Can SMEs boost exports and foreign reserves into the stratosphere through sharper policy?

THE question isn’t as absurd or as dramatic as it sounds. In fact, in the light of looming deadlines for Sri Lanka to start servicing its international debt in its own strength again, soon — 2028/9 isn’t a million light years away after all — it is quite pertinent and urgent.

- By Wijith DeChickera

There is a widespread perception among these enterprises themselves that this vital sector has been neglected, ignored or poorly served by the nation's policymakers over the years

All the more so because the tenuous tangent along which exports could shoot forex earnings into the stratosphere isn’t always immediately evident. And our island nation’s small and medium-sized enterprises may be closer to crash and burn than launch and dazzle than we dare think.

If current trends continue, small and medium-sized enterprises (SMEs) may collapse completely, once intimated Prof. Anil Jayanta, erstwhile Chairman of the NPP’s Economic Policy Committee.

It is the responsibility of a government to take small and medium-scale entrepreneurs to the international level, admitted Chaturanga Abeysinghe, onetime Executive Committee Member of the National People’s Power and now Deputy Minister of Industry and Entrepreneurship Development to boot.

SMEs are “the bedrock of Sri Lanka’s economy”. This has been the dominant thinking, as perhaps best captured by the ADB in its working paper on South Asian economies titled ‘Catalyzing Small and Medium-sized Venture Capital in Sri Lanka’ (Mar 2018). And the facts agree - SMEs comprise 75 percent of all active enterprises, providing 45 percent of employment and contributing 52 percent of gross domestic product (GDP).

However, there is a widespread perception among these enterprises themselves that this vital sector has been neglected, ignored or poorly served by the nation’s policymakers over the years.