Proposals for developing SMEs formulated - OIC task force meeting ends
By Our Reporter
LAHORE, March 18: The third meeting of OIC Task Force on Small and Medium Enterprises concluded here on Thursday after formulating four proposals for consideration and approval of the executive committee of the Islamic Chamber of Commerce and Industry.
Governor Khalid Maqbool said at the concluding session that the governments in OIC countries should protect the SMEs and create atmosphere conducive to their development by providing easy access to finance. The SMEs would require special attention of the governments for survival in the WTO regime as they were not capable of facing tough competition from bigger industrial units, he added.
He said textile, housing, health, agriculture, engineering and leather sectors had enormous potential for the creation of jobs through SME development. Textile sector alone could create three million jobs and increase exports from $2 billion to $7 billion per annum by the expansion of garment cutting, stitching and designing sectors.
Similarly, housing sector could also create thousands of jobs by developing 200,000 housing units every year if the government ensured provision of land and material at low rates. Leather sector exports could be increased from $700 million to $1 billion per annum by encouraging animal farming.
Governor Maqbool said a large number of jobs could also be created in the health sector by helping doctors set up clinics and fitness centres. Agriculture and engineering sectors had also enormous potential for new jobs.
He said SMEs in Gujrat, Sialkot and Gujranwala should be helped in installing effluent plants. He also stressed the need for a market survey of SMEs to provide them protection.
Islamic Chamber of Commerce and Industry secretary general Aqeel Al-Jassem said the SMEs provided employment to about 80 per cent labour force in Islamic countries but had limited access to finance and technology. SMEs constituted 90 per cent of manufacturing sector in Pakistan but had only 11 per cent share in the GDP.
He said women should also be encouraged in every sector, including the SMEs. OIC secretariat ambassador A. H. M. Muniruz Zaman stressed the need for formulation of an SME development policy regime in Islamic countries.
The Small and Medium Enterprise Development Authority (SMEDA) representative said of 2.4 million industrial units in Pakistan, 99.4 per cent were in micro and medium sectors.
RECOMMENDATIONS: The task force recommended setting up of a network to be called the OIC Network of SME Agencies (ONSA) to develop SMEs. It proposed that ONSA should be assigned the responsibility of reviewing, selecting and implementing SME development initiatives, including the development of an SME definition, coordinating exchange of experts, providing a platform for exchange of successful models, setting up of committees on SME sub-sectors, devising mechanism and channelling support for technology upgradation, marketing information and promotion of trade and joint ventures, development of an E-marketplace and network of private sector-led SME associations and organizing SME trade fairs.
The task force also recommended establishment of an SME fund. The fund could benefit from the experience of Small Enterprise Assistance Fund established in the US.
It suggested that the Islamic Development Bank should consider establishing windows for SMEs besides considering mobilization of capital in OIC member countries for establishment of SME financing instruments.
It also recommended establishment of technology and business incubators in selected countries to channelize innovations from developing to least developed countries and promote trade between Islamic countries by providing the desirous SMEs information and support for imports and exports. The costs of establishment of the incubators should be met by the host countries.
