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Posted On: 2 August 2009 04:07 pm
Updated On: 12 November 2020 02:09 pm

Incentives sought for small firms

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Since small and medium enterprises (SMEs) worldwide have shown extreme resilience to the current global financial crisis, there is an urgent need to focus on their growth, the Qatar Chamber of Commerce and Industry (QCCI) has said. As the Industrial Development Department is busy conducting a study to identify what ails the SMEs in the country and recommend incentives to encourage them, the QCCI reiterated SMEs were the only viable means for diversifying the GCC economies away from oil. “The dependence on oil and gas has shown there can be problems in times of crude price fluctuations in the global market,” said the chairman of QCCI, Sheikh Khalifa bin Jassem Al Thani. Currently, their contribution to the GDP of the entire region remains low at 10 percent, he said in remarks to Al Sharq. But trade and industry sources have pointed out a number of obstacles that hinder the growth of SMEs, and on top on the list is the absence of a single-window licensing system. At present, one has to run from pillar to post to get various clearances to set up an SME and they are not easily granted as in most cases there are large state-backed companies operating in similar fields and they fear that competition from smaller players might ruin their business. Lack of fully-developed industrial zones where not only plots of land but plots with buildings and other basic paraphernalia are easily available to SME entrepreneurs, is another major impediment to the growth of this sector. “There is no point if you give us a plot in an industrial zone which has no in-built structure to support manufacturing activity, because we would be required to invest 90 percent of the entire project cost on erecting the building itself,” said a source. In some GCC states, industrial zones have plots with the needed structures and an entrepreneur has to simply install machinery and get going, he said. “We don’t have such facilities here.” What is, therefore, required is a free-trade zone or a set of them for various small and medium industries with the required basic facilities, subsidised power and gas with tax concessions and import incentives. And the procedures of allotment of plots in these zones should be very simple, or else it wouldn’t serve any purpose, said the sources. Work visas required by SMEs are another major cause of woes as the authorities have a nationality-based quota system and do not grant requests for hiring workers from certain countries, they said. “All these hurdles must be removed if the state wants to see SMEs flourish,” said a source.