The establishment of the AEC marks the comprehensive integration of Southeast Asia's economies, uniting them into a production, trade, and investment bloc composed of a consumer market 600 million strong.
Leading economists forecast that the bloc collectively will command an annual gross domestic product (GDP) of roughly US$2 trillion in 2016, making up 40% of global GDP.
However, despite all the rosy forecasts and figures, many leading experts are now experiencing second thoughts or buyer’s remorse if you will, and are questioning whether or not SMEs are adequately prepared.
They are just not quite sure where SMEs fit into the overall economic landscape once the AEC officially comes into effect and whether they will be able to effectively compete in the new marketplace.
Economic expert Pham Chi Lan said Vietnamese SME’s shortcomings are weak capacity to access markets and capital, shortage of state of the art technology, weak management skills and low labour qualification.
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In addition, limited export markets and deficient trading skills prevent them from identifying potential markets.
A representative from the Vietnam SME Association said the AEC will open up more challenges for SMEs so they must improve upon their resources and capacity if they want to move ahead to become a leading business in the region.
SMEs should consider capacity as a priority to focus on as well as developing human resources, renovating technology and technical capacity and raising management capacity.
They also need to restructure their businesses, apply better production methods, build a long-term business strategy to expand production capacity and a business network, Lan said.
When the AEC officially forms, SMEs will have to operate in a much fiercer competitive environment, requiring them quickly to adapt to exist and develop sustainably in the market.
However, to grasp opportunities brought about AEC, the Government must devise proper support policies for SMEs to help them easily access bank loans, advanced technologies and markets.
The Government also needs to continue to strive to upgrade and revamp infrastructure, and ensure security, transparency and comprehensive legal framework for businesses to operate.
The legal framework should facilitate SMEs in trading and expanding export markets. To realise this, procedures, like business registration, licence granting, capital borrowing, payment method, tax declaration should be simplified.
In addition, relevant agencies should create the best possible conditions for SMEs to register doing business, change their products, and carry out import-export activities in accordance to law.
SMEs leaders are encouraging SMEs to take training courses on international business skills. Particularly, they have to closely coordinate with state-owned enterprises to raise competitiveness in the deep and wide AEC integration process.
