Development policies for small and medium-sized enterprises are needed to help rebuild ravaged Asian economies, according to a United Nations Conference on Trade and Development (UNCTAD) report.
Many Asian governments have ignored the sector's potential by failing to encourage foreign direct investment (FDI), the report said.
'The Asian crisis has underscored the importance of sustaining foreign direct investment, secretary general of the International Chamber of Commerce Maria Livanos Cattaui said.
'These firms could be the new entrepreneurial engines of growth for Asia, and for other emerging markets of the world.' Recipients claim that foreign direct investments have spin-off advantages, such as helping to find joint-venture partners, broadening technological base and strengthening research.
Foreign direct investment into this sector in which workers typically number fewer than 500 people, accounts for about 10 per cent of all FDI into the Asia region.
Obstacles to increased volumes of funds include unfair competition, complex investment regulations and corruption.
