asean sme regional gateway-gms sme biz network forum

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


I. Country profile

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


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

23

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 millionMedium 99 1.2 billion 1 billion


24

Number and Percentage of Enterprises by Size

<5 5-9 10-99Number of employees

Source: National Economic Census 2006


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 2009ASEAN 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 2009ASEAN 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




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


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.



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….



32

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.


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


34

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


35

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


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


37

THANK YOU

ຂອບໃຈ

asean sme regional gateway-gms sme biz network forum

Documents

laos sme swot

gms tradingsource

situation of smes

classification of smes

lao pdrdefinition of

economic performance

kip annual turnover

investment policysme