Why do governments pay particular attention to small enterprises?

In recent years, the media have devoted considerable attention to the difficulties faced by some Omani-owned small enterprises and the challenges they encounter in their day-to-day operations. This is where the government has an important role to play in mitigating the negative effects affecting these enterprises.
Many of these challenges can be addressed by reducing administrative procedures and simplifying requirements, to able them to achieve success and long-term sustainability.
The number of enterprises registered with the Small and Medium Enterprises Development Authority (Riyada) reached 130,359 at the end of last year. Of these, 110,479 were micro-enterprises, 18,804 were small enterprises, and 1,076 were medium-sized enterprises. These enterprises are classified primarily according to their annual revenues and the number of employees they have.
Here, it is important to emphasise the need to unify the statistics published by the various authorities concerned with small and medium enterprises. There are currently significant variations between the figures published by Riyada, the National Centre for Statistics and Information, the Ministry of Commerce, Industry and Investment Promotion, the Oman Chamber of Commerce and Industry, and others. Some data indicate that the total number of registered SMEs in Oman has reached around 270,000, of which more than 130,000 are registered with Riyada.
There is no doubt that many of these enterprises are currently facing a number of challenges and difficulties, some of which are related to markets and business opportunities.
They need access to small government contracts and tenders to secure their day-to-day operations and maintain business continuity. Such opportunities give them a better chance of surviving and meeting their financial obligations to banks and financing institutions.
Another major challenge is the rising cost of doing business, including fees and Omanisation requirements imposed on these enterprises. They also face difficulties in securing working capital and maintaining adequate liquidity during their operations. In response, the relevant authority has introduced a number of programmes aimed at empowering these enterprises and supporting the financing of working capital, contracts, exports and other business needs.
This situation requires appropriate policies, legislation and streamlined procedures that enable small enterprises to obtain licences and access the various forms of support and business-enabling facilities available to them.
Some believe that the solution lies in allocating genuine business opportunities to these enterprises. This could include implementing Ministry of Finance decisions to allocate 10% of government purchases and tenders to small enterprises, while distributing such opportunities geographically among eligible beneficiaries.
It is equally important to accelerate the payment of government dues owed to these enterprises, and to reduce the financial burden them during their early years of operation.
One option worth examining is the possibility of deferring certain fees and tax obligations until enterprises have had sufficient time to become profitable. In other words, the economic burden imposed on a business should be linked, to a reasonable extent, to its actual capacity to bear such costs during its initial years.
Such measures would help small enterprises remain in business, increase their annual sales, employ more Omani workers, and gradually to grow. They would also contribute to increasing local added value.
Small enterprises have the potential to create employment opportunities for young people in the future, diversify the economy and reduce excessive dependence on traditional sectors or large companies. They can further contribute to the development of Oman’s governorates and regions, increase domestic production, and provide a wide range of goods and services to larger companies.