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Ensuring SMEs survive natural calamities [ 29-08-2012 ]

SMALL and medium enterprises (SMEs) play a crucial part in the Pacific Rim economies but their tenacity in the global production chain is threatened by natural disasters.

Taiwan has taken the lead in improving the "natural disaster resilience" of SMEs in the 21-member Asia Pacific Economic Cooperation (Apec) grouping which includes Malaysia, Japan, Indonesia, Australia and the US.

It has hosted a series of meetings under the multi-year project which will improve trade and investment and this included business continuity plans for SMEs when faced with disasters.

SMEs are particularly vulnerable in the global supply chain and this was seen in Japan and Thailand.

Japan's massive earthquake and Thailand's floods last year had affected the auto-parts, logistics and information and communication technology industries.

Dr Wayne Chen from the Taiwan Institute of Economic Research said Taiwan had proposed the Apec Start-up Accelerator initiative to create a better environment for start-ups and entrepreneurs in the region.

This was successfully endorsed by the SME ministerial meeting, he said in a briefing to visiting Apec journalists here recently.

Earlier this month, SME ministers who met at St Petersburg in Russia reaffirmed the need to address trade and investment barriers for SMES as well as micro enterprises (MEs), corruption which imposes high costs, protection of intellectual property rights and a common information resource to foster innovation development.

Apec leaders will meet in Vladivostok, Russia, on September 8 and 9.

"We see the need to engage developing economies to future start-up related capacity building activities in the region, and propose the ASA initiative so developing economies can benefit by implementing projects contributing to the ASA initiative to advance the growth of start-ups in the region," Chen said.

Food security has returned to the fore of concern as host Russia places it as a priority topic for the grouping's discussion this year and the 62 action plans which have come into play since 2010, including six from Taiwan.

The six include joint research on post harvest handling of crops, irrigation technology, marketing strategies for indigenous vegetables and ICT early warning signs to mitigate slope land disasters.

Dr Susan Chang, who is director general of the department of international affairs (convenor of Apec food emergency response mechanism), said a virtual cooperation is being earmarked where members pledge food support to those in need of food aid.

"Over the past 10 years, there were 400 natural disasters in the world, of which 60 per cent are in the Apec economies."

Like the numerous Apec economies prone to natural disasters, Taiwan is concerned with the effects of climate change on its produce.

For net agriculture importer Taiwan, agriculture competitiveness has become a priority as it fine-tunes its national policy to revitalise the rural agriculture sector and raise its self sufficiency level from the current 32 per cent.

Not only does the sub-tropic country have an ageing farming society which averages 63 years, but its economies of scale has to be relooked at too, especially the shrinking farm size over the years, said Chang.

The spike in oil prices and food commodity prices have become an additional burden to bear, given its sizeably large annual import packs of feed corn which total 4.5 million tonnes and another 2.5 million tonnes of soya.

Innovation is key to boost growth in all these economies and Taiwan, the 18th largest economy in the world, aims to further streamline its formalities so as to create a barrier-free trading environment.

For one, the Chinese Taipei Customs believes that the "ubiquitous economic and trade network plan" will bring a new dimension with the customs single window system project and cargo movement security project.

International traders benefit from the move to simplify Customs procedures which will lead to a barrier-free clearance environment.

As of end of last year, 14 members including Malaysia had developed their respective national single window system.

Its deputy Finance Minister and concurrent director general of Customs Hwang Ding-Fang said a Customs cooperation agreement was recently signed with mainland China.

"We believe it can enhance trade facilitation and security between both sides and, we hope to be able to cooperate with other Apec economies in this regard in the near future."

Taipei Customs has completed a port-to-port RFID (radio frequency identification) e-Seal pilot programme with Malaysia, as part of efforts to improve the interoperability of the international supply chain.

Digitalisation is an important aspect and one which Apec economies can be proud of, thanks to Taiwan's initiative almost a decade ago.

The Apec Digital Opportunity Centre has reached much support from the others and this has helped to bridge the digital divide.

By 2011, for instance, the project would have set up 89 centres in 10 PMEs or Partner Member Economies which include Malaysia and trained more than 270,000 people.

"We expect to have 100 centres by year-end," said Stanley Wang, who is the secretary-general, adding that disused cargo containers have been used as makeshift teaching centres.

Just as popular as its digital expertise is the Taiwanese healthcare policy ideas.

Apec members are jointly working on strengthening healthcare systems and a recent meeting at St Petersburg attracted a large number of experts, keen on building up their influenza vaccine-related competence.


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