12th Small and Medium Enterprise Ministerial Meeting

Mr. Chairman,
The Honorable Ministers,
Distinguished Delegates,

At the outset, I have to express my deep sympathy to the victims of the recent tragic event caused by the hurricane in Southern part of the United States.

I would like to express my deep gratitude to Dr. KIM Sung-jin, the Administrator of the Korean SMBA and the Chairman of this Meeting, and his team for their ardent efforts to make this meeting of SME Ministers a great success.

We cannot emphasize too much the importance of the SME sector to the social and economic development of people in our region. We all know that SMEs are a major engine of economic growth. SMEs are particularly significant to APEC, because SMEs represent more than 95% of all enterprises in the APEC region, and provide over 60% of the private sector employments.

This meeting is particularly salient when we consider the challenges currently facing SMEs in an increasingly competitive business environment: To name a few of them, the last decade has shown a very low rate of growth for SMEs in the Asia-Pacific; Difficulties faced by small businesses have been compounded by structural, technical and financial imbalances between developed and developing economies; Despite improved adoption of SME-supportive policies in the APEC Region, there still remain areas where policy approaches differ significantly between economies or where SME friendly policies in some economies lag behind others.

Considering these challenges, I commend the themes of the Meeting quite relevant, as innovation serve as the key to the development of SMEs.

SMEs operations cut across almost all APEC areas of activity and participants in the APEC process have been working to overcome many of the challenges faced by SMEs. The APEC Secretariat has tabled document number 2005/SMEMM/008 listing a number of SME related activities undertaken by other APEC fora in 2005. I will highlight some features of these activities:

Before this Meeting, we had two Ministerials this year alone. They were the Meeting of APEC Ministers Responsible for Trade and the APEC Ministerial Meeting on the Telecommunications and Information Industry.

At the Trade Ministers' Meeting on Jeju Island in June, Ministers highlighted the importance of SMEs and micro-enterprises for ensuring economic growth in the APEC region. At this meeting, Ministers drew attention to the link between SMEs and APEC's work on areas such as intellectual property rights, trade facilitation, transparency, anti-corruption and the strengthening economic legal infrastructure. These areas are just as relevant to SMEs as they are to larger businesses and it is hoped that greater awareness of these issues and increased capacity building measures will enable smaller enterprises to be more competitive.

Trade ministers also instructed APEC officials to undertake initiatives that help SMEs and micro enterprises to have a grater presence in the formal economy. They highlighted the need to increase the technical capabilities of the people who operate SMEs and micro enterprises so that they are able to benefit from global economic opportunities and change.

APEC Ministers responsible for the Telecommunications and Information Industry met in Lima, Peru, in June, and issued a statement that is relevant to a number of SME interests. Most notable was the call by Ministers for continued work to overcome the digital divide in our region.

Increasingly SMEs and micro enterprises have seen the advantages provided by using online resources in their businesses. This includes using the Internet for locating and ordering supplies for their business needs, while SMEs are also increasingly able to sell their products and services online.

Telecommunications Ministers welcomed the release of information that revealed there has been a doubling of the number of people with Internet access in our region since 2000. They also called for continued efforts for the region to reach the goal set by Leaders of tripling Internet access in the APEC region by the end of 2010.

Looking more broadly, there are a number of SME related activities that are taking place in the fora and sectoral areas of the APEC process. I will provide you with a brief summary of these.

The SOM Committee on Economic and Technical Cooperation, or ESC, has approved an assessment program to strengthen the process of launching initiatives to meet directives from Leaders' and Ministers. This program will include an assessment of the implementation of past directives by Ministers. The ESC is also organizing the second APEC Roundtable with International Financial Institutions (IFI) on ECOTECH in September in Gyongju, in Korea. The dialogue will center on areas of capacity building for SME and micro enterprise development and trade facilitation.

Turning to the works by working groups: To assist small farming communities the APEC Agricultural Technical Cooperation Working Group has initiated projects to promote the development and transfer of agricultural technologies to SMEs. The Energy Working Group is undertaking a number of initiatives to promote the benefits of new and renewable energy technologies for SMEs. The Fisheries and Marine Resources Conservation Working Groups are now preparing for the Second APEC Oceans-Related Ministerial Meeting in Bali on September 16 and 17 that will cover a number of issues relating to small fisheries and other marine businesses. In addition, a number of Working Groups such as HRD (Human Resource Development) Working Group, IPEG (Intellectual Property Expert Group) and MRC (Marine Resource conservation) WG have engaged in SME related activities.

These SME related activities are a sample of APEC efforts currently underway to strengthen SME and Micro-Enterprises in the Asia-Pacific.

Improving policy tools and resources that support SMEs and Micro Enterprises is essential for the overall health of our regional economy. There are many ways that APEC is working to build the capacity and skill levels of small business people and this meeting will make another significant contribution to these activities. APEC fora look forward to the directions that will come form this Meeting to advance efforts to assist our smaller businesses.

This SME Ministerial is packed with important issues. Among others, I attach great importance to the significance of "Daegu Initiative on SME Innovation Action Plan", as this draft action plan is a set of activities with concrete milestones to improve the SME business environment for innovation by 2020.

Before closing, I would like to commend the excellent work of the SME Working Group under the able leadership of its Lead shepherd, Director General Chun DaeYeul. This working group has undertaken a number of new initiatives, carried out projects and worked together with other fora including the APEC Business Advisory Council to produce valuable policy recommendations.

Finally, Mr. Chairman, I congratulate you on your superb leadership in the preparation of this important meeting and wish you all the best and good luck.

APEC Secretariat will continue to provide secretarial services for the preparation of SME related Meetings.

Thank you.