peter pang : the role of smes in asian development statement by mr peter pang, deputy chief executive of the hong kong monetary authority and head of delegation, hong kong, china, at the 41st asian development bank annual meeting, madrid, 5 - 6 may 2008. * * * let me first thank the government of spain and the people of madrid for their warm hospitality. i welcome the successful conclusion of the adf x negotiations ahead of this meeting, providing timely and critical resources to the adb to further its work in poverty reduction in asia. the remarkable development of the region over the past decade has significantly improved the lives of its people. yet, eradicating poverty remains a huge challenge, and the rapid economic growth has brought about a new set of development issues. we therefore welcome the extensive review of the bank ’ s long - term strategic framework over the past two years to identify the new challenges faced by the region and the launch of strategy 2020 to guide the bank ’ s work in the next decade. i am glad to see that strategy 2020 correctly puts a greater focus on the sustainability aspects of growth as asia enters the next stage of development. among other priorities, i am also happy to note more emphasis being given to private sector development and private sector operations. enabling the private sector with firms investing, creating jobs and improving productivity is crucial to sustaining the long - term economic growth and expanding opportunities for the poor. in this regard, supporting the development of a vibrant small and medium enterprises ( smes ) sector will be of particular importance. smes play a vital role in the economic growth of developing countries, typically accounting for over 90 % of business establishments and about half or more of output and export shares. their entrepreneurship, flexibility and responsiveness to change are essential driving force of economic development. the employment opportunities they create improve the livelihood of thousands of millions of poor people. in many developing countries, and in fact in developed economies as well, smes account for as much as 70 % of the labor force. despite the important role of smes in the economy, their growth is often constrained by the lack of capital, among other impediments such as regulatory red tape. their small size, lack of credit ratings and the generally underdeveloped capital markets in the region deny smes access to bond and equity financing. banks are also reluctant to lend to smes or charge them a high interest rate, since smes usually do not have strong credit history and cannot provide substantial collateral.

are well aware that maintaining people ’ s trust in the ecb calls for tireless efforts on our side. facing challenging times, we have sought to enhance understanding of our decisions. for instance, since january 2015 the ecb has been publishing regular accounts of the governing council ’ s monetary policy discussions. as the exchanges and conversations we have in this room testify, this additional set of information enables you – and anyone who is interested in the conduct of monetary policy – to enhance scrutiny of the ecb ’ s policies. at the same time, this has provided us with greater opportunities to explain our decisions and demonstrate that we are acting in accordance with our democratic mandate. over the past few years, we have also stepped up our efforts to overcome the key communication challenges posed by the euro area structure, namely reaching out to citizens in 3 / 4 bis central bankers'speeches 19 countries, who naturally have different expectations regarding the ecb. we have thus enhanced our communication strategy, directly addressing a wider range of audiences. in addition to our institutional activities, my fellow executive board members and i have participated in about 180 events over the last two years, a quarter of them in centres of education. if i include think tanks, foundations, non - profit organisations and governmental bodies, we delivered more speeches to these fora than at the ecb and the ncbs. ecb staff members have complemented these efforts with a dedicated outreach programme aimed specifically at secondary schools and universities which goes into the functions and purpose of a central bank in an advanced economy, and also explains the financial crisis and the ecb ’ s role in alleviating its effects on the people of europe. we have covered similar ground in our expanded website, which now features videos, explainers and charts that describe complex issues in an accessible way. we have started using new tools, such as youtube and linkedin, as well as twitter, where we have almost 440, 000 followers. the european parliament, which represents eu citizens, is the key to fostering people ’ s understanding of and trust in ecb decisions. in this sense, it contributes to the effectiveness of our monetary policy. but your contribution, as parliamentarians, does not end here. you, as co - legislators, have a role to play in making sure that europe is well prepared if the risks i mentioned in my introduction were to materialise. we have seen that, far from damaging growth, a strong regulatory framework is essential in ensuring strong long - term economic performance.