The UAE Ministry of Economy will be the federal authority responsible for developing the small and medium business (SMB) sector in the UAE, following an official request from the Cabinet.

Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, said the Ministry is working a national plan to drive economic development by enhancing the role of SMEs (small and medium enterprises) and in coordination with concerned government departments in the UAE.

He was chairing the sixth meeting of the coordination and economic cooperation committee, which discussed the government’s outlook regarding SMEs and the Ministry's mandate in this regard.

Al Mansouri said that the Ministry has prepared a comprehensive proposal to develop the role SMEs in the UAE that will be shared with concerned parties.

The new proposal includes a very detailed analysis on the current status of SMEs and the challenges faced by the sector in the UAE. The proposal also includes the new suggested SME definition on the UAE level and a draft law on SMEs.

The new SME definition will be sent to parties concerned in the UAE before January 15 to study it and check its suitability for the needs of each emirate.

"The Ministry has studied and evaluated the status of SMEs in order to identify the challenges and opportunities in this vital sector,” Al Mansouri said.

“The Ministry also evaluated the experience of 28 countries in the fields of small and medium businesses. We are keen to coordinate efforts and exchange information with government departments in order to achieve best results and develop the performance of this vital sector.”

The previous meeting of the Ministerial Council for Services authorised the Ministry of Economy to finalise the draft law of SMEs.

The Ministry is currently exerting efforts to finalise the draft law to send it to local government SME institutions and Chambers of Commerce for their comments. It will then be presented at the cabinet in June 2010 for approval.

Al Mansouri said: “Our wise leadership is committed to strengthen the performance of the SMEs, which is a major contributor to the UAE’s GDP. The first UAE symposium dedicated for SMEs that was held in June 2009 and organized by the Ministry of Economy highlighted the directives of the government to develop the performance of the SMEs.”

SMEs encourage innovation and creativity, attract national labour force, benefit from local resources and attract foreign investments.

“We appreciate the support that from the UAE cabinet, Central Bank, Ministry of Finance and Ministry of Labour,” Al Mansouri continued.

“There are many challenges facing SMEs in the UAE including lack of training, financing, high operation cost, labour considerations, absence of marketing network to promote national products and procedural obstacles.

“The Ministry is working on tackling these challenges by developing SME projects all over the UAE. We will also work to facilitate procedures of registrations and financing, and to provide training programmes,” he concluded.

The Ministry is currently studying all options to finance SME projects and the required facilities to support SME owners from licensing fees and marketing their products.

The Ministry has already achieved progress in negotiating with many banks in the UAE and most of them showed interest to provide special facilities to support SME projects, said a statement. – TradeArabia News Service