15 Presentation on Opportunities and Challenge of Cambodia SME in the Integration of AEC
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Transcript of 15 Presentation on Opportunities and Challenge of Cambodia SME in the Integration of AEC
3/4/2015
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Opportunities and ChallengesOpportunities and Challengesfor Cambodia’s SME Post AEC 2015for Cambodia’s SME Post AEC 2015
by H.E. by H.E. HengHeng SokkungSokkungSecretary of State, Ministry of Industry and HandicraftSecretary of State, Ministry of Industry and Handicraft
National Conference on Mechanism for Private Sector Development
Synergy, Growth and ASEAN Economic Community03 March 2015
Cambodiana Hotel, Phnom Penh1
Secretary of State, Ministry of Industry and HandicraftSecretary of State, Ministry of Industry and Handicraft
Content Content
I- Understanding of SMEs situation in Cambodia
II- What is the AEC?
III- Where are we now?
IV- Understanding of SMEs situation in ASEAN
V- Opportunities and Challenges for CambodiaV- Opportunities and Challenges for Cambodia
VI- Conclusion
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I- Understanding of SMEs situation in Cambodia
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In 2013, its share to GDP started to rise
again to an estimated level of 24%. In
f h d i h lterm of growth, during the last 15years (1998-2013) the industrial sector
grew at average 12.4% per annum
and in 2014 SMEs growth was 9,7%compared to 2 6% for agriculture and
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compared to 2.6% for agriculture and7.5% for service sector, thus making itthe fastest growing sector.
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II-What is AEC 2015?
ASEAN ECONOMIC COMMUNITYASEAN ECONOMIC COMMUNITYSTRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)STRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)
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Pillar 1Single Market
& Production Base
• Free flow of goods• Free flow of services
• Free flow of investment
• Freer flow of
Pillar 2 Competitive
Economic Region
• Competition policy
• Consumer protection
• Intellectual
Pillar 3Equitable Economic
Development
• SME development
• Initiative for ASEAN Integration
Pillar 4 Integration into
the Global Economy
• Coherent approach towards externaleconomic relations
capital• Free flow of skilled labor
• Priority Integration Sectors
• Food, agriculture and forestry
property rights• Infrastructure
development• Taxation• E-Commerce
• Enhanced participation in global supply networks
HUMAN RESOURCE DEVELOPMENT RESEARCH AND DEVELOPMENTHUMAN RESOURCE DEVELOPMENT RESEARCH AND DEVELOPMENT 3
IIIIII--Where are we now?Where are we now?
AEC Blueprint: Signed in 2007
Defined: The AEC will “establish
ASEAN as a single market and
Four Pillars of AEC
Single Market and Production Base
Competitive Economic Regiong
production base with the goal of
making ASEAN more dynamic
and competitive.”
Competitive Economic Region
Equitable Economic Development
Integration into the Global Economy
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IV- Understanding of SME Situation in ASEANASEAN Action PLAN 2011-2015
BY ACTIVITIES
13Source : SME Post 2015 Action Plan Study5
2-1. SME Strategic Action Plan(SME SAP)The structure and breakdowns
ASEAN SME Strategic Action Plan (2016-2025)
The SME SAP has a pyramid structure from “Vision” to “Monitoring”. Each layer has connection with its both side of
SME SAP 2016-2025
Strategic Goals
Vision What ASEAN wants
to be
What ASEAN must achieve to get there
Planning& Collaboration
ones.
Desired Outcomes
Mission Statement
PwC14
Implementation
Monitoring
Actions for Strategic Goals How ASEAN will
achieve goals
How ASEAN will implement strategy
What ASEAN performs like
Collaboration& Monitoring
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SMEs in ASEAN
SMEs represent up to 99% of all enterprises in ASEAN member states (AMS);
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( );
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
More than 52 million SMEs in ASEAN Member States can be considered as
one of the most powerful sources to boost the economy in the region
efficiently and effectively Moreover promoting equitable development byefficiently and effectively. Moreover, promoting equitable development by
promoting SMEs is one of the main pillars for reaching our goal of ASEAN
Economic Community (AEC), (Ref. ASEAN data)
16SMEs development zone (Google)
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PRIVATE SECTOR ‐ PRIORITIES
INFORMATION CAMPAIGN
Aggressive campaign for SMEs
FINANCE
TRADE FACILITATION
SMEs
Improvements through financial sector reform, requirement for banks to provide financing
Rules of Origin, Green Lane, Product Standards
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WOMEN/YOUTH ENTREPRENEURS
Focus on Women and Youth Entrepreneurs
ABAC 2014 Report to Leaders
POST‐2015 ASEAN LANDSCAPE
INTEGRATED AND COHESIVE
COMPETITIVE INNOVATIVE DYNAMIC
RESILIENT INCLUSIVE
PEOPLE‐CENTERED
SECTORAL INTEGRATION
GLOBAL ASEAN
INTEGRATION
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Post 2015 – Focus on 5 Strategic Goals
Promote Productivity,
Technology and Innovation
Increase Access to Finance
Enhance Market Access/
Internationalisation
1 2 3
9 policies 5 policies 7 policies
Enhance Policy and Regulatory Framework
Promote Entrepreneurship
and HRD
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GOALS AND OUTCOMES
Strategic Goals Desired outcomesA ) P d i i T h l d I i ill b
A)Promote Productivity, Technology and Innovation
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
PwC
ASEAN SME Strategic Action Plan (2016-2025)20
B) Increase Access to Finance
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
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(cont’d)
C)Enhance Market Access and Internationalization
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
D)Enhance Policy and Regulatory Environment
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
PwCASEAN SME Strategic Action Plan (2016-2025) 21
E)Promote Entrepreneurship & Human Capital Development
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• BIG IMPACT • SHOW RESULTS• MAXIMISE RESOURCES
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V- Opportunities and Challenges for Cambodia
WOULD YOU LIKE TO FIGHT WITH ARNOLD?
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5‐Opportunities and ChallengesA‐Opportunities
Raise profile and prestige of Cambodia in theregion and International arena
Mutual support: International Organization
Integrated with ASEAN Market of more than 600million people
Develop human resource through IAI (Initiative forp g ( fASEAN Integration)
Receive aid and assistance from DialoguePartners, ASEAN’s friends, and other ASEANMember States
B‐Challenges
Human Resource
Lack of skill labour
Socio‐Economic Development
Connectivity
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Business needs
1 010
%
need partnership to help improving the business
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7.5
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more technical assistance with low cost
no demand
technical expertise to develop business plans/financial statements
more qualified support staff
more available sources of finance
more productive workforce to make full production capacity
d d h l i d i i d
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3more advanced technology to improve productivity and cut costs
more information on new markets/technologies/laws
more financial resources to expand the business
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Reduce electricity tariff
Reduce electricity connection fee
What should the government do!
Reduce electricity connection fee
Reduce electricity penalty fee
Eliminate unofficial payments
Ensure fair competition among SMEs
Provide more information (i.e. new market, technology, laws, etc) to SMEs
Provide grant and incentive to SMEs
Provide technical expertise (i.e. technology, marketing, finance, job markets, etc)
Design more SMEs support policies
Reduce tax on import and export especially the import of raw material
Reduce migration rate28
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VISION
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Strategy
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VI‐CONCLUSION
Although the Cambodian economy has recorded decenteconomic growth over the last decade, it is urgent foreconomic growth over the last decade, it is urgent forthe government to take necessary policy measures tograduate to a middle income county and compete withregional countries in attracting FDI throughinfrastructure improvement, including affordable andreliable electricity supply, expansion of transportinfrastructure, improvement to logistics system,upgrading of technologies, strengthening ofcoordination mechanism especially the upgrading ofthe capacity of the executing agencies together withthe provision of appropriate incentives.
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The Industry and SME development is the keypolicy and framework for promoting industrialdevelopment through economic diversificationdevelopment through economic diversification,export promotion and establishment of industrialmanagement framework. The industrialdevelopment policy, IDP, SME Promotion andDevelopment Policy will lay out measures thatcover various aspects to be implemented bycover various aspects to be implemented byconcerned ministries/institutions that are a goodmanagement and preparation of Cambodia forASEAN 2015.
សូមអរគណុThank You!
Please visit us @ www.mih.gov.kh