Making ASEAN Regional Connectivity Work for Women-Run Businesses

October 1, 2014

By Kate Bollinger

By the end of 2015, the long-anticipated ASEAN Economic Community (AEC) is set to come into effect, covering 16 countries, 600 million people, with a combined GDP worth of $2.3 trillion. While the AEC is intended to bring about broad-based economic benefits by creating a more competitive economic region with a single market and production base, there are concerns that this ambitious move may have detrimental impacts for businesses and even member countries who are not yet able to compete on a regional level.

There has been particular attention paid to the impact that the transition to the AEC will have on women-owned businesses that are on average smaller and have lower rates of formal cross-border trade than their male counterparts. The Asia Foundation’s 2013 research on barriers to women’s participation in trade in four Southeast Asian countries found a set of institutionalized barriers which disproportionately impact women engaging in trade including limited access to formal networks which would facilitate access to business skills and information; lack of social support systems; and difficulties with loan application paperwork which are particularly onerous when it comes to regional regulations.

There has been particular attention paid to the impact that the transition to the AEC will have on women-owned businesses that are on average smaller and have lower rates of formal cross-border trade than their male counterparts. Photo/Conor Ashleigh

In addition to these existing constraints, analysts predict that that much of the job growth created through the AEC will be in trade, construction, and transportation – jobs that typically employ more men than women. A report from the Southeast Asia Women’s Caucus on ASEAN warned that women’s small-scale business activities may be “monopolized by regional corporations” and women may lose control over “production and distribution in agriculture” because of regional competition.

However, amid these real concerns is also hope that the AEC may open opportunities for women in business. As highlighted in the Caucus report, with the AEC will likely come opportunities for investments in new technologies, which may present an opportunity for women-run businesses who are often less aware of new business-related technologies. While trade policies pursued by ASEAN have typically been gender-blind, there is increasing emphasis on the need to support women entrepreneurs including the development of an ASEAN’s Women Entrepreneurship Network (AWEN). This awareness has the potential to translate into policies more attuned to the needs of women entrepreneurs.

The Australian government hosted a recent forum in Vietnam that brought together over 100 participants, including government representatives, NGOs, and women entrepreneurs, from across the Asia-Pacific region to examine ASEAN integration and the implications for women business owners. The Asia Foundation hosted a panel at the forum that brought together four women entrepreneurs from Cambodia, Myanmar, Vietnam, and Indonesia, as well as our own staff, to highlight individual experiences and recommendations on how to make the AEC work for women-led SMEs.

Morakot Sinhabaedya, a panelist from Thailand and president of Sigma & Hearts Co., which manufactures small precision parts for the automotive industry, said that she has already taken advantage of regional markets and is now producing in both Thailand and Indonesia. She described the initial difficulties, such as navigating other’s perceptions of businesswomen, that she faced working in a male-dominated business environment.

The panelists also discussed the value of technology in business and trade. Studies have shown that firms who make substantial investments in IT outperform businesses that do not. Despite this fact, women often do not have access to the same technology inputs as men, partly due to the clustering of male-run firms into areas that require a higher technical background such as engineering. This phenomenon starts in educational institutions where men typically outnumber women in science.

Hnin Wai, secretary general of Myanmar Women Entrepreneurs’ Association, emphasized the importance of access to modern communication technologies for women in business, not only to access market and product information, but also to improve women’s connectivity and networking capacity. She explained how Facebook has allowed members of her association to connect and share information on regulations, workshops, trade fairs, trainings, and business opportunities. Panelists discussed how online registration for businesses and e-commerce helps open up opportunities for women entrepreneurs who might not otherwise have access to this information. Nguyen Thi Tuyet Minh, chair of the Vietnam Women Entrepreneur Council, Vietnam Chamber of Commerce and Industry, said that online registration has minimized problems she experienced earlier with business registration in Vietnam.

Challenges in accessing business-related information, especially at a regional level, were stressed by all panelists as a major constraint for women in business in ASEAN. During the panel, both Ms. Minh and Ms. Sinhabaedya noted a general lack of information on ASEAN integration, including laws and alliances, as well as limited information on markets and investment regulations in other ASEAN economies. Unclear information about processes and fees for registering businesses may prevent women from formalizing or expanding their business activities and thus accessing regional market opportunities.

Access to finance also emerged as an important concern. The Asia Foundation’s research in Southeast Asia found that more women than men business owners reported access to capital to be a problem. Research has also suggested that high interest rates disproportionately affect women’s firms in the East Asia and Pacific region, particularly smaller firms that are not able to absorb the costs of finance.

Our research also found that women who participate in formal networks were more likely to have plans to expand the size of their operations and also had larger firms than their counterpart male-run firms. All four panelists echoed the importance of networks in their presentations. Hnin Wai said that Burmese women entrepreneurs value opportunities for trade fairs, networking meetings, information sessions, and visits to established businesses because they provide access to needed business skills and information.

While these discussions are certainly ongoing, they reinforced the need for increased support to women entrepreneurs as economic integration across the ASEAN region becomes a reality. Such efforts will not only have important repercussions for women-run businesses but also for greater, more equitable economic growth across the region.

Kate Bollinger is a senior program officer for The Asia Foundation’s Women’s Empowerment Program in Washington, D.C. She can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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