Support for private business sectors

(Caracas, October 20, 1988).- During the I Meeting of Trading Companies Peru-Venezuela, which just ended in Caracas, CAF President & CEO Galo Montaño offered his institution’s support for strengthening modern trading companies, "to achieve greater autonomy in decision-making and an alliance to protect collective interests in relation to external markets."

At the meeting, sponsored by the Peruvian-Venezuelan Chamber of Commerce, in whose reactivation CAF participated, issues related to cooperation among Andean countries were discussed, especially trading companies’ efforts to open markets for Andean area products in favor of intra- and extraregional trade.

CAF ACTIVITIES CAF - Montaño said - is working on a program to give priority to stimulating and developing Andean Multinational Enterprises (EMAs) - formed by companies from two or more countries - including direct equity participation. The Corporation is authorized to provide seed capital up to 20% of capital stock for these companies, whose function is to interconnect industrial and commercial interests and investments between private companies in the Andean countries.

CAF has a special interest in promoting participation of the private business sector in the integration process and has organized several seminars and meetings to this end. For example, the Andean Area Exporters Meeting held this year analyzed the obstacles faced by exporters, including legislation and procedures which hold back their development, and discussed measures to eliminate factors adverse to growth.

CAF maintains an export finance support mechanism known as the Andean Trade Finance System (SAFICO) whose objective is to finance member countries’ trade in order to strengthen subregional integration by expanding participation in external markets. SAFICO grants loans to Andean exporters and importers of products originating in the subregion.

MECOFIN is another commercial credit facility implemented by CAF whose purpose is to establish, confirm and/or finance, in the short term, letters of credit for third countries which cover basic industries and processes which reactivate national industries or which generate exports. This mechanism supports Andean countries affected by limited access to lines of credit from international commercial banks.

Finally, Montaño emphasized the importance of modern trading companies, whose success has been seen in the Japanese and Brazilian experiences, especially in promoting non-traditional exports, and expanding the exportable offer of industrialized products with higher domestic value added. The achievements in this seminar will benefit integration because “integration is looking for and doing business between our countries."