Production Minister Raul Perez Reyes on Tuesday reported that business ventures of micro and small-sized enterprises (MSEs) contribute 24% to Peru's gross domestic product (
GDP).
Speaking at the launch of a Production Ministry's (Produce) campaign aimed at
MSEs, the minister said this sector provides 85% of
jobs in the Andean country.
"85 out of every 100 jobs are created by micro and small-sized companies. The sector is quite intensive in terms of labor, which represents the main source of employment in Peru," Perez-Reyes told Andina news agency.
This is why Produce is extremely interested in fostering development and associativity of MSEs so that they can continue growing and turn into medium and large-sized companies.
According to Perez-Reyes, micro and small-sized enterprises worldwide always make an important contribution to the economy. "In the case of Peru, this should be accompanied by formality," he added.
"Many of our MSE activities have a large informal component. Therefore, we have to formalize them so that they can
contribute to the employment, tax base, social security, and whatever formalization implies," he pointed out.
Informality
According to Produce, between 50% and 60% of
MSEs are formal and meet the requirements for it. However, there are many factors causing informality in the sector.
"More than an issue of red tape, which is another factor, informality has to do with low labor productivity, poor access to cheap financing, and production volume," the government official stated.
(END) ECS/JJN/RMB/MVB
Published: 5/29/2018