South Asia needs to bailout SMEs amid Covid-19

• An online policy dialogue titled ‘keeping SMEs in Business in South Asia: Policy Responses, Lessons and Proposals’ organized by the SDPI.
• Protection of SMEs is also important from gender perspective as majority of the home-based work force comprises of women.
• the Government in Nepal, realizing the problems being faced by SMEs, is considering to incorporate long term monetary policies and incentives in the forthcoming annual budget.

ISLAMABAD: South Asian countries needed to bailout Small and Medium Enterprises (SMEs) for their economies and need to have a South Asia network on SMEs amid pandemic of Coronavirus, said economic experts of SAARC region.

Expressing their views at an online policy dialogue titled ‘keeping SMEs in Business in South Asia: Policy Responses, Lessons and Proposals’ organized by the Sustainable Development Policy Institute (SDPI), experts from Pakistan, India, Sri Lanka and Nepal said that identifying the SMEs and workers working in informal sector was a major challenge.

Dr Aliya H Khan, Member Economic Advisory Council (EAC), while highlighting the specific impacts of Covid-19 on the daily wagers and other low income groups, said that the Prime Minister Imran Khan may announce the ‘Mazdoor Ehsaas Program’ on labour day (May 1st 2020) and it expected to alleviate the problems faced by this segment of society.

She said that protection of SMEs is also important from gender perspective as majority of the home-based work force comprises of women, who are already marginalized and the pandemic has enhanced their existing economic vulnerabilities.

Dr Rathin Roy, Director, National Institute of Public Finance and Policy (NIPFP), India, said that the SMEs in all the South Asian countries including India are facing similar kinds of issues due to global pandemic. He said while the Government in India is taking several measures to support SMEs, new approaches are required to deal with the situation such as locally focused supply chains.

Kithmina Hewage, Research Economist at Institute of Policy Studies (IPS), Sri Lanka, said that SMEs in Sri Lanka have born the heaviest brunt of the current crisis. He said that the short terms relief package to SMEs has been absolutely necessary. "However, going forward, we need to have a long term policy to support SMEs. This would help with econimc recovery post COVID19", he added.

Nar Bahadur Thapa, former director of the Nepal Rastra Bank (Central Bank of Nepal), said that the SMEs in the post-Covid-19 situation should work on the diversification of their products and e-commerce could alone be a key areas of focus.

He said the Government in Nepal, realizing the problems being faced by SMEs, is considering to incorporate long term monetary policies and incentives in the forthcoming annual budget. He also highlighted the importance of having a SAARC network of SMEs.

Hashim Raza, Chief Executive Officer Small & Medium Enterprises Development Authority (SMEDA) said that the Government of Pakistan fully understand the contributions of SMEs in the national economy and is trying to support the sector through various measures including soft loans to retain the permanent employs and work on restarting their business when the pandemic is over, and social protection for the workers.

He advised the SME sector to make the best of the situation, diversify the traditional export market and come up with innovative ways to absorb the laid off labour when times get better.

The experts, in response to queries raised by the audience, said amidst the fear of a deep and prolonged recession, innovative ways would have to be explored in order to ensure that SMEs are staying in the business in the post Covide-19 scenario.

The experts said that although the governments in South Asia are coming up with short term relief packages to SMEs, innovative measures including enhancing the regional trade would be need of the hour.