- Editors Desk
- Published Date
- Daniel Steinmann
- Hits: 1059
The SME push is not a new concept in development. Small and medium enterprises were instrumental in the rapid development of Hong Kong in the nineteen sixties and seventies. Today, Hong Kong is one of the world’s major financial centres and acts as conduit for a very significant slice of financing that either enters or leaves the upcoming markets in China.
SME development as a theme was later taken up in several South American countries where the determinant links between poverty and crime, ownership and growth, education and development, were analysed and published in several academic papers. From there, it was expounded further by the development agencies resorting under the UN umbrella, and became the policy of force for more than thirty years.
In Namibia, the benefits of grassroots SME development did not go unnoticed. But SME development, despite all the work that has gone into this field, is not a straightforward concept. Neither is it easy to develop clear-cut policies, nor to implement a coherent set of principles to suit all conditions. SME development is a nefarious theoretical terrain with as many policy proposals as there are researchers working on the topic.
The local experience has proven that it is rather difficult to formulate one-size-fits-all strategies. This week saw an impressive SME Expo in Windhoek with many hopefuls in attendance. Marking the event as a priority area in terms of policy and implementation, was the presence of former Anglo high brass, Clem Sunter, at the official opening. Sunter is famous for his “high road low road” scenarios which he formulated in the early nineties after a career of almost thirty years in the upper echelons of one of the world’s biggest mining conglomerates.
From a policy perspective, not even the definitions to delimit the SME sphere, are clear. In Namibia, the focus was always on micro enterprises to align development expectations with a population that is still mostly rural, and that is growing at a much heftier pace, than the overall economy. The result was that the initial focus was on self-employment until it dawned upon policy makers that not every individual is a born entrepreneur. Then our policies shifted to entrepreneurial support to ensure that those with the ability, actually rise above their immediate limitations, and establish the companies that will grow rapidly, and provide meaningful employment contributions. At that point, roughly 16 years ago, there was much talk about tender procedures favouring SME enterprises but after so many failed toilet paper manufacturers that could not survive supplying the government, all that emerged were a small number of fat cats.
Expropriation of the system became the norm, and the millions the GIPF squandered ended up mostly in the pockets of a handful of individuals, with a stream of bankrupt companies in the wake. SME development was not a huge success, and employment kept going down.
The problem is that from a public perspective, many of the initiatives were simply cosmetic. Similar to changing street names, where the suburb and the residents remain exactly the same, regardless of the name that street goes by. Poor residents in a poor neighbourhood are still in the same position today as they were ten years ago. Changing the street’s name added a nice cosmetic flavour but it did not upgrade the area. I suppose if political collateral in the form of Xs on ballots are important, then the cosmetics become important especially if the voters are still on the lowest rungs of development.
We need to realise that the success of SME development will eventually be determined by a rather complex set of policies with the backing and effort of a rather impressive number of development agencies. I sense the current focus of SME development has shifted to employment, but in reality I do not see this happen. Micro enterprises are still micro enterprises, and they usually employ only the owner and one, may be two, immediate family members. They exist because of need and not because the owner has big dreams of one day becoming the next fat cat.
So where does one find workable solutions between the two extremes of a woman selling apples at the taxi rank, and a connected fellow who uses government money to start up an undertaking that closes its doors at the first sign of adversity. Both claim SME status and both basically provide employment, and/or benefits, only to those in the immediate circle.
I suspect we will be debating the SME concept for a long time still, before we get to a system that actually works.
- Articles In This Category
- Editors Desk“The Namibian delegation informed the Angolan delegation about the private sector’s full control over the Namibian downstream monopoly, and in...Editors DeskTake your pick from the headline list. These words are frequently used by non-Africans to stereotype Africa. And to bolster this image, the...Editors DeskAgainst the background of commercial endeavour as reflected, for instance in the Windhoek Show, the business sector at large, is beset by a spate of...“government officials are venal, incompetent, and interested solely in getting lucrative appointments” (855 hits)Editors DeskThe headline hits one in the face. I could not help lifting it from an opinion article originating from Europe but analysing institutional capacity...Editors DeskIt may be somewhat premature but going by auction prices at last weekend’s famous annual game fest in Outjo, it seems the high-value game balloon...It is not a nuclear reaction - not yet! (3741 hits)Editors DeskWhen three major players in one industry, all announce substantial shifts in strategy and/or focus in a very short span, it signals a fundamental...Editors DeskBy Thursday evening, risk-off trading was very much the flavour of the big indices in Europe and the US. After a very volatile two weeks, major...Editors DeskWhen I feed the hungry, they call me a saint. When I ask why people are hungry, they call me a communist. - Helder Camara, archbishop (1909-1999)...Editors DeskThe self-styled conservationists who claim to protect seals, have turned into cyber terrorists. Realising that they have failed to stir emotions to...Editors DeskA survey conducted in four African countries by the International Planned Parenthood Federation to mark its 60th birthday, provides some eye-opening...
- Related Articles
- Making space for innovation and creativity (830 hits)General NewsThe development of human resources and institutional capacity is key in addressing the multiple socio-economic challenges affecting Namibia and with...Survey findings to enhance policy making (610 hits)General NewsThe unemployment rate will decline as more companies increase their workforce during 2012, the Namibian Business and Investment Climate (NamBic)...Exceptional racer in the making (1662 hits)SportAfter joining the National Enduro Race series only four years ago, Windhoek born Yana De Jesus, a self-taught racer and the second prize winner in...City making progress on land delivery (277 hits)General NewsThe City of Windhoek says it is on track to deliver 200 ervens in the Otjomuise Extension 4 area through a pilot public private partnership. Mayor...Cycling legend in the making (1368 hits)SportThe Economist recently caught up with the vibrant local cyclist, Windhoek born, Laban Naftal who recently came first in the Mariental Duathlon...
- Latest Articles
- Mobilising BEE power in tourism (474 hits)HeadlinesEntrepreneurship is said to be the main driver for economic growth hence the need for promoting and training entrepreneurs especially those engaged...Houses by the thousands (467 hits)HeadlinesA massive housing development programme, which will see a major facelift of the country’s informal settlements, is in its final stages of...From ECB to Energy Regulator (470 hits)HeadlinesThe transformation of the Electricity Control Board to a broader Energy Regulator is well on track with the final industry adjustments taking place....How many billions can the mattress hold? (23 hits)Editors DeskMy views on the informal economy are regularly sought by policy makers and entrepreneurs alike. The reason is rather straightforward: by all...WeatherWhat happened? Major disparities are prevalent across the three dimensional atmospheric range as revealed by the synoptic charts for surface levels:...