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Latin America and the Caribbean 2019

Policies for Competitive SMEs in the Pacific Alliance and Participating South American countries

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The SME Policy Index is a benchmarking tool that assists emerging economies in monitoring and evaluating progress in policies that support small and medium-sized enterprises. This first application of the Index methodology in the Latin American and Caribbean region covers the four Pacific Alliance member countries (Chile, Colombia, Mexico, Peru) and three participating South American countries (Argentina, Ecuador, Uruguay). Divided into seven policy dimensions, this report assesses the strengths and weaknesses that exist in different areas of SME policy design, implementation, and monitoring and evaluation, and provides guidance to policy makers in identifying policy areas for future reform according to international good practices. This report is a joint effort between the Development Bank of Latin America (CAF) and the OECD through its Latin America and the Caribbean Regional Programme (LACRP), in co-operation with the Latin American and Caribbean Economic System (SELA) and the “Foundation for the Strategic Analysis and Development of the SME” (FAEDPYME).

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Overview of key findings

LA7 countries (Argentina, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay) devote significant efforts to SME policy and private sector development, identifying these as crucial areas for sustainable and inclusive growth and employment. In particular, they have made notable efforts to build up an institutional framework for SME policies, establish a rich variety of business and entrepreneurial development services, and harness SMEs in productive transformation efforts. The results of the assessment suggest LA7 countries redouble their efforts in this regard, while stepping up their policy efforts to seize the opportunities of increasing regional integration, large domestic markets, young populations and an emerging middle class. The redoubling of efforts is also important to respond to the pervasive challenges of low productivity and high informality among SMEs (especially the smallest firms), high levels of inequality and the need to shift to higher value added activities.

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