Times of Oman
Aug 31, 2015 LAST UPDATED AT 01:31 AM GMT
Cut red tape to support budding entrepreneurs
July 28, 2013 | 12:00 AM

Saleh Al Shaibany

Muscat: Young inspiring entrepreneurs, when they find out that they have to go through a maze of red tape to set up a business, most of them give up the dream of their lifetime and end up joining the long queue of the unemployed. Is it any wonder?

The budding talent and the enthusiasm of young people seeking to make it good in various trades suffer countless setbacks as they are asked to fill up endless forms, process too much paperwork and go through exhausting official regulations.

The concept of one-stop shop usually only applies to foreign investors who are offered a fast track route to establish a business in the Sultanate. On the other hand, local youngsters, though they have financial aid readily available, find that to put their signature on an official paper to get a business going is very frustrating, if not frightening, task.  

Such overbearing bureaucracy puts the brakes on the economy.

It also allows the monopoly of the same old trading houses to control the businesses just as they have done over the last four decades. For Oman's economy to flourish, there has to be a genuine attempt to let young people in. We should dismantle the old walls of protection that favour the established trading companies who see new entrants as business rivals.

Protective regime
New entrepreneurship will offer competition but the established trade heavyweights should not take it personally and must stop resisting the change. Budding entrepreneurs are the future and they offer an exciting opportunity to diversify the economy to boost business growth at a time when finding jobs for the young is the top priority.

It is time the business protection regime changed and favoured small entrepreneurs who don't have the resources to overcome the red tape and comply with confusing regulations. It is also time that different government agencies united to smoothen their financing, licensing and labour requirements. In theory, everything is in place to open a venture but in practical terms, the myriad regulations and roadblocks are putting off new business people from making their mark.   

Start-up businesses will not see the light of the day unless we start making sweeping changes now. There is also a problem of those businesses that have made through the start-up stages. Their rate of survival is small.

According to statistics, a new small to medium venture stands only a 30 per cent long-term survival chance. If we take the example of the European Union (EU), small businesses that employ up to 50 workers form the largest employers but their success needs a solid support from the government. In the current scenario, small businesses can play an important role in self-employment and job creation, better even than multi-million companies that depend on automation to do the jobs rather than manpower.

One would ask the question, how many multi-million companies have been set up in Oman in the last 20 years? Just a handful, and the evidence is there in Sohar, the flagship of our big time industries, with only precious few set up there in the last two decades. It is evidence enough that setting up small businesses is the only solution to accommodate the thousands of young people who look for jobs every year.

The irony is that the young people themselves can set up these ventures and employ their peers, provided the environment is right for them. Unless state planners admit that there are structural inefficiencies in business creation, new trade ideas will never take off and the existing ones will continue to struggle.

Structural barrier
The structural barrier that creates hurdles for potential business people must be removed and replaced by friendly and supportive methods. One way of fixing it is to replace the officials who have been occupying these offices for a number of years to make way for more innovative and dynamic graduates. 

The government must also make it compulsory that manufacturers and large corporate companies offer their support by outsourcing some of their requirements to small ventures to keep them afloat. For example, a mineral water company recently opted to give a contract for plastic bottles to a foreign-based firm instead of a local one. Such contracts that can support local companies would create hundreds of jobs and keep the economy going.

So it is not just old fashioned red tape that needs to go but the old bureaucrats also who must make way for young blood if we want inspiring entrepreneurs to soar high.

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