SME growth key to One Asean goal

Posted on  30/09/2011  |  Media Centre

Friday, September 30, 2011

SMALL and medium enterprise development is one of the key areas that should be focused on to realise the ‘One Asean’ vision, said the head of an Indonesian investment company during Asia Inc Forum’s Asean 100 Leadership Forum yesterday.

“The motions to give Asean a chance have a much better rate of success if we actually empower these SMEs, because they would be able to create jobs, and they would be able to produce economic growth and in the long run they would provide stability,” said Sandiaga Uno, president of Saratoga Capital.

He noted that in Indonesia, there are an estimated 52 million “microsmall medium enterprises”, which contribute roughly 60 per cent to the country’s gross domestic product. “In terms of employment it is about nine per cent, so you would see ranging from 40 to 60 per cent of every single Asean nation is dominated by SMEs, and these are large in terms of numbers,” he said.

He said SMEs are “mobile, dynamic and very vibrant sectors of the economies, which are crucial to realising the ‘One Asean dream’.

He said Asean nations need to focus on SMEs as they lack access to finance, technology, human capital and so on.

One of the initiatives that the country has to empower these micro-SMEs is the ‘One Village, One Product’ concept, a programme that aims to bring focus and give micro-SMEs a chance to be more competitive in the local market, which Thailand is also practising.

However, similarly to Brunei, Indonesia currently has “mixed results” with the programme, with some areas like North Sumatra getting good results but other areas such as Kalimantan, struggling to produce a sustainable product.

“You have to see it in the long run where there is not a ‘one size fits all’, and that you have to share and compare best practices form other Asean countries,” he said.

In Brunei, one example of a project under the ‘One Village, One Product’ programme is Kg Tanjong Maya’s venture into the coconut business.

Dr Hj Amzah Hj Abdul Rahman, the head of the economic body of the council, said in a previous report that the programme is based on the concept of community economy where village members make products mostly made from coconut.

“It is hoped that through these programmes, in five years time, there will be a 10 per cent increase in the coconut trade investments annually, as well as an increase of the number of local and foreign tourists coming into the country,” he said.

Asked what could be done to help make such programmes a success, Uno suggested sharing best practices and achieving economies of scale and efficiencies and by ‘repetition’.

“When you repeat doing the same things over and over again, you improve it and that would create cost competitiveness that would create a society that would propel them to produce goods and services that would be better than any competitor,” he said.

One of the hurdles that Uno mentioned on why the concept was not achieving the desired results was that in Indonesia, ‘sharing of information” is weak. “There is very little information about what we are doing, about what bureaucrats are doing, and what the policymakers are doing. Everyone tends to focus on their own thing and the level of awareness is very low and even in Asean,” he said.

He added that it is the job of the people and stakeholders to socialise more and bring it up to the level that creates national and regional awareness.

The Brunei Times

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