Policy Insight: Formalisation of Microenterprises in ASEAN

In ASEAN, AMS are tackling informality and informal businesses from different perspectives. Of the eight AMS ranked in the ASEAN SME Policy Index 2018’s sub-dimension of “measures to tackle the informal economy,” five countries have attempted to assess the size and characteristics of the informal sector (Brunei Darussalam, Indonesia, the Philippines, Thailand and Viet Nam). In three countries (Cambodia, Lao PDR and Myanmar), where the level of informality is believed to be particularly high among micro enterprises, the Government is considering policy options to tackle informality (OECD/ERIA, ASEAN SME Policy Index 2018, 2018) .

Among AMS, there is a strong consensus about the need to reduce informality and promote formalisation of businesses. With support by GIZ and OECD, Economica Vietnam provided support to the ASEAN Secretariat in the conceptualization, implementation and documentation of the the 2018 Policy Dialogue (PD) on Registration of Micro Enterprises and Family Businesses – What, Why and How in the ASEAN Region, which was held on 2nd April 2018 in Lao PDR and  the 2019 Policy Dialogue on Formalisation of Micro Enterprises in ASEAN, held on 25 June 2019 in Bangkok, Thailand. The dialogue in Bangkok focused on developing a “comprehensive policy and actionable approach” – namely through the careful selection of incentives, the strengthening of law enforcement and improving the general business environment, and thereby removing “grey areas” in policy and/or regulatory frameworks.  This policy insight is built on these two important policy dialogues.

The “Policy Insight on Formalisation of Micro Enterprises in ASEAN”, launched in December 2020, aims to provide a better understanding of the current situation within ASEAN, and to share some policy insights on Formalisation of Micro Enterprises in ASEAN. It also attempted to provide a statistical overview on informal businesses in all ASEAN member states. The methodology used to prepare this report includes secondary literature review, studies, data and analysis available on micro enterprises in AMS as well as interviews with the experts and policy makers in the region. The report benefited from the contributions from the AMS, the ACCMSME members and feedback from the ASEAN Secretariat, whose valuable contributions have breathed life into this report. The report was drafted by experts from Economica Viet Nam and OECD. 

The Policy Insight can be downloaded here.


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