New development plan to help SMEs integrate with regional and world markets

The Department of SME Promotion has come up the SME Development Plan 2016-20 to create conditions that will allow the small and medium-size enterprises (SMEs) of Laos to integrate into regional and international economies, especially the Asean Economic Community.
The plan will focus on seven main policy areas, including projects and activities that will have a positive impact on SMEs and help to integrate them into the five-year National Economic and Social Development Plan for 2016-20.
“And it is in line with the Master Plan for SME Development (2016-2025) that Asean has approved and promulgated,” said a report from the department, which functions under the Ministry of Industry and Commerce and is the core body for research and development planning.
The SME Development Plan is one of vital policies of the Lao People’s Revolutionary Party and the government and it is stipulated in the socio-economic development

Two children observe a woman weaving silk.

plan. More than 569 billion kip will be needed to achieve different objectives defined in the SME Development Plan. This includes local funding of more than 95.74 billion kip and international funding of more than 473.29 billion kip, according to the report.
The report noted the seven main policy areas include product promotion, technology and innovation, promoting access to resources, promoting access to business development services, market access and market expansion, new entrepreneurship development, creating a good environment for establishing a business, and duty, taxation and finance.
The policy on product promotion, technology and innovation will promote cooperation between government, academia and the business sector in developing technology and technology transfer, registration of intellectual property facility, support access to quality and standardisation of systems, consulting and training to improve quality management and production, awards promotion, and upgrades of technology.
The policy on promoting access to resources will develop credit and financial products and services diversely, strengthen banks, financial institutions and small financial institutions, help in accessing capital, establish specialised financial institutions, and improve organisations that facilitate access to loans.
The policy on promoting access to business development services will strengthen organizations and academic units that provides business development services, support provinces to establish a technical service center, promote diversified technical services, create a database and business development service provider.
The policy on market access and expansion will support export promotion activities, creates a database and provides information on regional and international markets, create opportunities and increase marketing channels, commercialisation facility in regional and international markets, export promotion fund establishment, promote cooperation with large enterprises and foreign companies, value chain development in some potential sectors, and regional and international network creation to enhance business relationships.
The policy on new entrepreneurship development will create entrepreneurship courses in higher and vocational education, develop business management expertise, support the creation of new entrepreneurs, especially young people, women and students, promote educational institutions to play a role in creating new entrepreneurs, especially a center for business incubations and training, create franchising businesses, and praise entrepreneurs who are outstanding in various aspects.
The policy on creating a good environment for establishing a business will improve the business registration system, streamline regulatory processes and licensing of stakeholders to facilitate and speed up the process, improve the tax system to be transparent and fair, and promote a counseling platform between public and private sectors.
The policy on duty, taxation and finance will set new micro-enterprise conditions, including start-ups, to get exemption from VAT and income tax, provide credit to micro-enterprises, establish a matching fund for micro and small enterprises to improve technology, pay for expert consultations, and search for domestic and international markets.
SMEs are important for development, particularly in commercial goods production, trade and services, employment creation, income generation, raising of living standards and the country’s industrialisation and modernisation.
Measures for SME promotion and development are included in the Prime Minister’s Decree No.42/PM, issued in April 2004. According to the national economic census of 2013, there were over 178,500 enterprises nationwide, including over 124.500 SMEs. The labour force of SMEs included 471,282 people, equal to about 82.18 percent of the total labour in enterprises.

By Times Reporters
(Latest Update June 30, 2018

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