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Petchanet Pratruangkrai

The Nation

Publication Date : 13-03-2013

With less than two years to go before the Asean Economic Community (AEC) come into effect, more than half of Thai small and medium-sized enterprises still lack a proper understanding of what is going to happen and are unprepared for the challenges of market liberalisation, according to a new survey.

As a result, Thailand could lose out on many of the opportunities presented by market integration, while some businesses, and SMEs in particular, could be hit hard by the high level of competition from operators in other Asean member states. Many enterprises would lose market share, forcing them to close down or be taken over by foreign companies.

The results of a survey released yesterday by the University of the Thai Chamber of Commerce's Centre for International Trade Studies (CITS) showed that 56.25 per cent of SMEs across 13 sectors did not understand the benefits and challenges of regional integration.

Thai SMEs would prefer the AEC's implementation to be pushed back a year, to the beginning of 2016.

The figure has dropped only slightly from 57.47 per cent last year, reflecting the government's failure to engender AEC awareness among SMEs during the past 12 months.

CITS director Aat Pisanwanich said the disappointingly small rise in the number of SMEs that had become more aware of the AEC was down to the fact that government agencies had not educated them clearly about what they should do to prepare for the seamless market.

"The government's agencies have educated enterprises in the traditional way by organising seminars only in big cities and large provinces. But enterprises in small provinces and remote areas are not aware of the AEC [implications] as they lack the opportunity to access the information," he said.

Based on the centre's survey derived from 1,500 enterprises across 13 sectors in the agricultural, industrial and services fields, those in agriculture have the least understanding about regional integration.

Some 91.94 per cent of farming respondents know nothing about the coming integration, which presents a high risk that the Thai agricultural sector will lose market share within Asean, Aat added.

The study shows that among the 13 sectors surveyed, construction, livestock, farming, fishery, retail and wholesale are not ready for the competitive environment in a seamless regional market.

Major obstacles

Issues that SMEs know the least about are investment liberalisation, service liberalisation, non-tariff barriers, rules of origin and single standards for Asean products, the survey found.

The major obstacles among enterprises not ready for the AEC are a lack of knowledge and in-depth information about the benefits and challenges of each particular business, lack of financial support, low development of human resources and language skills in English and other Asean languages.

Aat said the government and all other concerned bodies must urgently increase enterprises' knowledge of integration.

Before the implementation of the AEC, most Thai enterprises, especially those in small and remote provinces, must know more about the implications of integration so that they can develop their businesses for the seamless market. Otherwise, SMEs could collapse because they are unable to compete with their Asean counterparts, he added.