With low sectoral competitiveness impacted by factors such as a lack of innovation and technological development, relatively low quality standards, access to finance, the business regulatory framework, infrastructure and market size, the policy of the European Union since 2006 has been to focus on small and medium-sized enterprises (SMEs), which make up 99% of the existing enterprises.

Therefore, in order to make the local economy more competitive, significant support is being given to develop and diversify the private sector, and to providing new technologies and high-quality business services to SMEs.

Four co-financing grant schemes under the Private Sector Development Programme, totalling around €18 million, have been financed by the European Union to date, one managed by UNDP, and three directly managed by the European Commission (EC). Under the three grant programmes directly managed by the EC, a total of 101 SMEs and business associations have been supported.

The focus of EU support under the grant schemes is the provision of new equipment and machinery, and specialised consultancy services for existing and start-up enterprises. Investments in new technologies particularly relate to the strengthening of the information and communications technology (ICT) sector in areas such as e-business, trade portals, exports on line, ICT products; the introduction of energy efficiency and renewable energy technologies with a concentration on solar energy; and the introduction of quality and environment standards (ISO EN 9000 and 14000 series). Other technology areas include food processing, cold storage and waste water treatment. A strong focus of the fourth SME grant scheme is to support private sector job creation and enhance SME skills.