World Bank asked to map out Thai SME promotions

Dec. 05 — Thailand is seeking help from the World Bank to map out its five-year promotion plan for small and medium-sized enterprises starting in 2017 in a bid to increase the gross domestic product (GDP) of SMEs to pre-financial crisis levels. Through the partnership, Thailand will have access to the World Bank’s expertise and database of countries. The World Bank has previously worked with China and Malaysia to develop a country strategy and is currently in talks with South Korea and Vietnam . It will also provide advice on revising laws related to SME promotion and how to lower the percentage of businesses in the informal sector. Thailand’s informal sector accounts for almost half the country’s GDP, the highest level in Asia-Pacific , said Wimonkan Kosumas, deputy director-general of the Industry Ministry’s Office of Small and Medium Enterprises Promotion (Osmep). The informal sector or informal economy refers to activities and income that are partially or fully outside government regulation, taxation and observation. Through the measures that will help reduce the level, companies will be able to fully utilise government programmes and gain access to technology and financial resources, she said. Last year, the GDP of Thailand’s 2.7 million SMEs accounted for 37% of the country’s total GDP worth 11.4 trillion baht , an increase from 36.6% in 2011. Under the fourth SME promotion plan starting in 2017, Osmep is targeting to increase the figures to 40-42%. Before the 1997 financial crisis, the figure was 42%. After that, much of the growth was in large businesses and foreign direct investment, said Mrs Wimonkan. For the third SME promotion plan from 2012-16, Osmep is targeting 250,000 newly registered SMEs. Patima Jeerapaet , Osmep’s new director, has set a target within four years for Thailand to become the centre of SME products in Asean, similar to China’s Yiwu wholesale market. He brushed aside political concerns, saying the increased demand in Thai products and services next year from tourists and regional customers will be positive contributors towards the SME sector. But he conceded that Osmep, which is under the Industry Ministry , needs to do more to help SMEs go abroad. “Our SMEs are still weaker than Malaysia and Singapore,” said Mr Patima, previously president of the Thailand Automotive Institute . He said Asean businesses are interested in partnering with Thais in food, medical tourism and services. Many European SMEs are interested in investing in Thailand , as it is no longer cost-effective to operate in their own countries, and Thai SMEs can benefit from technology transfers, he said. Mrs Wimonkan said Thai companies have to change their mindsets in order to compete abroad. “About 80% of Singaporean businesses work out of the office to meet customers compared with 10% in Thailand . We have to change this,” she said. ___ (c)2013 the Bangkok Post (Bangkok, Thailand) Visit the Bangkok Post (Bangkok, Thailand) at www.bangkokpost.com Distributed by MCT Information Services

World Bank asked to map out Thai SME promotions