MANILA: Strengthening the dynamics of micro, small, and medium-sized enterprises (MSMEs) with innovation and internationalisation is key to revitalising South-East Asian economies devastated by the Covid-19 pandemic, according to a new Asian Development Bank (ADB) report.
The Asia Small and Medium-Sized Enterprise Monitor (ASM) 2020 said MSMEs are a critical driving force in South-East Asian economies, accounting for an average of 97% of all enterprises and 69% of the national labour force from 2010 to 2019.
They contributed an average of 41% of each country’s gross domestic product over the same period, said the report.
“MSMEs in South-East Asian economies mainly focus on domestic markets and their level of entrepreneurship remains suboptimal.
“Supporting the development of MSMEs, particularly in technology adoption and participation in global supply chains, will contribute to inclusive growth and aid in recovery efforts from Covid-19, ” ADB chief economist Yasuyuki Sawada said.
Sawada said the report, which provides a rich set of data and analyses on MSME development in South-East Asia pre-Covid-19 pandemic, “would become a benchmark in helping design feasible government assistance for MSMEs amid a new normal in the region”.
The first volume of ASM 2020 presents a detailed assessment of financial and non-financial issues facing MSMEs in South-East Asia at both the country and regional levels.
It also analyses policies and regulations surrounding MSME development and access to finance in each country in South-East Asia.
Key findings from the report’s second volume, to be released on Oct 28, examine the impact of Covid-19 on MSMEs in Indonesia, Laos, the Philippines, and Thailand based on rapid surveys conducted from March to May this year.
The Manila-based bank said the challenges faced by MSMEs in the region have been exacerbated by Covid-19, with demand for MSME products and services declining since the onset of the pandemic. This has resulted in layoffs, reduced business operations, and a depressed outlook for the sector, the bank said.
The report explores policy approaches that could support MSMEs during and after the pandemic. ASM 2020’s remaining two volumes will be released by the end of 2020.
The ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. It assists its members and partners by providing loans and grants, among others. — Xinhua
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