Here in the Caribbean in particular, MSMEs form the backbone of many of our economies and create valuable jobs and opportunities for our people. According to the Caribbean Development Bank, MSMEs represent between 70 and 85% of Caribbean businesses and contribute between 60 and 70% of gross domestic product. What matters is that they make up an estimated 50% of total employment. Importantly, 40% of Caribbean businesses are women owned. The success of these companies reflects the ingenuity, industry and innovative spirit of our entrepreneurs. On the basis of the data, to build a resilient Caribbean, under normal circumstances where the economy must be a key partner, we would need to step up support for micro, small and medium-sized enterprise entrepreneurs.
However, given that we are living in unprecedented times with small and vulnerable Caribbean countries affected by the coronavirus pandemic, the focus must be on rapid recovery and building resilience. In order to be successful, the private sector plays an important role. Given the role MSMEs play in creating opportunities and jobs, it is therefore logical that MSMEs should receive priority attention. Policies that exclude them or offer sub-optimal support are counterproductive and only add to the recovery period or, worse, job loss and sub-optimal growth.
MSMEs need a range of support including Finances that I’ve already written about. However, it is not just about providing financial support and creating a conducive environment for businesses to thrive. There are other critical areas where support is needed to give our MSMEs the maximum chance of success.
First and foremost is the area of technology. COVID-19 has clearly shown the importance of adopting new ways of working and doing business. Our MSMEs must be supported so that they can cope with this new era. We at the Caribbean Export Development Agency (Caribbean Export) have already expanded our support in this area and have seen great interest from companies across the region. For example, at our last webinar on e-commerce “Build your e-commerce store from Scratch” in February 2021, we had over 400 participants from all over the Caribbean. This shows the eagerness of our companies to take advantage of the opportunities offered by technology to grow their businesses.
Technology also has a democratizing effect, helping companies regardless of size grow their business and reach new customers at low cost. There are many examples in this COVID-19 era. Here in Barbados, smallholders use the internet to sell their products. In Trinidad and Tobago there is a Facebook group “Trini Farmers” with an estimated 49,500 members, which serves as a peer group in which the members support each other. These are two good examples where entrepreneurs have taken the initiative. At the same time, we must actively support those who need help.
In terms of using technology to grow businesses, government has an important role to play in creating the right policy environment, providing incentives and concrete support for MSMEs. At the same time, it is not just about state aid, but also the larger corporate sector, including financial institutions, plays an important role as mentors and business partners for MSMEs. The success of micro, small and medium-sized enterprises is in everyone’s interest.
Second, the energy costs here in our region are among the highest in the world. This not only scares off foreign direct investors, but also hinders our business here in our Caribbean. High energy costs simply drive up production costs and make it difficult for us to compete nationally with imports and export our products to regional and international markets. To address this problem, the push towards renewable energies is important at both national and regional levels. At Caribbean Export, we work closely with MSMEs across the region to help them improve energy efficiency and thereby make them more competitive. However, we must do this to an extent that can have a transformative effect. The reality is that we are not there yet. Providing the necessary resources to reduce energy costs with the double benefit of protecting the climate must have high priority at national level.
Ultimately, our MSMEs need to focus on niche markets with premium products and reasonable prices to reflect their quality. At Caribbean Export, we have helped regional companies enter the European market and take advantage of the Economic Partnership Agreement with the European Union. But we also know that much more needs to be done. It is precisely for this reason that we have teamed up with the International Trade Center to create a hub for trading in sustainable products.
This hub will help make MSMEs more competitive by supporting the implementation of green business practices. There is already an established and growing market for products that meet sustainability criteria and we want to help Caribbean companies seize this opportunity. In the future it will be important to work with companies to support companies not only in Europe, but also in other premium markets, in order to bring our products to the shelves and to win the growing customer base for products that meet the criteria of “sustainability”. fulfill.
To sum up, rapid recovery and resilience building require a full support program and focus on our micro, small and medium sized businesses. They are the key to creating much-needed jobs and opportunities for our employees. In order to be successful, a broad partnership is required, including with the larger regional business enterprises. The Caribbean Export Development Agency is committed to this agenda. We will continue to work with all to provide this much-needed support and create options and opportunities for our people as we strive to build a truly resilient Caribbean.
Deodat Maharaj is the Executive Director of the Caribbean Export Development Agency.
About the Caribbean export
Caribbean Export is the only regional trade and investment promotion agency in the Africa, Caribbean and Pacific (ACP) group. It was established in 1996 by an intergovernmental agreement as a regional trade and investment promotion agency and serves the 15 states of the Caribbean Forum (CARIFORUM), namely: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Dominican Republic, Haiti, Grenada, Guyana, Jamaica , St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago.
The agency carries out numerous program-based activities aimed at improving the competitiveness of regional small and medium-sized enterprises, promoting trade and development between CARIFORUM countries, trade and investment between the Caribbean Community (CARICOM) and the Dominican ones Republic, the CARIFORUM States and the French Caribbean Outermost Regions (FCOR) and the EU Overseas Countries and Territories (OCT) in the Caribbean.