ASEAN Charter and Regional Micro, Small and Medium Enterprises Development

BALOBE LAW JOURNAL Volume 3 Issue 2, October 2023: p. 42 – 47 E-ISSN: 2775 – 6149 License Creative Commons Attribution-NonCommercial 4.0 Internasional ASEAN Charter and Regional Micro, Small and Medium Enterprises Development Dyah Ridhul Airin Daties1*, Johanis Steny Franco Peilouw2 1, 2 Faculty of Law Pattimura University, Ambon, Indonesia : * : 10.47268/balobe.v3i2.1521 Info Artikel Keywords: ASEAN; Regional; MSMEs; Development. Abstract Introduction: Micro, Small and Medium Enterprises (MSMEs) are a prominent sector in the Asian region that is proven to support the economy, especially developing countries. Although important, it is not uncommon for countries to ignore these independent economic initiatives. Purposes of the Research: This paper aims to provide a brief overview of ASEAN's role in the development of MSMEs in the Region which is the mandate of the ASEAN Charter. Methods of the Research: This research was conducted by conducting a normative juridical approach. Literature review and related secondary data. Results of the Research: The results showed that MSMEs are one of the efforts to realize the economic goals of the Region as stated in the ASEAN Charter. Behind its strategic role for the national and regional economies, MSMEs still often face various challenges, both internally, such as limited capital and technology, as well as externally, including issues related to licensing, raw materials, marketing to integration efforts into regional and global production chains. For this reason, ASEAN's role is very important, especially to implement the Strategic Action Plan for SME Development (SAPSMED) 2016-2025 with the vision of 'Globally Competitive and Innovative SME’. A. INTRODUCTION The Association of South East Asian Nations (hereinafter abbreviated: ASEAN) has undergone many positive and significant changes and developments leading to the maturation of ASEAN. Now the ASEAN partnership has synergized to become the ASEAN Community This is strengthened by the ratification of the ASEAN Charter which is specifically the legal basis and foundation of ASEAN's identity. The purpose of establishing the ASEAN Community is to further strengthen ASEAN integration in the face of the development of international political constellations. ASEAN is fully aware that ASEAN needs to adjust its perspective so that it can be more open in dealing with internal and external problems. The ASEAN Economic Community (hereinafter abbreviated: AEC) aims to make ASEAN a production base and buffer market area, a competitive region, a region that prioritizes equitable development and an area that is integrated with the global market. The development of Usaha Mikro Kecil and Menengah or Micro, Small and Medium Enterprises (MSMEs) is an integrated part of economic unification among ASEAN 42 | B A L O B E L a w J o u r n a l V o l . 3 I s s u e . 2 , O c t o b e r 2 0 2 3 member states. The ASEAN Economic Community (AEC) aims to develop economic potential in all ASEAN member countries. MEA is also expected to create job opportunities for 600 million people in Southeast Asia, as well as provide opportunities for companies in the ASEAN region to expand their operational areas. ASEAN economic cooperation covers various fields.1 MSMEs are a prominent sector in the Asian region that is proven to support the economy, especially developing countries. Although important, it is not uncommon for countries to ignore these independent economic initiatives.2 Anumber of internal obstacles to the development of MSMEs, including those related to access to banking financing, financial administration management, and the quality of human resources. Meanwhile, external obstacles faced in the form of limited access to raw materials and technology, a less conducive business climate, and weak infrastructure in the transportation and energy sectors. 3 Bank Indonesia in its mapping report and strategy to increase the competitiveness of MSMEs in the face of the AEC statedthat several previous studies on factors affecting the ability of MSMEs:4 1) Nicolescu (2009) shows that the ability of MSMEs to survive and grow depends on internal and external factors. Internal factors such as business scale, stakeholders personality, educational background, and company culture (internal training), can affect the level of productivity and innovation of the company. Meanwhile, external factors are factors outside the company such as access to capital and the policy environment, both government policies and the economic conditions of a country. 2) Wignaraja (2012) ; and Presisi (2014) shows that in general the participation of MSMEs in the Global Value Chain (GVC) is still low. This low participation is due to limited resources such as finance, information, management and technology capacity as well as access to market information. 3) Another study conducted by Harvie, Nardjoko & Oum (2010) stated that several factors that can increase participation in GVC include business scale, business maturity, foreign linkage, productivity, innovation and access to financing. The development of MSMEs is one of the efforts put forward in the ASEAN framework to realize the development of a stable economy, in addition to reducing development gaps, strengthening the quality of human resources, improving social welfare, and broader participation in the ASEAN integration process. The strategic role of MSMEs in the AEC includes helping to overcome the problem of unemployment, reviving industrial estates, having strong resilience when faced with a crisis, and contributing greatly to GDP and economic growth.5 The ASEAN Charter Risky Wahyudi. 3 Main Pillars of ASEAN Community. (2022, July 29). Explanation of the 3 pillars of the ASEAN Community, AEC, ASCC, and APSC. https://tirto.id/guzf accessed March 27, 2023. 2 Dafri Agussalim, in Gloria, MSME Important Actors in the ASEAN Economic Community, Gadjah Mada University, 2020, https://www.ugm.ac.id/id/berita/19821-umkm-aktor-penting-dalammasyarakat-ekonomi-asean, accessed March 8, 2023 3 Ibid. 4 Department of MSME Development of Bank Indonesia, Mapping and strategies to increase the competitiveness of MSMEs in facing the 2015 MEA and post-MEA 2025, 2016, p. ix 5 Dafri Agussalim, in Gloria, Op.Cit. 1 43 | B A L O B E L a w J o u r n a l V o l . 3 I s s u e . 2 , O c t o b e r 2 0 2 3 is a legal instrument that binds all ASEAN member states. The ASEAN Charter is expected to create a stable and prosperous ASEAN economy through the development of regional MSMEs. B. METHODS This article was done by conducting a normative juridical approach. Literature studies and secondary data related to the research objects were examined, such as books, journals, publications, regulations, and another material to be further analyzed C. RESULTS AND DISCUSSION One of the characteristics of public international organizations is that they must be formed by an international treaty. Therefore, international org (...truncated)