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Benefits of ASEAN to SMALL and MEDIUM Businesses

Last Update: Sep 22, 2023 @ 6:18 am
RubenLicera
Benefits of ASEAN to SMALL and MEDIUM Businesses

Social Good events attract social good inclined bloggers. This roadshow is one of those.

March 3 was another special day for me. It was one  of those few moments that I get to meet real social good bloggers. MomBlogger (Noemi Dado) is one of those who had inspired me to blog for social good which started way back 2008. Our first encounter was a quick meet and greet during the 2010’s iBlogPH Summit organized annually by Ms. Janette Toral.

From time to time, we get to encounter and discuss social good stuff (insert Tonyo Cruz and Ka Bino Guerrero).

This time we both met again  for ASEAN – Presidential Communications Operations Office (PCOO) Roadshow at the Cebu GrandCon. Noemi is part of the National Organizing Council  for the ASEAN 2017 Summit.

What interested me and my team to come into the event is the fact that we are currently working on projects with our counterparts in Malaysia. Aside from the ASEAN one-visa policy, that allows any ASEAN netizen to stay and travel in any ASEAN-member country from 14 days (2 weeks) to 30 Days (4 weeks), without any country visa but only your country passport, I want to get more facts on what other benefits can ASEAN small and medium enterprises (SME’s) as ASEAN comes full circle

It was an interesting morning of great resource for private and public sector. Here are some of the events that happened that day as I have tracked and posted via Telegram.

I even took note of an event the Vice President is doing that same time.

Official invites for this event came from  our partner #AngBagongPIA Philippine Information Agency. =)

That morning, not a single discussion or fora about ASEAN was staged. Good thing that during my quick chat with ASEAN consultant and Blogwatch blogger Noemi, I was able to get insights on how ASEAN can benefit netizens and businesses.

For this blog post, I intend to dig some facts about ASEAN and give some light and insights on what ASEAN can bring to the SMEs which comprises 96%$ of the market.

What is ASEAN?

what-is-asean
image source: slideshare.net

The Association of South East Asian Nations (ASEAN) is a close knit community established between few countries in the Asian region for better mutual co-operation in social and commercial way of life. http://aseanup.com/benefits-asean-economic-community-aec/ 

ASEAN is a 10-member international body that represents more than 600 million people living in the region. It was established in Bangkok in 1967 by the pioneering countries such as Thailand, Indonesia, Malaysia, Philippines and Singapore. Eventually, it has been joined by Brunei, Laos, Vietnam, Myanmar and Cambodia. Today, ASEAN provide great opportunities for business investors and promises to deliver to their expectations.

The ASEAN market

asean-market
image source: carma-asean.com

ASEAN region which has been solely dependent on export for their growth over the past is now trying to rebalance their economies with the help of local demand as part of an intentionally planned move in their business development in Asia as well as other regions and growth strategies. Without a doubt, most of the ASEAN economies are showing remarkable growth and the investment projections appear to be strong.

With a collective GDP of $2.4 trillion as of 2013, ASEAN is projected to be the fourth largest economy by the year 2050. ASEAN is home to more than 600 million people and with its labor force and consistent productivity improvements can drive the GDP to higher levels. ASEAN labor power is the third largest in the world after China and India.

In terms of consumer sector in ASEAN, according to Thailand’s statistics, it has increased over the years. It is now known to be a consumer demand hub. The region has 67 million households which are part of the consuming class, which is expected to double by 2025, making ASEAN one of the biggest consumer market for the businesses globally. The cities in the region are booming and more than 22 percent of the total population resided in the cities. The urbanization is on the rise and urban population accounts for more than 54 percent of the total GDP. Expect that an additional 54 million inhabitants will join the cities by 2025 and will ultimately boost the GDP.

At present, ASEAN focuses on trade, and we anticipate that it will continue to do so in the coming decades ahead, thanks to its rich supplies of resources and well-established industrial base, which the ASEAN Economic Community will further improve. With the promise of a single production podium and an integrated market, the drive for intra and inter-ASEAN trade will get a thrust and will hold the key for future.

The ASEAN Economic Community (AEC) officially launched on 31 December 2015, marking a milestone in the regional economic integration agenda. It aimed to create a single market that would enable easier movement of goods, services, and investment across the region. The formal establishment of the AEC does not point to an end of the efforts in achieving further integration among the AEC countries, be it economic, political and socio-cultural. ASEAN leaders adopted the AEC Blueprint 2025 in November 2015. Outlining the broad directions through strategic measures in five areas for the AEC from 2016 to 2025. Under the AEC framework, the more developed ASEAN members, namely, Singapore, Thailand, Indonesia, Brunei, Indonesia, Malaysia and the Philippines, had basically achieved zero tariffs as of the end of 2015, with the remaining four, namely Cambodia, Laos, Myanmar and Vietnam (ASEAN-CLMV), given more flexibility in lowering import duties until 2018.

The Advantages of ASEAN integration to small and medium businesses

advantages-of-asean-integration-to-small-and-medium-businesses
image source: aim.ph

The ASEAN Economic Community (AEC) seeks to establish a bigger market as well as a freer flow of goods, services and capital services among the ten ASEAN nations through the unification of economic policies including removing tariffs with very few exceptions, and harmonizing regulatory requirements to facilitate the flow of goods, service and investments, among others. According to an article courtesy of PhilStar, ASEAN StanChart chief executive officer Lim Cheng Teck said that AEC will help the region “create more jobs, attract foreign investments, increase cross-border trade, grow wealth and also improve the lives of its citizens.”

The ASEAN leaders have recognized SME development as a vital element for the AEC to be an equitable economic region. In 2011, the ASEAN and East Asia Summits emphasized the role of SMEs as vehicles for accelerating intraregional trade. Rebalancing the economies toward domestic and regional demand, and promoting inclusive growth in Asia. That is why ASEAN has formulated SME-specific policies.

In 2004, ASEAN drew up the “ASEAN Policy Blueprint for SME Development 2004–2014.” The blueprint aims to facilitate the emergence of an ASEAN SME sector that is entrepreneurial, innovative, outward-looking, competitive and resilient. It contains work plans, policy measures, and indicative outputs. AEC was never meant to benefit only the big guys. Small and medium enterprises (SMEs) will benefit from this integration for it will provide an opportunity to grow. SMEs will not remain stagnant in terms of productivity and employment absorption. This integration allows businesses and people move with ease across borders and generates growth and prosperity.

We see SMEs’ potential to contribute to regional development through their participation in international production networks, or global value chains. Many view the close linkages between multinational corporations (MNCs) as well as small and medium-sized enterprises (SMEs) as a powerful way to accelerate SME upgrading in areas like productivity, technology, and managerial know-how.

SMEs represent 99.6% of the operating business enterprises in Philippines, generating up to 32% of the country’s Gross Domestic Product. This highlights the role that they play in providing jobs for the local and regional workforce. Which translates to more income for their own businesses and local economies. “The ASEAN integration urges SMEs to level up and adapt to changes, as the demand increases for higher quality of products and also regional competition becomes stiffer,” says PLDT First Vice President and Head of SME Business Kat Luna-Abelarde. “The diversity, however, will provide them the freedom and creativity to develop new products and services that can potentially spur economic growth within their local economies and the ASEAN economy as a whole.”

Regional Director Leon M. Dacanay, Jr. of the NEDA Regional Office (NRO) 10 stated that AEC will undoubtedly offer greater benefits to the country’s MSMEs. Due to the larger market of 600 million consumers, enhanced technology sharing, and increased interdependence among SMEs in the region. All these will result to greater efficiency, higher productivity, and ultimately higher incomes of SMEs, he concluded.

Conclusion

On the onset of Asean Economic Community (AEC), SMEs must find proper positioning in a more closely integrated regional economy. With all its peculiar opportunities and challenges. Widening and strengthening the SME sector is key to overcoming the Philippines’ long-standing lack of inclusive economic growth. Through AEC, it will generate more job employment. SMEs can take advantage of the ASEAN integration. By thinking global or how to export, trade and do business in other ASEAN countries or expand in Asia.

More stable SMEs ready to expand their horizons would do well to invest time to study the documentary procedures. This will help them take advantage of trade and investment concessions under the AEC. Department of Trade and Industry hosts nationwide seminars through the Doing Business in Free Trade Areas program, focusing on SMEs. These efforts have increased Philippine firms’ utilization of trading privileges under various free trade agreements, including the AEC.

References: PIA, PCOO

Read Also: Top 10 Digital Transformation Challenges for Small Businesses and Ways To Overcome These

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