Prior to COVID-19's emergency, the economic performance of Latin American and Caribbean countries showed visible signs of slowdown as a result of stagnant productivity levels, deteriorating competitiveness and an unstable international context.
With the emergence of the pandemic, challenges have multiplied and the region is facing the worst crisis in its contemporary history. This is demonstrated by the figures of international organizations, which also project a recovery below the global average for 2021 and warn of the threats of a new lost decade for Latin America and the Caribbean.
In their efforts to contain the immediate effects of recession, countries have combined economic and health actions using their limited available resources. However, in order to avoid the realization of its long-term consequences, it will be necessary to undertake immediately an agenda of structural reforms that are the result of new economic and social pacts.
As part of these transformations, promoting the recovery of micro, small and medium-sized enterprises (MSMEs) represents a major task in rebuilding the business fabric and driving inclusive growth.
These productive units are a central component in the economic and social fabric of the region. They make up the vast majority of companies, are providers of a significant portion of goods and services, generate the highest proportion of employment, and are the main source of household income.
In addition, MSMEs expand the range of options for the workforce with low levels of training and fewer opportunities, becoming a mechanism to accelerate intergenerational mobility, reduce poverty, and strengthen social cohesion.
In view of their relevance, smaller companies have been a clear priority in the strategy-making process to boost the region's economic performance. However, the results have not been as expected and gaps with large companies have widened as a sign that barriers limiting their birth and development remain.
In this regard, emphasis should be made on three of the main challenges facing the region. The first is the growing informality that most vehemently affects the most vulnerable. Its persistence has strong social implications by restricting access to social protection systems and significant economic effects by reducing tax collection and the efficiency of productive factors.
The second refers to difficulties in accessing formal sources of funding. This prevents the development of ventures with wide potential for success, hinders innovation and export decisions, and reduces opportunities for business survival during periods of crisis such as the current one.
Finally, it is necessary to support the digital transformation of MSMEs as a catalyst for productivity and their insertion into value chains. The adoption of digital technologies can be especially useful in modernizing processes, expanding trade links and increasing production scales.
Working on overcoming these constraints is a step in the right direction and would result in large economic and social benefits for the region. However, this will require greater collaborative work and the formulation of new arguments and recommendations that guide actions.
In this regard, and in the context of these three challenges, the Permanent Secretariat of SELA undertakes the organization of this meeting with the central objective of building a roadmap to guide efforts to support MSMEs in the short and medium term, strengthening synergy and coordination among actors living in the region.