LAHORE, March 16: The small and medium sectors of a country play major role in its economic progress as well as international competitiveness and OIC members should take effective measures to enhance the capabilities of SMEs.
This was the offshoot of speeches made at the opening of third meeting of the OIC Task Force on SMEs here on Tuesday. Industries and production secretary Javed Ashraf Hussain presided over the inaugural session as Federal Minister Liaquat Jatoi did not turn up.
The OIC consists of 57 countries with 1.4 billion people - or 23 per cent of world population - and a gross domestic income of around $1250 billion that is mere four per cent of the world. The per capita income in OIC countries is 1/6th of the world average.
In his presidential speech, Javed Ashraf Hussain said that importance of small and medium sector could not be underestimated in any economy. "Sustained development of SMEs requires clear and transparent commitment of government for the development of local small sector which is capable of adapting itself with the changed conditions and competing internationally."
He stated the SMEs constitute over 90 per cent of business and were responsible for generating more than 80 per cent of total non-farm based employment in Pakistan. The secretary said the OIC countries should focus on enhancing the competitiveness of small sector in a 'rapidly changing global market'.
"Efforts should be made to raise awareness on advantages and challenges of the new trade regimes. They must be assisted in developing in tandem with new business needs, warranting easy and affordable access to finance, addressing skill gaps, and adopting policies that will support and ensure their sustained development across the OIC world."
Islamic Chamber of Commerce and Industry (ICCI) secretary-general Aqeel Ahmed Al-Jassem said: "OIC Task Force must assist the cottage, small and medium sectors to further expand as well as grow.
"The final report of the ongoing meeting would be sent to the OIC secretariat after its approval by the ICCI executive. All the member countries and stakeholders would be contacted for taking appropriate measures, and making policies to implement the recommendations of the meeting".
Smeda CEO Shahab Khwaja pointed out that there had been "increasing awareness and recognition of the role played by small and medium sector in any economy". He said the task force must use the opportunity to propose and recommend concrete and feasible initiatives for strengthening the performance of the SMEs in its member countries.
"The development of a strong and dynamic industrial sector in Pakistan is one of the most important goals of the government. The SMEs have established their distinct position in varied types of production systems and have been getting immense recognition all over the world due to their role in the economic development," he said.
Mr Khwaja pointed out that a more recent phenomenon witnessed since the mid 1980s was the growing foreign direct investment by SMEs all over the world. "Leading Asian economies have maintained an inward FDI average above 11 per cent as a percentage of gross domestic capital formation during 1990-96 and most of it in the SME sector," he said.
"Now there is a greater need for an SME to be present abroad to tap opportunities through increased market and resource access in order to maintain competitiveness in a fairly dynamic global market economy," he said.
"FDI by the small and medium entreprizes compliments that which is done by large transnational corporations as a potential avenue for the transfer of productive resources and technology that can enhance the growth and competitiveness of OIC members. FDI by this sector has the potential to strengthen the SMEs at home as well as host countries," Mr Khwaja said.
He said the SME sector remained insufficiently tapped resource of investment in the OIC member countries. "There is no denying that carefully designed policies are needed to encourage investment in the SME sector."
