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Public Private Partnership and Development of SMEs in OIC Member States - 2011-12-02

A Forum is to be organized by the General Secretariat of OIC in collaboration with Governments of Turkey and the United States on the sidelines of the Second Global Summit on Entrepreneurship 3 December 2011, 18:00pm Istanbul Harbiye Convention Center, Republic of Turkey. 

The objective of the Forum is to bring together influential captains of industries and entrepreneurs from various regions. This event will serve as a platform to develop policy recommendations and actions at creating a favorable socio-economic environment for the development and promotion of SMEs in OIC Member States.

Introduction

Entrepreneurship has an important role to play in the development of a country. It is one of the most important inputs in economic development. The number and competence of entrepreneurs affect the economic growth of the country. The crucial and significant role played by the entrepreneurs in the economic development of advanced countries has made the people of developing countries conscious of the importance of entrepreneurship for economic development.

It is now a widely accepted fact that active entrepreneurs, significant proportion of which is organized in the form of Small and Medium Enterprises (SMEs), can only explore the potentials of the countries, availability of recourses such as labor, capital and technology. Entrepreneurship helps in the process of economic development through employment and income generation, regional development and distribution of wealth as well as increasing the standard of living of the people and creating innovation.

Globally, SMEs represent a large share of registered businesses and contribute between 35-45% to the global GDP. They also represent an estimated 40-60% of global employment. Within the OIC countries SMEs vary considerably in terms of their contribution to GDP. For example, in Malaysia SMEs contribute 56% of the country’s GDP, whereas in Egypt and Saudi Arabia this figure accounts 33% and 25% respectively. Despite the role of SMEs in diversifying employment sources and overall economic expansion, in majority of OIC Member States SMEs are prone to face challenges in such areas as access to finance, training and development, and business support services.

Against this background SMEs feature prominently in the OIC economic agenda. To this end, the OIC established under the Islamic Chamber of Commerce and Industry (ICCI) a Task Force on Small and Medium Enterprises with overall goal of establishing a friendly environment for enterprise creation, economic growth and improve production efficiency in OIC economies through sustainable and dynamic SMEs development. The Task Force so far convened six meetings and identified several constraints such as limited access to capital, low level of technology, limited access to markets and market information, absence of business development services, regulatory and administrative constraints as well as inadequate institutional support, which are affecting SMEs development in OIC Member States.The Islamic Corporation for the Development of Private Sector (ICD), as the private sector development arm of the Islamic Development Bank, continues supporting various programmes aimed at developing SMEs in OIC Member States. The programmes of ICD cover such priority sectors as financial, agricultural, logistics, affordable housing, services and manufacturing industries. For example, ICD has disbursed US$ 391.4 million in 2009 in support of SMEs in OIC Member States, thus bringing the cumulative approvals since its inception to US$ 1.56 billion.

In a similar way, the Islamic Solidarity Fund for Development (ISFD) under its Microfinance Support Program (MFSP), a US$500 million fund, has approved various projects amounting to US$ 149.4 million in different OIC Member States to support SMEs. On its part, the 27th Session of the Standing Committee for Economic and Commercial Cooperation of the OIC (COMCEC) decided to make “Enhancing the Competitiveness of SMEs in OIC Member States” as the subject of Exchange of Views for its 28th session in 2012.

The opportunity afforded by the convening of the Second Entrepreneurship Summit in Turkey, presents a unique occasion to share experiences on how develop SMEs to become core of the economy, capable of strengthening the economy at the grass-root and community levels, while at the same time creating employment opportunity and income within community and locality. The proposed OIC special event on the sidelines of the Summit will review the current role of SMEs in the socio-economic development of OIC Member States as well as ways of promoting intra-OIC cooperation to increase the competitiveness of SMEs.

Objective

The special event’s main objective will be reviewing the OIC efforts in the area of promoting the role of SMEs in the socio-economic development of OIC Member States. It also aims at exploring news ways how to develop a more efficient OIC model of support, which would stimulate growth of competitive and innovative SMEs in OIC Member States. The event would also explore the implementation of the findings of the OIC Task Force on SMEs, which concluded its proceedings in 2008.

Presentations

IDB Group (ICD, ITFC and ICIEC), ICCI and the Turkish Union of Chambers and Commodity Exchanges (TOBB) are expected to make presentations on development of SMEs in OIC Member States during the event.

Discussions

It is expected that participants will address the event and touch upon issues related to development of SMEs in OIC Member States.

Participation

The participation of Private Sectors establishments, particularly Small and Medium Enterprises from OIC Member States will be encouraged. In particular the event will be open to: 

1) public policy makers from OIC Member States, who are in charge of economic planning, SMEs development, and enterprises promotion ;

2) representatives of investment promotion agencies in OIC Member States;

3) representatives of SMEs;

4) relevant Multilateral Development Agencies, International and Regional Specialized Organisations.

Expected Outcome

The Special Event would serve as a platform to develop policy recommendations and actions aimed at creating a favourable socio-economic environment for the development and growth of SMEs in OIC Member States. The envisaged actions may include:

· Developing capacity building programmes and promoting access to capital and facilities with a view to encouraging and facilitating the participation of SMEs in tourism, agro-allied industry, and other activities;

· Establishing a broad-based cooperation framework to improve the regulatory and institutional environment for SMEs operations;

· Creating an intra-OIC mechanism that encourages and facilitates SMEs to become active participants in the trade activities;

· Expanding the existing funding windows under ISFD, SPDA, ITFC, ICIEC and ICD to finance SMEs activities;

· Encouraging technology adoption among SMEs through providing financing facilities in order to make them competitive in the local as well as in regional and even international markets;

· Encouraging SMEs to participate in research projects through the dedicated programs;

· Supporting agro-based SMEs within the rural and agricultural development strategies;

· Promoting international partnership for SMEs development and collaboration with the Private Sector in OIC Member States;

· Exploring possibility of creating intra-OIC SMEs Clusters in such sectors as Food-Agro Processing, Textiles, Leather, Light Engineering, software development, Technology and Business Incubators, etc;

· Creating an intra-OIC e-market place for SMEs; · Organizing regular symposiums involving SMEs and public and private stakeholders.

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