Module 13: Small and Medium  Enterprises in ASEAN

Table of Contents

Reading Text & Presentation

SECTION 13.1
Small and medium enterprises (SMEs)


The growing trend of economic cooperation results in competition across all regions. New areas of integration enhance free and liberated trade. As countries have become interdependent, the opportunities for international trade increase and changes effect doing business in the ASEAN community.

 

13.1.1 Definition of SMEs
The definition of SME varies according to the character of the ASEAN country and there is a diverse range of company sizes, capabilities and business activities.
The following table describes the different definitions of SMEs in Southeast Asia:

 

Country

Explanation

Kingdom of Cambodia
คำอธิบาย: http://zhenghe.tripod.com/flags/big/cambodia.jpg

Small enterprises employ from 11 to 50 employees and fixed assets of $50,000 to $250,000. Medium enterprises employ more and have assets of $250,000 to $500,000.

Republic of Indonesia
คำอธิบาย: http://pirun.ku.ac.th/~b5410853261/image/3.jpg

 SMEs employ fewer than 100 employees.

Lao People’s Democratic Republic
คำอธิบาย: http://www.crwflags.com/fotw/images/l/la.gif

Small enterprises employ fewer than 19 employees with fixed total assets of 150 million kep, and medium enterprises employ fewer than 99 employees and an annual turnover not exceeding 1 billion kep.

Malaysia
คำอธิบาย: http://www.sjworldedu.com/wp-content/uploads/2013/12/malaysia-flag.png

SMEs vary in each business sector based on the number of employees and annual sales turnover.

Republic of the Philippines
คำอธิบาย: http://www.undp.org/content/dam/philippines/img/flag_philippines.gif

SMEs employ fewer than 200 employees, and have less than 40 million pesos in assets.

 

Kingdom of Thailand
คำอธิบาย: http://www.traveltop.net/wp-content/uploads/2011/11/thailand-flag.jpg

SMEs vary in each business sector based on the number of employees and fixed capital.

Socialist Republic of  Vietnam
คำอธิบาย: http://www.sa.ac.th/asean/images/Wallpapers%20Flag%20of%20Vietnam%20flag%20graphics%20(6).gif

SME refers to independent productions and businesses with registered capital, according to the law provisions, not exceeding one billion VND or annual labor not exceeding 300 employees.
(Source: SME development frame work of 2005)


Regional cooperation in ASEAN is guided by the ASEAN Strategic Action Plan for SME Development 2010-2015. This action plan is regulated by the ASEAN Economic Administers (AMEs) to develop competitiveness of SMEs towards a single market production base in ASEAN.


The Framework Agreement on the ASEAN Investment Area was signed on 8 October 1998 to increase the flow of foreign direct investment from both ASEAN and non-ASEAN countries. This agreement binds the members to progressively reduce and eliminate investment regulations and implement a free flow of skilled labor and technology.


Under the first pillar, ASEAN aims for transparency of their respective investment rules by establishing a database for ASEAN supporting industries and technology suppliers to identify technical cooperation. Investment liberalization supports national treatment. Under article 16, the main institutional arrangement is the ASEAN Investment Area (AIA) Council, in which the ministers are responsible for investment. The secretary general of ASEAN coordinates the committee on investment.
Trade and investment in specific areas help to build competitive advantage as follows:

 

Country Specialization
1. Republic of Indonesia คำอธิบาย: http://pirun.ku.ac.th/~b5410853261/image/3.jpg wood-based products and auto motives
2. Malaysia  คำอธิบาย: http://www.sjworldedu.com/wp-content/uploads/2013/12/malaysia-flag.png rubber-based products, textiles and apparel
3. Republic of the Union of Myanmar  คำอธิบาย: http://www.myanmar-embassy-tokyo.net/images/myanmar-new-flag.jpg agro-based products and fisheries
4.  Republic of the Philippines  คำอธิบาย: http://www.undp.org/content/dam/philippines/img/flag_philippines.gif electronics
5. Republic of Singapore  คำอธิบาย: http://www.mylittlehill.com/wp-content/uploads/2013/02/singapore-flag.gif e-ASEAN and healthcare
6. Kingdom of Thailand  คำอธิบาย: http://www.traveltop.net/wp-content/uploads/2011/11/thailand-flag.jpg air travel and tourism

 

The South East Asian region is one of the fastest growing regions in the world, which is beginning to gain its stride on a global scale.  The national trade group increases to coordinate economic growth both regionally and internationally. The ASEAN commitment is to initiate the region’s capacity, for example, attract investment, upgrade the standards and quality of its products, and upgrade the service products of small and medium enterprises (SMEs). The SMEs benefit from this dynamic ASEAN market. It is important to recognize the structures and factors unknown to many individuals. More knowledge about the country’s business can lead professionals to create a pool of personal skills and motivation.