Proposed Strategy for Import Substitution of Small Goods

Abstract

Most developed countries have focused on small and medium-sized enterprises (SMEs), enabling them to stimulate youth initiatives. Various infrastructures are available, and these countries provide support for such projects, contributing to their economic development. In many countries, SMEs account for more than half of the gross national product, as seen in Germany and France. Recently, many developing countries, such as China, have also focused on these projects, recognizing their ability to absorb unemployment and improve income levels for the poor, while creating high added value. SMEs are considered an important factor for economic and social stability. Yemen, however, is among the least developed countries in this regard, as it has not prioritized the development of small and medium enterprises and has not provided adequate support. Consequently, these enterprises face significant challenges in obtaining financing, with most being funded by owners' personal funds. Additionally, there has been a lack of attention to the infrastructure needed for these projects, such as training and rehabilitation. Unfortunately, many traditional industries have been taken over by importers who have opted to manufacture them abroad, particularly in China, leading to the loss of many traditional crafts and depriving many families of their livelihoods.

Based on this, a national strategy for the import substitution of small goods has been proposed as a means towards comprehensive economic development. This strategy revolves around preparing integrated infrastructure for these projects, including the development and modernization of technical and vocational institutes, linking them with financing institutions, and assisting local authorities and relevant entities in small and medium enterprises. This ensures that qualified graduates have opportunities for project employment,

will increase enrollment in these institutes. Additionally, industrial zones should be established where these projects can cluster, facilitating the provision of services and marketing of their products, thereby reducing costs and, consequently, minimizing the risks of failure. Tax exemptions should also be offered during the establishment phase to help these projects grow and sustain. In the medium to long term, this is expected to improve living standards, reduce unemployment rates, and contribute to foreign currency availability by decreasing imports, with the potential for these enterprises to contribute to exports as well.