RCEP, Putrajaya Vision 2040 to benefit SMEs, says business advisory firm
KUALA LUMPUR,. The small and medium enterprises (SMEs) are expected to benefit from the Regional Comprehensive Economic Partnership (RCEP), coupled with the Putrajaya Vision 2040, a business advisory firm said.
[email protected] (M) Sdn Bhd consultant and research fellow Dr Eric Balan said the vision is a 20-year run that would allow SMEs to penetrate into markets that was once difficult to enter.
“A wide range of goods and services sectors will see clear benefits but there are sectors that are now open to intense competition because of low-cost producers and this shifts economic supply,” he said in a statement today.
The Putrajaya Vision 2040 is an economic roadmap for a more open, resilient, and peaceful Asia Pacific community driven by trade and investment, innovation and digitalisation, and sustainable inclusive growth.
Balan said the benefits of RCEP would outweigh the cost, allowing SMEs to relook into their strategies and become more competitive in their offerings.
“By just being part of a RCEP supply chain would already boost SMEs’ position in the region. With the supply chain now extending globally, the SMEs’ risk can be mitigated,” he said.
Participating SMEs will now have opportunities to attract investments from the world over, he said.
“SMEs can now re-evaluate the use of their technology or their investments in technology to capture potential market share and growth.”
He said it was also timely that the enterprises carried out market research to diversify their goods and services from existing ones, carved out new segments they want to serve and shift their organisational thinking towards the goals of the RCEP.
“Cross-regional SME trade pacts in technical and manufacturing cooperation are highly mooted as this allows the SMEs to learn, source, integrate, distribute, and penetrate into the growing consumer markets, especially in China,” Balan added.
Meanwhile, [email protected] founder Prof Dr Mohar Yusof said the RCEP facilitated SMEs to continuously engage in learning and those that are rigid to change would definitely lose out from the benefits.
“It is then vital for the SMEs to have an acute sense of change of the region’s pulse for this will assist in market capitalisation and business contractions,” he said.
The signing of the RCEP has forced China, Japan and South Korea into a trade agreement that harmonises tariff concessions.
“This is a big advantage to the SMEs as prior to the RCEP, preferential tariffs were granted only when multiple sets of business engagements and rules were complied,” he said.
Mohar said with open markets and uninterrupted supply chain, the RCEP protected and secured the SME sector from being immobilised.
“The shock of COVID-19 crumbled major parts of the economy. A key feature of the RCEP is to promote and protect investment environment and this in turn will help in the operational ability of the SMEs,” he added.
The RCEP was signed on November 15 this year by the 10 ASEAN members — Malaysia, Brunei, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam, together with Australia, China, Japan, New Zealand, and South Korea to become the world’s largest free trade agreement, consisting of a market size of 2.2 billion people and accounting for a third of the world’s gross domestic product trade flow.