Small-scale enterprises spell hope for Egypt's industrial future
Egypt, Economics, 1/29/2003

Small-scale enterprises constitute the basis for industry and national economy in many countries. It was reported that 90 per cent of Malaysia's 53,553 manufacturing companies are small-scale operations.

In Japan, the ratio is a heady 99.7 per cent, almost matched in Taiwan with 98 per cent and Germany's 99 per cent of total manufactured output.

With the realization that small industries are essential to the establishment of a firm industrial base and a healthy economy, Egypt has been making great efforts to enhance the small-scale industrial sector, not only to stimulate the nation's economy but also to help provide new jobs and boost exports.

Part of these efforts was the creation of certain institutions, such as the Social Fund for Development (SFD), which offers graduates the opportunities to start up small businesses, thereby staving off high unemployment rates.

The issue came under review this week as the Shura Council, the Upper House of Parliament, which approved a report prepared by the Industrial Committee on devising a national plan and subsidiary programs to develop small industries and increase their overall contribution to the national economy.

In an address to the Shura Council, chairman of the Industrial Committee Mohammed Farid Khamis referred to the importance of SMEs in developing industry, invigorating the sluggish economy and creating new jobs.

He said that the government had offered small industries a host of advantages and incentives, which include tax exemptions and extended tax holidays.

Head of Shura Council Economic Committee, Mohammed Rashad Moussa said that small investors in Egypt have been facing the selfsame problems for decades.

He cited an example of a photographer who wanted to open a studio, but he was unable to obtain a license. "Obtaining a license for a small enterprise is one of the many bureaucratic problems facing small industries in Egypt," Moussa told the council.

In the course of Shura Council debates, Minister of Administrative Development, Mohammed Zaki Abu Amer disclosed that the government was studying a draft bill to facilitate procedures, thereby preventing clashes between the plethora of government agencies involved in the affairs and issues relating to small industries.

"This draft bill aims to create a favorable climate for small ventures. We have also prepared a booklet containing all the information about SMEs in Egypt and the facilities offered to them," the minister said.

Joining the debate, Secretary-General of the SFD, Hani Seif el-Nasr highlighted the role of the fund, saying that it had helped create 660,000 permanent and 300,000 temporary jobs.

"Up to LE3.5 billion was offered by the SFD to small-scale enterprises and only one per cent of the new ventures were forced to close down after a relatively short time in operation," Seif el-Nasr said, adding that the SFD had prepared a draft bill and submitted it to the Cabinet to supply an accurate definition of SMEs, by type, scale, staffing, financial resources and investment.

The Shura Council stressed the fact that small industries were the bases for heavy industry, urging the government to work harder to create more favorable conditions in which small industries could flourish, and to eliminate the obstacles to their growth and development.

"Small-scale industries spell hope for Egypt's industrial future," one member said.

Another member, Eglal Hafez called for a study of the Indian experiment in establishing and developing small-scale industries, since Indian and Egyptian societies have much in common.

Shura Council member Soad Kamel criticized the report, saying that it offered no clear definition of a 'small-scale industry'.

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