In discussing the current situation with regard to policies to promote the economic development of Small and Medium Enterprises SMEs in the South Asian region,
April 4, 2005 (Press Release) --
1. Actual Situation
In discussing the current situation with regard to policies to promote the economic development of Small and Medium Enterprises SMEs in the South Asian region, we found that the differences between countries were as great as the similarities across the region. For example, the policies of countries such as New Zealand and Korea were directed at encouraging SMEs to export, while those of countries such as Cambodia were directed at encouraging foreign investment in domestic SMEs. Nonetheless, there were some important similarities in government policy across the region. Governments were implementing policies that sought to address similar problems faced by SMEs in each country. Although the definition, form, and productive orientation of SMEs were different in each country, the problems faced were often the same. These problems included access to finance and credit; training and human resource development; access to technology; assistance with research and development; the impact of government regulation (compliance costs); the impact of government commitments in the WTO (especially for developing countries); limited information on possible markets and clients; weaknesses in transportation and infrastructure; and the impact of external factors such as the broader economic climate. Governments were attempting to address these problems within the constraints of tight national budgets.
The accelerated globalisation process and trade liberalisation-taking place in the international economy provides many challenges and opportunities for South Asian countries. In this context, SME participation and growth will be critical to South Asin’s future growth and development. SMEs represent a very important share of economic activity in the region and also are a significant employer of the labour force. Specific problems include access to and cost of credit; the technological divide in the region; lack of skills among workers to use technology to their advantage; access to capital; government red tape and the need to promote transparency; and the unpredictability of the economic environment; among others. Continue Part II
In discussing the current situation with regard to policies to promote the economic development of Small and Medium Enterprises SMEs in the South Asian region, we found that the differences between countries were as great as the similarities across the region. For example, the policies of countries such as New Zealand and Korea were directed at encouraging SMEs to export, while those of countries such as Cambodia were directed at encouraging foreign investment in domestic SMEs. Nonetheless, there were some important similarities in government policy across the region. Governments were implementing policies that sought to address similar problems faced by SMEs in each country. Although the definition, form, and productive orientation of SMEs were different in each country, the problems faced were often the same. These problems included access to finance and credit; training and human resource development; access to technology; assistance with research and development; the impact of government regulation (compliance costs); the impact of government commitments in the WTO (especially for developing countries); limited information on possible markets and clients; weaknesses in transportation and infrastructure; and the impact of external factors such as the broader economic climate. Governments were attempting to address these problems within the constraints of tight national budgets.
The accelerated globalisation process and trade liberalisation-taking place in the international economy provides many challenges and opportunities for South Asian countries. In this context, SME participation and growth will be critical to South Asin’s future growth and development. SMEs represent a very important share of economic activity in the region and also are a significant employer of the labour force. Specific problems include access to and cost of credit; the technological divide in the region; lack of skills among workers to use technology to their advantage; access to capital; government red tape and the need to promote transparency; and the unpredictability of the economic environment; among others. Continue Part II
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