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Why Asean SMEs find it hard to be part of global value chain

Asean business still struggle with lack of access and red tape that prevent them from becoming part of the global value chain, according to the National Economic and Development Authority (Neda).

In a news statement issued on Thursday, the Neda said this is especially true for small and medium enterprises (SMEs) in the region who lack access to financing, technology  and information.

SMEs also struggle with the absence of a dedicated government agency for business registration, faulty licensing systems and overlapping functions between various government agencies.

“There is a demand for a concerted regional level of coordination and cooperation for administrative simplification to enable the GRP [Good Regulatory Practice] agenda. Thus, we must find a way to connect this to our common regional work plan,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

These were discussed during the third Asean-Organisation for Economic Co-operation and Development Good Regulatory Practice Network meeting, hosted by the Neda and cochaired by the governments of Malaysia and New Zealand.

The meeting gathered around 80 delegates from different Asean member-states to discuss how to foster connectivity within the Asean region by improving regulatory practices.

Pernia said among the strategies developed in the meeting to address these challenges is for countries to actively engage the private sector, local governments and businesses in streamlining processes and enhancing good regulatory practices.

“Good regulatory practice is central in the Asean, [and it] is crucial in fostering connectivity within the region. We firmly believe that there are potential opportunities for Asean SMEs to be part of and benefit from the global value chains if regulatory constraints are correctly addressed,” Pernia said.

Apart from these, the meeting also provided a venue for different Asean governments to share regulatory challenges, as well as regulatory best practices.

Guillermo Luz, who is private-sector cochairman of the Philippine National Competitiveness Council (NCC), shared the country’s efforts in easing regulatory burden for investors and to promote competitiveness among businesses.

One initiative of the NCC is Project REPEAL, a project that allows government agencies, business organizations and individuals to identify regulations and laws that they find burdensome and unnecessary. These are reviewed by a technical working group, and are submitted back to agencies for proper action.

To date, a total of 22,599 rules and regulations have already been submitted for review, of which 3,765 have already been acted on. Around 80 government agencies are currently onboard.



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