Executive Summary: Here I have attempted to find out the problems and opportunities of SME in Bangladesh. I clearly acknowledge that I making this paper on the basis of secondary information from Internet and related Jounals published on the topics. The report is not absolutely based on Primary information.
The economy of Bangladesh is at the crossroads. Rapid liberalization has put most existing
industries under severe strain because of their inability to compete with consumer goods being
freely imported after the withdrawal of quantitative restrictions and the drastic reduction of
import tariffs. For the fiscal year 2004-2005, the erstwhile 4-tier duty structure of 7.5, 15, 22.5
and 30 percent has been cut down to 3 tiers, 7.5, 15 and 25 per cent, the weighted average being
16.44 percent. According to the budget speech of the Finance Minister, this would cause an
estimated Bangladesh taka (BDT) 11 billion (USS 186 million) loss of revenue to the
government; but there are no estimates yet about likely losses to the domestic trade and
economy of the country from the flood of imported consumer and industrial products -
cosmetics and toiletries, food and beverages, textiles and apparels, footwear and leather goods,
chemicals and pharmaceuticals, light engineering products, machine tools, hand tools and so on.
All these products (all under the SME category, and the rate at which the glittering
multistoreyed shopping malls are springing up in Dhaka and other major cities of the country is
perhaps a good indicator of the rate of displacement of domestic products by imported
merchandise. Although some producers have been successful in improving their products and
significantly increasing external market access, most are languishing.
Both equity and growth being of concern to the Government, the priority is to accelerate
GDP growth in a pro-poor manner from the present 5.5 percent to 8-10 per cent (Annex-I).
Agriculture, besides being the mainstay of the economy, is also important for increasing
employment and reducing poverty. The contribution of agriculture and fisheries to the GDP in
2003-04 was 22.83 per cent at 1995-96 constant prices (crop 12.98 per cent. livestock 2.90
per cent, forestry 1.84 percent, and fisheries 5.15 per cent) (Annex-II) while they provided
over 72 percent of the total employment. Correspondingly, the manufacturing contribution to
GDP in 2003-04 was 16.25 per cent accounting for only 5.4 percent of the total employment.
Whether to achieve the committed Millennium Development Goals (MOGs) of 2015 or the
targets of the National Strategy for Economic Growth, Poverty Reduction and Social
Development, commonly known as the Poverty Reduction Strategy Paper (PRSP), the
development process of Bangladesh must strive to expand employment creation opportunities
very rapidly. The scope of additional absorption of labour in agriculture being somewhat
limited, the best potential for this lies in the manufacturing sector. Inspite of droughts, floods,
cyclones and various other natural or management related disasters, the agricultural sector of
growth of the services sector has also been fairly robust. It is the manufacturing sector's
contribution to the GDP that has remained nearly stagnant at around 15 per cent and its
growth rate at 7.41 percent (estimated values of 2003-04 at 1995-96 constant prices).
NB:from Asia-Pacific Tech Monitor, Sep-Oct 2004 issue, pp. 44-56. Mr. Abdul Awal Mintoo is President of the Federation of Bangladesh Chambers of Commerce and Industry.
Introduction:
The abbreviation SME occurs commonly in the European Union and in international organizations, such as the World Bank, the United Nations and the WTO. The term small and medium businesses or SMBs is predominantly used in the USA.
EU Member States traditionally have their own definition of what constitutes an SME, for example the traditional definition in Germany had a limit of 255 employees, while, for example, in Belgium it could have been 100. But now the EU has started to standardize the concept. Its current definition categorizes companies with fewer than 10 employees as "micro", those with fewer than 50 employees as "small", and those with fewer than 250 as "medium".By contrast, in the United States, when small business is defined by the number of employees, it often refers to those with fewer than 100 employees, while medium-sized business often refers to those with fewer than 500 employees.
Both the US and the EU generally use the same threshold of fewer than 10 employees for small offices (SOHO).
In most economies, smaller enterprises are much greater in number. In many sectors, SMEs are also responsible for driving innovation and competition.
In India, the Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overall industrial economy of the country. It is estimated that in terms of value, the sector accounts for about 39% of the manufacturing output and around 33% of the total export of the country. Further, in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. As per available statistics, this sector employs an estimated 31 million persons spread over 12.8 million enterprises and the labour intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises.
In South Africa the term is SMME for Small, Medium and Micro Enterprises. Elsewhere in Africa, MSME is used for Micro, Small and Medium Enterprises.
Industry Canada defines a small business as one that has fewer than 100 employees (if the business is a goods-producing business) or fewer than 50 employees (if the business is a service-based business), and a medium-sized business as fewer than 500. In New Zealand a SME has to be 19 people or fewer.
The economy of Bangladesh is at the crossroads. Rapid liberalization has put most existing
industries under severe strain because of their inability to compete with consumer goods being
freely imported after the withdrawal of quantitative restrictions and the drastic reduction of
import tariffs. For the fiscal year 2004-2005, the erstwhile 4-tier duty structure of 7.5, 15, 22.5
and 30 percent has been cut down to 3 tiers, 7.5, 15 and 25 per cent, the weighted average being
16.44 percent. According to the budget speech of the Finance Minister, this would cause an
estimated Bangladesh taka (BDT) 11 billion (USS 186 million) loss of revenue to the
government; but there are no estimates yet about likely losses to the domestic trade and
economy of the country from the flood of imported consumer and industrial products -
cosmetics and toiletries, food and beverages, textiles and apparels, footwear and leather goods,
chemicals and pharmaceuticals, light engineering products, machine tools, hand tools and so on.
All these products (all under the SME category, and the rate at which the glittering
multistoreyed shopping malls are springing up in Dhaka and other major cities of the country is
perhaps a good indicator of the rate of displacement of domestic products by imported
merchandise. Although some producers have been successful in improving their products and
significantly increasing external market access, most are languishing.
Both equity and growth being of concern to the Government, the priority is to accelerate
GDP growth in a pro-poor manner from the present 5.5 percent to 8-10 per cent (Annex-I).
Agriculture, besides being the mainstay of the economy, is also important for increasing
employment and reducing poverty. The contribution of agriculture and fisheries to the GDP in
2003-04 was 22.83 per cent at 1995-96 constant prices (crop 12.98 per cent. livestock 2.90
per cent, forestry 1.84 percent, and fisheries 5.15 per cent) (Annex-II) while they provided
over 72 percent of the total employment. Correspondingly, the manufacturing contribution to
GDP in 2003-04 was 16.25 per cent accounting for only 5.4 percent of the total employment.
Whether to achieve the committed Millennium Development Goals (MOGs) of 2015 or the
targets of the National Strategy for Economic Growth, Poverty Reduction and Social
Development, commonly known as the Poverty Reduction Strategy Paper (PRSP), the
development process of Bangladesh must strive to expand employment creation opportunities
very rapidly. The scope of additional absorption of labour in agriculture being somewhat
limited, the best potential for this lies in the manufacturing sector. Inspite of droughts, floods,
cyclones and various other natural or management related disasters, the agricultural sector of
growth of the services sector has also been fairly robust. It is the manufacturing sector's
contribution to the GDP that has remained nearly stagnant at around 15 per cent and its
growth rate at 7.41 percent (estimated values of 2003-04 at 1995-96 constant prices).
NB:from Asia-Pacific Tech Monitor, Sep-Oct 2004 issue, pp. 44-56. Mr. Abdul Awal Mintoo is President of the Federation of Bangladesh Chambers of Commerce and Industry.
Introduction:
The abbreviation SME occurs commonly in the European Union and in international organizations, such as the World Bank, the United Nations and the WTO. The term small and medium businesses or SMBs is predominantly used in the USA.
EU Member States traditionally have their own definition of what constitutes an SME, for example the traditional definition in Germany had a limit of 255 employees, while, for example, in Belgium it could have been 100. But now the EU has started to standardize the concept. Its current definition categorizes companies with fewer than 10 employees as "micro", those with fewer than 50 employees as "small", and those with fewer than 250 as "medium".By contrast, in the United States, when small business is defined by the number of employees, it often refers to those with fewer than 100 employees, while medium-sized business often refers to those with fewer than 500 employees.
Both the US and the EU generally use the same threshold of fewer than 10 employees for small offices (SOHO).
In most economies, smaller enterprises are much greater in number. In many sectors, SMEs are also responsible for driving innovation and competition.
In India, the Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overall industrial economy of the country. It is estimated that in terms of value, the sector accounts for about 39% of the manufacturing output and around 33% of the total export of the country. Further, in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. As per available statistics, this sector employs an estimated 31 million persons spread over 12.8 million enterprises and the labour intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises.
In South Africa the term is SMME for Small, Medium and Micro Enterprises. Elsewhere in Africa, MSME is used for Micro, Small and Medium Enterprises.
Industry Canada defines a small business as one that has fewer than 100 employees (if the business is a goods-producing business) or fewer than 50 employees (if the business is a service-based business), and a medium-sized business as fewer than 500. In New Zealand a SME has to be 19 people or fewer.
Bangladesh Perspective:
Strength Of SME Sector:
Fine, Chalaya Jow.
উত্তরমুছুনShahnewaz Rahmani (Tasik)
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