What is enterprises? [Archives:2000/33/Business & Economy]

August 14 2000

Definition of small enterprises vary from one country to another, according to their circumstances. However, there has been a wide agreement on their integral role in gearing up economies.
There hasn’t so far been a unified definition for small enterprises in Yemen. For example, the Ministry of Industry defines them as small installations using 15 or less employees and equipment for less than YRs 2 million, while it was defined as the project that embraces 1-4 employees in The First Industrial Survey.
Results of the First Industrial Survey in 1995 showed that 33284 small enterprises installations are present in Yemen. According to the same survey, governorates’ share of those projects was as follows: 15% in the Capital Secretariat, 13% in Ibb, 11% in Sana’a, 9% in Taiz, 8% in Hadhramaut, 8% in Dhamar and 7% in Hodeidah. This indicates that more than 71% of the small enterprises installations are concentrated in those governorates, while Shabwa and Al-Jawf ranked as the lowest since they featured less than 1% of the total number of the projects.
Importance Of Small Enterprises:
The ability to meet the market demands and tastes in a remarkably short time, creating new job opportunities, improving administrative skills and ability of recycling wastes of big industrial plants attach high importance on small enterprises.
Development and encouragement of small enterprises in a country like Yemen is a strategic goal for making progress. Weakness of economy, increase in unemployment make development of small enterprises a must in order to create new jobs and to eliminate poverty.
Realizing this importance, the Ministry of Industry established in 1995 a unit for promoting small enterprises as part of the agreement between our country and the United Nations Fund. Another agreement to fund the unit was signed between Yemen and the Netherlands.
The unit encourages establishment of small enterprises by giving loans to people to run such projects. Germany has also showed interest in providing technical aid to Yemen in the same domain. The result was the signing of a cooperation protocol between Yemen and GTZ on August 14, 1996. Work in the cooperation program between Yemen and Germany commenced in October 1998 and will go on for 8 years as planned. Activities of this project have been concentrated, for the first phase of its implementation, in Taiz and Aden.
At the office of the Small Enterprise Promotion in Taiz we met Mr. Rudolf Guthuer, Team’s Head, who said: “We encourage small enterprises and people who help themselves.” He added that plans had been set up to form ad hoc committees to study the problems that small enterprises suffer from, especially those related to governmental offices. Our main job is not funding, but providing information and advice for technicians, he said. We help those who need help. We coordinate with the private sector and the Unit For Small Enterprise Promotion in the Ministry of Industry to solve financial problems through loans, he added.
We also met with Dr. Abdul Ghani Hameed, project General Manager who said that the enterprises provided more than 60% of the job opportunities in the market. There are certain factors that can develop small enterprises’ capability of export level, he said. Exemption from taxes is an example, he added.
The office creates a kind of dialogue between owners of small enterprises and authorities concerned and has continuous contacts with them as to come close to their problems.
As for the difficulties faced he referred to those with governmental authorities such as taxes, customs, duties, electricity and those created by enterprises owners’ lack of administrative skills. He added that there were plans to establish a service center for information and consultations besides establishing a fund to support small enterprises’ runners.
Yemenis have a reputed old history in handicrafts and traditional industries. Many of them run small enterprises. However, the future of small enterprises looks uncertain. Despite the great number, products seem to be less accepted by consumers for their poor quality which results from lack of technician skills. The solution can be through more training for owners of such projects to enable them successfully run their projects and improve quality of their products to export levels. Certainly, such a stage needs extra abilities.