Abstract:
Pakistan's economy is an economy of SME. Policies in the past have given a general
perspective, direction and defining broad parameters of activity within the macroeconomic
framework, but efforts have focused on the large enterprises, neglecting SME which are at the
heart of our economy.
Our SME suffer from a variety of weaknesses which have constrained their ability to adjust to
the economic liberalization measures introduced and to take full advantage of rapidly
expanding markets of the world. But SME importance and contribution in the economic activity
suggests that there is a significant potential to enhance their growth through appropriate
regulations and promotion.
While SME are being mentioned in some of our socio-economic strategies and policy
documents, measures are not sufficiently specified and prioritized for us to be able to speak of
any coherent SME policy or approach. The SME Sector Development Program seeks to
improve this situation by inviting all concerned stakeholders to draft Pakistan's future SME
policy.
SME promotion is an important issue for many government departments and central offices.
However, there is an existing lack of coordination and regular information exchange
mechanism among institutions which constrains their collective ability to deliver in the SME
development process.
The responsibility for facilitating SME policy development lies with SMEDA, attached to the
Ministry of Industry and Production. One of the major reasons for the lack of coordination is
that SMEDA has not been provided with a mechanism to initiate, coordinate, monitor, and
evaluate initiatives of SME development outside of its own scope of activities.
Therefore, cross-departmental and stakeholder consultations, resulting in the preparation of our
national SME policy are our key to success. A network of institutions stimulating the growth of
SME is also being proposed.
The issues highlighted in this paper give a retrospective view of things while giving a current
picture of the SME business environment in Pakistan. There are issues we may only solve in the
long term and which therefore are beyond our current scope. And there are issues we may solve
in the short to medium term. These issues should become the focus of our SME policy. Short to
medium-term issues revolve around three major topics:
