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Draft SME Promotion Bill
On December 22,1998 The Cabinet approved in principle the draft SME Promotion bill,proposed by the Ministry of Industry. The bill is
expected to be submitted to the Parliament before the current session closes.


The draft bill features the following key instruments :-


SME Promotion Committee
Chaired by the Prime Minister, with Minister of Industry as vice-chairman, Ministers of Commerce, Agriculture and Finance as
committee members, and Director of a new "SME Promotion Office" as secretary to the committee.
Consists of 25 members, of whom at least 12 must be appointed from the private sector, including at least 3 regional SME entrepreneurs.
Key responsibilities include recommending "SME Promotion Plan" to the ministerial cabinet ; submitting "SME Status Report" to the cabinet
and the public ; recommending incentives, new laws, or legislative amendments to the authorized agencies ; supervising concerned agencies
on the implementation of the SME Promotion Action Plan.
With regard to incentives and legislative amendments, if the authorized agencies decline to carry out the committee's recommendations,
the committee chairman is empowered to make a final decision and issue orders accordingly.

SME Promotion Office
Has a status of a "special executive agency" (a semi-government, autonomous agency.)
Recommends definition of SMEs to the SME Promotion Committee.
Recommends target groups for promotion to the Committee.
Co-ordinates the formulation of "SME Promotion Action Plan".
Prepares "SME Status Report".
Manages the "SME Promotion Fund" in accordance with rules and regulations set by the Committee and the Office's Executive Committee.
Is empowered to carry out lending, investing, holding shares, and assisting SMEs financially.
Department of Industrial Promotion (DIP) will act on behalf of the Office during the interim period. SME Promotion Office Executive Committee
Chaired by the Permanent Secretary of Industry, with the Director of

SME Promotion Office as secretary to the executive committee.
Consists of 15 members, of whom at least 5 must be appointed from the private sector.
Oversees the Office's work plan, budget plan and administrative regulations.
Sets the policy, terms, conditions, regulations, and allocation of the SME Promotion Fund.

SME Promotion Fund
Sources of fund may include seed money and annual budget contribution from the government, earnings from service fees,
funds and other assets from domestic and foreign private sector, as well as foreign governments and international organizations.
The fund can be used to assist SMEs or groups of SMEs (financially ? directly ?), and to finance projects of government departments,
other government agencies, state enterprises, and private sector organizations, as approved under the SME Promotion Action Plan.
There is also provision for the fund to be used for other assistance related to the promotion of SMEs, as approved by the SME Promotion Committee.

SME Promotion Action Plan
Will cover the following areas / measures :-
(1) Financial support and assistance to SMEs.
(2) Establishment / development of capital market for SMEs.
(3) Development of entrepreneurs and SMEs personnel.
(4) Research, development and dissemination of modern technologies appropriate for SMEs, including adaptation to local / traditional know-how.
(5) Product development and product quality standard upgrading.
(6) Market promotion and marketing support ; domestic and global market expansion ; promotion of product image ; product design development ; packaging.
(7) Development of modern management practices, with emphasis on efficiency and transparency.
(8) Informational support ; promotion of the use of information technology.
(9) Promotion of linkages between SMEs and LEs.
(10) Promotion of association among SMEs for mutual assistance and joint business undertakings.
(11) Development of regional / rural / community-based SMEs.
(12) Promotion and strengthening of private sector organizations whose functions relate to the promotion and support of SMEs.
(13) Infrastructure for investment of SMEs.
(14) Incentives for promotion and redressing inherent disadvantage of SMEs.
(15) Promotion and technical support for energy and environmental conservation, and hygiene.
(16) Amendment of legislations and regulations which are obstacles or cost-burdens to SMEs.
(17) Promotion and support regarding intellectual property rights.
(18) Other promotional measures to encourage new SME establishments, to assist in the survival of existing SMEs and promote their
growth and competitiveness.

Agencies involved must submit progress report at least once a year.
Agencies responsible for information needed to facilitate planning, will be required to publish the necessary information.
SMEs and private-sector organizations may be required to report certain information, which will be stipulated under ministerial decree(s).

Incentives
SMEs or groups of SMEs may apply directly for assistance from the SME Promotion Fund.
The SME Promotion Committee will make recommendations to the authorized agencies regarding the appropriate forms of incentives,
the eligible target groups, the terms and conditions, and the applicable duration.

Supervision and Control
SMEs which misrepresented their status in order to gain eligibility for the incentives and promotion, may have their privileges revoked
(up to 5 years), as well as be punishable under the applicable laws.
SMEs which fail to provide the information required by law, may be ineligible for promotion.
Agencies which do not want to implement measures recommended by the SME Promotion Committee, must report their reasons
to the Committee within 15 days, but the Committee Chairman has the authority to make a final decision and issue orders to the
agencies accordingly.

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Source: Department of Industrial Promotion
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