The main reason is the unavailability of export promotion programs and policies at the industry and corporate level. The main objectives of export promotion are to contribute to the general economic improvement of the country and, consequently, to increase the standard of living of the population.
Introduction
Background Information
SMEs in Eritrea
The domestic market is relatively small to justify the growth of many of the SMEs. Export promotion can thus be one of the ways to increase exports and increase entrepreneurs' awareness of competing in the global market.
Literature Review
SMEs and the Economy
Moreover, SMEs are the source of employment and daily income in Africa and other third world countries. SMEs as suppliers of larger companies also contribute to the competitiveness of these firms.
SMEs Barriers to Internationalisation
SMEs are a source of innovation on the grounds that they are more flexible, more dynamic and more sensitive to changes in demand than larger firms. Therefore, if SMEs want to compete in the international market, these problems must be avoided.
Value of the Proposed Study
There are also organizational barriers, including limited resources, lack of 'global vision' and previous experience in international marketing, and difficulties in finding suitable overseas partners (agents/distributors); and production/market barriers related to the suitability of the company's product or service for internationalization and the selection of the most attractive overseas markets (Internet 3).
Motivation For Research
This could only be done through the government's concerted effort in the export promotion and development programmes. It is the expectation of the researcher that in order to answer these questions and the crucial problems mentioned above, it will be necessary to study the need for the creation and improvement of Export Promotion Programs (EPPs) focusing on financing, information provision and creation of network of main actors that can apply to the needs of SMEs in Eritrea.
Statement of the Research Problem
Problem Analysis & Definition
One of the basic assistance given to SMEs is in the form of information and advice which is better called the Information Provision Service. How can the management of the Ministry of Trade and Industry create and improve export promotion services to SMEs in Eritrea, focusing on financing, Information provision and Networking of main actors.
Objective of the Study
Research Design and Methodology
In order to fully achieve the desired results of the research, the following three data collection methods were used: Documentation, Interviews and Focus group interviews. Focus group: - obtaining information from direct beneficiaries of export promotion policies, i.e. SMEs, was very important for the validity of the research.
Internal and External Validity
With the aim of increasing the reliability of the data, a follow-up interview on specific questions was conducted as needed. However, the focus group interview that was planned to be conducted with selected SME entrepreneurs from various sectors of the industry was not conducted due to certain problems and non-availability of these entrepreneurs.
Limitations of the Study
Structure of the Study
Summary
Introduction
The Internationalisation Process of (SMEs) Small and Medium Enterprises
Motivation, Constraints & Opportunities for Internationalisation
The major problem areas for the exploring firm are communication, sales efforts, gathering marketing information, information on business practices, and obtaining financial information. Marketing managers' input is highly valued in decisions related to international marketing activities.
The Information Needs of the Small and Medium Sized Export Oriented Enterprises
The Importance of Export Information
This is done in the form of export information and advisory services to exporting SMEs. At the center of the model is the network between the company and some of its major external parties on the product and service market. However, part of the information is already covered in the previous steps of environmental analysis.
The Export Finance Needs of SMEs
The second concerns the risks involved in each of the payment methods. The exporter may be able to lose control of the documents, and thus of the goods. According to Dunn & Knight (1982, PP. 7) the terms export credit and export finance refer to the set of facilities available to an exporter in any country to help him cover the risks of default in his export business.
Formulation and Implementation of Export Promotion Policies and Programs
In most countries, export promotion efforts are made under the auspices of the country's trade promotion organizations. It is also clear that export promotion programs are part of the implementation programs of the government's strategic policies. However, successfully offering export promotion depends on the organization and networking of the activities and responsibilities involved.
Introduction
History of Business and Industrial Development in Eritrea
By the early 1930s, Eritrea was one of the most industrialized colonies with advanced infrastructure in Africa (Internet 40). Due to this situation, the Ministry of Commerce and Industry has taken the following measures to address the challenges faced by the industrial sector in the country. In the previous chapter, it was discussed that export promotion policies are the result of the government's strategic economic policy.
Overview of the Industry and Situation of SMEs in Eritrea
Challenges to the Growth of Firms in Eritrea
However, the growth of these companies has been hindered by the inherent problems of the sector in particular and the economic situation in the country in general. The average amount of capital per worker in Eritrea is just over $21,000, which is a very high amount considering the size of the country and its private sector. However, most of the funding is apparently used to meet working capital needs and investment is very small.
Export Opportunities for the Manufacturing Firms
To support this policy, creating an export promotion and development center was one of the strategic issues. When the export promotion center was established, there was a belief that more people would be put in place to strengthen the center and its structure. They created and announced the essentials of the export promotion center and elected the Minister of Industry as chairman to handle the center's daily activity.
Export Crash Programme
The Deputy Director General was not well informed about the export promotion center activity and could not continue to provide guidance to the center. The export promotion center was denied a legal entity and could not carry out its activities as required. As a result, the export promotion center was closed in 2001 by the new minister assigned to the Ministry of Trade and Industry.
Export Challenges of the Eritrea's Manufacturing Industry
As we said earlier, lack of market research is one of the main problems faced by Eritrean companies. One of the main reasons is the low awareness of managers about the importance of information processing. There is one chamber of commerce in Eritrea, which is established by an association of companies.
Trade Promotion Organisation
The destinations for these exports were as follows: Sudan, Tanzania, Uganda, Kenya, Australia, Yemen, Saudi Arabia and the United States for the footwear products. Italy, USA, Germany, Denmark, Netherlands, Srilanka, UAE for the food sectors, especially fish exports.
The Chamber of Commerce of Asmara
Although the economic and industrial policies have clear objectives for the development of the industrial production sector, there are no clear policies and implementation strategies at the lowest level. Some of the constraints include lack of market research, lack of exportable products, lack of quality, poor presentation or marketing skills, lack of training to improve productivity and marketing skills, outdated machinery and equipment, lack of facilities export credit and the lack of cooperation between firms. These problems will be solved only with the joint efforts of the government in export promotion and export development programs.
Introduction
This was mainly due to the physiological distance and cultural similarity between the two countries. In fact, one of the international consultants who studied the textile sector had warned the ministry in its report that dependence on one market is not good for the country and its businessmen. But the problem was clearly seen after the closure of the Ethiopian market when the border conflict between the two countries broke out in May 1998.
Findings
As one of the studies identified, the companies were unable to enter into contracts with a foreign buyer due to their lack of working capital and capacity. The Ministry of Trade and Industry should also have worked on the possibility of making available the export financing services of COMESA's PTA bank. Currently, there are no export promotion services offered at either the industrial or corporate level in Eritrea.
Introduction
The development of export promotion policy and implementation of the program should be elaborated within a consultative framework and various stakeholders should be involved to give their feedback. Then the information must be collected and analyzed through workshops, questionnaires and other tools to refine and finalize. This means that for the success of the export promotion program effective trade support networks at national and regional level.
Organisational Structure
To that end, it is important to have different institutions responsible for various foreign trade activities and a variety of policies, procedures and practices that affect foreign trade performance, and it is also important to have effective mechanisms to coordinate between trade-related institutions and organizations . In addition, the Department of Foreign Trade in collaboration with SME owners/managers should focus on developing a network for useful personal contacts and collaborative efforts - at trade fairs, exhibitions, during contractual agreements with foreign buyers or suppliers, through agents and other companies. The 8ME development unit should be under the department of industrial development, where the export promotion and development center could be under the department of foreign trade of the MTI.
Implementation Issues and Phases
Analoui Farhad and Karami Azhadar Strategic Management in Small and Medium Enterprises." 1SIE Edition, Thomson Learning, London). European Journal ofMarketing: Vol Export Decision-Making In Small Firms: The Role Of Organizational Learning." Journal of World Business, Spring98,. Mohan-Neill, Sumaria Indra, "The Influence of Firm's Age and Size on Its Environmental Scanning Activities." Journal of Small Business Management Oct95, Vo!.
