SMEs best tool for low-cost job creation, poverty reduction

ISLAMABAD: Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Thursday said the government should develop an effective strategy to attract Chinese investment in joint ventures in the SME sector which offer low-cost job creation and rapid poverty reduction.

Chinese businessmen can help boost local SMEs through joint ventures in the industrial zones planned along CPEC, it said in a press releaae issued here.

Technological cooperation between businessmen of Pakistan and China can also help and modernise existing SMEs through a transfer of technology, Chairman FPCCI Regional Committee on Industries Atif Ikram Sheikh said.

He said the development of the proposed industrial zones along the trade route will offer an opportunity for development of the SME sector which is the backbone of the economy.

Atif Ikram Sheikh said development of the SME sector is necessary for equitable and inclusive economic growth and we must take advantage of the emerging opportunities.

The business leader said cooperation between the two friendly nations will also ensure rapid transfer of technology which is necessary to modernise SMEs.

China must support Pakistan in developing its comparatively advantageous industries in the mining, agriculture and manufacturing sectors, he demanded.

Some of the fields in which joint ventures can be worked out include logistics, trucking, warehousing, fisheries, horticulture, minerals, food processing, surgical instruments, construction, livestock, dairy, ICT, engineering, apparel, and cold storage and supply chain business, he noted.

The business leader said many popular western companies buy products from Pakistan and sell them in the international market under their brand name while giving a very small share to local SMEs which must be tackled.

SMEs constitute around 90 percent of the 3.2 million private enterprises; it employs around 70 percent of the non-agriculture labour force. These enterprises also contribute over 30 percent to GDP and 25 percent of the country's total export earnings which can be increased substantially.

The share of SMEs in the value-added manufacturing is estimated at 35 percent.