13th APEC Small and Medium Enterprise Ministerial Meeting

Your Excellency Mr. Vo Hong Phuc, Chair of the 13th APEC SME Ministerial Meeting,
Honourable Ministers,
Distinguished guests,
Ladies and gentlemen,

1. Recognising the great importance of SMEs and Micro Enterprises (MEs) for socio-economic development in the region, at their meetings in Korea last November, Leaders and Ministers agreed to develop a private sector agenda. This has the aim of creating an enabling environment for small businesses to improve their competitiveness in the marketplace, while at the same time, promoting innovation as the main driving force in creating dynamic SMEs and MEs.
2. This agenda has since been implemented by APEC Senior Officials with additional input from other APEC fora. This included an "Ease of Doing Business" Symposium on Private Sector Development organized by Canada and New Zealand on the margins of the second ABAC meeting of the year in Montreal. This Symposium concluded that there exists a strong positive link between the quality of an economy's domestic regulations and its sustained economic performance. Delegates agreed that effective and market-friendly regulation is particularly important for SMEs, and that according to the World Bank's report on "Doing Business", APEC is faring well in comparison with other regions of the world. The Symposium warned, however, that APEC must pay continual attention to its regulatory performance to remain competitive.
3. The outcomes of this Symposium served as the basis of the "APEC Work-plan on Private Sector Development" that has since been endorsed by the SOM and will now be managed by the SME Working Group. The centerpiece of this work-plan is a series of capacity building workshops to be held by the APEC host economy each year from 2007 to 2010. The first workshop on "Starting a Business" will be hosted by Australia on the margins of the SME Working Group and Ministerial Meetings in Hobart in March 2007. The themes for the following two workshops are "Obtaining Business Licenses" during Peru 2008 and "Access to Capital" for Singapore 2009. The fourth theme will be selected in collaboration with Japan and in consideration of progress made in the years between then and now.
4. At their meeting in November last year, APEC Ministers also called for additional APEC activities to be developed that promote international trade for SMEs and MEs. Ministers agreed that many of these businesses had high export potential but lacked formal channels to export their products and services. Smaller businesses also face difficulties when confronted with impediments to trade, particularly behind the border barriers, as they usually do not have the financial capacity to overcome these problems. Ministers have called for these problems to be dealt with and for continuing efforts in areas such as improving access to formal sector finances, particularly for MEs.
5. The call by Leaders last year for APEC to create a stronger environment for promoting the activities of SMEs and MEs, has also seen APEC expanding its activities in areas such as improving small business understanding of intellectual property rights issues. IPR issue plays an important role for all businesses regardless of size, and are a key element in innovation. Increasingly, small business is realizing the hidden value of this often untapped wealth. However the problem for many SMEs and MEs is that they feel that the integration of IP concerns into their businesses may be complicated and expensive ventures. APEC is working with Member Economies to develop possibilities for future cooperation on IPR issues for smaller businesses. An "APEC Workshop on Intellectual Property for Small and Medium-Sized Enterprises and Micro-Enterprises" was held in February 2006 in Ha Noi. Organized by the APEC IPR Experts Group, this marked an important milestone in the discussion of IP issues relating to SMEs. 
6. In the area of dealing with corruption, SMEs are particularly vulnerable. While larger businesses have the resources to defend their businesses from threats of corruption, SMEs and MEs often do not have the time, knowledge of government systems, connections and other resources to deal with corrupt official or companies. The APEC Anti-Corruption Task Force has undertaken a number of initiatives that strengthen the capacity of small businesses and clarify the options open to them if confronted with corruption. It must be stated though that while APEC is building capacity to increase technical knowledge and promote the greater use of information technology, these will not in themselves reduce corruption. As such APEC is combining this knowledge with improvements to public sector performance, by enhancing competent and clean political and managerial leadership and strong civil society, and increasing news media involvement in exposing corruption.
7. Since the last meeting of SME Ministers in Korea, APEC has held a number of sectoral ministerial meetings. These include two meetings of APEC Finance Ministers, a meeting of APEC Ministers Responsible for Trade, a meeting of APEC Ministers on Avian and Influenza Pandemic, and a Ministerial Meeting on Oceans.

• To create a truly enabling environment for the development of SMEs and MEs through the improvement of legal, policy, macro-economic infrastructure and tackling all other "behind-the-border" problems;
• To provide more favourable conditions for SME and ME activities through diverse programs of human resources development, financing, and technical assistance;
• To encourage and facilitate the business activities of SMEs and MEs through creating more access to international markets, enhancing export opportunities, and effectively reducing transaction costs;
• To strengthen the international competitiveness of SMEs and MEs through further promotion of capacity building and innovation activities.