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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. Presentation Outline.

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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, KhonKaen, Thailand

6-10 September, 2010

slide2

Presentation Outline

  • Country profile, economic performance and investment policy
  • SME situation and policy
  • SWOT Analysis of ASEAN Economic Integration
  • Impact of ASEAN Economic Integration

ASEAN SME Regional Gateway-GMS SME BIZ Network

slide3

I. Country profile

ASEAN SME Regional Gateway-GMS SME BIZ Network

export import
Export-Import

Source: MoIC 2010

ASEAN SME Regional Gateway-GMS SME BIZ Network

gms trading
GMS Trading

Source: MoIC 2010

ASEAN SME Regional Gateway-GMS SME BIZ Network

ii situation of smes in the lao pdr
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

ASEAN SME Regional Gateway-GMS SME BIZ Network

number and percentage of enterprises by size
Number and Percentage of Enterprises by Size

99.8% - SME

<5 5-9 10-99

Number of employees

100+

Source: National Economic Census 2006

ASEAN SME Regional Gateway-GMS SME BIZ Network

distribution of employment ebs2005 es2007 and es2009
Distribution of employment (EBS2005, ES2007 and ES2009)

Source: GTZ/HRDME –ES 2009

ASEAN SME Regional Gateway-GMS SME BIZ Network

type of enterprise es2005 es2007 es2009
Type of enterprise (ES2005,ES2007,ES2009)

Source: GTZ/HRDME –ES 2009

ASEAN SME Regional Gateway-GMS SME BIZ Network

iii swot analysis of asean economic integration
III. SWOT Analysis of ASEAN Economic Integration

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

ASEAN SME Regional Gateway-GMS SME BIZ Network

iii swot analysis of asean economic integration1
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

ASEAN SME Regional Gateway-GMS SME BIZ Network

i swot analysis of asean economic integration
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;

ASEAN SME Regional Gateway-GMS SME BIZ Network

iii swot analysis of asean economic integration2
III. SWOT Analysis of ASEAN Economic Integration

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.

ASEAN SME Regional Gateway-GMS SME BIZ Network

iii swot analysis of asean economic integration3
III. SWOT Analysis of ASEAN Economic Integration

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….

ASEAN SME Regional Gateway-GMS SME BIZ Network

sme policy
SME policy
  • Vision (2007-2010)

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.

ASEAN SME Regional Gateway-GMS SME BIZ Network

main objectives
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

ASEAN SME Regional Gateway-GMS SME BIZ Network

target
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

ASEAN SME Regional Gateway-GMS SME BIZ Network

sme policy pm decree 42 pm
SME policy (PM Decree 42/PM)

1. Creating an Enabling Regulatory and Administrative Environment

2. Enhancing Competitiveness

3. Expanding Domestic and International Markets

4. Improving Access to Finance

5. Encouraging and Creating Favorable Conditions for Establishment of Business Organizations

6. Enhancing Entrepreneurial Attitudes and Characteristics within the Society

ASEAN SME Regional Gateway-GMS SME BIZ Network

iv impact of asean economic integration
IV. Impact of ASEAN Economic Integration
  • Positive impact
  • Market expansion
  • More competition-more joy for consumer
  • Increasing of Supply chain
  • Negative impact
  • Zero income tax
  • Growth of SME’s may faced competitiveness
  • Change of everything

ASEAN SME Regional Gateway-GMS SME BIZ Network

slide37

THANK YOU

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