Attachment 4: Proceedings

Welcoming Remarks by Mr. Omar Halim, Executive Director of NAM CSSTC

Recognising  that technical cooperation among developing countries can be an important catalyst for South-South cooperation, the Heads of State and Government of the Non-Aligned Movement (NAM) endorsed the establishment of the NAM Centre for South-South Technical Cooperation (NAM CSTC) during their eleventh Summit, held at Cartagena, Colombia, in 1995. Meanwhile, at the tenth NAM Summit, held at Jakarta in 1992, NAM member countries has decided that NAM CSSTC programmes should focus on integrated and equitable people-centred development.  At their twelfth NAM Summit in Durban in 1998, the Heads of State and government declared that the eradication of poverty, through sustained and accelerated economic growth, should become a major objective of NAM member countries during the twenty-first century. Consequently, the NAM CSSTC will give the highest priority to projects that facilitate the exchange of information and experience; promote technical cooperation among NAM member countries and assist, wherever possible, these countries in their efforts to reduce or eliminate poverty.

Together with the rest of the world, NAM member countries - the majority of which are among the poorest members of the international community – have to face the impact of globalization and the rapid advanced of technology. These phenomena provide both opportunities and challenges for developing countries. Furthermore, the small and medium enterprises (SMEs) comprise the vast majority of enterprises, and provide employment opportunities to the overwhelming proportion of the labour force, in developing countries.

At this juncture, therefore, NAM CSSTC feels that there is a strong rationale to organize an expert group meeting to discuss the role of SMEs in people-centred development and the  potential of information and communication technology in increasing the efficincy of production and preparedness of SMEs in facing the rapid process of globalization.

The meeting, which is jointly organized by NAM CSSTC and the ministry of Industry and Primary Resources of Brunei Darussalam and financed by the government of Brunei Darussalam, was perceived with this objective in mind. It is further hoped that, this meeting could be followed by future projects that could assist interested SMEs in NAM member countries to advance their capacity in participating and competing in the international markets. In this way, a broader-based development process in NAM member countries will have been advanced.

With the encouragement of Ministry of Industry and Primary Resources, Government of Brunei Darussalam, NAM CSSTC is convinced that the meeting will meet its objectives.

Finally, on behalf of the Board of Directors of the NAM CSST, I should like to express our deep appreciation to the Government of Brunei Darussalam for their unrelenting assistance and support in rendering this project to a success.

Opening Remarks by Dato Paduka Abdul Rahman Haji Ibrahim, Permanent Secretary Ministry of Industry and Primary Resources, Brunei Darussalam

Global competitiveness is an important issue that many countries and businesses are grappling with as the new economy becomes pervasive everyday. The small and medium enterprises of many developing countries and especially those in the Non-Aligned Movement must certainly address the issues of business and investment competitiveness in order that they would survive in the local and global markets.

It is therefore my distinct and privilege honour to greet you on this Workshop on NAM SMEs with the theme “Promoting Sustainable Growth and Competitiveness of NAM’S SMEs IN GLOBALISED MERKET THROUGH E-COMMERCE” organized jointly by the NAM Centre for South-South Technical Cooperation and the Ministry of Industry and Primary Resources. I believe this workshop is very timely and relevant to help NAM’s SMEs find some common grounds and propose relevant action measures that would help them turn in potentials of e-commerce into golden business opportunities.

The workshop today will give the participants not only the chance to listen to the distinguished experts but also the rare opportunity to share experience and common concerns with one another. With the active involvement of everyone, the objectives of this workshop would certainly be realized.

It is my sincere hope that the partnership between the various government agencies and leaders of SMEs from the Non-Aligned Movement will contribute to workable e-commerce policies and programmes that would truly benefit the SMEs in our respective countries.

I would like to especially acknowledge the NAM Centre for South-South Technical Cooperation for co-sponsoring this seminar with our ministry and the organizing committee for the successful holding of this workshop.

Let me wish all of you every success in your delibertations.

The Rapporteurs’ Notes 

Paper 1 – E-Commerce and its Role in SME development
   

The main points of Mr. Ang’s presentation:

§         Defining e-commerce and its place in the scheme of e-business, its direct benefits in terms of cost reduction, improving efficiency and market outreach for all enterprises especially SMEs.

§         The dot.com meltdown proved that business performance is still based on sound business principles.

§         There is a tremendous opportunities for e-commerce as the number of internet users worldwide will continue to expand.

§         SMEs need to prepare themselves to take on the opportunities that has arisen from the changes brought about by internet technologies. Cost of internet access and infrastructure is bound to decline and this will benefit SMEs.

§         Role of government is to produce legislation conducive to growth of e-commerce that is consistent internationally.

§         There are relatively cheap ready-made packages offered by e-commerce service providers that can jumpstart SMEs into e-commerce, such as Alibaba and MyOHQ.

§         Other ideas that encourage the use of e-commerce by SMEs-

o       Customising industry specific portals to suit SMEs in different trades will allow for building sizeable trading communities

o       Strengthen the security and authentication system to encourage trust in the transaction

o       Government should go on line to encourage SMEs and other clients to go on line. Considers government as a key driver for the economy to go on line.

Paper 2. Successful Models on SMEs Access to Infrastructure

The main points of Mr. Tallae’s presentation are as follows:

§         Governments must recognize the important role of e-commerce in promoting trade and investment and should be committed in supporting its adoption, utilization and development through appropriate fiscal and legal policies.

§         Pakistan’s experience in this area includes:

o       Strengthening government R & D infrastructure – manpower, scholarships, libraries, laboratories, schools, universities

o       Enhancing Linkage between government R & D and private sector industries

o       Investments in venture capital

o       Creation of Technology Cluster Councils consisting of private and public sector that provide services to SMEs such as training, product development, consultancy and quality improvement.

o       Creation of a Standards and Quality Control Authority and National Accreditation Council for certification purposes

§         His ideas on mechanisms that could enhance NAM co-operation includes the formation of an expert’s committee to draft project documents that would address the various issues related to promoting the rapid adoption and use of e-commerce by NAM countries.

Paper 3. Vietnam’s SMEs in the Globalised Market: Access to Finance and Infrastructure

Some key points need to be highlighted from the paper presented by Nyugen Thi Thien of Vietnam 

1.      Vietnam potential to Advance in the globalize market

·                    Low labour cost.

·                    Huge local markets for theirs products.

·                    Well-skilled workers.

·                    Increased access to new IT

·                    Well established professional and skill training system

2.      Vietnam’s SMEs-Difficulties and constraints in accessing to infrastructures.

·                    Social/political perceptions towards privates’ enterprises are not positive that results in discrimination against them.

·                    Unstable business environment that increases risks.

·                    Poor business infrastructure and market support to SMEs.

·                    Increasing competition pressure from larger firms and outside.

3.       Strategies and programme

+  Macro economic policies:

·        Terminating the discrimination against private sector in accessing to resources as compared to SOEs.

·        Removing provisions and regulations that restrict SMEs in expanding their business, access to finance and infrastructures.

+ Institutional measures.

·  Promoting of the development of EPZ

·  Development of infrastructure services

·  Centre of trade information

+ Competitiveness promotion:

·     Policy measures relating to inputs include tax/tariff exemption/reduction; Decreasing input prices of raw materials and brought-in services, including business support services; reducing capital costs/interest rates; providing more access to credit support; removing monopoly of public services providers.

·    Output related policy measures include Credit support for production for export and export business; Support to insurance transportation of goods.

·    Reducing tariff on imported information technology/equipment.

         + Quality improvement promotion policy measures:

Skill training and knowledge improvement for workers, managers through improvement of training facilities, trainers and hence the training quality. Introduction of new developments and technologies, including information technologies.

Some important points need to be highlighted are in the areas of SMEs barriers to Growth, access to infrastructures issues and Development mechanism for NAM co-operations.
 

Paper 4 UNCITRAL’s Model E-Commerce Law – Issues for Adoption and Formulation

§         Pg Kasmirhan referred the participants to the following documents:

o       UNCITRAL Model Law on Electronic Commerce with Guide to Enactment (1996 with additional article adopted in 1998)

o       ASEAN Electronic Commerce Legislation Comparison Table (dated 1 Dec 2000)

o       E-ASEAN Reference Framework for Electronic Commerce Legal Infrastructure (ASEAN Secretariat 2001)

§         He discussed in lengths some of the major issues related to the various legal issues on electronic transactions and the recognition that each countries must adhere to their own legal framework but at the same time conform to some international standards when dealing with cross border transactions.

§         He indicated that ASEAN countries have advanced its efforts to harmonise their respective e-commerce law to that of UNCITRAL in terms of scope, definition of electronic signature/digital signature, definition of electronic record/data messages, effect of electronic signatures and others.

Paper 5 – Striking a Balance between Governance and Business Growth – Experiences and Best Practices

Ms Mapp’s salient points are as follows:

§         Government’s challenge on e-commerce is the creation of structural changes that will increase the competitiveness of the country.

§         The experience of a group of rural women in Panama, which made use of information and communication technologies to improve their operations and market their craft industry world wide, indicates that leadership, human capacity building activities and perseverance are important ingredients in the success of their business venture.

§         The legislation in many governments around the world have not kept up with the rapid changes in the evolving world of virtual business. Many are now embarking on initiatives that aim to strike a balance between governance and business growth.

§         Cited the experience of Panama in formulating its Law No. 43 issued on 31 July 31 2001, that define and regulate the following:

o       electronic document and signatures

o       entities that certifies electronic commerce and the interchange of documents

§         The purpose of such law is to minimize the risk of fraud in electronic transactions and promote business growth.
   

Paper 6. Kedai Online: Putting Information Technology To Work For Cooperative’s Retail & Distribution Networks

The speaker, Mr. Dharma Setiawan Basri, the President Director of PT. Jaring Kedai Nusantara, Indonesia emphasized several key strategic issues that critically important for consideration in establishing a successful on-line trading transactions over the networks especially with particular references to cooperative’s retail and distribution systems.

Some of the key learning points shared with fellow members and participants of the workshop are:

      Evaluating pros and cons of e-commerce through the experiences of others

      Determining KSFs leading to the success of e-commerce in retail and wholesale sectors

      Focusing on the strategic intent of the business i.e. vision/mission, goals/objectives and strategies to be applied

      Knowing the players/clients in the Digital Market Place

      Identifying the major elements of marketing particularly on:

q       Market opportunity to be exploited

q       Service and Product to be offered

q       Value proposition

q       Strategic alliances

The relevance of the above was emphasized through Indonesian experience on KEDAI Online Business Model that strategically designed for Consumer Package Goods Industry of Indonesia.

Other important points that also being emphasized and needs further considerations are:

q       Logistic cost is very dominant

q       Payment system. The norms of using US Dollars as a currency exchange terms for international transactions is suggested for the NAMs members to review. A Gold-based Currency System is proposed as an alternative to the existing one.

Paper 7. Issues And Strategies of Implementing E-Commerce HRD Programmes

The important points from Dr Boris’s papers are:

§         Briefly discussed globalisation by citing its positive and negative impacts for developing countries, the reasons behind them and the social risks

§         The main issues of globalisation that impacts on relationships between countries and peoples:

o       North – South Polarisation and Center periphery

o       Intensification of antagonisms between globalising economic bases and state sovereignity

o       Aggravation of conflict between multinational companies and local firms

o       Slow development of political and legal superstructures within globalising system.

§         The main resources of the new economy that is driven by information technologies are knowledge, human potential and internet.

§         After reiterating the importance of e-commerce in the new economy, he indicated that human resource is a key factor in e – business. Personnel should be mobile, flexible, competent, hardworking and efficient.

§         Cited initiatives of some countries in the areas of access to telecommunication infrastructures, e-management, information security, human investments, conditions for e-business development (tax incentives, etc.)

§         Concluded presentation by posing several questions that participants can discuss in the workshop sessions
 

Paper 8. Competitiveness and Use Of Internet And E-Commerce In The Peruvian SMEs – Focusing on Human Resources

Ms Silivia’s main points are:

§         After explaining briefly the characteristics of Peruvian SMEs and profile of internet use in Peru, the main barriers to internet and e-commerce use in Peru was discussed.

o       Economic barriers

o       Social barriers

o       Cultural barriers including lack of e-skill

o       Technological barriers

§         Peru outlined seven areas where SMEs will require support to be competitive in the new economy and discussed briefly each point and what initiatives the public and private sector, either separately or collaboratively, had taken to promote or improve the use of e-commerce in Peru. These ranges from introducing banking services to the creation of a Commission for the enlargement of Internet Use and an Institute of Electronic Commerce.

§         The main points of the private sector’s proposal to improve internet access and use of e-commerce were categorized according tp stakeholders.

o       Government

o       Unions

o       Companies

§         Cited Peru’s efforts in the area of improving Human Resource in ICT  as part of a US $ 43.7 million 5-year project called HUASCARAN. Part of the project will include the provision of around 11,000 PCs to several secondary schools in the urban areas of Peru.

§         Government’s support in the areas of access, regulatory environment, financing and education is important in the development of strategies and implementation of effective actions.
 

Paper 9. Small and Medium Scale Enterprises (SMEs) In Ghana and The Use Of E-Commerce In Fast Tracking Their Development -
Potential And Challenges

Ms Angela’s main points:

§         E-commerce may not be feasible for many SMEs in Ghana, but a few benefit from using e-commerce particularly those exploring niche or export markets. These high flyers need to be supported.

§         For the vast majority of SMEs who cannot afford the setup cost, intervention through ICT is by provision of more relevant and up to date information. Models for effective information delivery need to be explored.

§         Ghana’s policy to support SME development includes emphasis on science and technology, improving linkages between agriculture and manufacturing, better coordination among institutions providing SME support services, establishment of public-private companies to support development of private enterprises, encouraging foreign direct investments and international trade. These require an ICT framework that is being developed.

§         ICT utilization is increasing as electricity and phone line coverage also expands.

§         Utilisation of SMEs in Ghana is very limited, with lack of capital to purchase equipment as most critical limiting factor. Others constraints especially in the rural areas are poor communication links, electricity, lack of credit cards, transportation and relevance of information form remote sources.

§         Potential for ICT use by SMEs remains bright as government has recognized the important role of private sector as engine of economic growth and has instituted policies and programs that support SMEs. Some of these initiatives include

o       Support to formation of network or clusters of SMEs

o       UNECA/ECA initiative on prospects for implementation of e-commerce

o       Reform of school system to develop technical and productive skills to support industrial development.
 

Paper 10. Role Of E-Commerce In The Development Of Small And Medium Enterprises (SMEs) In Nepal

Main points:

§         Nepal also sees SMEs as an important player in poverty alleviation and enhancement of employment as they constitute around 98% of around 3,600 manufacturing establishments. The bulk of these SMEs are in the rural areas.

§         ISPs exist in Nepal, but internet utilization is mostly by private sector banks and financial institutions, NGOs. There are around 100,000 users (2001 estimates), but the level of penetration of e-commerce is almost non-existent, except for “pashmina” traders.

§         There are existing websites on handicraft products, but these needs to be further improved in terms of poor user interface, information, payment mechanism and export formalities.

§         The development of e-commerce and SMEs are constrained by the

o       Limited information particularly those related to marketing or expanding of market opportunities

o       Lack of managerial skills of owners, labour policies and laws that encourage the availability of competent employees and their retention by SMEs.

o       Policies or Programs that support the formation of strategic alliances, resource sharing, subcontracting arrangements between large and small companies; access to financing, cyber laws, taxation

o       Short supply of the telecommunication infrastructure to support IT requirements

§         Current efforts to improve the situation includes the formulation of IT policy that aims to put Nepal in the global IT map within the next 5 years.
   

Paper 11. Promoting Sustainable Growth And Competitiveness Of NAM’s SMEs In A Globalized Market Through E-Commerce : Burundi Case

Main points:

§         In 1986, Burundi’s government has instituted institutional, legislative as well as administrative measures that are aimed towards the development of the private sector as the cornerstone of development.

§         These measures have resulted in a slow but steady economic growth until 1992. This growth was dominated by primary products and not by the manufactured goods. Since the crisis of 1993, growth has declined particularly in the manufacturing sector.

§         SMEs in Burundi are faced by constraints which are interrelated or interconnected:

o       Weak domestic and regional market situation

o       High production cost factors (imported raw materials for manufacturing, unskilled local labour force, electricity, telecommunication)

o       Inadequate transport infrastructure and dependence on external exchanges as it is landlocked geographically

o       Limited access to finance or financial guarantees

o       High Duties and Social costs (risk to labour, old age or disability pension)

§         Prospects for Burundi remain high due to the effort of regional integration (Common Market for Eastern and Southern African Countries, COMESA).

§         Burundi realizes the benefits of internet technology and e-commerce in economic growth. It is upgrading its telecommunication infrastructure for better bandwidth, reliability and connectivity either through private sector investment in a liberalized telecommunication industry or with assistance from UNDP. The latter also includes HRD activities.

§         Recommendations that can contribute to development of internet include formulation of policies that promote training, affordable assess cost to service and reduction of duties on computer equipment, monitor the developments in e-commerce.
 

Paper 12. Uganda’s ICT Profile And An Emerging E-Commerce Network For SMEs 

Main points:

§         Liberalisation of the telecommunication sector has increased the telephone density in Uganda. Target is for all 52 districts of Uganda to have points of service by 2003.

§         A National ICT policy, which is being prepared, is expected to be completed by June 2002. Sector specific ICT policies are also being prepared.

§         Recognises the benefits of e-commerce in trade and industry growth and international aid agencies are helping Uganda create an environment for commerce to flourish

§         Recognises the role of Micro (ME) as well as Small Entrepreneurs (SE) in the socio economy of the country where they provide employment to around 10 % of its 24 million population.

§         Constraints faced by ME and SE include:

o       Lack of standardization and quality control

o       Lack of business skills and computer skills

o       Lack of access to credit as well as marketing

§         Constraints are being addressed by interventions by government in collaboration with international aid agencies, NGOs, public and private sectors.

§         One such initiative is the UIP, which is joint project between UNIDO and the government. It’s main objective is to build institutional capacities for the development of MSEs and investment promotion through technology and information networking in support od agro-based industrial development.

§         One of its subcomponent is the establishment of a commercial information network that will support MSMEs in their need for information. The Uganda Business Information Network was incorporated in September 2000 and is expected to be launched ib January 2002. A company whose shareholders include public/private sector is a profit making undertaking that is expected to be self-sustaining within 2 years of operation.

§         Indicated that Uganda’s UBINnet.com could be part of a NAM wide e-commerce network.
 

Paper 13. National Situation of Small and Medium Enterprises in Zambia and Their e-Commerce Readiness

Main points:

§         Support services for SMEs have evolved both in terms of form and substance since the mid 1970s. From an NGO run Village Industry Service Organisation, services to SMEs were taken over by a government body, the Small Industries Development Organisation (SIDO), which was established in 1982. This body had successes in its broad range of services to SMEs such as training, undertaking feasibility studies, business counseling, and marketing. To offer better services including financial support services to SMEs, SIDO was replaced by the Small Enterprises Development Board (SEBD) in 1996.

§         Zambia has 5 ISPs. While Zambia recognises the importance in national developments it is faced with several constraints which includes:

o       Absence of a national IT policy

o       High cost of access to internet and computer equipment

o       Low density of telephone connectivity

o       Security to handle on-line payments, very few people with credit cards.

o       Legal and Regulatory Environment needs to be strengthened.

o       Awareness and skills needs to be promoted.

§         Zambia’s priority is the development of a national IT policy that covers the whole range of issues and sectors in the socio-economy that includes e-commerce. Its current effort in e-commerce is for the establishment of a forum on e-commerce development and this is being spearheaded by the Ministry of Commerce, Trade and Industry.