MSMEs Key to Southeast Asia’s Post-COVID-19 Recovery — ADB

CEYLON TODAY | Published: 3:00 AM Oct 26 2020

Strengthening the dynamics of micro, small, and medium-sized enterprises (MSMEs) with innovation and international isation will be key to revitalising Southeast Asian economies devastated by the COVID-19 pandemic, says the Asian Development Bank.

MSMEs are a critical driving force in Southeast Asian economies, accounting for an average of 97% of all enterprises and 69% of the national labour force from 2010 to 2019. They contributed an average of 41% of each country’s gross domestic product over the same period, the bank said.

“MSMEs in Southeast Asian economies mainly focus on domestic markets and their level of entrepreneurship remains suboptimal. Supporting the development of MSMEs, particularly in technology adoption and participation in global supply chains, will contribute to inclusive growth and aid in recovery efforts from COVID-19,” said ADB Chief Economist Yasuyuki Sawada.

 “We’re confident that this new report, Asia Small and Medium-Sized Enterprise Monitor (ASM) 2020, which provides a rich set of data and analyses on MSME development in Southeast Asia pre-COVID-19 pandemic, would become a benchmark in helping design feasible government assistance for MSMEs amid a new normal in the region.”

The first volume of ASM 2020 presents a detailed assessment of financial and non-finan cial issues facing MSMEs in Southeast Asia at both the country and regional levels. It also analyses policies and regulations surrounding MSME development and access to finance in each country in Southeast Asia.

Key findings from the report’s second volume, to be released on 28 October, examines the impact of COVID-19 on MSMEs in Indonesia, the Lao People’s Democratic Republic, the Philippines, and Thailand based on rapid surveys conducted from March to May this year. 

The challenges faced by MSMEs in the region have been exacerbated by COVID-19, with demand for MSME products and services declining since the onset of the pandemic. This has resulted in layoffs, reduced business operations, and a depressed outlook for the sector. The report explores policy approaches that could support MSMEs during and after the pandemic.

ASM 2020’s remaining two volumes will be released by the end of 2020. They comprise a thematic chapter analysing the impact of fintech-based loans to tricycle drivers in the Philippines; and a technical assessment that will present ADB’s new Small and Medium-Sized Enterprise Development Index.

CEYLON TODAY | Published: 3:00 AM Oct 26 2020

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