Mexico City - The Business Coordinating Council (BCE) proposed a national crusade for economic formalization that encourages the national economy, and a business revolution to encourage the country's small and medium-size enterprises (SMEs).
MV Note: The reference is to Mexico's informal economy, which employs 60% of Mexico's workers. Although SME's make up 90% of all Mexico's businesses and 42% of employment, they contribute only 23% of the country's GDP. For this reason, Secretary of the Treasury Luis Videgaray recently declared that Mexico must raise the productivity of workers in the informal sector.
In the weekly paper "The Voice of the BCE", the council president, Gerardo Gutiérrez Candiani, said:
It emphasized that a priority issue is to start a national crusade for economic formalization, which is an essential link for success of the reforms achieved, such as labor, and the pending reforms, such as tax and financial reform. This, it stressed, is necessary to give way to significant and sustainable increases in credit, productivity, total wages and tax collection.
"We are at an opportune time to bolster a cutting-edge policy for small and medium-size enterprises. The government of Mexico has a commitment to the SMEs."
MV Note: In 2002, Mexico's Congress passed the Law for Development of Competitiveness in Micro-, Small- and Medium-sized Businesses.Thus, the BCE said, the Pact for Mexico raised new areas of advocacy and action to strengthen national development in the short term, with significant effects for the domestic market and for businesses.
It emphasized that a priority issue is to start a national crusade for economic formalization, which is an essential link for success of the reforms achieved, such as labor, and the pending reforms, such as tax and financial reform. This, it stressed, is necessary to give way to significant and sustainable increases in credit, productivity, total wages and tax collection.
MV Note: Pemex [Mexican oil company] has been the nation's primary revenue source, paying very high tax rates that have constrained the entity's own maintenance and technical development. Experts explain that energy reform requires expanding the tax base to replace revenue currently provided by PEMEX.
Also, it said, it is urgent to firm up, with the SMEs as a fundamental pillar, an agreed-upon framework for an advanced industrial policy in order to foster supply chains, seed capital schemes and financing for high potential companies, regional development centers and engines of accelerated growth, such as energy and construction.
In that regard, it insisted that promptness be given to a renewed National Infrastructure Plan, since it is important that there be clarity and perspective for the construction sector and for high-impact projects, such as an ambitious plan for the South-Southeast and a relaunch of the housing industry and sustainable, well-planned urban development.
Thus, it recalled, the importance of the multi-annual budgeting initiative for priority infrastructure projects, now that--it indicated--they have at their disposition measures that can give good results this year for the domestic market and the growth of the SMEs.
It mentioned that at the development bank, apart from what is projected by the financial reform, there is an opportunity to broaden short-term financing with a program of capitalization with intermediaries, single record and immediate qualification.
State and Local Opportunities
In terms of regulatory efficiency, it added that a deeper and more ambitious commitment is required with the SMEs in the states and municipalities that are responsible for many of the barriers that businesses have, in order to improve development options, promotion and administration of regional synergies.
In this regard, it stressed that local entrepreneurs and their authorities are the ones who best know their needs, environment and opportunities. Hence, it expressed the willingness of entrepreneurs to work harder on this front with the National Conference of Governors (CONAGO), business organizations and local governments.
Regarding public safety, it is very important to integrate the experience, perspective and the participation of the SMEs in the prevention plans that are being implemented.
It is time, it declared, to redouble the effort to begin to show the domestic market with an effective public-private alliance for vigorously attacking the obstacles, weaknesses and structural factors that inhibit development of the vast majority of companies in Mexico. Spanish original
In that regard, it insisted that promptness be given to a renewed National Infrastructure Plan, since it is important that there be clarity and perspective for the construction sector and for high-impact projects, such as an ambitious plan for the South-Southeast and a relaunch of the housing industry and sustainable, well-planned urban development.
Thus, it recalled, the importance of the multi-annual budgeting initiative for priority infrastructure projects, now that--it indicated--they have at their disposition measures that can give good results this year for the domestic market and the growth of the SMEs.
It mentioned that at the development bank, apart from what is projected by the financial reform, there is an opportunity to broaden short-term financing with a program of capitalization with intermediaries, single record and immediate qualification.
State and Local Opportunities
In terms of regulatory efficiency, it added that a deeper and more ambitious commitment is required with the SMEs in the states and municipalities that are responsible for many of the barriers that businesses have, in order to improve development options, promotion and administration of regional synergies.
In this regard, it stressed that local entrepreneurs and their authorities are the ones who best know their needs, environment and opportunities. Hence, it expressed the willingness of entrepreneurs to work harder on this front with the National Conference of Governors (CONAGO), business organizations and local governments.
Regarding public safety, it is very important to integrate the experience, perspective and the participation of the SMEs in the prevention plans that are being implemented.
It is time, it declared, to redouble the effort to begin to show the domestic market with an effective public-private alliance for vigorously attacking the obstacles, weaknesses and structural factors that inhibit development of the vast majority of companies in Mexico. Spanish original
*MV Note: In Mexico, small and medium-size businesses are independent entities with a strong presence in commerce. They are virtually excluded from the industrial market due to the large investments required and limitations imposed by legislation on the volume of business and personnel. If legal limits are exceeded, by law, a small business becomes a medium-size business, and a medium-size business automatically becomes a large company; therefore, a SME never exceeds the legal limits for annual sales or headcount. Source: Wikipedia (in Spanish): Small and Medium-Size Businesses.