SMEDA plans to generate 10 million new jobs in Pakistan
Lahore, Pakistan: The Small and Medium Enterprises Development Authority (SMEDA) plans to generate 10 million new jobs by establishing 270,000 new SMEs in Pakistan and this plan can GDP growth.
This was stated by Chief Executive Officer of SMEDA Muhammad Alamgir Chaudhry while talking to state run news agency, APP here on Wednesday.
Muhammad Alamgir Chaudhry said that present government’s manifesto aimed at vigorous industrialization through SME development, as the SME sector was a proven engine of growth for employment.
The SME sector is, in fact, the backbone of economy in Pakistan with 3.2 million SMEs in the formal sector and presence of innumerable SMEs in the informal sector, he said, adding that 65 percent of the total SMEs in Pakistan are situated in Punjab, 18 percent in Sindh, 14 percent in Khyber Pakhtunkhwa, two percent in Baluchistan and 0.6 percent in Islamabad. He mentioned that over 40 percent of Pakistan’s total GDP; USD 240 billion, comes from the SME sector alone.
Similarly, 46.46 percent of the total exports and surprisingly 80 percent of the total employments are being contributed by SME sector in the country.
To a question, he said the SMEs create high number of jobs with lowest investment for instance, the cost of job creation in a garment unit of about 200 workers, being an SME based sub-sector of the textile sector, is approximately Rs 70,000 per job, whereas, the cost of per job in the Spinning Unit, being a large industry of the Textile sector is about Rs 1.1 million.
The CEO said that government, taking cognizance of the SME development, created Small and Medium Enterprises Development Authority (SMEDA) in October 1998, which has been evolving multiple initiatives including sector development strategies, business development services, common facility centers, training and handholding of the SMEs.
The five-year SME Development Plan chalked out by SMEDA last year has attracted government attention because of presenting a number of initiatives for job creation through development strategies of 13 potential sectors, he maintained.
The plan is targeted to generate 10 million new jobs by establishing 270,000 new SMEs to be resulted into an increase of about $ 120 billion in GDP and an addition of national exports worth US$ 36 million in next five years, he said.
He claimed that SMEDA, despite being a government organization, had given optimal results in SME development and has so far entertained 91,311 walk-ins at RBCs apart from developing 170 pre-feasibility studies of various sectors, 285 tailor-made business plans and 2,335 training programmes held with 100,0290 total participants in 75 cities of the country. SMEDA services and projects have mobilized a total investment of about Rs.28 billion up till now.
To another question, he said that the world economies were making heavy investments on their SME development institutions so as to provide conducive environment to their SMEs for rapid and sustainable growth.
For instance, the per capita investment to be made by Japan, Korea and Brazil on their SME development institutions is US $ 78.52, US $ 70.12 and US $ 7.24 per SME respectively.
Similarly, Turkey is investing on its SMEDA US $ 0.53 per SME and India is spending 0.09 US dollar per SME on its SME development department. As compared to the given facts, SMEDA, in Pakistan is currently operating with just 95 employees out of the 195 approved head count and the per capita investment to be made by government which is USD 0.01 only.
