INF/MSME/W/5  
17 June 2019 
(19-4132) Page: 1/3 
 Original:  English  
 
  
INFORMAL WORKING GROUP ON MSMES  
This note was prepared by the WTO Secretariat and is being circulated at the request of the 
delegation of Uruguay, coordinator of the Informal Working Group on MSMEs.  
 
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The OECD recently published a report  on "Good Regulatory Practices to Support Small and Medium 
Enterprises in Southeast Asia " that provides interesting insight into the operational aspects of 
designing and implementing good regulatory practices (GRP) for small and medium -sized enterprises 
(SMEs ). GRP refers to the use of tools such as administrative simplification, impact assessments, 
and stakeholder engagement to improve the quality of the regulatory environment for businesses 
and citizens.  
 
The present note provides a summary of the key findings of the OECD report . The report is available 
at: https://read.oecd -ilibrary.org/governance/good -regulatory -practices -to-support -small-and-
medium -enterprises -in-southeast -asia_9789264305434 -en#page1  
 
1  INTRODUCTION : 
1.1.  A fair, sensible and transparent regulatory environment helps SMEs thrive loca lly and  
internationally . SMEs are often disproportionately affected by the increasing stock and flow of 
regulations as they tend to have weaker adaptive capacity to comply with complex or changing 
regulations . Adopting good regulatory practices (GRP ) helps  businesses of all sizes, but especially 
SMEs , comply with regulations . This OECD report is the first comprehensive stock -taking of 
developments in implementing GRP  to support SMEs in ASEAN countries.  
2  BACKGROUND: WHAT IS GRP AND RELEVANCE TO MSMES.  
2.1.  Good regulatory practices (GRP) refer to the use of tools such as regulatory impact  evaluation, 
stakeholder engagement and ex post  evaluation to improve the quality of the  regulatory 
environment for businesses, citizens and society . GRP tools are useful fo r identifying and reviewing 
which regulations are essential for achieving given outcomes,  ultimately making regulatory 
compliance as straightforward and meaningful as possible.  
2.2.  For businesses, GRP facilitate a stable and enabling regulatory environment tha t can help  boost 
investment, trade and entrepreneurship . While GRP benefit businesses of all sizes,  they are 
especially helpful for SMEs . Compared  with their larger counterparts, SMEs may be less adaptive to 
– and potentially  disproportionately affected by  – the stock and flow of regulations . In 
Southeast  Asia, where the vast majority of businesses are SMEs, a regulatory environment 
ill-adapted to  the needs and characteristics of SMEs can significantly undermine the health of the 
local economy as well as re gional competitiveness.  INF/MSME/W/5  
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  3  METHODOLOGY  
3.1.  The report uses a standard template to evaluate the use of GRP on MSMEs . ASEAN members ' 
GRP are assessed individually on the basis of the approach presented  in Table 1 . Findings are then 
summarized at the regional level according to the following categories:  
 
a. Administrative Burden Reduction  
b. Regulatory Oversight  
c. Regulatory Impact Analysis  
d. Ex post evaluation  
e. Stakeholder engagement  
f. E-Customs  
g. Aligning Standards  
h. Special economi c zones  
An example of an assessment table on regulatory oversight is provided in Table 2 . 
 
Table 1: Structure of Member Profile chapters  
Title Role 
Regulatory Context  Provides the Government objectives and main 
planning information determining the MSME 
policies  
Regulatory Governance  Profiles Governance structure : Institutional and 
Regulatory Setup ; Regulatory Process ; and 
Business laws and regulations.  
Highlights of Regulatory opportunities and 
challenges to support SME s Profiles challenges and strategy being adopted 
concerning several themes (not completely 
uniform) ; R egulatory Clarity ; R egulatory 
delivery ; a dministrative simplification ; 
E-government;  Regulatory quality management ; 
stakeholder engagement ; Appeals ; M SME 
linkage policies  
Recommendations  Provides recommendations from the OECD 
perspective (likely not applicable for the WTO)  
Notes  Explanatory notes  
References  Reference documents.  
 
 
Table 2: Regulatory oversight bodies in Southeast Asia and systematic adoption of good 
regulatory practice (GRP) tools  
 Regulatory Oversight body(ies)  Regulatory 
Impact 
Assessment  Stakeholder 
Engagement  Ex post 
evaluation  
Brunei 
Darussalam  Management Services Department, 
Ease of Doing Business Steering 
Committee  No Yes Ad hoc basis  
Cambodia  Economic, Social and Cultural 
Council (ECOSOCC)  Mandatory for 
new laws ; partial 
implementation  Yes Project -by-project 
basis 
Indonesia  Ministry of Law and Human Rights ; 
Ministry of Home Affairs  Mandatory for 
new laws ; partial 
implementation  Yes Project -by-project 
basis 
Lao P eople's 
Democratic 
Republic  Ministry of Justice  Partial  Yes. Mandatory  Partial  
Malaysia  PEMUDAH, Malaysia Productivity 
Corporation, Ministry of Trade and 
Industry  Full 
implementation  Yes Partial  INF/MSME/W/5  
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   Regulatory Oversight body(ies)  Regulatory 
Impact 
Assessment  Stakeholder 
Engagement  Ex post 
evaluation  
Myanmar  Directorate of Investment and 
Company Administration 
(responsible for investment 
oversight) ; Multiple  Partial  Yes. Mandatory  Not implemented  
Philippines  National Economic Development 
Authority ; Department of Trade and 
Industry ; national Competitiveness 
Council  Partial -pilots  Yes Not implemented  
Singapore  Ministry of Trade and Industry ; 
Pro-Enterprise Panel  Ad hoc basis  Yes Ad hoc basis  
Thailand  Office of the Council State  Mandatory, in 
implementation  Yes. Mandatory  Mandatory, in 
implementation  
Viet Nam  Ministry of Justice  Mandatory, in 
implementation  Yes. Mandatory  Partial  
 
4  OVERALL FINDINGS OF THE REPORT:  
4.1.  Almost all countries initiated administrative burden reduction programmes, and all countries 
practice stakeholder engagement, as well as offering online regulatory processes . Some countries 
have introduced regulatory policies targeted at SMEs, while others have opted to level the regulatory 
playing field for businesse s of all sizes . MSMEs are heterogenous and have different needs . Due to 
differences in government structure, government approaches to setting regulatory policy and using 
GRP also differ from country to country as such  further challenges lie ahead for regulatory 
co-ordination and implementation . A dedicated SME regulatory policy may not be necessary as long 
as the general regulatory environment is fair, transparent, clear and effective.  
4.1  Key recommendations  of the report  
On importance of good regulatory practices (GRP) :  
• The purpose and impact of regulations – both existing and proposed – should be clearly 
set out, justified and expressly communicated to the public via systematic and targeted 
stakeholder consultations.  
• Ex ante regulatory evaluation, inclu ding regulatory impact evaluations, should be 
followed by ex post evaluation to ensure continuous relevance.  
• Regulatory enforcement is crucial for improving overall regulatory compliance . Penalties 
for non -compliance should be proportional and calibrated t o facilitate compliance.  
On Differing Needs of SMEs : 
• Policy makers must continuously update their understanding of SMEs ' needs, which are 
more dynamic than ever and may cut across sectors or jurisdictions.  
• Regulatory interventions should be tailored to the  sector(s) in which SMEs operate and 
the tools that they use, rather than administered according to simple employee count 
or revenue.  
• Encourage SMEs to participate in and contribute to government policies and 
programmes by putting more emphasis on serving SMEs, which will also help build trust.  
On governance diversity:  
• More co -operation on regulatory harmonisation is required to unlock the full potential 
of an inclusive, connected ASEAN economic community . Regulations may not be 
uniform, but they sh ould be complementary.  
• Anticipate regional regulatory requirements in the development and application of 
national regulations – whether on processes or standards – to help smooth the learning 
curve between local and international trade.  
• Take advantage of d igital technologies to deliver smarter policies, regulations and 
services.  
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