Federation of Pakistan Chamber of Commerce and Industry (FPCCI) on Thursday, urged the government to develop an effective strategy to attract Chinese investment in joint ventures in the SME sector. FPCCI believes that this is the best way for low-cost job creation and rapid poverty reduction measures.
The press release issued stated that business from China has the potential to boost local SME business through joint ventures. The industrial zones planned along the CPEC offer an exceptional opportunity for these joint ventures that would go a long way in creating more opportunities for small business in Pakistan.
The Chinese technical edge
China thrives on a culture of technological advancements that has seen local Chinese small business compete with global giants. The technological cooperation between Pakistani and Chinese business people can help modernize existing small scale businesses in Pakistan. The transfer of technology will also have a long term positive impact in the SME sector for Pakistan, opined Chairman FPCCI Regional Committee on Industries Atif Ikram Sheikh.
SME’s are considered as the backbone of an economy. They tend to create necessary opportunities for creating an inclusive economy.
Atif further stated that the proposed industrial zones on the CPEC trade route offer a great opportunity for energizing the SME sector within Pakistan. The cooperation between two nations will ensure rapid transfer of technology – a necessary event to modernize Pakistani SME’s.
He also asked the Chinese government to help Pakistan in the mining, agriculture, and manufacturing sector. He also pointed out the opportunities that can be immediately utilized with Chinese cooperation. In his view SME joint ventures can start in logistics, warehousing, fisheries, horticulture, minerals, food processing, surgical instruments, construction, livestock, dairy, ICT, engineering, apparel, and cold storage, and supply chain business.
The business leader also asked the Pakistani government to step in to create goodwill for Pakistani manufactures. He noted that many foreign popular companies buy Pakistani products and label them as their own and sell them at a higher price without giving Pakistan the necessary credit. Such a practice hampers goodwill of Pakistan and does not give necessary credit to the SME sector in Pakistan.
SMEs constitute approximately 90 percent of the 3.2 million private enterprises. The sector also employs around 70 percent of the non-agriculture labor force. GDP contribution from SME is estimated to be 30 percent while SME share in export earning is almost 25 percent of the total export earning pie.