3. SMEs in ASEAN
3.1 Performance
ASEAN countries have touted SMEs as the engine of economic growth and
development, the backbone of national economies, the highest employment-generating
sector, and a potential tool of poverty alleviation by creating self-employment avenues.
Notwithstanding various definitional issues and data problems by combining all
sources which are available, there is a (rough) estimated total of some 21 million nonagricultural
SME in ASEAN, or about more than 90% of all non-agriculture firms
in the region (Table 3). These enterprises play a strategic role in private sector
development, especially in the aftermath of the 1997/98 Asian Financial Crisis. In
some member countries, as their economies modernize or industrialize, SME provide
the much-needed inter-firm linkages required to support LEs to ensure that they remain
competitive in the world markets. SMEs generally account for between 20-40% of
total domestic output and they employ an overwhelming proportion (mostly in the
75-90% range) of the domestic workforce, especially adult persons and women.5