SMEs Key To Brunei’s Growth

From small corner shops to restaurants, small and medium enterprises (SMEs) arc the backbone of the country's economy. His Majesty the Sultan and Yang DiPertuan of Brunei Darussalam in his birthday titah Sunday asked relevant agencies to provide further recognition to SMEs as their contribution to the nation's economy is important as ever.

In the 13-minute titah, His Majesty called on all parties to appreciate the contribution of SMEs and together assist them in their problems and urged the relevant agencies to iron out or streamline any regulations or processes that can hinder the growth of SMEs.
Government agencies must also provide an avenue for the growth and development of SMEs so that they will become a key sector that can help develop the nation, the monarch said.
His Majesty said he was confident that with proper planning, the country could produce trained entrepreneurs that can be the pioneers of the export industry.
"If this happens, it will provide the chance to put our local products in the regional and international market," the ruler said.
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This was not the first time His Majesty had highlighted the importance of public services and the private sector.
In the National Day titah this year, His Majesty said that the public sector services need upgrading and improvement in more appropriate ethics.
His Majesty also urged the private sector to contribute to the development of the country, especially in strengthening the country's Gross Domestic Product through more direct and meaningful economic activities.
SMEs in Brunei have certainly come a long way. Their contribution as the engine of economic growth has been reiterated over the years.
According to a report by the Organisation for Economic Cooperation and Development (OECD) published in November 2006, SMEs constituted the dominant form of business organisation, accounting for 95 to 99 per cent of enterprises in many countries and this has resulted in a 60 to 70 per cent of job creation in OECD countries.
SMEs in countries like Thailand, Philippines and Indonesia constitute a large portion of the respective countries' economies.
In Brunei, SMEs account for 98 per cent of all active business enterprises and have contributed about 92 per cent of employment in the private sector and a little over 66 per cent of GDP within the non-oil sector of the economy.
The 8th National Development Plan provided an incentive for Ahem to participate further in the economic diversification of the country.
His Majesty in a titah on the 8th NDP said since much depends on the cooperation between the government and private sector for the country's economy to prosper, all government agencies should take necessary steps to create a conducive environment to encourage more local and foreign investments in the country.
"All ministries and departments should continue to coordinate their activities to ensure more efficient and effective implementation of National Development, whilst the private sector should play an active role to accelerate the country's economic diversification process."
The Ministry of Industry and Primary Resources (MIPR) has undoubtedly been the focal point for SME development.
The ministry recently formed a committee for the development and promotion of local products with representatives from local business organisations, entrepreneurs and senior officers from several related government agencies.
The committee coordinates, plans and implements supporting programmes for SMEs, as well as ensures a more effective cooperation and communication between the government agencies and the private sector.
Assistance from the government has not stopped there, the introduction of two finance schemes that aims to provide loan facilities to local entrepreneurs in starting or expanding their business have seen loans of up to B$23 million approved through the MIPR to 406 entrepreneurs in 2006.
The Minister of Finance II, Pehin Orang Kaya Laila Setia Dato Seri Setia Haji Awang Abdul Rahman bin Haji Ibrahim, at the official launch of the First International Islamic Conference on Inclusive Islamic Financial Sector Development said that through various initiatives to encourage local SMEs' growth, the government in 2006 had granted B$18.38 million worth of financial support to 66 entrepreneurs via the Industrial Facilities Scheme in sectors such as agriculture, fisheries, manufacturing and tourism.
Several banks in the country have come forward with attractive financial loans for local SMEs.
Several SMEs, however, have asked for authorities to consider providing flexibility in repaying loans.
But the Minister of Finance II said, "Entrepreneurs must assume a high level of personal integrity and adopt a strong capacity towards business management, especially financial discipline since a true understanding and strict demonstration of financial discipline would always underpin a successful business."
Apart from the financial support, there have been other efforts to further improve the skills of entrepreneurs in managing their businesses.
Recently, the SME Innovation Centre, an initiative by the Brunei Economic Development Board (BEDB), was opened as part of its ongoing efforts to support and develop the local SMEs, in particular the growing number of technopreneurs in Brunei.
Courses conducted by specialised agencies have noticed a significant increase in the number of participants from different business fields. The Entrepreneurial Development Centre (EDC) in Sinaut, for example, has been carrying out training programmes for prospective and qualified SMEs in Brunei for the past 20-25 years. Since 2002, around 700 participants have attended these programmes every year.
Furthermore, special areas have been earmarked to accommodate SMEs aimed at encouraging more locals to enter the business foray.
His Majesty Sunday said, "I want to see especially SMEs to seize this opportunity."
So, it's up to SMEs to make good of the opportunities provided by the government and help pump-prime the nation's economy