Karachi, September 13, 2013 (PPI-OT): Being badly affected by the unfavourable situation prevailing in the Sindh province the Union of Small and Medium Enterprises (UNISAME) held an urgent meeting with Muslim Raza Rawjani Sindh provincial chief of the Small and Medium Enterprises Development Authority (SMEDA) at UNISAME house and brought to his notice the hardships of the sector and demanded immediate attention of the authority to the most pressing problem of law and order and also other major issues of energy, high cost of production, technological gap and lack of financing facilities.
President UNISME Zulfikar Thaver said the union is receiving daily complaints from SME members and SMEDA cannot remain passive to the issues and invited the immediate attention of the provincial chief to the poor law and order situation and increasing cases of kidnapping, illegal demands of monthly payments from gangsters, broad daylight robberies in factories and taking away of cargo at gun point. This is destroying the industries of the province and withholding further investments.
He said if this continues the SMEs will close their units.The articles and memorandum of the authority permit it to advocate the cause of the sector and SMEDA besides being a policy adviser to the government needs to keep an eye on the issues and suggest measures for removal of impediments.
Basically due to poor law and order the SMEs are unable to expand their business and the provincial governments need to provide protection squads to SME units in Industrial areas he suggested.
The union suggested the formation of an SME Liaison Committee (SME-LC) between the SMEs and the rangers as the police has proved to be ineffective and in fact promotes the payment of ransom. The union also recommended allowing private detective companies to work in the province in support of the law enforcing agencies.
The meeting also discussed the second most bothersome issue of energy and to overcome energy crisis the government needs to encourage alternate energy devices especially biomass in rural areas. Likewise Solar and wind energy needs wholehearted support of the government.
The other important aspects of SME promotion were also discussed and all participants agreed that the government needs to exempt farm inputs from duties and also alternate energy devices. The farm inputs have become so costly that the produce items have become costly and uncompetitive and exports of produce items has decreased. This is also reflecting on the agro based industries.
There is a technological gap. Pakistani SMEs are far behind others. and to promote and develope the sector it is very essential that the SMEs are allowed to have their own Chamber of Commerce, Export Promotion Bureau, SME Specific Bank, Venture Capital and Credit Guarantee Insurance Company.The SME policy needs to be implemented in letter and spirit.
SMEs need finance at affordable mark up.The EXIM Bank promised in the Trade Policy has been shelved. SMEs need Leasing facilities to enable them buy under pay as you earn scheme.
The SMEs cannot export to third world countries although the importers are very sound buyers but the Pakistani banks are not accepting LCs from banks of low rating of third world countries. Banks are also not accepting goods in transit and Bill of Ladings as collateral and are always demanding immoveable property. The concept of financing on the basis of cash flows has not really been accepted by our commercial banks.
The Trade Development Authority of Pakistan (TDAP) collects export development surcharge (EDS) from all exporters and in return the exporters get nothing specifically beneficial , the SME exporters have been demanding export house since a decade and although the draft was prepared and steering committee was formed nothing concrete has been done. The TDAP needs to be revamped on top priority basis.
The union committee members requested the provincial chief to take up the matter with the authority high command and the ministry of industries promptly for positive steps to facilitate the sector.
For more information, Contact:
Union of Small and Medium Enterprises (UNISAME)
75/1 3rd Commercial Street,
Phase IV, D.H.A., Karachi, Pakistan
Phones: + 92 35884225 and 6
Cell: + 92 300 8245307 and + 92 321 8245307
Fax: + 92 35380642