Latin America - AL-INVEST - an initiative to support the internationalisation of SMEs

Latin America - AL-INVEST - an initiative to support the internationalisation of SMEs

Since 1994, AL-INVEST has been a flagship programme of EU cooperation with Latin America. The programme promotes inclusive growth and aims at creating opportunities through facilitating the internationalisation of thousands of Latin American small and medium enterprises (SMEs), in collaboration with their European partners.

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AL-INVEST 5.0

AL-INVEST 5.0 started operations in the first semester of 2016. It is designed to contribute to productivity growth and the sustainable internationalisation process of SMEs in Latin America through organisations that represent the private sector and promote its development, such as Chambers of Commerce, Trade Associations and Export Promotion Agencies, etc. Within the framework of the programme, Latin American SMEs will continue to benefit from training and technical assistance to improve their productivity and competitiveness, participate in business meetings in relevant trade fairs, and have access to quality information as well as to advice on market opportunities, potential clients or business partners and EU legislation and policies.

AL-INVEST 5.0 is implemented by an international consortium led by the Cámara de Industria, Comercio y Turismo de Santa Cruz de Bolivia (CAINCO) to which the following entities belong:

  • Asociación Guatemalteca de Exportadores (AGEXPORT)
  • Bolsa de Comercio de Uruguay
  • Cámara de Comercio e Industria de El Salvador
  • Cámara de Comercio de Lima
  • Chambre de Commerce et d´Industrie de Région Paris Ile-de-France (DGA AIE)
  • Confederacao das Associacoes Comerciais e Empresariais Do Brasil
  • Cámara de Comercio de Costa Rica
  • Inter-American Development Bank
  • SEQUA – Partner of German Business

The consortium receives an EU co-financing of 25 million EURO. Of these 25 million, at least 15 million EURO were reserved for Call for Proposals so to widen the participation of different organisations in the programme.

Furthermore, AL-INVEST 5.0 is complemented by a project on "Better Growth Policies for SMEs in Latin America that is implemented by the United Nation´s Economic Commission for Latin America and the Caribbean (www.cepal.org).

Overwhelming participation in first Call for Proposals AL-INVEST 5.0

At the end of the deadline on Monday 16 May 2016, a total of 124 proposals from 17 Latin American countries and the EU were received. The huge participation demonstrates that this  flagship programme of European cooperation with Latin America continues to be highly attractive to the `private sector in Latin America and the EU. The objective of the programme is to strengthen productivity and competitiveness of micro, small and medium-sized enterprises in Latin America and to foster economic relations within the region and with the EU. More than 25 000 companies are expected to directly benefit from AL-INVEST 5.0. More info on the programme website.

BACKGROUND

AL-INVEST began with a 2-year pilot programme in 1994. The success of the first phase led to the approval of four subsequent programmes:

  • AL-INVEST I – 1995-1999
  • AL-INVEST II – 1999-2004
  • AL-INVEST III – 2004-2007
  • AL-INVEST IV – 2009-2013

AL-INVEST IV

The main objective of the programme was to support Latin American SMEs to improve their competitiveness, promote innovation and strengthen business internationalisation. To achieve these goals, several actions were introduced, among them:

  • Facilitating business links between Latin American and European SMEs.
  • Promoting regional integration and social cohesion, development policies, and business partnerships.
  • Encouraging knowledge and technology transfer.
  • Strengthening Latin American business organisations and facilitating networking with their European counterparts.

AL-INVEST IV was implemented by three consortia that attended different geographical zones in Latin America: the Consortium for Central America, Mexico and Cuba (CAMC), those for the Andean Region (RA) and for Mercosur, Chile and Venezuela (MCV). Each Consortium had a lead organisation: the Mexican development bank Nacional Financiera (NAFIN); the Santa Cruz Chamber of Industry, Services and Tourism (CAINCO) in Bolivia; and the Brazilian National Confederation of Industry (CNI). The three regional consortia were supported by a Coordination and Services Consortium headed by the Association of European Chambers of Commerce and Industry (EUROCHAMBRES) in Brussels.

Overall, the EU contribution to the programme amounted to €50 million (83% of the total cost).

RESULTS

The AL INVEST IV programme involved 18 countries in Latin America, and served almost 60,000 SMEs. AL INVEST IV represented a considerable and quite remarkable effort both by geographical coverage and by scale of the beneficiary population, especially in regard to the Latin American context. Sectors served by the programme covered a range of major areas of activity of Latin American SMEs, including traditional sectors (agriculture), crafts and technology-intensive sectors (IT, etc.).

Some results include:

  • The direct contribution to generate new exports worth €84 599 457 in the region of Mexico, Central America and Cuba alone. The evaluators calculate that one euro of EU contribution generated five euros of new business;
  • The creation of more than 20 000 direct and more than 60 000 indirect employments in Bolivia, Colombia, Ecuador and Peru;
  • More than 6 500 SMEs in the Andean Region increased their exports, of which more than 1 000 were first-time exporters.

Case study: the Nucleus Approach in Cartagena

In 2010, several small cattle farmers were contacted by the Chamber of Commerce of Cartagena. They were presented with a new initiative of the Chamber to bring together entrepreneurs of the same sector. Together, they would exchange experiences and develop their business. The chamber organised advice for the use of solar equipment for electric power generation and for the use of mineralised salts for the soils of the herds. In April 2014, the initial dozen had turned into a group of more than 70 cattle farmers. The group founded an official association. They hired accountants, organised technical assistance and participated in trade fairs.

With the support of AL INVEST IV, the Chamber created 22 Nuclei, benefiting 341 SMEs. 45% of those SMEs were in fact micro enterprises.