SMEs should play key role - PM

Rasika SOMARATHNA

Prime Minister Ratnasiri Wickramanayaka yesterday said that Small and Medium size Enterprises (SMEs) should play a key role in promoting grassroots economic growth which in turn would contribute to supplement equitable sustainable development in the country.

The Premier was addressing a function held at the Presidential Secretariat organized by the National Chamber of Commerce of Sri Lanka at which they handed over cash grants to 70 identified budding SME entrepreneurs to further their enterprises.

The cash grants were given through the Business Promotion Fund established by the NCCSL under their SME development program. The effort is being funded by the Government of the Netherlands.

Cash grants to chosen SME entrepreneurs were distributed in the presence of Export Development and International Trade Minister, Prof. G.L. Pieris, Industries Development Minister Kumara Welgama, the Ambassador of the Government of the Netherlands Leoni Cuelenaere, NCCSL officials and the Netherlands Embassy officials.

The Premier also said that the NCCSL had been able to encourage the growth of profitable and sustainable SMEs even in the remotest of areas of the country.

This has not only enhanced the SME’s contribution to the Gross Domestic Product but also has contributed to employment generation in rural areas, he said.

Citing details presented by a NCCSL official regarding their contribution to the growth of the SME sector, the Premier said that through this he had come to know that their support for SMEs did not stop at cash grant level but extended to other areas such as technical support, helping SMEs to adjust to changing market conditions and helping reduce their vulnerability.

While emphasizing that SMEs had a pivotal role to play in the country’s future economic growth, the Premier also said that today the world economic order is changing.

While some long-standing western economic super powers are on the decline, nations such as India, China and Russia are showing signs of taking over using innovative means.

Sri Lanka too should take a cue from these emerging trends for the betterment of the country’s economy, he said.

The Premier also brought to the notice of the officials the reluctance of transporters of goods such as vegetables, fruits and other perishables to adopt proper packaging methods which he said was spoiling around 40 percent of the goods transported.

He urged authorities to come out with a viable mechanism to arrest the problem. The Premier on the occasion also thanked the Netherlands Government for coming forward to fund the effort.

The NCCSL during the event pointed out that their contribution to supplement the local economy using innovative means and by way of encouraging emerging enterprises since their inception in 1948 had paid rich dividends.

According to them presently 500 corporations and 3,500 SMEs are under their wing which are linked through 20 branches throughout the country.

Under the present effort the Government of the Netherlands has granted $ 2 million to help SMEs. According to the NCCSL they have already distributed Rs.134 million to 703 deserving SMEs upto now.

Also according to them the results so far has been very encouraging with many SMEs emerging as profit making viable business entities with the help of additional funding.

SMEs have become more important in the economic matrixes seen in recent years across the globe through increased government interventions and legislation aimed at nurturing these enterprises as engines of economic growth and employment creation. It is also estimated that SMEs constitute over 90 percent of total enterprises in most economies with a high rate of employment growth.

They are also a vehicle for increased industrial production and exports. In Japan it is estimated that SME’s contribute 99 per cent for the GDP. Also in the USA and EU countries it is estimated that SMEs contribute over 60 percent in employment, 40-60 percent to GDP and 30-60 percent to exports.

Asian nations such as India, Indonesia, China, Malaysia, Japan, and South Korea also have thriving SMEs sectors contributing between 70-90 percent in employment and an estimated 40 percent for the GDP.