Monday, January 2, 2012

Logistics as a Competitiveness Factor for Small and Medium Enterprises in Latin America and the Caribbean

International trade has experienced substantial changes in the past decade. The opening of world markets, as reflected in the reduction of tariffs and the elimination of non=tariff barriers in the 1990s, has given rise to remarkable changes in trade activities. Nowadays, it is common practice for companies to source, manufacture, and market their products beyond their own country’s borders.

The logistics industry is one of utmost relevance and principally serves as a motor of private sector development and growth of the economic sectors of a country or region.A logistics industry that is efficient and accessible to everyone is a key element for companies in a country or region in general, and its small and medium sized enterprises (SMEs) in particular, to successfully compete in this new global context.

Despite improvements in Latin America and the Caribbean (LAC) in recent years, structural logistics problems persist, creating obstacles to exports for firms in the region, particularly SMEs.

This paper emphasizes the main challenges faced by the logistics industry and proposes interventions to address these challenges. Moreover, on the basis of case studies the region, the paper analyzes what measures can be taken by SMEs to improve their logistics capacity, thereby improving their export potential-

Carlos Kirby and Nicolau Bros.Inter-American Development Bank Capital Markets and  Financial Institutions Division DISCUSSION PAPER No. IDB-DP-191.November 2011