Small and Medium Enterprises Development Authority (Smeda) has approached the USAID for evaluation of its role following the changed scenario in consequence of 18th Amendment in the Constitution and 7th NFC Award that caused diversion of major resources to the provinces.
Smeda that was established to develop small and medium enterprises in the country has good track record and competent staff but unfortunately it is currently under-utilised mainly on account of lacking appropriate resources, said Smeda Chief Executive Officer Yousuf Naseem Khokhar in an interview with the Business Recorder.
"After shifting of resources to the provinces, should the authority be provincialised to avoid problems relating to duplication and overlapping," he added. There are number of organisations like Business Support Fund and Competitive Support Fund, which are also working for development of SMEs in Pakistan, he said and added that all such organisations should be clubbed with appropriate resources in the interest of SMEs sector that could prove backbone of the economy in real term.
Dr Salman Shah who was heading a committee of the experts and sponsored by the World Bank had prepared a five-year business plan and made strong recommendation to strengthen Smeda by allocating enhanced resources. The Committee identified that Smeda in Pakistan was an SME development body working the lowest volume of funds. On the contrary, the SME development bodies of India, Bangladesh and even Tanzania were having funds higher then Smeda-Pakistan. But, the plan could not be implemented too because of lacking funds, he disclosed.
Talking about the budget, Yousuf Naseem said, over 70 per cent of Smeda's on-line budget of Rs 194 million is spent on salaries, 7-8 per cent goes on rent and remaining 3-5 per cent is consumed by the utilities. Smeda finds no budget for its capacity building and also setting up small Common Facility Centers required to be established on regional basis, he said.
He further said that a number of public sector organisations including Smeda had to face 40 per cent cut in their budget that put them under financial constraints and thus. Presently, Smeda is incapable to continue development work for SMEs, he added. Smeda chief is of the view that the institutions like Smeda that has set new milestones of performance should be provided with adequate funds. In the present predicament, we are trying to fill in the financial gap through provincial government and the international donor organisation. We have adopted a strategy to have close co-ordination with the international donor agencies like World Bank, UNIDO, USAID, JICA and GTZ.
Still, Women Incubation Center set up in Lahore a few years back proved to be so successful that similar centers were demanded by women of various metropolis including Peshawar, Quetta, Hyderabad and Karachi. Such centers have been replicated in Karachi and Peshawar and are operative now. Whereas, the Women Business Development Centers in Quetta and Hyderabad are at the verge of completion. But, it is very strange the first one center set up in Lahore is facing hardship because of the financial constraints.
It needs to be improvised, for which Smeda is striving to do the task through some women universities like Lahore College for Women University, he said. Yousuf further disclosed that Smeda, during last 4-5 years, was covering up the development projects cost through PSDP. But, the recent 30 per cent cut in PSDP budget has closed this venue as well. It has rather become difficult to complete some running projects.
The acute example of such projects is the Red Chilli Processing Center, Kunri-Sindh that has consumed about Rs 190 million and requires Rs 40 million only to reach completion. But, the project is kept in limbo due to absence of the further releases of funds. If the required funds were not provided, the earlier spending of Rs 190 million on this project could be wasted.
Similarly, a highly viable project relating to black stone is also in suspension. It is the known fact that Pakistani black stone has a huge market both locally and internationally. Amongst the successfully completed PSDP projects the most prominent Common Facility Centers are the Agro-food Processing (AFP) facility at Multan, Foundry Service Center (FSC), Lahore, Gujranwal Business Center and the SME Subcontracting Exchange at Gujranwala.
Some of the developments tasks are bring undertaken in collaboration with USAID, which include updating of the SME Policy 2007 and Capacity Building Plan of Smeda. A high powered committee is working on fast track to complete these assignments. Under the capacity building plan of Smeda three options are being worked out; A, two year short-term plan, B, 3-5 year medium term plan and C, 5-10 years long-term plan, he said.
CEO Smeda especially underlined that the best and the biggest development project was being implemented in collaboration with provincial government of Khyber Pakhtunkhwa titled as "Economic Revitalisation of KP & Fata". It is being run with multi-donor funds. Parallel with this project, a Micro Grant program is being implemented by Smeda with the support of UNIDO for Early Recovery and Restoration of Flood Affected Communities in Pakistan, he said.