Mr Lee Yi Shyan at the Inaugural ASEM SME Ministerial Meeting in Beijing, China

Speech by Mr Lee Yi Shyan, Minister of State, Ministry of Trade and Industry at the Inaugural AsEm SME Ministerial Meeting on Tuesday, 30 October 2007, at the great hall of the people, Beijing, china ASEM MM Sub-Theme: “Creating sound service policy and supporting environment for SMEs”

Mr Ma Kai, Chairman of the National Development and Reform Commission and Chairman of the ASEM SME Ministerial Meeting

Fellow Ministers

Ladies and Gentlemen

Introduction

On behalf of my delegation, let me first thank Chairman Ma Kai and his officials for their warm hospitality and excellent organization of this inaugural event.

SMEs are an important pillar of Singapore’s economy, as they are in other ASEM countries represented here. In Singapore, 99 per cent of enterprises are SMEs. They employ 56 per cent of the workforce, and contribute to 42 per cent of value added. They are also a key source of innovation that injects vibrancy into our enterprise ecosystem. We therefore recognize the need to have a sound SME policy to create a conducive environment for SMEs to form and grow.

Creating a pro-business environment

We do not shield our SMEs from competition. Instead, we provide an environment where they can compete, thrive and prosper. An environment that makes it easy for them to do business in Singapore.

We have invested extensively in our infrastructure to benefit our businesses. Besides industrial estates, our investments into roads, ports and airports have given both large and small enterprises access to excellent connectivity. We also have a network of free trade agreements (FTAs) and mutual recognition agreements (MRAs) to help our enterprises serve other markets. Furthermore, Singapore promotes a pro-enterprise regulatory environment and facilitates SMEs’ access to financing and to markets.

Private-Public collaborations

Government policies have a huge impact on entrepreneurship. Business regulations and compliance procedures designed for large businesses can be too onerous for SMEs, stifling entrepreneurship and creativity. Hence, an overriding challenge of government is to change the mindsets of its regulators, and also the banks, to be pro-entrepreneurship.

This is a big challenge, and difficult to achieve from within. We have therefore engaged the private sector on this journey.

Pro-enterprise regulatory environment

Singapore established the Pro-enterprise Panel in 2000, to actively solicit feedback from businesses on rules and regulations that hinder business and stifle entrepreneurship. The Panel comprises business leaders and senior civil servants, to review these suggestions to ensure rules and regulations remain relevant and supportive of a pro-business environment. Over the past seven years, the Panel has reviewed over 1,700 suggestions, and accepted more than half of these for implementation.

The Action Community for Entrepreneurship is a private-sector led movement to promote entrepreneurship in Singapore. It conducts an annual survey of businesses and ranks government regulatory agencies according to how pro-enterprise they are.

To help SMEs navigate government rules, Singapore launched the Enterprize One initiative, which facilitates online application of government licenses. Today, 30% of government licenses can be applied online, covering the licensing needs of 80% of our start-ups.

Access to Financing

We adopt a similar private-public sector partnership approach in improving SMEs’ access to financing. The Singapore government works with financial institutions to catalyze new financing solutions for SMEs. Our efforts are beginning to bear fruit. Banks have taken their own initiatives to introduce innovative SME banking products over the past few years, including credit cards and unsecured loans for SMEs. Today, SMEs account for 35% of the total business lending in Singapore.

Access to Markets

To help our SMEs better access the global markets, the Singapore government will continue to expand Singapore’s economic space, through our network of FTAs. FTAs give our companies a competitive advantage through the reduction of tariffs as well as non-tariff barriers. Last year, our FTAs achieved close to half a billion worth of tariff savings.

Conclusion

Overall, Singapore has done well in creating a pro-enterprise environment . We were recently ranked top by the World Bank for the “ease of doing business”.

Our pro-enterprise environment benefits Singapore as well as non-Singapore SMEs. We welcome SMEs to set up in Singapore and use Singapore as a base to grow internationally.

Singapore looks forward to working with the ASEM community towards a pro-SME environment across Asia and Europe.

Thank you.