SME sector:

Core segment of economic development in the country

Sanjeevi Jayasuriya

The Small and Medium Enterprises (SMEs) sector will be considered as the core segment of economic development in the country.

The country has a SME economy, where 70 percent of plantation sector, 85 percent of rubber, 100 percent of paddy and 90 percent of coconut are of small holdings. These SMEs need recognition, support and considerable synergy to integrate with the real economy, Treasury Secretary Dr P.B. Jayasundera said.

“SMEs are the central mechanism in the entire operation and this is the age of SMEs,” he said at the SME Sri Lanka Forum held on last week in Colombo.

Plans are under way to create 500 blue chip SMEs in the country. The banks are expected to set up an investment fund to support the SMEs in this endeavour. “The strength of the domestic economy and the back yard economy is equally important. Sri Lanka has recorded strong indicators in 2010 and will continue in coming years too. We need to position business to enable Sri Lanka to be the emerging market economy in Asia,” he said.

“Our skills levels are rising, Sri Lanka’s remittance economy will move much faster than the export economy. We can achieve over eight percent economic growth and realize US $ 4,000 per capita income.

“There is a policy shift with the blend of good policies rectifying the past mistakes. The new policy regime would result in greater flexibility and good governance. The decisions are made at the right time and they are sensible and meaningful. The policy regime has created the right environment to lead the country forward,” he said.

The country could consolidate as a middle income country by reaching $ 4,000 per capita income. The SMEs are needed to be provided with lending over seven years with reasonable interest rates. The banks should look at the business model when providing lending facilities and encourage the potential SMEs, Dr Jayasundera said.