smes cannot capture a share of the outsourcing market that is now dominated by countries such as india. to take this leap forward, the focus must be on innovation and increasing productivity and competitiveness. the strategy may need strengthened financial support and perhaps more trade and export market facilitation. in singapore, for instance, a new sme loan programme has been introduced to help singaporean firms penetrate global markets. as a start, a similar scheme could be devised under the recently launched caribbean single market programme to enable caribbean smes to develop the potential and capacity to export. while most smes will remain focused on the local market, those that are likely to thrive and expand are the ones that embrace the export challenge and are prepared to adopt new technology, develop new information systems and devise innovative products that are globally competitive. here at home, as part of its diversification effort, the government is investing in the development of a cluster of technology industries linked to the university of trinidad and tobago. this cluster is expected to develop a range of innovative products that can compete at the global level. there is no reason why this should not be fertile ground for the expansion of the sme sector. let me end by again congratulating the nova committee of the trinidad and tobago chamber of industry and commerce for arranging this most important forum. i am sure that the dialogue and the exchange of ideas and experiences that will take place over the next two days will help the sme sectors throughout the caribbean come closer to realizing their potential and expanding their contribution to the transformation of the region. the future of the region is in their hands.

governments which are committed to sme development focus on making funding available on reasonable terms. one challenge they and central banks face is to encourage the traditional financial institutions, particularly the commercial banks, to lend to smes. invariably they try to do this through lo an guarantee schemes. the logic is that banks are more likely to make loans to perceived “ risky ” small businesses when they know that the government ( or some government agency ) will guarantee repayment even if the borrower defaults. credit guarantee schemes have become the most popular of government support schemes worldwide since they combine a subsidy element with market - based characteristics. the arrangements are also intended to make use of the banks ’ infrastructure for loan administration. but guaranteed schemes are not perfect and lead to moral hazard since the banks ’ funds are not at risk, and since the small businesses can default with little cost. variations of the scheme have been devised to deal with these issues. to supplement credit available through the traditional institutions, several governments see the need to establish institutions that provide direct credit to small and medium enterprises. such institutions ( development banks in most countries ) face unique challenges in avoiding political interference and operating along strictly commercial lines. at times, rapidly growing small businesses require equity as well as debt financing. several countries have sought to address this deficiency through the development of a venture capital industry. the united kingdom has a very interesting concept called “ the business angel ” where small amounts of venture capital come with considerable technical expertise and general management advice. it has been demonstrated that the successful promotion of smes development requires the integration and linkage of technical training and business support services with financial assistance programmes. governments are best placed to take the lead in adapting the education system to the needs of business, and in particular, small business. governments are also well placed to provide arrangements for entrepreneurial training and support perhaps in collaboration with private sector or non - governmental organizations ( ngos ). in many countries, the state has sought to nurture an enterprise culture through an alliance of business education and training programmes with initiatives like “ business incubators ”, which in effect are facilities where aspiring entrepreneurs can learn business skills. some people think that the effect is exaggerated and that the best thing that the government can do for sme development is to reduce regulatory impediments and bureaucratic red tape and implement tax policies that promote small - business growth. a bit about our local situation … …. notwithstanding our abundant energy resources and our robust energy based industrial platform, the imperatives of economic