ISLAMABAD, Dec 8: The Islamabad Chambers of Commerce and Industry (ICCI) has urged the World Bank to provide support for the development of small and medium enterprises (SMEs) in the country.

The demand was made by the ICCI president, Zubair Ahmad Malik, while talking to a four-member World Bank evaluation team, which visited the chambers here on Monday.

The World Bank Mission for Pakistan Country Assistance Evaluation, consisting of Lily Chu, Geoffrey Fox, Richard Stern and Brenda Manuel, is on a visit to seek private sector’s views on the World Bank’s current lending of over $1 billion to Pakistan as of July 2002.

“The SMEs, which provide employment to 80 per cent of our population and are the back-bone of industrial development, need greater attention for advancement,” the ICCI office-bearers told the World Bank officials.

They said the SMEs sector progress was hampered by the high rate of interest (between 12 and 16 per cent) charged by the banks on loans and lack of modernization of plants and upgradation of skilled labour.

The high cost of carrying out business in Pakistan and high power tariff are the factors which retard industrial development. Pakistan’s power tariff is the highest among the South Asian countries and several industrial units have been closed down. The Water and Power Development Authority complains that it lacks the financial resources needed to carry out major infrastructural improvements in its installations. This results in high power tariff and line losses, the ICCI office-bearers said.

Poor governance and bureaucratic irritants are the other important factors responsible for inadequate flow of foreign investment, they added.

They told the bank officials that Pakistan, despite making more advancement than other low-income countries, failed to achieve social progress commensurate with its economic growth. Health and education are the too most important sectors which should be allocated much higher percentage of resources by the World Bank and the government, they said.