Enabling Environment for the Successful Integration of Small and Medium-sized Enterprises in Global Value Chains

Country Studies of Bangladesh, Nepal and Sri Lanka

image of Enabling Environment for the Successful Integration of Small and Medium-sized Enterprises in Global Value Chains
Small and medium enterprises (SMEs) in South Asia and are effective job creators and income generators. In addition, SMEs play a key role in poverty reduction and inclusive economic growth. However, SMEs in the subregion often face considerable resource constraints and have limited capabilities to compete effectively in global and regional markets. Recent experience from a wide range of the Asia-Pacific countries, particularly from South-East Asia and China, indicates that domestic SMEs can access international markets through global (and regional) value chains (GVCs). This publication aims to propose practical policy interventions for improving business environments by targeting three South Asian countries — Bangladesh, Nepal and Sri Lanka, to facilitate SMEs’ access to global and regional markets through GVCs. Sector based value chain approach was adapted to focus on a few product groups with high export potentials: plastic goods from Bangladesh; coffee and ginger for Nepal and rubber and electronic products in Sri Lanka. National action plans and a subregional programme, together with operational strategies including needed institutional framework among stakeholders, for those products were developed and presented.



Prospects of selected SMEs’ integration in global value chains: A synthesis of country studies on Bangladesh, Nepal and Sri Lanka

Most of the South Asian countries have significantly improved their economic growth rates, with five to six per cent average annual growth during the last decade of earlier century and first decade of this new millennium (ESCAP 2009c). South Asian countries, perhaps with the exception of Nepal, have improved their trade performance, particularly exports, and have been successful in integrating their economies in the regional and global markets. Growing intraregional trade and further enacting trade and investment liberalization measures, new prospects for cross-country industrial linkages within emerging international production networks are providing new impetus to establishment of regional value chains. Such regional value chains, as well as individual enterprises in selected South Asian countries, are also establishing networks in global value chains.


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