Efforts by Asean governments and the private sector to promote productivity, technology and innovation can further regional economic integration, said Ambassador-at-Large Ong Keng Yong yesterday.
Mr Ong, who is also executive deputy chairman of the S. Rajaratnam School of International Studies, told a seminar that the Asean Economic Community (AEC) can open up growth opportunities, particularly for small and medium- sized enterprises (SMEs).
He added that efforts are under way by Asean governments to reduce tariffs and non-tariff barriers.
SMEs, he said, can capitalise on the AEC, which is an integrated market and production base of more than 620 million people that could expand to more than three billion through the Regional Comprehensive Economic Partnership (RCEP).
Mr Ong, who was speaking at the Asean Summit seminar at Marina Bay Sands, said the free trade agreements Asean has with China, India, Japan and South Korea, as well as the joint pact with Australia and New Zealand, are being amalgamated into the RCEP.
The AEC and RCEP could help SMEs attain economies of scale and increase their participation in the global value chain. But firms would also face intense competition from multinationals and cheap imports, Mr Ong cautioned. This means businesses must develop resilience and sustainability through capacity-building to sharpen their competitiveness.
Mr Ong noted that SMEs represent more than 95 per cent of enterprises in Asean.
"SMEs must keep pace with globalisation, trade liberalisation, advancement of production processes and technology," he added.
Mr Ong outlined the need for SMEs to have access to finance and markets, adding that Asean governments can help by enhancing the regulatory environment. They also need to improve infrastructure development, including broadband access, to facilitate connectivity. Promoting entrepreneurship and human resources to boost SME development is also important.
Mr Ong noted that Asean countries need to work together and "navigate through the interests of powerful neighbours and the bewildering technological developments affecting the marketplace and society".