country studies on bangladesh, nepal and sri lanka - Escap

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STUDIES IN TRADE AND INVESTMENT 70 xii LDC LPI MNC MT NGO NRs. OAM OBM ODM OECD R and D SAARC SAFTA SAPTA SCI SEZ SDC SIDA SL Rs. SMEs SWOT TID Tk TNC TOT UNCTAD UNDP UNIDO USAID WEF WTO least developed <strong>country</strong> Logistics Performance Index Multinational corporation metric tonne Non-governmental organization Nepalese rupees Own account manufacturing Own brand manufacturers Own design manufacturing Organization for Economic Co-operation and Development Research and development South Asian Association for Regional Cooperation South Asian Free Trade Agreement South Asian Preferential Tariff Agreement Small and cottage industries Special Economic Zone Swiss Agency for Development and Cooperation Swedish International Development Cooperation Agency Sri Lanka rupees Small and medium-sized enterprises Strengths, Weaknesses, Opportunities and Threats Trade and Investment Division Taka (Bangladeshi currency unit) Transnational corporations Training of trainers United Nations Conference for Trade and Development United Nations Development Programme United Nations Industrial Development Organization United States Agency for International Development World Economic Forum World Trade Organization
COUNTRY STUDIES ON BANGLADESH, NEPAL AND SRI LANKA Chapter 1 INTRODUCTION Over the past two decades trade and investment have been the driving forces in accelerating economic growth in South Asia. In the recent decade South Asian countries have increased export competitiveness and foreign direct investment inflows. As a result, new business opportunities have opened up for domestic enterprises. Despite their tremendous potential, SMEs 1 in South Asia are still at a disadvantage due to a lack of essential business factors such as capital, profitability, managerial skills, trained labour, brands and networking. Although SMEs account for more than 90 per cent of all private enterprises and employ roughly 60 per cent of the domestic workforce in South Asia, relative share of SMEs production in total domestic output is much smaller, approximately 35 per cent, as is the direct contribution of SMEs to merchandise export earnings, which is around 25 per cent (AAMO 2007). Broad-based inclusive and sustainable growth with the active involvement of the private sector is one of the most important development strategies in poverty reduction opted by many developing countries, including those in South Asia. To attain this goal, export-oriented SMEs and supporting industries should be recognized for the important role they play in their respective national economies. However, to become successful SMEs should be promoted and supported by not isolated and half-hearted measures but concerted and coordinated policies and institutional efforts. In smaller economies with limited domestic markets, high economic growth and rapid socioeconomic transformation can be achieved through export growth, and SMEs, showing 1 Having recognized their expected contribution to industrialization in developing countries in Asia and the Pacific, this study mainly focused on the development of export-oriented SMEs as well as SMEs in supporting industry, including micro enterprises. Those SME segments are typically characterized by high technology adaptation and backward linkage, which are key success factors for their effective participation in global and regional value chains (Uchikawa and Keola 2009). Other major SME segments, namely domestic market-oriented SMEs and cottage industry, which serve domestic and local markets, were not discussed extensively in this study although they may share some of similar corporate characteristics to export-oriented and supporting industry SMEs. Note that the statistics of SMEs in this study are the aggregate data of all SME segments at the regional, subregional and national levels. 1
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ESCAP STUDIES IN TRADE AND INVESTME
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United Nations United Nations publi
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