Small businesses can grow with no protection, Lee says

JAKARTA (JP): Singapore Deputy Prime Minister B.G. Lee said yesterday that small- and medium-scale enterprises (SMEs) are able to grow in the absence of government protection.

Lee said that SMEs can grow in tandem with the rest of an open economy if they are progressively upgraded and assisted to adopt to new economic realities, without the government having to resort to direct protectionism.

"Even though the productivity of SMEs and the volume of their exports may be lower than the modern sector, SMEs still form an indispensable part of Singapore's economy and society," Lee told the 21st International Small Business Congress.

The three-day congress, officially opened by President Soeharto yesterday, is attended by over 700 participants from 38 countries. Other speakers included a number of Indonesian ministers and a dozen economists from noted international agencies.

Lee said the success of his country in developing small business resulted from intensive support from the Singaporean government's three development agencies, the National Productivity Board (NPB), Singapore Institute of Standards and Industrial Research and Economic Development Board (EDB).

The NPB, an agency designed to promote productivity, has helped the retail sector upgrade training programs and form business groupings, he said.

Lee said that the research agency provides SMEs with access to technology while the EDB helps them on a sectoral basis such as providing finance schemes, he said.

He added that such approaches have enabled small businesses in Singapore to grow with no special protection from the government.

"Sustainable forms of North-South co-operation in promoting SMEs are likely those contracted by mutually consenting parties from the private sector, encouraged by the governments' support, following market forces rather than running counter to them," Lee said in his paper titled "The Role of SMEs in Sustainable Development: North-South Cooperation."

The paper describes how Singapore has promoted SMEs while relying on MNCs to provide investments, jobs and linkage with markets throughout the world.(hen)