SME entities, with the focus on sustaining production

SME entities, with the focus on sustaining production

The industry increased 6.9% during June, and registered an increase of 5.9% in the first semester. Photo: Nacho Corbalan.

Representative chambers of micro, small and medium-sized enterprises (MSMEs) brought different initiatives closer to the Secretary of Production, José de Mendiguren, with the focus on rSolve problems that are going through in the current situation, with the objective of sustaining production.

In a week with an intense agenda, the different chambers were “very satisfied” with the responses received and they highlighted that Mendiguren “is a couple that understands the problems that the industry is going through”.

The initiatives raised by the SMEs to the new secretary were materialized in recent days, through different meetings and activities.

Last Tuesday, Industrial Argentine SMEs (IPA) along with 13 other entities proposed alternatives “to boost production, employment and exports.”

In this context, they expressed concern about some difficulties in accessing foreign currency for importing inputs and raw materials for production. They also drew attention to the export currency settlement processesand on access to financing, among others.

The head of IPA, Daniel Rosato, assured Télam that “we raise the problems and difficulties we have to import inputs and raw materials, which affects the production of some firms and also affects exports. We also have companies that are with debt problems”.

In this sense, Rosato indicated that “Mendiguren is aware of the problem and has promised to work on the issue to help companies that are having difficulties. He also told us that starting in September the problem of access to dollars to import will be solved and the situation will return to normal. We were very satisfied, and we left him a folder with 13 proposals”.

Along the same lines, the General Business Confederation (Cgera) approached ideas to “guarantee SMEs access to supplies for production, accelerate the training of trades, create marketers of Argentine products in neighboring countries, and allow the externalization of foreign assets for the industry”.

For its part, the Association of National Entrepreneurs (ENAC) provided the Secretary a bill that proposes to found an “Institute for the SME Economy”an intention that “was born as a response to the need to recover 100,000 SMEs that were lost in the last 10 years and as an initiative to create 1,000,000 registered jobs,” according to the entity.

The head of ENAC, Leo Bilanski, explained to Télam that “strictly speaking, they are different proposals: from creating a specific institution for SMEs, to creating an SME ombudsman, passing through a non-bank credit program. Mutuals and cooperatives have $250,000 million in fixed terms and are willing to put them at the service of productive credit.”

Bilanski also highlighted the importance of encouraging the creation of companies, and stated that “there is no possibility of the labor market absorbing new positions without the generation of new SMEs. That is the way forward”.

In relation to the difficulties in acquiring inputs, the SME leader stated that “there are problems in the production chain and the Government knows it, and we also know that the State is limited in its wallet. There is a joint effort to understand the problem.”

The warning signs in the SME world are given at a time of economic growth and recovery of industrial activity, combined with pressure on the reserves of the Central Bank (BCRA) mainly explained by the increase in fuel and energy imports due to the increase in their prices and high winter consumption.

Mindful of setbacks, Mendiguren stated days ago that “the government’s objective is to sustain and increase the level of activity, for which it is necessary to manage the dollars well.” Along these lines, he indicated that activity “remains strong” and that the goal this year is to reach US$90 billion in exports to maintain the trade surplus.

Industry figures

According to Indec data, economic activity grew by 7.4% year-on-year in May, with which it accumulated in the first five months of the year an improvement of 6.2%. Meanwhile, the industry increased 6.9% during June, and registered an increase of 5.9% in the first semester.

In July the positive trend continued with an increase of 3.5% year-on-year, according to estimates of the advanced index of industrial activity prepared by the Center for Production Studies (CEP XXI) dependent on the Ministry of Economy.

Economy Minister Sergio Massa pointed to the strengthening of reserves as one of his central management objectives. After four weeks with losses, the BCRA has accumulated seven days in a row with purchases of foreign currency, for a total of US$ 145 million.

The accumulation or acquisition of foreign currency is central in the national economy if it is intended to sustain and/or increase growth. According to different investigations, for each point of increase in GDP in Argentina, imports rise between 2.5% and 3%.



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