1. APEC Ministers Responsible for SMEs met in Kuala Lumpur on 7 - 8 September 1998 to review the work of the Policy Level Group (PLG) on SMEs and discusses:
  • an integrated plan of action for SME development;
  • the impact of the regional financial instability on SMEs; and
  • the importance of electronic commerce for SMEs.
In addition, Ministers had a dialogue with representatives of the business sector on the outcome of their meetings and on how the private sector could benefit from the APEC process.
2. Ministers took note of the report of the SME PLG on its activities and welcomed the decision of the APEC Senior Officials to extend the mandate of the SME PLG for another two years. The mandate was extended with the understanding that decisions on the PLG's future focus and mandate may result from the current review of APEC management process. Ministers also noted the on-going activities under various APEC fora, both public and private, as presented by the APEC Secretariat.
3. Ministers noted the progress on the implementation of the seventeen approved projects which have significant impact on capacity building of the public and private sectors to provide high quality information and services to SMEs and to improve their capacity to adopt new technology and penetrate new markets. To date 7 projects have been completed and the remaining 10 are at various stages of implementation.
4. Ministers further endorsed the following three new project proposals prioritised by the PLG SMEs, while acknowledging that future project proposals must take into consideration existing financial resources of APEC:-
  • A Strategy for Internationalisation of SMEs in Asia-Pacific Area: Lessons from Empirical Study on Korea and other APEC Member Economies
  • Ministers recommended the funding of this project be shared by the APEC Secretariat and the Republic of Korea
    Training and Certification for Small Business Counsellors - Phase III
  • Ministers recognised the importance of this project for all APEC economies and stressed on the need to manage the project efficiently.
  • Electronic Commerce Impact Study for SMEs
    Ministers agreed that in order to avoid duplication, the SME PLG will coordinate with the Telecommunications Working Group and the E-Commerce Task Force on the implementation of this project.
5. Ministers welcomed the report on best practices for disseminating information to SMEs. Ministers acknowledged that there is no single best way to deliver information to SMEs and encouraged giving priority to the development of effective information management for SMEs. Ministers stressed that it is crucial that SMEs be informed of all APEC initiatives to enable SMEs to benefit from such activities.
6. Ministers emphasised the importance for the SME PLG to ensure that APEC projects build on work of other APEC fora and benefit a majority of member economies. Ministers agreed that implementation of future projects should not necessarily be constrained by the resource availability in APEC. Member economies are encouraged to contribute the balance required for the implementation of approved projects.
Integrated Plan of Action for SME Development (SPAN)
7. Ministers considered the proposed Integrated Plan of Action for SME Development (SPAN) which serves as a set of broad guidelines for SME development in individual economies. The SPAN builds on the Framework of SME activities approved by Ministers in 1997. Ministers recognised that SPAN provided a convenient reference point for review of initiatives, programmes and regulatory frameworks to promote the development of SMEs and to plan future action at the individual economy level and collaborative efforts at the APEC level. Ministers emphasised the importance of focusing the SME work programme on key issues which affect SME development, and on sharing best-practice responses to these issues.
8. Ministers emphasised that SPAN, besides focusing on enterprise development, should also promote the development of new entrepreneurs including technopreneurs. In this regard, there is a need to demarcate between enterprise and entrepreneurial development.
9. Ministers further requested the SME PLG to collaborate with other international organisations to ensure that APEC perspectives are reflected in the work of such organisations, and with other APEC fora to ensure that such perspectives are developed in a coordinated and efficient manner.
10. Ministers commended the inclusion of micro enterprises and women entrepreneurs as an integral part of SPAN. Ministers agreed that SPAN should also include environmental considerations. Ministers recognised that environmental friendly and cost effective technology should be accessible to SMEs.
11. In endorsing the SPAN, Ministers acknowledged that it is not intended to be prescriptive and that adoption would be on a voluntary basis. Ministers stressed the importance of private sector participation in contributing to and carrying out the objectives of SPAN. Ministers asked the PLG SME to compile information on SME programmes and services in member economies to be appended to the SPAN.
12. The SPAN will be presented to the Ministerial Meeting and Leaders in November 1998.
 
Electronic Commerce and SMEs
13. Ministers recognised the importance and benefits of electronic commerce for SMEs. Ministers exchanged information on efforts undertaken by their respective economies in promoting the use of electronic commerce.
14. Ministers reaffirmed the leading role of the business sector in the development of electronic commerce and the role of the market in advancing the expansion of electronic commerce throughout the APEC region. Ministers reaffirmed the need for specific programmes to facilitate and promote the wider use of electronic commerce by SMEs. Ministers also recognised the need for setting-up appropriate information infrastructure to ensure business access to electronic networks.
15. Ministers noted the work programme of the APEC Electronic Commerce Task Force, the various APEC fora and ABAC on electronic commerce including the year 2000 (Y2K) problem, a major issue that needs to be addressed.
16. Ministers directed the SME PLG to work closely with the relevant APEC fora with the view to further develop capacity building initiatives and to assist SMEs in the use of electronic commerce. The APEC Secretariat was asked to compile a list of electronic commerce hub and network service providers available in APEC economies.
Addressing the Impact of Regional Financial Instability on SMEs within the APEC Region
17. Ministers noted that the Asian financial crisis has affected other economies outside the region. Ministers expressed concern that, if not addressed urgently, the global contagion effect that is evident now will exacerbate.
18. Ministers noted the work undertaken by Finance Ministers and other APEC fora to overcome the crisis. Ministers strongly endorsed APEC Financial Ministers' decisions to:
  • share knowledge and experiences on approaches to financial market regulations
  • consider establishing a global system of multilateral surveillance of national financial sector supervisory and regulatory systems
  • develop immediate measures to support SMEs and strengthen social safely nets in affected economies
19. Ministers emphasised that APEC Finance Ministers should develop the necessary securities and financial market regulatory framework as soon as possible.
20. Ministers agreed that proposals pertaining to measures, to address the financial crisis discussed at this Meeting, be conveyed to Financial Ministers.
21. Ministers also noted that reforms have been taken by individual economies to strengthen financial institutions and economic governance at the domestic level. Ministers stressed that it is important to continue with the liberalisation process and that the present financial turmoil should not deter progress in this regard. Ministers also stressed the importance of APEC economies taking measures either individually or collectively to prevent a future recurrence of the crisis.
22. Ministers encouraged the adoption of specific measures to address the impact of the crisis on SMEs. These could include:
  • Ensuring the availability of trade financing by exports credit agencies
  • Expansion of industrial supply and subcontracting business cooperation
  • Better risk assessment capabilities in relation to credits for SMEs
  • Dissemination of information on opportunities to build better business linkages for trade and investment among SMEs
  • Establishment of an interactive business matching web sites.
23. Ministers directed the SME PLG to work closely with other APEC fora to assist SMEs to overcome their difficulties as a result of the financial crisis.
Dialogue with the Business Sector
24. Ministers took note of the report by the Pacific Economic Cooperation Council (PECC) and commend its efforts to support the APEC SME PLG.
25. Ministers welcomed the briefing by the representatives of the various private sector groups on their recent meetings. Ministers noted the importance of greater private sector involvement in APEC and called upon the private sector groups to ensure that the initiatives and programmes contribute to the growth and development of SMEs. Recognising the special needs of SMEs, Ministers welcomed the SME Business Forum's proposal to establish an ongoing SME Task Force to foster closer public/private sector SME dialogue.
26. Ministers welcomed the Declaration of the 1998 Women Leaders' Network Meeting and took note of their recommendations. Ministers emphasised the importance of eliminating barriers to the full participation and contribution of women to our respective economies: and noted the establishment of the confederation of Women's Business Councils in APEC economies ad a catalyst to facilitate and enhance business networking and partnerships among women entrepreneurs.
27. Ministers commended the APEC Export Credit Agencies and Export Financing Institutes Working Group on SME Exporters Support for their commitment to working with commercial lenders and international financial institutions to enhance trade financing, risk sharing and co-insurance opportunities to improve credits risks of SME exporters and augment financing availability. Ministers also noted the Working Group's focus towards simplification of documentation and improvement of services to SMEs by means of electronic communication.
28. Minister's welcomed the recommendations made by the APEC Business Advisory Council (ABAC) especially on initiatives that would accelerate the recovery of the SME sector.
29. Ministers took note of the report of the Young Entrepreneurs' Organisation (YEO) and their proposal to create the Young Entrepreneur Business Award and the formation of the Young Entrepreneurs' Advisory Council (YEAC).
30. Ministers welcomed the suggestion from the Business Forum on the establishment of the SME Task Force and noted that its participation in the activities of the PLG SME will be subject to the APEC rules on non-member participation. The PLG will follow up on this and other recommendations of the business organisations.
Next Ministerial Meeting
31. Ministers welcomed New Zealand's offer to host the next Ministerial Meeting in Christchurch in April 1999.
32. Ministers thanked the Chair for her guidance in chairing the Meeting and Malaysia for the warm hospitality extended for the duration of the meeting.