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Guatemala has advanced in the construction of a new institutionalization
to support the micro sector, the small and medium businesses.
Thanks to the increasing recognition that the social sector and political is
giving within the national economy, they recognize their potentials to
develop the country.
The importance lies in the creation of new job sources, which would
start a series of positive events for the workers
and their families.
Moreover it contributes to the growth and to the social and economic development of the country.
The Federation of the Small and Medium Guatemalan Corporation,
FEPYME, groups businessmen dedicated to productive and commercial
activities.
Looking after the interests of its associates and of the sector of Small and Medium
Guatemalan Corporation.
Facilitating a better business climate, giving them advantages to be
more productive and competitive.
FEPYME contributes to take advantage, develop, and potentialize that
entrepeneur spirit that all Guatemalans have inside.
Today with us is Lic. Ernesto Morales, President of the Federation of the
Small and Medium Guatemalan Corporation, FEPYME.
Welcome to Investment and Development.
Thank you very much Luis, I appreciate the opportunity on behalf of the Federation
of the Small and Medium Corporation.
we are with all the intention of participating in any activity that
tells about the entrepeneurship of our associates and in this way
they will know all the benefits for them.
It is a pleasure to be here in your program.
Thank you very much.
Why is the corporate development important in our country Guatemala?
Yes, definitely all the corporate sector makes up the productive system,
which generates all the work.
Generator of that wealth and of taking advantage of all those resources
that Guatemala has.
Within the things which regard to the sector of the micro, small and medium corporation
I can tell you that we have been trying to give to it
all the necessary tools so that this sector can get stronger
and develop.
We have seen that in countries like Taiwan, The European Union, the PYME has been
the generating motor for that economic growth.
We don´t want to invent anything, the only thing we need
is the support and to do the strategic alliances with the government sector
as well as with the corporate sector.
In fact we have already done the approaches, like for example, it is our
competence to see the political situation which the Vice Minister of the Development
of the Micro, Small and Medium Corporation is doing.
From the beginning of this government we have done the approaches,
we consider that we are on the right track.
What we have wanted to say is that the rural development is important
but also strengthening the small and medium corporations.
In the developed countries we can see the relevance of these sectors, that
inclusively the micro, small and medium corporation mean more than 80% of
the generation of the National Gross Product.
What is the difference between the micro, small , and medium Guatemalan corporation?
There are several ranges and it depends if we see it based on the number of
employees that they have or of the lever of receipts given.
If we see it by the number of employees , a microcorporation is made up of
1 to 5 employees.
A small enterprise has from 5 to 20 or 50 employees.
And a medium enterprise has from 50 to 200 employees, from 200 on
it is considered a big corporation.
What is the impact of the economy dynamism in the generation
of the National Gross Product, contribution to the exports, of the sector of the
micro, small , and medium national corporation?
Currently the associates of the Federation of the Small and Medium Corporation
are formal enterprises.
The formal economy is made up in an 80% by small
and medium medianas empresas, which contribute to the National Gross Income
with a 38% of the NGI.
That is why it is important to make it stronger.
Because if these enterprises are able to reach a level of development,
the contribution will be more than the NGI.
Important too, the development of the Central American Customs Union.
Because our corporations are more regional every time, this means
thinking about a market of 47 millions and we are thinking about
Central America and a part of the Caribbean.
What is this vision that has been impulsed to this entrepeneurs
to make them dynamic and to operate in a regional way?
Of course that in the specific market segments where they
are competitive.
At a Central American level, the PYMES are within the range of a 90%
in the economy and they contribute with the 50% of the jobs.
We consider that all the Free Commerce Treaties are
good if we give the small and medium entrepeneurs
all the tools.
To be able to face all these possibilities and these strengths
that can come.
But the rest have to prepare so that instead of being an advantage,
it can become a disadvantage for them.
We have to prepare them to be more competitive.
We should apply in a way, a very simple Math form to evaluate
if it is convenient for us or not, a famous Free Commerce Treaty and the Math
equation would be very simple.
How many positions are we losing, but also how many positions
are we gaining and which would be the contribution to the Gross Domestic Product?
To make a balance between imports and exports.
We shouldn´t enter only into conceptual commercial schemes
just because they tell us they´re good.
In the practice we have to verify if it is really beneficial for
the majority of the country or if its better at the time, to take a dilatory, and say
we are going to improve more the competitiveness of the country like Chile and Mexico have done.
Interesting the topic of Development of the Micro, Small, and Medium Enterprise
with FEPYME.
Let´s go to a commercial and then we will continue.
Let´s continue with Investment and Development in the topic of the Micro, Small
and Medium Enterprise.
What is the energy factor that is influencing in the competitiveness
of the enterprises?
We see that we are highly depending on an oil bill that is
costing us more than US$ 2,300 million a year, we see the significant increases.
We know that the hydro, wind, geothermal resources that we have
as Guatemala, but we haven´t taken advantage of them in their potential.
How much is this affecting the micro, small, and medium enterprise the fact
that we are not generating enough energy with renewable Guatemalan
resources?
That was a topic that had to be covered a long time ago,
I consider that we have posponed it.
Sometimes, we don´t take decisions in the matter
until we see the crisis.
In this sense we consider that there are many small and medium enterprises,
and even the big enterprises of course, that have the capacity for
investing in this type of enterprise and energy generation.
Definitely we have enough resources so as to
supply ourselves and be selfsufficient in that sense.
Definitely the current cost of energy is one of the issues that
is also affecting the micro, small, and medium enterprise.
Due to the fact that this goes directly to its production costs and at the end
it has to be transferred to the final consumer.
If we can supply ourselves of another type of energy sources
that are not generated by diesel or fuel or even
of another type of generation of electricity.
This will lower the cost, and then we will be
more competitive.
We need to improve the element of energy cost to be
more competitive.
What are the main obstacles, what is really preventing
the development of the micro, small, and medium enterprise?
We have to take advantage of that entrepeneur spirit that the majority of Guatemalans
have, the capacity of ideas, that spirit of going on, and
mainly in the rural area.
Definitely we have focused as a Federation
to give to the associates training topics, technical assistance, and
we have done it well.
We have had the support of the international cooperation, needless to say
that the European Union with its support propram to MIPES which is coordinated
with the Economy Ministry, we have in fact been able to
do good projects.
yesterday we launched a diploma course that started yesterday and it
ends on December 10th, and it refers to the internationalization
of the PYMES.
There we are giving the small and medium entrepeneurs,
even if they don´t have the capacity of exporting, all the tools
that are necessary in international commerce.
For them to be competitive and to be able to internationalize their products.
Give them a global vision, because if it doesn´t matter if they are exporting to Australia,
South Africa or Singapur.
The important part is that they are conscious that they are competing
with enterprises that come from those latitudes.
The punctual obstacles that prevent development and growth.
Which ones are those?
I mentioned these two issues of training and technical assistance, because
the central issue is access to credit.
We have currently had some meetings with people of the World Bank,
with people who have come from the Treasury Department.
It has been identified that if you evaluate the sectors
that have had access to credit, it´s like a "U".
Here is the micro enterprise, here is the small, and here is the medium
enterprise and here is the big enterprise.
Only in these two poles has the credit been arriving, but
to the small and medium enterprise, very little
credits have been given.
What is preventing this, a political will of the government,
a legislation, a structure of the national financial scheme?
What do we need to do?
If we have already seen that the developed countries have advanced,
an economic and social growth supporting the micro,
small and medium enterprises.
If we see that they represent more than 80% of the generation of
the Gross Domestic Product.
What needs to be done then to dynamize and to make credit
more accessible to the micro, small, and medium enterprises?
Currently, the law of Secured Transactions, since January 1st
of this year, the reality is that this law isn´t finished yet.
A law without rules is an operation manual, in which you can find the register,
the same of constituting a registrator in "Secured Transactions".
In this sense we consider that it is a good law, because that will allow
the small and medium entrepeneur, to ensure personal property,
not only real estate.
Because a lot of small and medium entrepeneurs, lack real estate
so as to be able to mortgage and with that money, invest in their business.
This means that they could give as guarantee a machine,
an equipment, furniture, tools that they have?
They can even guarantee themselves of what you mentioned, for example if
an enterprise dedicates itself to raising cattle, well it´s cattle herd .
If it is an agroindustrial enterprise, its crops, will be able to be given as
guarantee for the shipping documents.
A receivable invoice, a letter of credit.
A bill of lading for example a shipment that they will receive.
We have been talking in a sense of industry, commerce and services.
very important, this law, I understand, that was approved over a year ago.
What are we waiting for to have this regulation, who does it depend on?
Having a law without regulation and not being applied is like having
an enciclopedia locked in a closet.
In this crisis period, lack of jobs, difficult situations that
are showing up, this should be of national priority.
When will this regulation be ready to take it to the practice, this law
of "Secured Transactions"?
I think a register will be established starting next year.
This means that in January 2009, it will be working.
I take advantage of this space to ask the honorable Congress of the
Republic to give us viability in this sense, this regulation is important.
The small and medium enterprises need to access soft loans.
Form themselves their own team, their own tools as guarantee, this is
a great advantage.
In this way we are going to be able to strengthen and develop this sector that
needs it so much and which is so important for the national economy.
It is urgent, it is important, it must be a priority 1, triple "A" priority, 217 00:14:12,110 --> 00:14:14,733 so we need this regulation, we need to establish a register
of "Secured Transactions" and locate the funds.
That is why it´s important for the Congress, as well as the Ministry of Economy
to work together to take it to practice.
I have understood that the Ministry of Economy has done it´s part.
Now, it´s the honorable congress´s turn to make this regulation a reality
and based on that, constitute this register and move forward.
The truth is that in the countries where this law is already working,
you have seen the impact it has caused.
Because that is another thing, there are a lot of laws, a lot of projects, but
we, Guatemalans, should learn to measure the impact.
In reality, all the actions from the international cooperation, as well as
the national legislature, have to measure the impact, to see if they are in fact
getting to the sector which they are directed to.
I think that the success of any action we take will be there,
at a public level and at a private level, too.
We have to see if at the moment of that impact it shows in the development and in
the economic growth of the country.
So we have to focus the sectors where it is needed the most and where it will
have a better impact.
I am sure that in this moment, all the congressmen are watching
this program and I take advantage of making a call.
See the priority and it can surely be
implemented from January 2009 on, ideally
it should have been on January 2008.
Let´s go to a cut and then we will continue with Development and Investment.
Let´s continue with Investment and Development, with the issue of Micro, Small, and Medium
Enterprise, with the support that FEPYME is giving for the development of this
important sector.
What are the chances in the international markets
for the micro, small, and medium enterprise?
At a regional level of all Central America, the micro, small, and medium enterprise
has accomplished, I think, up to this moment the role that it had to play.
Now it is preparing to take advantage of the Free Commerce Treaty
with the United States.
You have to meet certain quality standards, must be certified in
a certain type of production and therefore with Europe, we have to do the same thing.
I think that with the United States, maybe at a medium term, some
enterprises are already doing it.
But so that it is taken advantage of at the most, we have to continue preparing
as I said at the beginning.
I also consider that it is also important to speak about an issue, Luis, that already
exists in the rest of the countries.
In Guatemala, there currently doesn´t exist any law for the small and medium enterprise.
In what sectors are the micro, small, and medium entreprises concentrated?
Let´s say agricultural, agroindustrial, industrial or of services?
And in what sectors do we have more potential in Guatemala, to develop
the factor of the micro, small and medium enterprise?
FEPYME has existed for 21 years, it is born with its legal personality
in 1987, we are made up of 12 unions and 4 associations.
Within which we have people who are entirely dedicated to
metal mechanics, transportation, commerce, and services.
We have an Association of Integrated Cattle, we have people who dedicate to
agroindustry, handcrafts, furniture.
We cover all the economic activities within the range
of the small and medium enterprise.
This is what makes us different from all the other Cameras, that we are also
part of the productive sector of the country.
They have also given us their solidarity because they have seen
the effort that the SME and what it really represents, if the
necessary support is given, it is beneficial for the country.
What additional factors of competitiveness, of efficiency are being worked on
to take more technology, to increase competitiveness, to project them
to more markets?
What is the integrated strategy that is being worked on at a national level
to develop this sector?
We have a program of "International Advisors".
This is a program that is supported by the European Union.
They are EU retirees who come to give specific consultancy
to the enterprises.
We have had already had it in the enterprise of the textile branch, metal mechanics,
transportation fleets, and they have really come to make
a reengineering to these small businesses.
This doesn´t mean that they are doing wrong.
It can be done better.
And increase the level of productivity and at the same time its level of competitiveness.
These people comes for a month, for 2 months, depending on what the entrepeneur
requires.
They come free of charge, the only thing the small or medium
entrepeneur has to give them is lodging, and they don´t ask for a 5 star hotel.
The truth is that up to now, the consulting they have come to give, we can
make a program about this when there is an opportunity, so that some of the
entrepeneurs who have been benefitted with this program, can come.
Of course, let´s have them tell their stories here.
I have always thought that whatever I come to say here
has to be backed up by them.
Because the truth is that they are the beneficiaries of all the procedures
done by the Federation of the Small and Medium Enterprise.
It should be translated into concrete results.
Finally, we know that a school of business has opened.
What are the benefits and what is the final message that you would send to the sectors of
the micro, small and medium enterprises?
But also to the executive so that they can help to face those
challenges and create opportunities.
We have focused in this school of business, seeing
the efforts that have been done in training issues,
and technical consulting.
But the small and medium entrepeneurs already want to see real things.
For example, we are focused on making entrepeneur
breakfasts, integrating entrepeneur missions.
Getting people together that in fact have no economic capacity to
do it with entrepeneurs of other regions, seeking for support.
We are participating within the program of IBERPYME which is a program
of Iberoamerica which groups all the institutional unions of SMEs.
And for a lot of satisfaction we have done several entrepeneur missions,
one of them was to Galicia, Spain last year.
We qualified within the 27 SMEs to 8 SMEs of the Federation.
We couldn´t offer a lot of things, but we could see
the way in which they develop their enterprises, this people was
very convinced.
A lot of people has taken advantage of the visit we paid to Galicia, within
them people of the textile are, because in this part there is a lot of this
that can be learned a lot.
We learned a lot.
Adquisition of machinery.
There is a great challenge then to develop this sector.
Ernesto, thank you very much for sharing with all our national
and international audience.
We know that we are going to be in following programs, we suddenly
make some visits or bring some entrepeneurs that can give us testimony.
It is imperative that it really develops in the micro,
small, and medium enterprise.
Thank you very much.
Thank you very much Luis, the truth is that I take advantage of this opportunity
to thank and tell all our associates and all the sector of SME
at a national level.
FEPYME is at your service and we have to take advantage of these spaces.
Thank you very much.
We thank the opportunity.
Thank you very much Ernesto and surely has to triple the number of
associates and develop more.
Guatemala has to continue improving to give the opportunity of growth to the
micro, small, and medium national enterprises.
The enterprises generate products and services for society, they make
business with providers of society, they give the opportunities
of inhabitants of society, they pay their taxes
for benefit of society so that the government can do
social investment.
and generate utilities for their actionists who are also members of
society, so as to say entrepeneurs are synonyms of social development.
It is important to strengthen the micro, small, and medium national enterprise
to generate more job sources, to channel the investments
in Pro of the development of our country.
The future of Guatemala is in the micro, small, and medium enterprises.
Let´s take advantage of the entrepeneur spirit that all Guatemalans
have inside.
We will see each other next week, in an interesting program
as the one of today.