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IDB President Enrique V. Iglesias calls for stronger international support for microenterprise in Latin American and the Caribbean

BARCELONA – Inter-American Development Bank President Enrique V. Iglesias today urged European, Latin American and Caribbean institutions to forge stronger links to improve the services they offer to microenterprise, a leading source of jobs for the poorest Latin American and Caribbean people.

In his opening speech at a plenary session of the III Inter-American Forum on Microenterprise on the creation of such trans-Atlantic ties, Iglesias pointed out that more than 120 million people in Latin America and the Caribbean work in these small businesses with 10 or less employees.

During crises, he added, people in the most vulnerable social groups such as poor women turn to microenterprise to make ends meet and feed their families.

"Macroeconomic stability is fundamental, a starting point without which no development is possible, but nevertheless limited," he said. "Over the past few years Latin America has made a macro revolution; it still has to carry out a micro revolution. And in such a revolution these small enterprises will play a key role."

More than 500 delegates from governments, donor agencies, private sector institutions, civil society organizations and academia are attending this four-day forum inaugurated on Tuesday at Barcelona’s old stock exchange. Among Wednesday’s participants were Spain’s Queen Sofia and her daughter Princess Cristina.

During the meeting organized by the IDB’s Sustainable Development Department’s Microenterprise Unit and sponsored by the Spanish Agency for International Cooperation delegates will analyze the best practices and the most innovative tools for developing financial and non financial services for microenterprises.

In his address Iglesias highlighted Europe’s sustained support for microenterprise, praising the efforts of Spain, Sweden, Norway, Belgium and Luxembourg in this field and the pioneering trust funds established by the European Union to expand the IDB’s microcredit programs.

Iglesias also stressed that, as well as improving the variety and the quality of the services provided to microentrepreneurs, there are several pending issues that must be addressed by all the parties interested in microenterprise development.

Governments must reform the laws and regulations that stifle the efforts of the most vulnerable entrepreneurs. The private sector must become more heavily involved in supporting microfinancial services. Non profit institutions and non governmental organizations that provide invaluable voluntary work will have to become more entrepreneurial to provide more efficient services.

Through its various projects the IDB Group encourages and supports such efforts. It advises governments on regulatory reforms, it provides resources for microfinancial programs and helps strengthen the Latin American and Caribbean institutions that work in the field of microenterprise.

To illustrate the type of programs the IDB seeks to support, Iglesias described an "innovation competition" that will be held soon by its Multilateral Investment Fund.

This autonomous fund managed by the Bank expects to offer $10 million in grants to support ground-breaking projects designed by NGOs, consulting firms or universities to improve the quality of life and the productivity of microentrepreneurs in Latin America and the Caribbean.

To that end, the Barcelona forum is intended to serve as a catalyst for ideas and projects, as well as to draw from Europe’s vast experience in promoting small- and medium-sized businesses and microenterprise.

Other panels of the forum will cover issues such as the use of the Internet to develop microenterprises, the impact of economic crises on microfinancial institutions, and successful cases of social entrepreneurship.

On Thursday, October 19, Catalonian President Jordi Pujol and Iglesias will present the Inter-American Awards for Microenterprise Development, which recognize the outstanding achievements of institutions and people that support the development of microenterprise in Latin America and the Caribbean.

The IDB has devoted some $800 million in more than 500 microenterprise and microcredit programs since 1978.

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