The Hindu Business Line : `Strengthen role of small enterprises'

THE President of the SAARC Chamber of Commerce & Industry (SCCI), Mr M. Macky Hashim, on Wednesday indicated that the income gap between South Asian countries and the developed world would widen further unless steps are taken by the governments of these countries to build an environment more conducive to strengthening small enterprises (SME).

Addressing the inaugural session of the SAARC countries SSI Conference-2005 here, Mr Hashim said, "we cannot survive without the contribution of SMEs to the national economy and employment generation".

These enterprises usually comprised about 99 per cent of all enterprises, accounting for 50 per cent of manufacturing output and between 40 to 70 per cent of employment.

If the UN Millennium Development goals for poverty reduction are to be achieved, he said SME promotion must be added to the current menu of social policies and programmes that the developing countries are being urged to follow.

Referring to an UNIDO study, Mr Hashim said only 16 countries had so far upgraded their capabilities and industrial structure vis-a-vis technology-intensive products.

The rest are slipping behind in the global export race.

In most developing countries, he observed, SMEs are forced to stay in the informal economy by heavy administrative, regulatory and tax burdens.

In particular, SMEs in South Asia are facing a tough business environment.

It is in this context that the current SSI conference was expected to offer a chance to step up the SMEs' role.

Mr Hashim recommended that the governments in South Asian countries frame policies and a regulatory framework suitable to the requirement of SMEs.

Administrative procedures have to be simple while SMEs should be allowed easy access to finance at reasonable terms.

This apart, policies should be taken to encourage and promote women as well as young entrepreneurs in addition to protecting ethnic minority entrepreneurs.

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