Region

• Competition policy

• Consumer protection

• Intellectual property rights

• Infrastructure development

• Taxation• E-Commerce

Pillar 3Equitable Economic

Development

• SME development

• Initiative for ASEAN Integration

Pillar 4 Integration into

the Global Economy

• Coherent approach towards externaleconomic relations

• Enhanced participation in global supply networks

HUMAN RESOURCE DEVELOPMENT RESEARCH AND DEVELOPMENT

3

3

AEC Blueprint: Signed in 2007

Defined: The AEC will “establish

ASEAN as a single market and

production base with the goal of

making ASEAN more dynamic

and competitive.”

Where are we now?

Four Pillars of AEC

Single Market and Production Base

Competitive Economic Region

Equitable Economic Development

Integration into the Global Economy

4

5

SME ACTION PLAN 2011-2015

BY ACTIVITIES

Source : SME Post 2015 Action Plan Study5

AEC-Yangon-Oct14v1.pptx 6Draft—for discussion only

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The Rise of ASEAN : A new economic giant

2003 2013 2020e

World GDP ranking

0.7

1243210

($T)

Mexico

ASEAN

Spain

Canada

Italy

China

France

UK

Germany

Japan

USA

#10

2.4

2050

($T)

India

Italy

Russia

Brazil

ASEAN

UK

France

Germany

Japan

China

USA 4%

19%

1%

4%

4%

3%

12%

15%

17%

3%

12%

CAGR %(2003-13)

CAGR %(2013-20e)

5.1

20 2550

($T)

Canada

Brazil

Russia

France

UK

Germany

ASEAN

India

Japan

China

USA 5%

10%

2%

15%

12%

3%

4%

2%

6%

4%

4%

Source: EIU, BCG analysis

#7

#5

Double-

digit

growth

comparable

to BRIC

Double-

digit

growth

trumps

majority

BRIC, only

lags behind

India

7

AEC matters to Private Sector:

ASEAN is a large market!

Estimates of East Asia’s Middle Class

METI: 880 million (2008)

ERIA-Intal Estimates: Estimate A: $3-12 per capita per day PPP

ASEAN 7 : 156 million mid-2000s China : 526 million mid-2000s India : 96 million mid-2000s

Estimate B: $4 – 30 per capita per day PPP ASEAN 7 : 111 million mid-2000s China : 378 million mid-2000s India : 49 million mid-2000s

Source: ERIA – Dr Intal

8

SMEs represent up to 99% of all enterprises in ASEAN

member states (AMS);

SMEs generate 56% to 97% of domestic employment

including youth and women;

SMEs contribute 30% - 60% to GDP; and

SMEs contribute 19% - 31% to exports

SMEs in ASEAN

PRIVATE SECTOR - PRIORITIES

9

INFORMATION CAMPAIGN

FINANCE

TRADE FACILITATION

WOMEN/YOUTH ENTREPRENEURS

Focus on Women and Youth Entrepreneurs

ABAC 2014 Report to Leaders

Aggressive campaign for SMEs

Improvements through financial sector reform, requirement for banks to provide financing

Rules of Origin, Green Lane, Product Standards

POST-2015 ASEAN LANDSACPE

INTEGRATED AND COHESIVE

COMPETITIVE INNOVATIVE

DYNAMIC

RESILIENT INCLUSIVE

PEOPLE-CENTERED

SECTORAL INTEGRATION

GLOBAL ASEAN

10

Post 2015 – Focus on 5 Strategic Goals

Promote Productivity,

Technology and Innovation

Enhance Policy and Regulatory

Framework

Increase Access to Finance

Promote Entrepreneurship

and HRD

Enhance Market Access/

Internationalisation

1 2 3

4 5

9 policies 5 policies 7 policies

11

PwC

GOALS AND OUTCOMES

ASEAN SME Strategic Action Plan (2016-2025)

Strategic Goals Desired outcomes

12

A)Promote Productivity, Technology and Innovation

B) Increase Access to Finance

A-1) Productivity, Technology and Innovation will be enhanced

A-3) Innovation will be promoted as a Key Competitive Advantage for SMEs

A-2) Cluster-based Strategy will be enhanced

A-4) IPR Protection for Commercialization will be enhanced

B-1) Regulatory Framework for Access to Finance will be developed and enhanced

B-2) Financial Inclusion and Literacy will be promoted

B-3) Alternative Financing will be promoted

PwC

(cont’d)

ASEAN SME Strategic Action Plan (2016-2025) 13

C)Enhance Market Access and Internationalization

D)Enhance Policy and Regulatory Environment

E)Promote Entrepreneurship & Human Capital Development

C-1) High Value Information of the Market to SMEs will be enhanced

C-2) Financial Facilities for SMEs to Export will be developed

C-3) Integration into the Global Supply Chain and Market will be enhanced

C-4) Partnership with Large Enterprises will be promoted to Increase Market Access Opportunities

D-1) Inter and Intra- Governmental Cooperation and Coordination in Policies and Regulation will be enhanced

D-2) Cheaper and Faster Start-ups will be enhanced

D-3) Institutional Framework will be strengthened

E-1) Conducive Environment for Entrepreneurship will be created

E-2) Entrepreneurship Education will be promoted

E-3) Capability Building Activities including Women and Youth will be provided

SME Integration requires specific focus post 2015:

Avoid

CROWDING OUT

private sector

improving the Policy Environment

Cross SectoralCollaboration

(Across Sectors and With Business)

Targeted SME Programmes

1 2 3

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NEW PLAN INITIATIVES SHOULD:

MOVE THE NEEDLE

BENEFIT SMES AS A GROUP

FOLLOW-THROUGH

• BIG IMPACT

• SHOW RESULTS

• MAXIMISE RESOURCES

15

Thank You

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