A recent rapid assessment on SMEs clusters conducted by Mekong Institute (MI) reveals that the agencies and stakeholders involved in promoting SMEs and cross-border trade in this economic corridor still have limited capacities. The biggest challenge facing the SMEs in the SEC is how to access and create effective linkages with regional and global markets. Most of the SMEs are domestic market-oriented and have been facing critical constraints caused by lack of (i) capacities and competiveness at the international level; (ii) effective advocacy; and (iii) skills of trade negotiation, while a regional approach for SME development along SEC to access regional and global value chain has not been made.
To address the issues, MI formulated the project on “Enhancing Competitiveness of Small and Medium-sized Enterprises (SMEs) in the Southern Economic Corridor (SEC) of ASEAN Mekong Subregion (AMS)” with an aim to enhance capacities of the agencies involved in trade and investment activities to facilitate cross border trade and support SMEs through range of capacity building programs. The Government of Japan through the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Component of Japan-ASEAN Integration Fund (JAIF) has collaborated and entrusted MI to implement the Project for a two-year period 2016 – 2018.
Project Development Objective
To enhance capacities of the agencies involved in trade and investment activities to facilitate cross border trade, and support SMEs and Business Development Service (BDS) providers through technical and management capacity development programs. To this end, capacity development programs for stakeholders and beneficiaries in CMTV are developed through series of activities related to (i) Capacity Development for SME Clusters / Networks; (ii) Trade and Investment Promotion through Public and Private Partnerships (PPP), and (iii) Strengthening BDS providers.
Project Development Outcomes
To contribute to the rapid economic development and inclusive growth in project provinces along the SEC through further promotion of trade and investment with enhanced competitiveness of SMEs in conducting cross-border trade and investment, and increased cross-border industrial clusters that integrate into regional and global value chain. For these purposes, the Project has been designed to obtain the expected outcomes as follows:
SMEs in selected border locations increase profits and employment through participating in SME clusters / networks, and integrating themselves into vibrant regional / global value chains;
Inter and intra trade and investment at the project locations increase through active involvement of both public and private sectors in organizing a series of trade and investment promotion events and utilization of the web-based SEC profiles and SME database to attract regional and international investors;
BDS Providers, including Chambers of Commerce and Industries (CCIs), SME Associations, Banks, and Logistics providers, deliver demand-driven business development, trade and investment services through the enhanced business linkages and information networks along the SEC of the AMS.
The project has three components plus one preparatory and M&E part.
Component A - Capacity Development for SME Clusters / Networks: Conduct a modular training program on SME cluster development, export consortia formation and value chain integration assisting SME clusters in penetrating into regional and global markets. It is expected that 38 leaders of local production groups, SME associations, provincial SME promotion offices, and Chamber of Commerce an Industries (CCIs) from CMTV participate in this capacity building program. They then apply the newly acquired skills and tools to benefit over 1,000 SMEs on SEC.
Component B - Trade and Investment Promotion through PPP: Actively involve public and private sectors in organizing a series of trade and investment promotion events and utilization of web-based SEC profiles and SME database to attract regional and international investors.
Component C - Strengthening BDS Providers: Intends to enhance the capability of BDS providers in delivering demand-oriented business development, trade and investment services.
Preparatory and Monitoring and Evaluation Part: In addition to the above three components, activities for project preparatory, monitoring and evaluation are also implemented. These include: a) baseline study; b) value chain mapping and analysis; c) annual and end-of-project monitoring and evaluation; d) Project Steering Committee (PSC) Meetings; and e) annual and end-of-project audit.
Farmers-led business enterprises, local producers, processors, traders on rural and border towns of SEC are direct beneficiaries of the project. To achieve the development result, the project enhances capacity of four target groups: a) Local production groups / associations; b) SMEs clusters / Business networks; c) Provincial and Border Government Officials; and d) CCIs and business associations (BAs). These target groups serve as MI local partners (the project intermediaries) to work with and lead the project direct beneficiaries, i.e. SMEs.