When thinking about regional financial integration, one would think of regional currencies like the Euro as the epitome example, however a different story is unfolding in Southeast Asia. Financial integration in ASEAN has been a long sought-out dream for a region with an undeniably large market growth in the future. An integrated market would mean further development within the finance sector including banking, insurance, capital markets, as well as trade. In a region with great market potential yet low intra-regional trade, improving access to financial services will not only lead to economic and trade growth but also to market efficiency by lowering the cost of capital. However, financial integration is a complex matter and in order to fully understand it, one must understand ASEAN’s progress thus far and the small concrete steps the organization is taking in ensuring a financially integrated future.
ASEAN’s financial integration has been a drawn-out process, but its saliency has been expressed since the 1997 ASEAN Finance Ministers Meeting in Thailand. The first concrete step towards financial integration was taken in 2003 after the agreement between ASEAN’s finance ministers on The Roadmap for Monetary Integration in ASEAN.[1] This was followed by another step in 2007 when ASEAN leaders declared for the establishment of the ASEAN Economic Community (AEC) by 2016 within the formulation of the AEC Blueprint which encompasses plans for trade and services liberalizations, which includes financial services, capital account regimes, and financial system integration.[2] This would mean that the AEC plans to work on removing the restrictions for intra-regional financial service and capital account provisions, capital market harmonization and development, harmonization of payments and settlements systems, and mutual qualification for financial professionals.
By 2011, the ASEAN Financial Integration Framework was established as the main approach for initiatives to liberate and integrate financial sectors. With the goal of a semi-integrated financial region by 2020, the main objectives of the framework include the provision for intra-ASEAN financial services, capacity building and development of ASEAN capital markets, capital flow liberalization, harmonization of payments and settlement systems, and regional financing surveillance and arrangements. Two years after, the Central Bank Governors of ASEAN member states (AMS) published the “The Road to ASEAN Financial Integration—A Combined Study on Assessing the Financial Landscape and Formulating Milestones for Monetary and Financial Integration in ASEAN” Summary Report as a reference guide got the financial integration process.[3] The establishments of the AEC in 2015 only furthered the on-going progress. Currently, ASEAN has taken two very distinct steps in fulfilling the goal of the ASEAN Financial Integration Framework.
In a region where intra-ASEAN trade has not yet reached unprecedented levels, bilateral trade in Southeast Asia has long been dominated by the use of the dollar. This is mainly due to the dollar’s stability and liquidity, and also the lack of a regional currency unlike the Eurozone.[4] However, transactions using the dollar has made trade, investments, and business less efficient as it takes more time to convert local currencies into the dollar and reconvert them back. Overreliance on the dollar also causes it to strengthen which could potentially make local currencies depressed and trade more costly. Furthermore, ASEAN local currencies are known to fluctuate against the dollar which may impact their debt value, as a stable currency against the dollar would lead to less debt, but a fluctuating currency would increase debt.[5]
In 2016, Thailand and Malaysia initiated a bilateral cooperation for a local currency settlement and was followed by Indonesia in 2018. The aim was to establish a monetary framework that enables the usage of local currencies to facilitate cross-border payments and flow of trade. This framework became known as the Local Currency Settlement Framework (LCS) which enables bilateral transactions to be done using local currencies within each country. The goal was to reduce overreliance on the US dollar as the currency used for trade transaction settlements and to generate local currency stability by diversifying currency exchanges.[6] Ultimately, LCS is also a strategic move in developing transaction efficiency by implementing direct trading without having to buy and sell the dollar for conversion. Broadly, it will also enhance market efficiency and local currency market development.[7]
In its implementation, the central banks of these AMS (the Bank Negara Malaysia, Bank of Thailand, and Bank Indonesia) have appointed several banks within their respective countries as Appointed Cross Currency Dealers (ACCD). These are banks that have the ability to facilitate transactions in foreign currencies, under the consideration that they have good resilience and health, experienced in providing various financial services, and have good relations with banks in partner countries.[8] Services provided by the ACCD banks in local currencies includes issuing receipt of import and export payments for trades in goods and services, receipt and payment of labor compensation transactions and investment incomes, remittances, and direct investment between LCS customers with a 10% ownership minimum limit. Currently, there are 7 AACD banks appointed by Indonesia, 6 ACCD banks appointed by Malaysia, and 5 ACCD banks appointed by Thailand.[9]
As of now, the LCS cooperation has expanded to include Japan and China through the MoU signed between Bank Indonesia and the Ministry of Finance of Japan in 2020, followed by an MoU signed by Bank Indonesia with the People’s Bank of China (PBC) in 2021. The central bank of the Philippines, the Bangko Sentral ng Pilipinas, has also signed commitments with the central banks of Indonesia, Thailand, and Malaysia during the ASEAN Finance Ministers and Central Bank Governors Meeting in 2019, though they have yet to appoint any ACCD banks domestically.[10] Though trade between these countries is still heavily dominated by the dollar, the implementation of the LCS has showed a positive trend. In 2018, Bank Indonesia reported that Indonesia’s trade with Malaysia using the LCS framework reached 1.4% which rose to 3.6% in 2019 and 4.1% in 2020. Thailand also experienced a rise in LCS implementation numbers from 0.6% in 2018 to 1.1% in 2019 and 1.3% in 2020.[11] Additionally, it is predicted that trade and investments using the LCS framework will increase up to a targeted 10% in 2022, noting the US$2,53 billion transactions done within the framework in 2021. Such number constitutes 35% from trade transactions, 14% from remittances, 1% from investments, and 50% from interbank cover positions.
The LCS framework brings several notable benefits as its payments system is more efficient for faster transactions, provides alternative hedging instruments to export financing and direct investment, and exposes transaction settlement to diverse currencies whereby diversification is hoped to be able to support macroeconomic stability and foster economic recovery. The usage of the LCS has the potential to bring structural changes in payments invoicing within ASEAN. Though the share of local currency usage for trade and investments are still small—with only around less than 10% of transactions conducted in local currencies compared to the dollar—there is great hope for a more wide-spread use of the LCS framework, noting the positive growth of its usage since 2016. As of 2019, total trade done within the LCS has accumulated up to US$83 billion.[12] It is a slow and small step towards the long road for currency resilience in ASEAN.
Likewise, Indonesia recently created an initiative to expand the Quick Response Code Indonesia Standard (QRIS) features and services. The initiative was reiterated in 2021, and was followed with the commitment to establishing QR interconnectivity domestically and regionally. This is in line with the Bandar Seri Begawan Roadmap (BSBR): An ASEAN Digital Transformation Agenda to Accelerate ASEAN’s Economic Recovery and Digital Economy Integration document endorsed by the AEC that reaffirms ASEAN’s collective agreement to a five-year agenda towards the development of the ASEAN Digital Economy Agreement and negotiations on the Digital Economy Framework Agreement (DIFA) by 2025. Within the document, there is a special focus on the creation of financing, payment, and service connectivity in relations to the ASEAN Payments Policy Framework as also noted in the joint statement issued during the 8th ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) this year.[13]
The ASEAN Payments Policy Framework for Cross-Border Real-Time Retail Payments fall under the Acceleration phase, whereby it aims to implement an inter-operable cross border digital payment via QR within the ASEAN region. This is done to increase the promotion for financial inclusion through digital finance services and regional payment connectivity in order to accelerate the Inclusive Digital Transformation Strategy, which includes the development of an ASEAN inter-operable QR Code Framework by 2022.[14] This is in line with the ASEAN Payments Connectivity Initiative which plays a key role towards furthering financial integration and connectivity of financial transactions in ASEAN, noting that QR payments are a reliable, affordable, and efficient method of payment that holds the potential to boost SMEs participation within international trade of goods and services, particularly within the tourism sector due to its practicality and convenience.[15] A cross-border QR holds a potential in increasing transaction efficiency and hastens the digitalization of trade and investment. Furthermore, the initiative holds the potential to go hand-in-hand with the LCS framework to help maintain macroeconomic stability. According to Bank Indonesia Governor, Doni P. Joewono, Bank Indonesia, Bank Negara Malaysia, and the Bank of Thailand has initiated a pilot cross-border QR that allows merchants and consumers to make retail and real-time cross-border payments via QR known as the Real-Time Retail Payments Systems (RT-RPS).[16]
A conclusion on the future of ASEAN’s financial integration
It should be noted that the current existing cooperation for the LCS framework and the cross-border QR initiative is being spearheaded by Indonesia, Thailand, and Malaysia, which so happens to also be part of the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT). These three countries also share similar sentiments in decreasing reliance on the dollar, and their strategic geographical proximity may have contributed to higher levels of trade amongst them, considering Malaysia and Thailand are part of Indonesia’s top 10 trading partners in 2018.[17] Through small concrete steps, these three ASEAN member states are paving the way for a wider ASEAN financial integration.
Since a reduction on dollar reliance and currency diversification could mean value stability for local currencies, governments need to make sure that data disclosures on the usage of the LCS framework is accessible to SMEs who may interested in conducting business with lowered exchange rate risks due to the wide choice of transaction currencies. Furthermore, information on preferential settlement currencies between firms and regular surveys for local currency usage in investments and trade are the key to promote greater use of the LCS within the region, as it would increase the numbers of direct transaction markets and create an ASEAN foreign exchange market to reduce local currencies transaction costs further.[18]Similarly, there is a lot of hope that cross-border QR payments would contribute towards economic recovery and the future of digital payments and finance, as an integrated cross-border QR initiative could spearhead the development of standardized financial technologies and infrastructure, which could hopefully expand for cross-border remittance payment and stock market sales. This initiative may hold great prospects to increase efficiency within international wholesale and retail trade and promotes investments digitalization.[19] Additionally, it has the potential to increase SMEs added values in conducting online direct transactions and boosting tourism recovery.[20]
However, for any of these initiatives to work regionally, ASEAN member states’ central banks need to expand efforts in digitalizing financial sectors in order to create an inclusive environment for an integrated financial market. Greater access and awareness on digital finance would not only drive the regional economy, but also reduce cash dependence, financial exclusion, and further realizing the AEC’s investment and trade liberalization. In this sense, the Qualified ASEAN Banks Framework should be utilized to help banks carry out the appropriate financial services and work together with stakeholders in ensuring the provision of digital financial technologies and e-platform services are accessible to many ASEAN member states, particularly for the CLMV (Cambodia, Laos, Myanmar, and Vietnam) where there is a cash-based market dominance and limited finance technological readiness.[21] The LCS and cross-border QR initiative have already operated under the principles of non-intervention and interacts with the ASEAN Way in regards to monetary power and autonomy through currency deterritorialization.[22] Hence, cooperation in fostering the political will and domestic readiness between ASEAN member states needs to happen to secure the future of ASEAN financial integration.
[1] ASEAN, “Finance Integration,” asean.org, n.d., https://asean.org/our-communities/economic-community/finance-integration/.
[2] ASEAN Briefing, “Understanding Financial Integration in ASEAN,” ASEAN Business News, April 27, 2016, https://www.aseanbriefing.com/news/financial-integration-in-asean/.
[3] ASEAN Briefing, “Understanding Financial Integration in ASEAN,” ASEAN Business News, April 27, 2016, https://www.aseanbriefing.com/news/financial-integration-in-asean/.
[4] J Shimizu, “Exploring Local Currency Usage to Reduce Exchange Rate Risks in Asia,” AMRO ASIA, January 30, 2019, https://www.amro-asia.org/exploring-local-currency-usage-to-reduce-exchange-rate-risks-in-asia/.
[5] A. Y. Widyastuti, “Gubernur BI Yakin Transaksi Local Currency Settlement Tahun Ini Naik 10 Persen,” Tempo (TEMPO.CO, February 16, 2022), https://bisnis.tempo.co/read/1561500/gubernur-bi-yakin-transaksi-local-currency-settlement-tahun-ini-naik-10-persen?page_num=3.
[6] Jalin, “Understanding Local Currency Settlement in Bilateral Transactions,” jalin.co.id, October 22, 2021, https://www.jalin.co.id/en/understanding-local-currency-settlement-in-bilateral-transactions/.
[7] Bank Indonesia, “Bank Indonesia Committed to Local Currency Settlement in ASEAN Region,” www.bi.go.id, 2019, https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/Bank-Indonesia-Terus-Berkomitmen-Dukung-Implementasi-Penggunaan-Local-Currency-Settlement-di-Kawasan-ASEAN.aspx
[8] Jalin, “Understanding Local Currency Settlement in Bilateral Transactions,” jalin.co.id, October 22, 2021, https://www.jalin.co.id/en/understanding-local-currency-settlement-in-bilateral-transactions/.
[9] Bank Indonesia, “Bank Indonesia Committed to Local Currency Settlement in ASEAN Region,” www.bi.go.id, 2019, https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/Bank-Indonesia-Terus-Berkomitmen-Dukung-Implementasi-Penggunaan-Local-Currency-Settlement-di-Kawasan-ASEAN.aspx
[10]The Jakarta Post, “ASEAN Local Currency Deals,” The Jakarta Post, 2019, https://www.thejakartapost.com/academia/2019/04/10/asean-local-currency-deals.html.
[11] Jalin, “Understanding Local Currency Settlement in Bilateral Transactions,” jalin.co.id, October 22, 2021, https://www.jalin.co.id/en/understanding-local-currency-settlement-in-bilateral-transactions/.
[12] A. Y. Widyastuti, “Gubernur BI Yakin Transaksi Local Currency Settlement Tahun Ini Naik 10 Persen,” Tempo (TEMPO.CO, February 16, 2022), https://bisnis.tempo.co/read/1561500/gubernur-bi-yakin-transaksi-local-currency-settlement-tahun-ini-naik-10-persen?page_num=3.
[13] ASEAN, “ASEAN Economic Community Council Endorses Roadmap to Accelerate Economic Recovery, Digital Economy Integration,” asean.org, 2021, https://asean.org/asean-economic-community-council-endorses-roadmap-to-accelerate-economic-recovery-digital-economy-integration/.
[14] Monetary Authority of Singapore, “Joint Statement of the 8th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM),” www.mas.gov.sg, 2022, https://www.mas.gov.sg/news/media-releases/2022/joint-statement-of-the-8th-asean-finance-ministers-and-central-bank-governors-meeting
[15] E Haryono, “Cross-Border QR Transactions Support ASEAN Financial Integration,” www.bi.go.id, 2022, https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/sp_245022.aspx.
[16] IDN Financials, “BI: Cross Border QR Transactions Support ASEAN Financial Integration | IDNFinancials,” www.idnfinancials.com, 2022, https://www.idnfinancials.com/news/42210/bi-cross-border-qr-transactions-support-asean-financial-integration
[17] H Supadi, “The Use of Local Currency Settlement in Trade among Indonesia, Malaysia, and Thailand,” JOM FISIP 8, no. 2 (2021), https://jom.unri.ac.id/index.php/JOMFSIP/article/download/30945/29808
[18] N. Laoli and B. Pink, “BI Berencana Perluas Kerja Sama Local Currency Settlement Di Sejumlah Negara Ini,” PT. Kontan Grahanusa Mediatama, September 9, 2021, https://newssetup.kontan.co.id/news/bi-berencana-perluas-kerja-sama-local-currency-settlement-di-sejumlah-negara-ini.
[19] N. Ihsan and A. Olivia, “Cross-Border QR Code Bolsters Financial Integration in ASEAN Region,” Antara News, 2022, https://en.antaranews.com/news/215325/cross-border-qr-code-bolsters-financial-integration-in-asean-region.
[20] E Haryono, “Cross-Border QR Transactions Support ASEAN Financial Integration,” www.bi.go.id, 2022, https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/sp_245022.aspx.
[21] P. Chuasakulvanich and P. Srimanote, “ASEAN – the Significance of Financial Inclusion by Qualified Financial Institutions,” Trade Finance Global, September 19, 2019, https://www.tradefinanceglobal.com/posts/asean-significance-of-financial-inclusion-by-qualified-financial-institutions/.
[22] Adinda Mardania and Mohtar Mas’oed, “Local Currency Settlement (LCS) Framework and the ASEAN Way: Implementation of Regional Monetary Agenda,” etd.repository.ugm.ac.id, 2018, http://etd.repository.ugm.ac.id/penelitian/detail/159989.
Russia Appreciates Africa’s Readiness In Stepping Up Economic Cooperation
Marsha Phoebe is on her fourth semester as an international relations major in Gadjah Mada University, Jogjyakarta, Indonesia. Her academic concentration is on global politics and security with a special interest for low security issues. Regions of interest include Southeast Asia, Japan, Latin America, and Africa.
Taking the India-Singapore Cyber Partnership Forward
The Use of The ASEAN Way In Resolving Disputes
How ASEAN should step up to accelerate sustainable energy within the region
ASEAN-US Summit: Vietnam and the United States Place a High Value on Their Partnership
Where is ASEAN amidst the rise of protectionism?
Pillars of Economic: Entrepreneurs, Digitization, SME & Exports
Under auspices of BRICS (Brazil, Russia, India, China and South Africa) and China holding the 14th Summit, it provides the platform to address emerging global and thorny regional problems. The BRICS member countries collectively represent about 26% of the world’s geographic area and are home to 2.88 billion people, about 40% of the world’s population.
What are the issues at stake: During the past two decades, new geopolitical confrontation as between democracy and authoritarianism, and unipolar and multipolar system, have partly appeared between the United States and Europe on one side and Russia and China on the other side. There other ccountries that are followers of the these distinctive groups. The group deeply dissatisfied about unipolar system and global hegemony throttled by the United States.
Despite the individual differences, BRICS members ultimately seek to consolidate its position, with a number of instruments at hand, in the development of the new global order and therefore have the following:
(i) Unified front and expansion of the group, demonstrate its effectiveness in addressing emerging tasks on regional and international stage. For instance in May, China suggested launching discussions of the issue that Argentina and Saudi Arabia had expressed interest in joining BRICS.
According to experts, other potential candidates include Bangladesh, Egypt, the United Arab Emirates and Uruguay who joined the BRICS New Development Bank last year. In addition, analysts point out that events held on the sidelines of the BRICS foreign ministers meeting involved representatives of Indonesia, Kazakhstan, Nigerian and Thailand.
A number of countries are already on the list as potential new members. The final positions is that this geopolitical configuration is in exploratory phases, undoubtedly meant to bring a new axis of Russia-China but inclusion of Mexico , Indonesia and Turkey has its own strategic baggage. The procedures have to be thoroughly examined and reviewed, the dialogue is of importance to further expand BRICS.
(ii) The question of creating an international reserve currency based on a basket of currencies of the BRICS countries is being considered. In addition, the development of reliable alternative mechanisms for international settlements is being drawn up together with BRICS partners.
Russia’s financial messaging system is open for the connection of banks of the five countries. The geography of Russia’s Mir payment system is being expanded. The fact is that there are comprehensive measures directed at reducing the negative impact of sanctions and strengthening trade and investment ties with all interested states.
(iii) On fortifying the economic front is one key area for BRICS. Russia is feverishing cooperating with China and India. Trade among them has witnessed exponential growth, and Russia is set to make new legislations that could facilitate further, especially in the Central Asian region and within the Eurasian Union.
Closely relating to that Russia is advocating for expanding entrepreneurial freedoms, reducing administrative burdens, launching new preferential lending programs, and introducing tax and customs exemptions. While these aim at supporting Russia’s economy against raft of draconian sanctions, it would simultaneous help China, India and many Asia-Pacific countries that are ready to do mutual business with Russia.
Against these backdrop as briefly discussed above, BRICS can serve as an opportunity for the group to convince the world that it can be a viable financial option against Western-led institutions like the World Bank and the International Monetary Fund. Furthermore, combined together they possess a huge resources and only need to present a “clear-cut economic model” that ultimately be attractive and be replicated around the world. BRICS countries constitute 40 percent of the world’s population, and the group needs to engage in more interactive development processes especially the global south to get more clout as a serious global player.
China is holding the BRICS presidency in 2022. While strengthening economic, technological and scientific potential, the BRICS partners are ready to continue working on principles of respect to interests of each other, unconditional supremacy of international law, and equality of countries and peoples of the globalized world.
The 14th BRICS summit held in June, the leaders of Brazil, Russia, India, China and South Africa focused on the state of affairs and prospects of multifaceted cooperation within the group in the political, economic, cultural and humanitarian areas. The summit touched upon pressing international and regional issues and are reflected in the summit’s final declaration.
Since its establishment, the BRICS success could be described as moderate. The group has a combined population of 3.23 billion and their combined GDP is more than US$23 Trillion. Historically, the first meeting of the group began in St Petersburg in 2005. It was called RIC, which stood for Russia, India and China. Then, Brazil and subsequently South Africa joined later in February 2011, which is why now it is referred to as BRICS.
Human needs in this world cannot be separated from 3 basic needs, namely shelter, clothing and food. Clothing is one of the things that humans will always use from birth to the end of their life no matter rich or poor because everyone needs clothes during their life. The industrial sector that produces this clothing is the garment industry, the garment industry is a company engaged in the manufacture of apparel for men and women, for all ages from baby to adults. Product from garment examples such as underwear, shirts, jeans, t-shirts, jackets, blouses, etc. and usually these garment products are mass-produced with the same model. Characteristics of garments produced by garments are the models of clothing that are made usually have the same shape, garment clothing generally uses standard sizes (S, M, L, XL) or numbering (Fitinline, 2019). There are lots of garment factories in each country and usually the factory has chosen the targeted market segment according to the product production. However, there are still many obstacles that can occur in this garment industry. Among other things, the rapid changes in the garment industry so that innovation must be carried out every time because fashion is always evolving, causing this industry have to adapt to the trends that are popular with the community, as well as high competition due to the many existing garment factories so that characteristics and expertise are needed to survive. However, when a garment factory can produce products with brands that have strong characteristics, Models that are trendy and comfortable to wear, the brand can quickly become a favorite of the community and with the right promotion can build branches in several countries.
If the garment industry is an industry that focuses on apparel, then above the garment industry there is an industry that is wider in scope, namely the textile industry is one of the manufacturing industry sectors that produces starting from raw materials to become materials that have a selling value such as yarn, cloth, and finished products made from textiles. The textile industry is very large because it consists of several materials. There are natural materials such as silk, wool, and cotton. And there are also synthetic materials, namely polyester, polypropylene, nylon. As for the process of making yarn into fabric, there are 3 types, namely woven, knitted and nonwoven. Woven itself is a fabric making technique that has the principle of combining threads lengthwise and transversely or making patterns that cross each other, while knitted fabrics are fabrics made with the principle of entangling threads that are intertwined with each other to form a circle or arch so that the threads can relate to each other. Then nonwoven is a fabric that is made without going through the woven and knitting process but with a special nonwoven machine. Fabrics made with different techniques have different purposes and functions depending on the use and purpose of use.
By seeing the importance of textiles in everyday life and because textiles are an industry that will always be needed, it is not surprising that the demand for textiles is always increasing from time to time. So that countries that have large textile production can make textiles one of the economic sources for state income. Here are 3 countries with the largest textile production in the world:
It’s not new anymore if China dominates the global textile market because this country is able to have an output reaching 52.2% of global textile production in 2019. Several factors that support China to become a giant ruling textile industry are due to low production costs, technological advances that as well as, considerable supply of raw materials. These things make China the largest textile producing country in the world. In addition to being the largest textile producer, China is also the country that exports the highest textiles. From Statista data, in 2020 China was the top global textile exporter with a value of around USD 154 billion. This figure of China’s exports is almost 43.5% of the total textile export market worldwide (Inda Susanti, 2022).
India occupies the second position as the largest textile producing country in the world, textile is one of the oldest industries in India and the development of this industry is always increasing from time to time. In India there is a division into 2 sectors. The first sector is an unorganized sector that still uses human labor and simple tools. Then the second sector is an organized sector, namely a sector that is more modern because it uses combined techniques and machines. India’s textile industry is estimated to be worth USD250 billion in 2019. According to the IBEF report, India’s State textile industry accounted for 7% of industrial output in 2018/2019. It contributes 2% to India’s GDP and employs more than 45 million people in 2018/2019 (Inda Susanti, 2022).
United States of America (USA)
America is in the 3rd position with the largest textile production. America managed to account for 5.3% of the output of global textile production in 2019. The biggest strength of textiles from the United States of America comes from the production of nonwoven fabrics, medical textiles and protective clothing. By combining advanced technology and innovation, the United States continues to grow with textile production increasing every year. Citing data from the US National Council of Textile Organizations (NCTO), the total value of shipments of US-made fibers and filaments, textiles and apparel amounted to approximately USD76.8 billion in 2018, up from USD73 billion in output in 2017 (Inda Susanti, 2022).
It is estimated that the demand for textiles in the future will continue to increase with the development of technology, there will be many new innovations that can be useful for human life. Especially in the garment and textile industry sector. As one of the basic human needs, it is estimated that the industry will remain stable and continue to increase, although sometimes there will be a decline but will return to a stable position. So literally the garment industry is part of the textile industry as well. However, the garment industry has a main focus on making apparel. Meanwhile, the textile industry has a wider scope because it processes from raw materials into finished materials that are ready to be reprocessed or can be sold directly without being reprocessed.
There is only one “Big Economy” within each nation; a unique economic development process harnessed around the assembly of small and medium businesses spread across any given nation. Nevertheless, mastery to lead the “Big Economy” requires big minds; so long, the small-minds only see small business as small; failing to recognize that all big businesses of the world only hatched as small babies in the past. Later, after many diaper changes SME grew into giants. This is normal in the life of a business cycle for any entrepreneurially fertile business minded landscapes.
Let there be light: Nevertheless, as a simple fact, like turning an ‘on’ and ‘off’ light switch; economies without digitization are as if without electricity, without upskilled frontline teams on tasks as if without a bulb. The Mindset Hypotheses openly challenges the visible damages to economic developments across the free world equally as monitor to growth the sooner tested across SME regions the faster the turnaround.
Fake entrepreneurialism: Unfortunately, the lack of mastery of the Big Economy is a big issue. Academia is always uncomfortable with SME, job creator entrepreneurial mindsets, for being too much out of the box rule breaker, while nestled in their own Ivey covered moist edifices feel cozy with their own job-seeker mindsets while claiming expertise on some fake entrepreneurialism of sorts. Issuing papers as wall hanging and passing judgments on entrepreneurial journeys, without once creating a single SME. Entrepreneurialism is not a degree; it is a state of mind. A quick live debate will prove all this, hence the deep silence.
Is China showing mastery in harnessing its big economy of SME? Observe across the world how much powers acquired by optimizing their SME sectors, upskilling of exporters, reskilling of manufacturers and quadrupling exportability. Now, compare this to the openly visible abuse and abundance of the SME within the free economies of the world, critically damaging levels of skills and leaving national citizenry behind in the races of global age competitiveness now in post pandemic revival left almost in salvage states.
Five Big Myths of Economic Development Debunked:
The political syndrome: politics is not creating the economical answer, as an overview, observe the art of the politics; reflected in their national leaderships of their free economies and their election wizardry all now almost gone to the dogs. Observe the chaos, nation by nation. Notice the salvage operations and runaway elections, watch the language, the populist narratives and pre-anarchy landscapes. Political power is about creating economic powers or else.
National mobilization of entrepreneurialism will save nations: The current global level rhetoric at global institutions already mandated to foster economic growth, mostly going in circles and lip servicing, geo-econo-socio-politico issues with visible absence of real concrete workable solutions. Such verbiage, followed by thousands of trade groups and chambers all joining the same chorus lines and echoing the same rhetoric visible on social media by the hours but critically lacking any hard core national mobilization programs. Of course, it takes special mindsets for special challenges, like airlines flown by trained pilots and not by frequent flyers. Acquire mastery on mobilization methodologies… why large number mobilization requirements are a mystery and why not just regular class size do?
The economic crisis fabrication: The challenge is “economy” and nothing else but economy. Here observe the assembly of casual, randomly picked expertise at play in managing the most complex and difficult puzzles of survival of humankind, the local grassroots prosperity. Notice, the majority of national crises, from economy, jobs, immigrations, crime, and education, housing or health all related to local grassroots prosperity.
What level of high schooling is required to decipher such puzzles? What we have, nation-by-nation, like some paintings- by-the-number to create masterpieces for the history of the economic museum. So what is wrong? Why is the big economy so neglected, why SME sectors are fragmented and buried under bureaucracies, red-tapes and old mentality trade groups and chambers lingering like left over burden declared some abstract SME with no future, all due to lack of job creator entrepreneurial mindsets. Absence of mastery on economic development now openly visible
Economy is not about numbers rather entrepreneurialism
The number syndrome: A calculator from a ‘dollar store’ is often sufficient as the Economy of the past is in numbers, but the economy of the future is all about entrepreneurialism. Growth is a by-product of job creator entrepreneurial mindset. Psychologist and HR both are allowed to break-up the furniture infinitum on this, but unless the mindset hypotheses is smashed, job seekers will build the organizations and job creators will create that organization in the first place; the visible damage to our economic development widespread across the free economies of the world as failure. Find answers fast
The error of mind: The term “SME” is a grave error, a misnomer created by job seeker mindset, as there is nothing small about a baby elephant. It will become an elephant in time. It is all about creating a big new company, active within a big economy of million small medium large businesses within a nation. However, such tasks must break away from the current economic development models serving selected interests, brutal toward SME treating them as small and of lesser value, unable to decipher the hidden powers of risky new business models. Mandatory study of 1000 earth-shattering entrepreneurs is necessary to avoid mistakes about the large national SME sectors treated as leftovers and spillovers from the undesired job creator mindsets. Close study and testing will prove the lingering harsh realities.
The big loss of a nation: The biggest loss to any nation is the wasteland of the ‘job creator entrepreneurial mindsets’ abandoned across the nation as lingering SME as undecipherable journeys of businesses for the formally attired degree holders as tall towers occupants of the job seekers mindsets. Lack of knowledge on properly structured Digitization, Mobilization, Exportization and global age immersion of new trades of micro exports, micro manufacturing and global competitiveness. Provided such progress led by entrepreneurial mindsets.
Throw away Teleprompters: as lip service on SME all but dried out, the only fact remains, that the SME economy by far the “Big Economy” in search of big minds, ignorance on small business fertility is a harsh lesson of today. Today, the art and science now hidden in balancing both, the job seeker and job creator mindsets to mobilize entrepreneurialism and create economic growth. Seek out authoritative dialogues and create bold open debates
The unpredictability of elections: Tragically, the cryptopia mentality stripped naked the unskilled citizenry of most free economies. Rather than creating internal Skill-Wars to create upskilling and reskilling, the leadership chose to declare Forever-Fake-Wars so their nations learn slowly to dig their own graves as metaverse therapy. Now in need of diaper change the next rounds of elections will sort out the ongoing damages. Prepare for mega change
Check the profiles on LinkedIn: Today, openly visible, across the world, on LinkedIn profiles, the Job seeker mindsets now freely running the economic development progress of the free economies of the world. What is most damaging is the absence of a job creator entrepreneurial mindset creating input and global age narratives on national mobilization of entrepreneurialism.
Absence of such mastery is visibly sinking the experimental economic development in a big way. A quick test will prove such imbalances but this requires entrepreneurial leadership to tackle such timely challenges, otherwise all failed to collect dust as some long undecipherable academic study. For authoritative analysis and special workshops on acquiring mastery on such topics, study more on Google.
Big minds urgently required; Big minds needed to deal with big economies, based on global collaboration, diversity and tolerance, as rest is crypto-tyrannies. Creating real value economic power is the ultimate leadership goal to lead a sovereign nation, as the rest is fakery. Without a big economy, get ready for the big bust; Study the origin and history of business, the art of value creation to allow differentiation to eliminate the value manipulation. The rest is easy.
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