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| Monday, 9 February 2004 |
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Financial constraint a continuous stumbling block of SMI sector Despite many innovative state interventions, bilateral and multilateral donor assistance, country's Small and Medium term Industry (SMI) sector is severely handicapped by financial and economic barriers, a recent research study by Industrial Services Bureau (ISB) stated. Lack of credit to many industrialists has surpassed all other constraints such as managerial, organizational, technical, information and marketing. Though this is not a new finding, this fact was empirically tested and proved by research, the study stated. One of the outcomes of the phase two of the above project was the identification of barriers for the promotion of energy efficient and environmentally sound technology in four industrial sectors - desiccated coconut, tea, brick and tile and ceramic of four participating countries, Sri Lanka, Philippines, India, China and Vietnam. The research was under the purview of an Asian Regional Research Project on energy, environment and climate interrelations coordinated by the Asian Institute of Technology of Bangkok. Swedish International Development Cooperation Agency (SIDA) sponsored it. Though these barriers are both sector and country specific, in order to facilitate cross-country comparisons, a common set of barriers were identified. One of the main objectives of this research project is to make policy recommendations. However, as barriers are numerous, they need to be identified and dealt, the study said. Therefore, one of the activities of phase three of this project, which is now operational, is to prioritise barriers identified in phase two. As priorities are sector specific and respondent dependent, it is rather difficult to analyse manually and hence it was decided to use a widely accepted computer software known as Analytical Hierarchy Process (AHP) for this purpose, this is also recongnised as a good management tool for decision-making. Though the interest and the perceptions of these groups; are quite diverse, the outcome of their responses was that the financial and economic barriers are the most significant of all. Given below is the list of 20 barriers prioritised, and most significant five are either financial or economic. High initial capital cost on energy efficient (EE) and environmentally friendly technology, (EFTs) difficult access to funds, increased cost of production due to environmentally friendly projects, (EFP) tendency to invest only on short-term projects and poor financial gain from EFTs. Among the other barriers are market uncertainties and less demand for green products keeps away from EE and EFP implementation, difficulty and lack of knowledge to gain external technical support, limited service providers on EE and EFPs, management is concerned about cost increase due to implementation of EFPs, limited in-house technical expertise, management is comfortable with the existing technologies, lack of awareness of management on EE and EFTs, higher priorities on production than EE and EFTs. ISB believes that this research findings will be an eye opener for policy makers to look for more effective and novel means of providing the accesss to necessary finance. Its Director Gamini Senanayake said that attempts made by the Energy Conservation Fund of the Power and Energy Ministry to set up a guarantee fund is a progressive step in the right direction. |
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