I. Introduction

Small and medium enterprises (SMEs) are an important part of ASEAN economic integration. Hence, their development is prioritized in the Pillar 3 “Equitable Economic Integration” of the ASEAN Economic Community (AEC) Blueprint. As ASEAN is committed to accelerate the establishment of the AEC by 2015, the 18th ASEAN Summit, under the chairmanship of Indonesia, has reaffirmed the important role of SME development as a critical element towards narrowing the development gaps amongst and within the ASEAN member states.

SMEs are integral to the economic development and growth of the ASEAN member states, as they largely outnumber large enterprises in both quantity of establishments and share of the labour force that they employ. Within ASEAN, SMEs account for more than 96 per cent of all enterprises and 50 to 85 per cent of domestic employment. The contribution of SMEs to total GDP is between 30 and 53 per cent and the contribution of SMEs to exports is between 19 and 31 per cent. They are important in terms of income and employment generation, gender and youth empowerment through business participation, and their widespread presence in non-urban and poorer domestic regions. SMEs are the backbone of ASEAN and SME development is integral in achieving sustainable economic growth.1

The Strategic Action Plan for ASEAN SME Development 2010–15 envisions that “by 2015, ASEAN SMEs shall be world-class enterprises, capable of integration into the regional and global supply chains, able to take advantage of the benefits of ASEAN economic community building, and operating in a policy environment that is conducive to SME development, exports and innovation”.

Concrete and detailed policy measures, implementation time-frame, and indicative outputs have been identified in ASEAN Policy Blueprint on SMEs Development (APBSD). Even though the APBSD is no longer the working framework for ASEAN, its reference to AEC and the review of its implementation up to 2009 would provide some useful insights and lessons for regional efforts in SME policy development and coordination in ASEAN. The review would not entirely refer to what is in the AEC, since there are only a few priority actions with respect to SME development in the AEC.