SMEs and economic resilience building

Abstract

This paper discusses the role of private sector development in the economic resilience building of small states. The private sector is generally more exposed and more responsive to market dynamics, thereby contributing to the flexibility of the economy. However, instances of market failure may be more prevalent in small economies, especially if there is a proliferation of monopolies and oligopolies. This calls for appropriate polices to encourage competition and efficiency, within the context of promoting a business environment that is congenial to small and medium sized enterprises which are the main drivers of economic growth in small states. The paper considers the Doing Business index published by the World Bank and hypothesises that small states which have overcome their vulnerability through the establishment of policies aimed at enhancing economic resilience also register positive performance in the doing business index.