IDB and ALIDE consult with development banks on measures to defend the structure of production and employment
- These measures seek to establish support for the MSME segment, which accounts for 70% of employment on average and is incorporated into value chains.
May 5, 2020.- The Inter-American Development Bank (IDB) and the Latin American Association of Development Financing Institutions (ALIDE) are studying ways for development banks to mitigate the impact of the COVID-19 pandemic on the production and employment structure of the MSMEs.
The two international organizations consulted with a group of presidents and directors of Latin American development banks about a public policy program with measures to be taken by governments in the region and countries belonging to the Organization for Economic Cooperation and Development (OECD). The opinions they collected are helping to structure a better targeted and more effective proposal, which they plan to implement in the region through the efforts of development banks.
The public policy they are discussing is aimed at maintaining employment in order to minimize the burden on social protection systems and safeguard the production structure, so that recovery can be accelerated once the crisis has been surmounted.
In particular, measures are being studied for supporting the MSME segment that accounts for an average of 70% of employment and is involved in the value chains. “The challenge we should center our efforts on is to keep the largest number possible of MSMEs operating with the least disruptions possible,” the document points out.
The actions studied by the IDB and ALIDE fall into four areas: finance and short-term liquidity guarantees for working capital; finance and foreign trade guarantees in documentary instruments; financial restructuring to comply with commercial and banking obligations; and finance and the granting of value chains.
Most of the programs can be implemented in the various countries by calling on the efforts of development banks or central banks.
ALIDE is the community of financial institutions that generates banking solutions for the development of Latin America and the Caribbean. Founded in 1968, its main objective is to contribute to the economic and social development of the region, through the good practices in development financing that it promotes among its associates, about 90 institutions with a presence in more than 20 Latin American countries and other regions of the world.