MINISTER of Tourism, Industry and Commerce, Mr. Manniram Prashad has asserted that Small and Medium Enterprises (SMEs) contribute significantly to the economic development of a country, especially in terms of job creation.

He made this comment during his address at the opening session for the presentation of the Guyana’s SMEs Strategy last Friday at the Cara Lodge, Georgetown.

“They are perceived as the economic force of a nation and as such, must be able to provide high quality products and services to access regional and international markets,” he charged.

The Minister said that this initiative is being undertaken by the Pan-Commonwealth SME Information, Communication and Technology (ICT) Competitiveness Development Programme, not only in Guyana but in two other Caribbean countries–Barbados and St Vincent and the Grenadines.

Prashad outlining some of the objectives of the SME Strategy Development Programme said it provides assistance through training and development in facilitating the SME sector working together including the use of appropriate ICT applications.

He said also another objective is to develop effective strategies and roadmaps for the three client countries into the area of Small and Medium Enterprise development which may subsequently be integrated in the country’s economic development SME policy and activities.

He noted that the specified objectives are part of the mandate of the Commonwealth Ministerial Group meeting on Small States held in December 2003.

According to him, the global trading system of which we are apart of is redefining business in Guyana and other developing countries hence to be more competitive, our business must be able to respond to more demanding market.

“It therefore means, that small and medium enterprises in our country need to be efficient, innovative and proactive in their business practices,” he urged.

He also pointed out that Guyana’s rising competitiveness challenge has cushioned the need for a competitiveness strategy.

Prashad said that the executive summary of the Guyana’s National Competitiveness Strategy document, a public/private partnership initiative, has outlined clearly our position for it to succeed in the global market place.

The minister also pointed out that for Guyana, the terms of reference for the project is to provide assessment and analysis of the SME sector, develop a SME strategy, facilitate a stakeholder consultation programme, a strategy dissemination programme and submit a detailed report including the output of the assignment.

“There is no doubt that small businesses are an effective vehicle for the development of the national economy which contributes to the reduction of poverty. Small businesses could also claim to be the world’s biggest businesses since it is estimated that more than 95 percent of the world’s business are small to medium sized,” Prashad emphasised.

“In Guyana, small businesses represent about three-quarter of the total business activities and make a substantial contribution to the generation of employment and income,” he informed.

He offered that SMEs are extremely important hence every effort must be made to strengthen their competitiveness by facilitating their involvement in industry, national and regional standardization activities which will in turn bring economic growth and development of SMEs.

Prashad also observed that research has proven that the implementation of a quality management system is one of the key solutions to help streamline the sector and many businesses started as small, medium or micro-enterprises have today developed into large entities due to the implementation of enhanced quality control mechanisms.

The minister commented that the encouragement and development of small business growth has been a major concern of both governmental and non-governmental organisations in many developing countries.

He noted that some of the challenges that SMEs experience include limited ability to absorb high transaction costs, lack of access to capital markets and lack of lobbying capacity and as a result, various national and regional initiatives are being taken to promote SMEs development around the world.

He commended the initiative by the Commonwealth Secretariat and all the relevant agencies and encouraged the stakeholders to play their role in addressing the recommendations outlined in the document.

The minister assured that the government will continue to lobby for financial support for the successful implementation of the strategy.