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Mr. Seetharaman gave his view on role of small and medium-sized enterprises (SMEs) on economies. He said "As a central pillar in the world economy, (SMEs) play a critical role in innovation, advancement and sustainable development worldwide. In today's increasingly globalised world, SMEs around the world have to unprecedentedly compete globally. They are both the most dynamic and the most vulnerable constituent in the global economy. The 21st century belongs to the SMEs"
Mr. Seetharaman highlighted the relevance of SMEs on national and Global competitveness. "National level Competitiveness is considered by all countries to be a prerequisite for maintaining high levels of income and employment. When a nation loses its competitiveness, this is reflected in its deteriorating welfare conditions rather than elimination from the market. We see today many countries struggling to manage its competitiveness and thereby run the risk of deteriorating welfare conditions of its people. One of the most important indicators of competitiveness is export competitiveness. If countries are to strengthen competitiveness, they will have to support programmes that are necessary for strengthening productive capacity at small- and medium-sized enterprises level. SME promotion should be one of the key areas for governments to remove unemployment issues."
Mr. Seetharaman gave his insights on areas where SMEs can improve its competitveness. He stated that "Public-private dialogues, access to Business development services (BDS), access to Finance and technology are the key areas which SMEs need to focus. The quality of public-private working relationship between the public and private sectors might even be a competitive advantage for a country in its own right BDS interventions are specifically aimed at helping small enterprises to overcome market imperfections and inadequate access to technology, as well as to operate more competitively and with greater efficiency in domestic and global markets. Traditionally SMEs had difficulty in obtaining formal credit or equity.
In recent years leading commercial banks in developed countries have been particularly successful in servicing the SME market. Technology development can be done mainly through clustering and inter-firm cooperation or business linkages."
Mr. Seetharaman gave his outlook on Global and regional trends in SMEs. He stated "Small and medium enterprises (SMEs) are expected to contribute 22 % to India's Gross Domestic Product (GDP) by 2012.China’s financial institutions increased lending to small businesses in the first half of 2011 by 18.2% YOY to $3.1 trillion. In Australia there are over 1.2 million SMEs representing over 96% of all business and 33% of GDP. SMEs act as a Foundation of Japanese Industry accounting for over 99% of all businesses in Japan On average 80% of the GCC region’s business and employment market is made up of Small and Medium enterprises (SMEs).Bank loans to SMEs accounted for only 2 percent of total lending in Gulf Arab countries. SMEs in Saudi Arabia represent almost 93 percent of total enterprises and account for about 24.7 percent of total employment. Kuwait and Saudi Arabia are planning to establish authorities to promote SMEs"
Mr. Seetharaman mentioned the current trends in Qatar for SMEs business. He stated "Enterprise Qatar, an early initiative linked to QNV 2030, will provide a focal point for stimulating services for small and medium-size enterprises and support diversification. It will direct its energy towards knowledge-intensive businesses, focusing particularly on developing entrepreneurial skills among young Qatari men and women. It will be the SME sector’s representative within Government and ensure that key issues are heard and supported."
Mr. Seetharaman highlighted the current trends in Qatar for SMEs lending. He stated "Qatari banks face unique challenges on SMEs in relation to collaterals and for financing start up SMEs. Qatar development Bank has actively supported SMEs both through direct and indirect lending. Qatari banks have tied up with Qatar development bank to promote "Al Dhammeen" a Credit Guarantee program introduced by Qatar Development Bank (QDB) to finance SMEs in Qatar."
Mr. Seetharaman highlighted the current scenario for long term fund raising by SMEs "Capital markets are giving platform to enable SME players raise capital. In London we have AIM- London exchange which is the international market for smaller growing companies. NYSE Alternext was created by NYSE Euro next to meet the needs of small and mid-sized companies seeking simplified access to the stock market In this year Bombay Stock Exchange (BSE) and NSE it has been granted an 'in-principle' approval by the capital market watchdog Sebi to launch an exchange exclusively for small and medium enterprises (SMEs). Qatar Exchange, in association with Qatar Development Bank, Enterprise Qatar and Silatech, is creating a junior bourse for small and medium enterprises (SMEs) in a move that will give a substantial lift to the cash-starved sector. The accounting standards frameworks are also aligned to address issues and challenges of SMEs."
In his concluding remarks, Mr. Seetharaman said that "In the coming years SMEs will play a significant role to improve national and global competitiveness"
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