OECD urges changes to govt's SME plan
The Organisation for Economic Cooperation and Development (OECD) has suggested changes to the government's small-business promotion plan for 2012-16 after finding a number of weaknesses in it.
The suggested changes were discussed by Sergio Arzeni, director of the OECD's Centre for Entrepreneurship, SMEs and Local Development, at a seminar held yesterday by the Office of Small and Medium Enterprises Promotion (Osmep).
The recommendations are the result of the OECD's study of the Third SME Promotion Master Plan for 2012-2016, which was approved by the previous government. Osmep plans to discuss the scheme with experts, government agencies and representatives from local and international associations in further detail and conduct budget-planning sessions before the plan is implemented over the next five years.
Jonathan Potter, senior economist at the OECD centre and the leader of the review team, told the "Thailand SMEs Review" seminar that the plan's weaknesses included a lack of policy coordination among government agencies dealing with SMEs; inadequate development of medium-sized enterprises; regional inequalities; lack of technological readiness; inflexible financing; and a business environment burdened with unnecessary red tape and corruption.
Potter urged the government to reinforce Osmep's role as the central body for SME and entrepreneurship policy formulation and coordination; adopt "rolling" budgeting to allow greater flexibility; and to plan based on results.
Arzeni urged Osmep to "improve its economic evaluation of all projects and programmes, because inappropriate evaluation means wasting money".
Additionally, he said, Osmep should improve the quality of its statistical information and databases to help small and medium-sized enterprises with high potential grow internationally; improve the capacity of financial markets to provide formal financing for SMEs and entrepreneurs; streamline its process of helping SMEs access financing; and provide proper advice, mentoring, training and other assistance to make SMEs more productive and broaden their opportunities.
Upcountry SMEs had been neglected, Potter said, pointing out that two-fifths of such enterprises were in Bangkok and surrounding areas. Osmep should address regional inequalities to boost entrepreneurial growth in the upcountry provinces, he said.
Implementing the suggestions would enable local SMEs to cash in on the current economic growth in Asia amid the financial crises in the United States and Europe, allowing them to become more competitive and grow rapidly, Potter said.
Responding to the recommendations, Osmep director-general Yuthasak Supasorn said: "There's no time to waste in making policy changes needed to help local entrepreneurs; we need better and more effective policies to help small enterprises grow into large ones."
The key problem, he said, was a shortage of medium-sized companies with the potential to become large-scale enterprises that will be in a position to seek new opportunities for growth in regional markets when the Asean Economic Community launches in 2015.
Pornprapai Ganjanarintr, deputy director-general of the International Economic Affairs Department at the Ministry of Foreign Affairs, said that while the financial crises in the West were likely to see an influx of foreign SMEs into the Kingdom, it was important to strengthen the domestic market to link to the global supply chain.
