Governments 'must tap SMEs' global potential'
Manama, September 1, 2013
The failure of many small and medium enterprises (SMEs) to develop international trade opportunities is a major challenge for governments and business owners, said a body of leading financial experts.
The Association of Chartered Certified Accountants (ACCA) also called upon governments, international institutions and business associations to work together to have a better understanding of the part played by SMEs in global supply chains and encourage their activity.
The association has published a paper "Tapping into SME international potential" outlining the essential measures to enable them to enjoy more success.
The paper, issued by ACCA's Global Forum for SMEs, makes recommendations for increasing their presence in international trade, reported the Gulf Daily News, our sister publication.
It calls on governments and policy-makers to recognise that the internationalisation of SMEs is not only about export, but also takes the form of import, foreign direct investment, international sub-contracting and technical co-operation, it stated.
It says that policies and business support networks need to reflect this.
The paper also calls on governments to work together to remove barriers to cross-border trade to enable small firms to access international markets.
"While there is a common misconception that international trade is only for larger businesses, the reality is that many SMEs, including those in the Middle East, are successful in cross-border activity," said ACCA's Global Forum for SMEs chairman Mark Gold.
"However, many feel excluded from the opportunities that export and import can bring, which is why we have developed this paper calling on governments, policy-makers, financial institutions and advisers to think small first to enable SMEs to think big," he added.
"The importance of the SME sector in Bahrain is underlined by its contribution to the private sector employment and achieving a sustainable growth for the economy," KPMG in Bahrain partner and head of middle markets Harish Gopinath said.
"Like in other GCC countries, the Bahrain government is also providing innovative and vital stimulus to the country's fast emerging sector to boost their skills, capacity and their competitiveness both locally and regionally.
"The principal industry sectors of SMEs in Bahrain are trading followed by manufacturing, construction and services.
"Innovation within the SME sector is seen as vital to boost the country's exports," he added.
Governments should co-ordinate their efforts to create infrastructures relating to standards, intellectual property rights, financial market, dispute resolution and regulation to enhance global trade and SME participation in it, the paper says.
There is also a need for governments to focus on the domestic business environment and look at tariffs and other potential barriers.
There is also a need for SMEs to make better use of advisers, such as accountants.
ACCA, for example, has a global network of members who could make those connections.
Research shows that the banks' specialist export products are heavily underused by SMEs, possibly because they do not meet their needs, the report stated.
With banks not always being good at cascading information on the niche products to all managers and branches, both governments and financial institutions need to ensure that the export finance offered is relevant to SMEs, as well as affordable.-TradeArabia News Service