EDITORIAL - Boosting small businesses

Recent suggestions by managing director of the International Monetary Fund (IMF), Christine Lagarde, that nations capable of doing so should be considering renewed fiscal stimulus were obviously not made with Jamaica in mind.

The IMF is well aware that the austerity measures it has imposed on many countries, among them Jamaica, have hamstrung those governments which are already in economic malaise and have little, if any, fiscal space to pump billions of dollars to sustain business and job buoyancy. These difficulties in Jamaica have also helped to keep unemployment at the level of close to13 per cent.

We are a country that keeps piling up new debt to fight old debt, so there is never anything left over to invest in new technologies and innovation. Instead of improvement in education, for example, our Government has to consider interest payments or ways of organising new borrowings.

It seems that successive Jamaican governments have been obsessed with the short term, so they have never been able to implement the kind of structural reform that is necessary to build the Jamaican economy. And with mutterings about a vicious cycle of financial turbulence in the major economies, we remain powerless to withstand the likely knock-on effects.

This is why we welcome the opening of the Branson Centre of Entrepreneurship which opened in Montego Bay this week. The centre aims to harness the wealth of creative energy of bright young Jamaicans who will, hopefully, become part of the vibrant sector of small and medium-size enterprises (SMEs).

Numerous obstacles

It is true that Jamaican entrepreneurs face numerous obstacles, such as a lack of technical help, complex tax bureaucracy, and a need for capital support. The voice of the SME leadership has long clamoured for recognition and freedom from the bureaucratic leash which has been placed around them for so long.

Here is something else which is hampering the growth of SMEs - the seeming reluctance of the Government to do business with them. In fact, we want to suggest that, for the most part, governments have ignored this sector and left them virtually to struggle on their own.

We feel that the time is right for the Government to re-examine its procurement policy and system of public tender as it relates to doing business with SMEs, which have demonstrated that they have tremendous creative energy, especially in areas such as IT, construction, tourism, fashion, consultancy and facilities management.

It would be extremely interesting to find out what portion of the Government's annual Budget is spent with SMEs; and further, if the Government is gaining better value by spending most of its Budget with huge firms. Ultimately, we expect the Government will make the right decisions to ensure that it gets full value for every dollar spent.

We feel if significant numbers of government contracts are awarded to capable SMEs, it will mean millions of dollars worth of new business as well as new jobs for those wading around in a jobless pool. This is perhaps one way for Jamaica to get ahead of some of its problems.