Friday 31 May, 2013
Pierre Mendes France Conference Centre, Ministry of Economy and Finance, Paris
After nearly a decade of continuous expansion, GDP growth in Latin America will slow from 4.3% in 2011 to 3.1% in 2012 and 3.5% in 2013. The outlook remains relatively positive, but is exposed to global uncertainty and volatility. In addition to the slow growth of OECD countries, the slight slowdown of the Chinese and Indian economies, which have been key drivers of global growth and demand for Latin America’s raw materials, is also expected to have a negative impact.
In this context, the need for addressing the structural issues of competitiveness and productivity of economies in the region is crucial. Small and medium enterprises (SMEs) must play a central role in unleashing Latin America's growth potential and creating higher quality jobs. They represent an overwhelming majority of private enterprises in the region: SMEs account for 99% of businesses and employ 67% of employees. However, their contributions to GDP and overall productivity are low: whereas large firms in Latin America have productivity levels 6 times higher than those of SMEs, this difference is only 2.4 times in OECD countries. A common problem for SMEs is not so much their size, but their isolation in the productive structure, which makes them unable to scale up production and specialise.
The fifth edition of the International Economic Forum on Latin America and the Caribbean provided the opportunity to discuss these challenges and to share solutions for sustainable economic development in the region. After providing an overview of the economic outlook of the region, the Forum asked how governments in the region can engage reforms in favour of higher productivity by more adequately addressing the needs of SMEs and by better including them in the production structure.