Examining Small And Medium-Sized Enterprises In Yemen Essay

Has become an of import factor of success to every organisation and became the chief and major tract that SMEs directions must go through through to confront the challenges of modern twenty-four hours environment.

This paper presents an effort to research the …… . Practices of little and average sized endeavors ( SMEs ) in Yemen.

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More specifically, the SMEs working in Yemen tend to stress …… patterns in creativeness matter-of-fact facet keeping objectiveness accomplishing comparative advantage and keeping focal point.


SMEs make a important part to the socio economic and political substructure of developed and developing states every bit good as the states in passage from bid to market economic systems ( Matlay and Westhead, 2005 ) . Furthermore, a healthy and turning SME sector is perceived to be important for sustainable competitory advantage and economic development at local, regional and international degrees ( Porter, 2006 ) . The importance of SMEs has grown tremendously over the last 20 old ages ; this existent growing has been matched by grasp of their function. In add-on, SMEs are reduced the norm of unemployment, and they create new invention.

The definition of SMEs in Yemen depends on the figure of employees, where little concern has 1 to 4 employees, medium-size has 5 to 9 employees, and higher than these Numberss become a large concerns, SMEs aim at helping developing states to cut down unemployment rates without disbursement more capital, Characterized by geographical spread, which helps to cut down regional disparities, produce goods and services to the people in society who has low income and SMEs Provide occupations for some groups, particularly adult females and young person. The authorities in Yemen attempts to develop SMEs to go strong concerns by set uping many organisations to finance the SMEs like Social Fund for Development and some organisation such as Small and Micro Enterprises Promotion Services, these organisations under the Council of curates of Yemen.

SMEs challenges
The authorities has tried to develop the SMEs in Yemen by back uping several organisations related to SMEs sector to supply consulting, support, and preparation for the proprietors of SMEs. But still there are many challenges that confronting this sector in Yemen as below:

1. Interest rate, this is the first challenge that faces new and old SMEs because the involvement rate of the fund about 12 % per twelvemonth, this rate is high if compared with Malaysia rates 3.75 % , besides the proprietors are confronting some troubles to pay off this involvement in the beginning old ages of their concern. ( SMEPS study, 2009 )

2. Consulting and preparation, the lower of advisers and preparation for SMEs whether people or organisations are effected in SMEs to travel bankruptcy in many sectors in Yemen. In fact, there are no more preparation for those who want to get down their ain concern.

3. Experience, some of the SMEs do n’t hold adequate experience when they want to get down up their concern, for illustration they do n’t fix proper programs for undertakings when they start, whether the undertaking successful and profitable and return on invested capital or non. If the reply no, you must analyze another undertaking.

4. The import from China, the merchandises are imported from China normally their monetary value are lower than that we produce, as we are in a hapless state, the client will prefer the lower monetary value, this challenge effects many SMEs, because, the SMEs said that, it is better to import from China than bring forthing same merchandises in Yemen.

5. Forging in SMEs, many SMEs start their concern in same sector, when they saw some sectors were successful, so they ca n’t construct their competitory in the market, subsequently they go bankruptcy.

6. Most of SMEs merchandises are for local market ; their merchandises do n’t hold a good quality to be export globally due to the weak ability for competitions.

Gross domestic merchandise at changeless monetary values increased from 4.4 % in 2007 to 4.7 % in 2008. The GDP growing in 2008 was basically based on the sectors of building ( 30.7 % ) , and conveyance repositing and communications ( 12.3 % ) . On the other manus, non-oil GDP growing slowed from 8.9 % in 2007 to 7.5 % in 2008.

Essential estimations of gross domestic merchandise at changeless monetary values for 2008 show that most economic sectors registered positive growing rates. Agriculture, forestry and piscaries grew by 2.9 % in 2008, while the other sectors achieved growing rates runing from 3.5 % for fabrication to 30.7 % for building. In the same twelvemonth, extractive industries shrank by 7.9 % and non net income societies by 4.2 % . In 2008, services bring forthing sectors as a group exceeded in growing the group of goods bring forthing sectors, as services registered a growing rate of 8.4 % compared with 10.7 % in 2007. As a effect the part of the services sectors to growing in GDP at steady monetary values rose from 58.8 % in 2007 to 60.9 % in 2008. On the other manus, the part of goods bring forthing sectors to GDP growing retreated from 43.8 % in 2007 to 42.5 % in 2008.

Foreign Trade
Datas of Foreign Trade between Yemen and the remainder of the universe during 2008 showed an acceptable development despite regional and international uncertainnesss. This betterment was attributed to the policies and steps taken by the authorities during current twelvemonth and the last few old ages, which increased trade and economic partnership with states.

Entire value of exports rose up from US $ 7049.5million in 2007 to US $ 8976.9 million in 2008, an addition of US $ 1927.4 million, or 27 % over that of last twelvemonth. Ratio of exports to GDP in 2008 amounted to 31.3 % . The addition of Exports particularly Oil exports during 2008, has a positive consequence on the volume of trade with some of Yemen ‘s trade spouses. Exports to China rose by 80 % during 2008 and Its comparative portion increased from 20.8 % in 2007 to 31.1 % in 2008. Consequently China ranked in the first place of importers from Yemen. Year 2008 witnessed an addition of exports to Thailand by 47 % during 2008 and its comparative portion rose from 19.5 % in 2007 to 23.8 % in 2008, ranking Thailand in the 2nd place among importers from Yemen. ( bank, 2008 )

U.A.E climbed to the 3rd rank because its comparative portion increased from 7.6 % in 2007 to 9.5 % in 2008. India retreated from the 3rd to the 4th place whereas its comparative portion retracted from 16.1 % in 2007 to 8 % in 2008 and export value went back by 40 % during 2008. Exports to South Korea grew by 113 % during 2008. As a consequence, its comparative portion increased from 3.6 % in 2007 to 6.3 % in 2008. Exports to Saudi Arabia grew by 50 % during 2008 ; hence its comparative portion increased from 2.2 % in 2007 to 2.8 % in 2008. The comparative portion of South Africa retracted from 4.1 % in 2007 to 2.7 % in 2008 because export value went back by 20 % during 2008. ( bank, 2008 )

Imports besides increased with 24.6 % , from US $ 7490.3 million in 2007 to US $ 9333.8 million in 2008, to run into ingestion and investing demands.

Imports from U.A.E increased with 65 % during 2008 as good, and the comparative portion rose from 21.6 % in 2007 to 28.9 % in 2008, ranking U.A.E in the first place

Among Exporters to Yemen, which is the same rank it occupied in 2007.

China ascended from the 3rd to 2nd rank, whereas its import value rose with 10 % during 2008, although the comparative portion declined from 7.9 % in 2007 to 7.0 % in 2008.

Saudi Arabia retreated from the 2nd to the 3rd place, whereas its comparative portion retracted from 8.2 % in 2007 to 6.7 % in 2008, although import value rose somewhat by 0.5 % . ( bank, 2008 )

Kuwait mounted up from the 6th rank to the Forth, where its comparative portion grew from 5 % in 2007 to 6.4 % in 2008 and Imports value rose by 58 % during 2008. Imports from India increased by 7 % during 2008 although its comparative portion decreased From 4.5 in 2007 to 3.9 % in 2008. Imports from U.S.A declined with 9 % . As a consequence, its comparative portion fell from 5.2 % in 2007 to 3.9 % in 2008.


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