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Rather strange though it may sound, a news report has it that the Union of Small and Medium Enterprises (Unisame) had a meeting with the Citizen Police Liaison Committee (CPLC) Chief Sharafuddin Memon, the other day, with a view to evolving a foolproof system for the safety and security of small and medium enterprises (SMEs) in Karachi.
While complaining of discomfiture, victimisation and denial of their rights by the police, on the one hand, and harassment by anti-social elements, on the other, it is reported to have sought police protection for the SMEs functioning in different areas of the city. Seemingly frustrated by the official apathy to their plight, Unisame President, Zulfikar Thaver, is reported to have decided to approach CPLC for forging close co-ordination with it to resolve these problems. His assertion that SMEs, spread all over Karachi, needed a peaceful environment to carry on their business, will undoubtedly appeal to reason. Viewed in this perspective, positive will also appear to be the response of the CPLC chief in the matter.
For not only he assured them of full co-operation, but also suggested Unisame setting up complaint centres under the umbrella of the CPLC, making a beginning with a pilot project for liaison between Unisame members and itself. He is also stated to have urged them to work together with the CPLC to benefit from its expertise and crime-defeating management system.
Quite some effort has gone into big way promotion of the small and medium enterprises in the country ever since the development of the SME concept several years ago.
It will, however, be noted that, like in several earlier seemingly magnificent and impressive initiatives in economic development, the efforts made in that direction have turned out to be more ambitious than realistic.
As for the prospects of SMEs in Pakistan, it should become fairly discernible from the fact that they contribute 30 percent to the GDP, 80 percent to urban employment and 25 percent to exports, thereby, calling for the need of an all-pronged thrust to ensure a fair deal for them in meeting their genuine requirements.
However, notwithstanding their convergence largely in the informal economy and their financial predicament, SMEs have continued contributing significantly to the country's economic progress. It will, however, be noted that despite their tremendous growth potential, mostly due to entrepreneurial skill and experience of men running such units, this vital sector has remained beset with too many problems, particularly relating to easy access to both the old and the new financial institutions.
Of course, a number of measures have been adopted to address their financial predicament from numerous thrusts, including the State Bank's inducement to commercial banks to provide them with needed credit facilities, a great deal will still appear as remaining left to be desired.
For the fact remains that a large bulk of SMEs can hardly qualify for such facilities now thrown open to them due to their inability to meet the still too harsh requirements attached. Perhaps, one sure way of taking the SME sector out of its multi-faceted problem will be to pull it out of the informal economy in which it has remained trapped rather too long.
This can be done through the dual approach of easing taxation fears and provision of lower cost of credit they, generally, pay to traditional moneylenders. This is not to say that the government is necessarily averse to such ideas. For from all indications, efforts will appear to be on for a more imaginative and more determined efforts to address the situation in the longer run.
This, indeed, may be quite flattering in itself. However, while hoping for better days to dawn, it will be in the fitness of things, meanwhile, to focus other ground realities staring in the face of the SMEs, particularly, in a problem-ridden city like Karachi. Needless to point out, some of the problems the city SMEs happen to be confronted with are common to its entire industrial scene.
This, of course, has reference to the distressing problem that Unisame has now taken to the CPLC, seeking their help to resolve. For even medium and large industrial units located in the city's various industrial estates, have remained beset with extortionist activity of organised groups.
Viewed in this perspective of the overall lawlessness in Karachi, such a situation will appear to demanding special attention of the concerned authorities. Welcome, as such, will be the CPLC gesture, while also calling for indulgence of the City government in the effort too.

Copyright Business Recorder, 2004

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