Face SME strategy MEA

31 Desember2015, ASEAN single market came into force. ASEAN Economic Community (AEC) is intended to integrate the four pillars of the ASEAN economies
                
Creating a single market and production base, enhance competitiveness, promote economic development yangadil, ASEAN danlebihmengintegrasikan into the global economy. Enforcement of MEA on the one hand will provide opportunities for the free flow of goods, services, investment, capital and skilled labor. With the MEA will encourage ASEAN region is becoming more integrated, dynamic and competitive in the face of regional and global trade competition.
                
                
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Currently intra-ASEAN trade value reached $ 1.5 trillion per year by a combination of gross domestic product approaching $ 2.5 trillion, with a combined population of 630 million people. This liberalization will bring many opportunities and challenges, depending on the readiness of businesses in the face. As a free trade area, more than 70 percent of products made in ASEAN will not be subject to tariffs, aka zero tariffs.
                
This makes the free movement of goods and services which are expected to lower the price of raw material and production costs in ASEAN up to 10-20 percent. Unfortunately, this tariff reduction is actually not much dimanfaatkanolehUKM. According to estimates only about 20 to 25 percent of Indonesian companies that take advantage of the preferential tariff reductions (common effective preferential tariff / CEPT) applicable in AFTA or MEA.
                
As a result of this tariff reduction opportunities actually used by many multinational companies. SME itself an essential part of the ASEAN economies. Until now, 96 per cent of ASEAN companies are SMEs which comprises 50 percent to 95 percent using domestic labor; contributes 30 per cent to 53 per cent of gross domestic product (GDP); and contribute 19 percent to 31 percent of exports.
                
While the Indonesian SMEs accounted for 99.98 percent of its Indonesian unit, accounted for 57 percent of national GDP and more than 97 percent of domestic employment. During this time many of our SMEs engaged in the informal sector in rural and tend not well informed.
                
SMEs themselves for this still stutter face domestic competition with medium and large businesses, but now suddenly have to face fellow SMEs from all ASEAN countries. The readiness in the face of the MEA is not the monopoly of our SMEs. SMEs other countries are also facing the same conditions. A survey conducted by the Asian Development Bank and the Institute of Southeast Asian Studies (2015) found that less than a fifth of businesses are ready to face the ASEAN region, the ASEAN economic community.
                
In the middle of this year, the Ministry of Commerce Malaysia conducted a survey of about a thousand small and medium scale industries. More than half of those who do not know about the ASEAN Economic Community, especially what it can do for their business.
                
There are about 60% of SMEs are not aware of the opportunities in other ASEAN countries, either they do not realize what it was MEA or not aware of the opportunities available in the ASEAN countries. Similar conditions also experienced by other ASEAN countries. Myanmar, for example, also face constraints that are not much different. Even the business itself admitted Myanmar is not ready to join the MEA market. This means that Indonesia is not the only ASEAN country that still require more preparation.
                
SME strategy
                
Required an appropriate business strategy for SMEs in positioning themselves against the MEA. Basically, every country has a distinct competitive advantage according to the resources of the country concerned. Every country has awarnessyang about to be built in the face of competition.
                
The difficulties encountered by our SMEs to compete is weak branding and promotional activities as well as market penetration abroad. The difficulty is not to make the SMEs we are forced to enter foreign markets. The challenge, not only the responsibility of SMEs, but also the government. In addition there are many challenges in improving the competitiveness of the national economy.
                
Up to now we still face competition from other countries related to the competitiveness of infrastructure, readiness of human resources, finance and banking financial institutions in supporting the development of SMEs, and a business climate that encourages competition and business efficiency.
                
In addition, SMEs must be able to adapt to the overall business environment, ease of access to finance, access to markets, and productivity and efficiency. Access to finance is a major obstacle, because financing schemes for SMEs still use commercial credit, interest rate financing even Indonesia is far from competitive compared to other ASEAN countries.
                
Not to mention the special micro enterprise that has the potential to grow from a small or medium-sized businesses are still experiencing barriers to connect with financial institutions because they do not have the financial documentation and records, there is no banking relationships, and lack of financial literacy. SME credit information asymmetry, the availability or lack of guaranteed credit, SME financing program mismatch, adds to the problem.
                
Meanwhile, banks must also be able to bridge a better access to finance of SMEs. It can be achieved through improved risk management skills and financial institutions better understand the needs of the sector, thus enhancing their ability to manage SME financing program.
                
In addition, banks should help SMEs realize the importance of good payment behavior for themselves, since it would be able to support their demand for loans to SMEs. SMEs also need to understand and manage financial risk and liquidity, so as not to cause a higher debt than their income, avoid identity fraud (their personal information is used by others to obtain credit) and so forth.
                
SMEs are encouraged to have a competitive mindset; connect to your target market; in accordance with international standards and best-in-class processes or benchmarking; compete in a sustainable manner; and adapt to the best business practices. In the face of MEA, small and medium enterprises (SMEs) are also urged to be able to integrate with the ASEAN free market (MEA) into an opportunity to grow.
                
ASEAN economic community provides an opportunity for SMEs to become a major player in the ASEAN market and allows for the integrated production network of regional and global value chains. With the ability to compete, Indonesian SMEs will be able to become a regional and global player competitive and increase productivity to face ASEAN free market.
                
Aunur Rofiq
Politicians, Business Practitioner,
IPB Alumni Association Board of Trustees

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