Small enterprises to struggle with AEC competition
Small enterprises to struggle with AEC competition
The business sector is concerned that Lao businesses may struggle to survive in the face of growing competition that will be brought about by the establishment of the Asean Economic Community (AEC) in 2015.
President of the Young Entrepreneurs Association of Laos Ms Valy Vetsaphong told Vientiane Times recently that Lao businesses particularly the SMEs will face more challenges than they will have opportunities when the AEC is established.”
She attributed the main reason to the fact that the Lao production base is too small and limited infrastructure hampers economic growth, while noting that Lao business people will struggle in the face of increased competition.
“We begin to do business with our families. We don't start learning how to do business through business management. We do business while learning from our errors,” she said.
“Lao people are not familiar with competition, indicating that they would stop doing business when they lost profit. It's different from Chinese and Vietnamese who never stop spending their efforts to do business despite losing profit.”
Still, some 90 percent of businesses in Laos are SME's. Some Lao entrepreneurs have ideas to expand their businesses but insufficient skilled staff and high interest rates on bank loans hinder the growth of their businesses.
The association asked the government to impose more policies that facilitate the growth of the business sector so that they will be stronger before market integration eventuates.
“At the present time, some businesses have already got stuck ahead of the market competition which will come in 2015 … I want the state sectors to spend more time listening to businesspeople and ask them their problems,” Ms Valy said.
She recommended that the business sector needs to improve themselves through professional management. They also need to ensure the quality of their products is competitive in the regional market.
“Our businesses need to realise that if they cannot survive the coming market competition, they need to turn to other businesses as a way to survive,” she said.
“We have a saying that the AEC will mean that the big fish will eat the little fish. So before the big fish eat us, why don't we find partners or group our businesses so that we become bigger companies with stronger financial capacity.”
The association president advised businesses to seek ways to reduce production costs in an effort to lower their prices by using new technology.
“I think that we need to use technology and reduce manpower while enhancing the quantity and quality of our production,” she said.
In her evaluation, Ms Valy estimates that the understanding and preparation of Lao people towards the AEC is just a little bit more than 30 percent.
The situation is worse at the provincial level where a lower percentage of people understand this issue and how the AEC will impact their livelihoods.
If compared to other Asean countries, Laos is behind them, she said, saying that the most important thing is that all sectors need to work together to prepare our country for the AEC.
More information is needed so that the public understands the issue.
vientiane times
