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Experts at OAS Roundtable Discuss the Challenges and Opportunities of SMEs in Latin America

The Organization of American States (OAS) today hosted its 50th Policy Roundtable that featured the presentation of the publication "Latin American Economic Outlook 2013: SME Policies for Structural Change,” produced by the Economic Commission for Latin America and the Caribbean (ECLAC) and the Organisation for Economic Cooperation and Development (OECD). The Roundtable also examined the challenges faced by small and medium enterprises and the public policies needed to strengthen and stimulate growth.

In his introduction to the event the OAS Secretary for External Relations, Alfonso Quiñonez, recalled that this is the third time that the OAS has hosted the presentation of the report, "which allows us to reflect on the work we have taken on, and that is a key part of our raison d'être, to contribute to the fight against poverty and to foster partnership programs that promote social inclusion in the region."

The senior OAS representative highlighted the importance to the region of small and medium enterprises (SMEs), which he characterized as "one of the main participants of economic growth that play an important role as job creators, accounting for between 25% and 40% of job generation" in Latin America. He added that this sector "provides a certain stability to the labor market and significantly contributes to the democratization of opportunity and the participation of citizens, which means social inclusion." He also highlighted the work that the OAS has done in the last decade on issues related to the strengthening of SMEs, including workshops, training programs, publications and initiatives that promote entrepreneurship among youth.

During the event, the Director of the Development Centre of the OECD, Mario Pezzini, analyzed the macroeconomic situation in the region, gave an assessment of the situation of SMEs and outlined the policy recommendations to facilitate the development of this sector in Latin America that are contained in the report. He said that these enterprises "are a priority area for strengthening the overall economy of the countries" and therefore, policies should be created to transform them into agents of change, in order to increase productivity and competitiveness and maximize their potential to generate quality jobs.

Referring to policies that can be implemented for SMEs, Pezzini emphasized the need to support equality in productivity and investment, to combat isolation, to promote competitiveness with an inclusive approach, and to engage both local and regional government sectors and large companies in efforts to work for the development of SMEs, "since many of them are their suppliers."

"SMEs can be a key tool for the competitiveness of a country and a crucial component of the overall value chain but we cannot continue to consider them only as a traditional craftsman sector, giving some eventual subsidy, because this does not reflect a policy of sustainable development," concluded Director Pezzini.

For her part, the Director of the Washington Office of ECLAC, Inés Bustillo, highlighted the social and economic achievements of the region and stressed that SMEs "can play a key role in the future toward the further improvement of social development," although she noted that some of the characteristics of this sector are its low productivity, informal nature and its restricted access to technology. She further said that the report highlights the "bottlenecks" in public policy relating to SMEs such as limited access to finance, high collateral requirements, excess margin requirements, and complex bureaucratic requirements.

The ECLAC representative called for implementing public policies for SMEs that are consistent, comprehensive, sustainable over time but also flexible. "In the report we emphasize the need for consistent and sustained actions and the importance of strengthening institutional capacity to maintain, coordinate and implement these policies and to have the flexibility to adapt to changes and the specific demands of geographical areas and subregions."

The panel discussion that followed the presentation included the Director of the OAS Department of Economic Development, Trade and Tourism, Maryse Robert; the Director of the Project on Prosperity and Development of the Center for Strategic and International Studies (CSIS), Daniel F. Runde; and the Director of Customs and Regulatory Affairs for Latin America and the Caribbean for FedEx Express and Advisor to the Association of American Chambers of Commerce in Latin America (AACCLA), Francisco X. Santeiro, who spoke of the economic and social progress that has occurred in recent years in the region and how it relates to SMEs.

Moderated by Peter Hakim, President Emeritus of the Inter-American Dialogue. the panel discussed some of the central themes of the report including access to credit and information and communication technologies; the importance of promoting trade agreements; the challenges in terms of training, government support, and risk mitigation; the importance of promoting intellectual property; and the financial challenges. The group agreed in highlighting the initiatives that the OAS has made to strengthen the institutional capacity of the countries in this area.

The OAS Executive Secretary for Integral Development, Sherry Tross, concluded the event by highlighting the richness and variety of the discussion with panelists that included representatives from governments, civil society,the private sector and international organizations, and said the OAS "adds value to the conversation by bringing together the different actors working in a particular subject from different perspectives by encouraging them to have a rich and coherent exchange."

A gallery of photos of the event is available here.

The B-roll of the event is available here.

The audio of the event will be available here.

For more information, please visit the OAS Website at www.oas.org.

Reference: E-131/13