Most Thai Small And Medium-Sized Enterprises Unprepared For Asean Integration

[webfact]

Most SMEs not ready for AEC
Petchanet Pratruangkrai
The Nation

Lack awareness of benefits, challenges of new era; prefer push-back to 2016

BANGKOK: -- With less than two years to go before the Asean Economic Community (AEC) come into effect, more than half of Thai small and medium-sized enterprises still lack a proper understanding of what is going to happen and are unprepared for the challenges of market liberalisation, according to a new survey.

As a result, Thailand could lose out on many of the opportunities presented by market integration, while some businesses, and SMEs in particular, could be hit hard by the high level of competition from operators in other Asean member states. Many enterprises would lose market share, forcing them to close down or be taken over by foreign companies.

The results of a survey released yesterday by the University of the Thai Chamber of Commerce's Centre for International Trade Studies (CITS) showed that 56.25 per cent of SMEs across 13 sectors did not understand the benefits and challenges of regional integration.

Thai SMEs would prefer the AEC's implementation to be pushed back a year, to the beginning of 2016.

The figure has dropped only slightly from 57.47 per cent last year, reflecting the government's failure to engender AEC awareness among SMEs during the past 12 months.

CITS director Aat Pisanwanich said the disappointingly small rise in the number of SMEs that had become more aware of the AEC was down to the fact that government agencies had not educated them clearly about what they should do to prepare for the seamless market.

"The government's agencies have educated enterprises in the traditional way by organising seminars only in big cities and large provinces. But enterprises in small provinces and remote areas are not aware of the AEC [implications] as they lack the opportunity to access the information," he said.

Based on the centre's survey derived from 1,500 enterprises across 13 sectors in the agricultural, industrial and services fields, those in agriculture have the least understanding about regional integration.

Some 91.94 per cent of farming respondents know nothing about the coming integration, which presents a high risk that the Thai agricultural sector will lose market share within Asean, Aat added.

The study shows that among the 13 sectors surveyed, construction, livestock, farming, fishery, retail and wholesale are not ready for the competitive environment in a seamless regional market.

Major obstacles

Issues that SMEs know the least about are investment liberalisation, service liberalisation, non-tariff barriers, rules of origin and single standards for Asean products, the survey found.

The major obstacles among enterprises not ready for the AEC are a lack of knowledge and in-depth information about the benefits and challenges of each particular business, lack of financial support, low development of human resources and language skills in English and other Asean languages.

Aat said the government and all other concerned bodies must urgently increase enterprises' knowledge of integration.

Before the implementation of the AEC, most Thai enterprises, especially those in small and remote provinces, must know more about the implications of integration so that they can develop their businesses for the seamless market. Otherwise, SMEs could collapse because they are unable to compete with their Asean counterparts, he added.


-- The Nation 2013-03-13

[h90]

and which countries SME are better prepared?

Indonesian, Lao, Cambodia??

[bigbamboo]

Didn't they already push the start of the AEC back to December 31st 2015, so it effectively kicks off in 2016 anyway?

[Robby nz]

The article talks about agriculture among other things and this made me wonder what would happen about the rice mountain should it still exist at that time.

Would the rules of ASEAN allow free trade of rice between member countries?

If so then Thailand would be forced to match any lower prices from ASEAN partners, this of course would apply to other products as well.

You could say that Thailand already has problems with completion from other rice producers and that is the reason the rice mountain exists but belonging to a regional trade block would only exacerbate these troubles.

Not to mention the higher Thai wages......................................I said not to mention.............................................

[RisqEM]

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

[hanuman2543]

The worst nightmare of all Thai companies is slowly becoming reality . Real competition and a leveled playing field for all.

[reiltin]

Common trade tariffs,Customs union,Agriculture reform and ease of movement of workers among members,-a level playing field....forgetting SMEs is the government itself ready?

[thunder30101]

Dont kid yourself Thailand will opt out of the asean trade agreements using every excuse possible to justify their decision. With the current gov. running up massive public debt and encouraging more private debt than can be serviced by the low wages paid here, thailand's economy is heading for a slow painful downfall.

[nevets]

Tha big pomplem is in my experiance you can not tell the Thai anything as they no everything, and say i Thai you no understand.

[Pimay1]

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

Since when do Thais think beyond the next meal?

[clockman]

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

Since when do Thais think beyond the next meal?

Or the next drink!

[Payboy]

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

Since when do Thais think beyond the next meal?

True that, considering only a few decades ago the standard greeting in LOS was "kin kao reu yang".

[Phronesis]

Ahhh haaa ahhh ahhh haaa ahh hhhaaaaa

Most Thai small businesses are not ready for AEC....

Most Thai small businesses are not ready for TOMORROW.

[TomAikins]

The major obstacle is the fact that, in reality, most of them are a bunch of numbskulls.

[seaeagle]

Dont kid yourself Thailand will opt out of the asean trade agreements using every excuse possible to justify their decision. With the current gov. running up massive public debt and encouraging more private debt than can be serviced by the low wages paid here, thailand's economy is heading for a slow painful downfall.

Agree. I've been saying for a long time that Thailand will come up with some kind of 'opt in / opt out' situation, similar to that which the UK did with the EU. Accepting common rules across foreign boundaries is just a bridge too far for the Thai psyche.

Difference being that the UK opt out was based on a fair degree of logic, which, at least as far as the Euro goes, has been proven correct. However, the Thai opt out will be purely based on xenophobia, blind nationalism and greed.

[JetsetBkk]

...low development of human resources and language skills in English and other Asean languages.

And how is 'The Nation' doing with its English language skills?

"BANGKOK: -- With less than two years to go before the Asean Economic Community (AEC) come into effect..."

Er, I think that should be "comes into effect".

[IsaanUSA]

What really will happen with the AEC? Is it supposed to be free trade of any goods within ASEAN?

I'm assuming that the suppliers to the small and medium sized enterprises are aware of the changes and will be able to easily import goods from other ASEAN countries to sell the to small and medium sized enterprises. Those same small enterprises should make sure that their distributor is going to try and distribute their product to other ASEAN businesses. Somchai The Farmer doesn't need to know much, he just sells his grain to the mill. Sally the Shopkeeper doesn't need to know much, she just orders goods from her supplier (and hopefully can now sell a wider selection of beer).

Also, the comments on this thread are pretty sad. Why even post of this forum if you dis-like Thai people so much and basically call them stupid?

[khaowong1]

What really will happen with the AEC? Is it supposed to be free trade of any goods within ASEAN?

I'm assuming that the suppliers to the small and medium sized enterprises are aware of the changes and will be able to easily import goods from other ASEAN countries to sell the to small and medium sized enterprises. Those same small enterprises should make sure that their distributor is going to try and distribute their product to other ASEAN businesses. Somchai The Farmer doesn't need to know much, he just sells his grain to the mill. Sally the Shopkeeper doesn't need to know much, she just orders goods from her supplier (and hopefully can now sell a wider selection of beer).

Also, the comments on this thread are pretty sad. Why even post of this forum if you dis-like Thai people so much and basically call them stupid?

Because that's what forums are for.. to share views.. And if you notice, which you seem to, there are lot's of diverse views..

[Sing_Sling]

The article talks about agriculture among other things and this made me wonder what would happen about the rice mountain should it still exist at that time.

Would the rules of ASEAN allow free trade of rice between member countries?

If so then Thailand would be forced to match any lower prices from ASEAN partners, this of course would apply to other products as well.

You could say that Thailand already has problems with completion from other rice producers and that is the reason the rice mountain exists but belonging to a regional trade block would only exacerbate these troubles.

Not to mention the higher Thai wages......................................I said not to mention.............................................

Ah, the higher wages bogey-man yet again . . .

I wonder, in your home-country . . . did they cut your wages to that of the lowest trading partner? No? Odd.

Also, I am guessing that Malaysians and Singaporeans are quaking in their boots because the minimum wage is quite a bit higher than in Thailand or even . . . egads . . . Cambodia.

Actually, they aren't quaking anything

[Markaew]

Tha big pomplem is in my experiance you can not tell the Thai anything as they no everything, and say i Thai you no understand.

I see you had a few beers before posting.

[Markaew]

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

Since when do Thais think beyond the next meal?

[Markaew]

What really will happen with the AEC? Is it supposed to be free trade of any goods within ASEAN?

I'm assuming that the suppliers to the small and medium sized enterprises are aware of the changes and will be able to easily import goods from other ASEAN countries to sell the to small and medium sized enterprises. Those same small enterprises should make sure that their distributor is going to try and distribute their product to other ASEAN businesses. Somchai The Farmer doesn't need to know much, he just sells his grain to the mill. Sally the Shopkeeper doesn't need to know much, she just orders goods from her supplier (and hopefully can now sell a wider selection of beer).

Also, the comments on this thread are pretty sad. Why even post of this forum if you dis-like Thai people so much and basically call them stupid?

It's called experience in Thailand. EiT not TiT.

[h90]

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

Since when do Thais think beyond the next meal?

There are a lot Thais that think and plan well and far ahead. Just these you don't find in the bar or on the street, because they are busy working.

Many have Chinese influence, but not all. As technical company I am in contact with a lot very smart very well planing Thais.

(but of course also with a fair share of idiots)

[RisqEM]

m

Pretty sure they won't be prepared in two years as well. Since when do Thais care about anything outside Thailand?

Since when do Thais think beyond the next meal?

There are a lot Thais that think and plan well and far ahead. Just these you don't find in the bar or on the street, because they are busy working.Many have Chinese influence, but not all. As technical company I am in contact with a lot very smart very well planing Thais.(but of course also with a fair share of idiots)

Yeah, I guess you missed the sarcasm. The majority of working Thais don't plan past lunch IMO, and are only good at doing it when their boss tells them to do it so he doesn't have to! Remember the 8 point electrical plan to avert outages?

[Chang_paarp]

I wonder how the immigration department will cope? Will ASEAN members have different rules about 90 day reporting?

How about the labour department? Work permits and those issues will be interesting. Will you be able to hire 4 ASEAN staff rather than 4 Thais?

[IsaanUSA]

How about the labour department? Work permits and those issues will be interesting. Will you be able to hire 4 ASEAN staff rather than 4 Thais?

No, there's only 7 (?) high level jobs that have the ability to move around ASEAN. ASEAN and AEC are about trade, not immigration.