CENTRAL AMERICA: Micro-Enterprises Gear Up for Globalisation

By Thelma Mejía Reprint | | Print |

Thelma Mejia

TEGUCIGALPA, Oct 8 1995 (IPS) - Micro-enterprises in Central America are gearing up to face the challenges of economic globalisation, with an experimental U.N. programme called “flexible specialisation.”

The U.N. Development Organisation (UNIDO) programme helps small entrepreneurs to join forces and trains them to update and reconvert their productive processes.

Participating micro-enterprises share ideas and generate a climate of trust, which allows them to unify criteria and improve the quality of their products, making them more competitive in local and regional markets.

Jorge Trigo, UNIDO’s national coordinator in Honduras, told IPS that flexible specialisation is neither costly nor complicated. “It is a very simple method, the success of which is based on the organising of groups, and on people’s determination to make their businesses survive and do well.”

What is important “is that a consciousness of unity exists among Central American micro-enterprises. That is the only way the processes of integration and globalisation of the economy can be successfully confronted.”

According to International Labour Organisation (ILO) figures, some two million Central Americans work in one million micro- enterprises, 250,000 of which are engaged in industrial activities.

If only 10 percent of those small businesses applied methods of flexible specialisation, the region would be able to compete in today’s new markets, the ILO claims.

The programme is most advanced in Honduras, which is seen by UNIDO as an example for the rest of Central America, Trigo said.

UNIDO has trained 33 micro-enterprises in Honduras, in branches such as clothing and footwear manufacturing, packing and the wood, furniture, agro and metallurgical industries.

Jose Maria Figueroa, who has formed a small association with 12 other entrepreneurs in the metallurgical industry in Tegucigalpa, pointed out that “before, we worked individually and in isolation, without opportunities for progress.

“But now that they have organised us and given us technical assistance, we aren’t afraid of competition by the country’s large industrialists, because the programme has made credit available to us, and we have credibility with our creditors.”

Cristhian Guillen, an expert in flexible specialisation, said the main obstacles facing micro-enterprises in the region were lack of government support, limited technical assistance, restricted access to credit, and inadequate legislation.

Guillen added that the economic adjustment policies implemented in the area do not fully favour production, while “the sector of micro-enterprises has been the hardest hit.

“At a time of globalisation of the economy, micro-enterprises cannot go it alone. They have to organise, and need to be supported by government policies that rather than hurting them, motivate them to improve production.”

The dominance of imported goods, sold at extremely low prices that undercut local producers – including clothing, footwear, furniture and electronic appliances, above all from U.S. companies – also operates against small entrepreneurs in the region.

Central American economists estimate that the average investment of micro-enterprises in the region is 2,000 dollars – not enough to allow them to keep up-to-date in equipment and productivity, and to employ skilled workers.

But experts consulted by IPS say flexible specialisation will allow small entrepreneurs to join together and use appropriate working techniques.