“Regional economic growth key to the development of Southeast Asia”
Regional economic growth is essential for the further development of Southeast Asia, hard hit by the Covid-19 pandemic. This was the key message delivered during the regional webinar “Better Local Business Environments for Pandemic Recovery in Southeast Asia” on Wednesday.
Southeast Asian policymakers discussed national and subnational policies to spur economic and social recovery.
Better business environments in Southeast Asia are key to rejuvenating businesses hit hard by the Covid-19 pandemic, according to an AfDB statement.
Ramesh Subramaniam, AfDB Managing Director for Southeast Asia, said: “Small businesses are the foundation of local economies in Southeast Asia. Understanding how local business environments are affecting business viability during this challenging time is key to unlocking policy interventions that support post-pandemic recovery and can help move towards the Sustainable Development Goals.
Local economies in most parts of the region are dominated by micro, small and medium enterprises (MSMEs). They make up 97% of all businesses in the region, employ about two-thirds of the total workforce, and account for about 40% of gross domestic product. Unlike large companies, which are usually located in metropolitan areas, 80% of MSMEs reside in provincial towns or in rural and remote areas where they provide a range of essential products and services to their local communities, providing employment, especially to women, the liberation pointed out.
However, MSMEs face a unique set of challenges. They have low levels of capital and limited resources for innovation. Many are very informal with low levels of knowledge about government support and programs. Across Southeast Asia, MSMEs have suffered significant income and capital losses due to the Covid-19 pandemic. MSMEs also face new challenges, such as higher business costs, growing indebtedness and regulatory uncertainties that require structural reforms to improve the local business environment.
As small businesses are important contributors to economic success, any economic recovery plan or attempt to transition to a low-carbon economy will require mapping business conditions in local economies to understand important drivers, strategies and behaviors. that can enhance the development and support of MSMEs. local economic growth.
The regional webinar discussed key government policy responses, including the need for an ecosystem-wide approach that can seamlessly bring together the many different elements responsible for creating a thriving local economy with dynamic small businesses and entrepreneurship. Fostering better alignment through greater information sharing, policy dialogue and small business mentorship is needed to rebuild more competitive and productive MSMEs after the COVID-19 pandemic. The webinar was organized by the AfDB with the support of the Poverty Alleviation and Regional Cooperation Fund of the People’s Republic of China, the statement added.
- Key words: economic growth, Southeast Asia