See all Boxes >>

Box 9 • Boosting Exports Through Postal Services in South America

Drawing on a pioneering program in Brazil to promote exports by small businesses through streamlined procedures available at post offices throughout the country, the IDB is helping other countries in South America boost their exports and support small businesses. The idea is to use the huge network of postal service branches to serve businesses with small local markets.

A $1.6 million MIF grant was approved in June 2007 to replicate this simplified postal export system program in four other South American countries under the Initiative for the Integration of Regional Infrastructure in South America (IIRSA). The program will help establish a simplified postal export system in the public postal services of Peru and Uruguay, which have a presence in poor, remote areas, and in two others. It will introduce new procedures to allow streamlined exports through postal services under certain conditions.

The Brazilian program, called Exporta Fácil (“Easy Exports”), is particularly attractive for small businesses in remote localities that do not have access to or cannot afford other commercial shipping services, which are usually based in bigger cities, and for whom the previous export system was too complicated, costly and burdensome, requiring that multiple forms be submitted to different offices. With the streamlined procedures, Brazil is expected to export nearly $200 million in 2007 under the program, up from just $160,000 when it was first launched in 1999. Although the amounts exported through the program are a mere fraction of overall exports, they are making a significant contribution to small business development by opening up more opportunities for small entrepreneurs to gain access to new markets.

Exporta Fácil has been so successful the 12 IIRSA countries decided to include the program among their 31 priority projects for regional integration of infrastructure. It is one of two priority projects with a regional scope. Brazil is playing a leadership role in an example of South-South cooperation by providing technical assistance and knowledge at no charge to other South American countries, with support from the MIF.

In countries such as Peru, the project is also seen as a contribution to the decentralization process currently underway. With the simplified procedures, local entrepreneurs only need to make one stop at the closest post office and fill out a single form.

In Brazil the service has been used in a variety of sectors, the most active participants being small-scale manufacturers of small, lightweight finished goods, such as car parts, an important sector in São Paulo where the auto industry relies on many small suppliers. Other common small business exports include jewelry, lingerie, cosmetics, porcelain and even doggie clothes (taking advantage of opposite seasons). These are the kinds of sectors Peru and Uruguay have targeted for their respective “Exporta Fácil” services that will be implemented under the MIF program.

In Brazil the program, which is self-sustaining, has led to job creation and improved efficiency, organization, competitiveness and innovation among small and medium-sized enterprises. In Peru and Uruguay, the program has been integrated into the national strategies to promote exports, especially value-added exports, and is expected to have a similar impact.

The more countries in South America that use the same system, the stronger the postal services will be in all of them. Once they implement their Exporta Fácil programs, other governments besides Brazil can provide technical assistance to the remaining countries in South America and other subregions, such as Central America, where other countries are interested in the program.

The IDB is playing a dual role: first, as part of its contribution to regional integration, it has supported IIRSA since the initiative was launched in 2000, by providing technical coordination; and second, through the MIF grant, the Bank is providing funding for the implementation of the program and additional technical expertise to create synergies with other projects in the MIF cluster for small and medium-sized enterprises, such as a project in Otavalo, Ecuador, to establish a one-stop window for small business formalization and development.

By sponsoring this pilot program in Peru, Uruguay and two other countries in South America, the Bank will help these countries to launch their own Exporta Fácil programs, boosting exports by small and medium-sized enterprises, which represent the backbone of the economy in the region.