Asian SME Summit 2009 :

Economic turmoil brings opportunities- FCCISL Advisor

Ramani Kangaraarachchi

[At a glance]

* Crisis had a severe negative impact on SME sector

* Problems limit growth and expansion

* Geographical isolation prevent SMEs from exploiting market opportunities

The Asian SME Summit 2009 is taking place at a time of unprecedented global economic turmoil that has shaken the economies mostly Asian and some very severely. But it has also brought about new challenges and opportunities for the sector to become more dynamic and competitive, said Advisor to the Federation of Chambers of Commerce and Industry Sri Lanka (FCCISL) Dr. Wilbert Goonaratne. He was speaking at the Summit which was held from August 6-8 at the BMICH.

The theme of the Summit was “Public Private Partnership in SME Development through Capacity Building, Policy and Research”. Seven countries including Sri Lanka, India, Thailand, Philippines, Japan and Vietnam participated.

He said that the crisis has had a severe negative impact on the SME sector, especially in terms of employment livelihood and export earnings. As such new opportunities must be examined and identified more rigorously.

Dr.Goonaratne said that the Small and Medium Enterprises form one of the most important and critical sectors of the economies of Asian countries and in many countries, despite its importance.

It is confronted with an array of fairly well-known problems limiting their growth and expansion and sometimes its very survival.

These include poor access to and high cost of institutional finance, poor technology, shortage of skills, poor infrastructure and services as well as inadequate legal and regulatory support.

In addition, the small size of many SMEs and sometimes their geographical isolation prevent them from taking advantage of market opportunities, achieving scale economies and prevent internationalization of such functions as training, logistics, technology and innovation due to high fixed costs, he said.

Recalling the Dohar Declaration of 2006 which encouraged ACD member countries to share experiences and best practices to improve SME development, through capacity building among SME related agencies, he said within the broad objectives several sub objectives have been identified for discussion at the Summit.

Firstly, identify and propose new policy reforms and initiatives towards capacity building, financing, research development as well as innovative network opportunities among ACD member countries.

Secondly, propose more effective ways of strengthening PPP and the role of Government in SME development specially in a market economy to create a level playing field for SMEs.

Thirdly, propose appropriate mechanisms to share knowledge and information on effective policy tools and interventions in SME development among ACD countries.