Lejia Lombardi
Mauro Marcondes-Rodrigues (left) and José María Díaz Batanero.

The IDB recently held a seminar on Brazil’s pioneer program to promote exports by small businesses through streamlined procedures available at post offices throughout the country. A MIF grant was just approved to expand this simplified postal export system program to Peru, Uruguay and two other countries under the Initiative for the Integration of Regional Infrastructure in South America (IIRSA). Chasqui’s Alexandra Russell-Bitting met with IIRSA coordinator Mauro Marcondes to learn more about the initiative and the Bank’s contribution to it.

Chasqui: What is the simplified postal export system program?

Mauro Marcondes: The simplified postal export system program is an IIRSA project designed to replicate in South America the Brazilian government initiative called Exporta Fácil, launched in 1999 to increase exports and give micro and small businesses access to international markets by promoting exports through postal services and simplifying export procedures by coordinating all the various government agencies traditionally involved in them. These include Customs, the Ministry of Communications, the Central Bank and SEBRAE, the agency for micro and small business development and promotion.

Like in the United States, the Brazilian postal service has universal coverage, with a branch in every municipality in the country. The idea was to use this huge network to support small business. Exporta Fácil serves businesses with small local markets whose products can be shipped under Universal Postal Union standards: the exports must be nonperishable goods that can be packaged in boxes weighing less than 30 kilos and measuring less than 3 meters in length plus width plus height. The value of exports is capped at $20,000 per shipment in multiple packages, a limitation that has been gradually increased due to the demand from exporters from the original $5,000 cap set in 1999.

Exporta Fácil is particularly attractive for small business 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. In countries such as Peru, the project is also seen as a contribution to the decentralization process currently under way. With the simplified procedures, local entrepreneurs only need to make one stop at the closest post office and fill out a single form.

Chasqui: What kind of companies tend to use the postal services for exports?

Mauro Marcondes: In Brazil the service has been used in a wide of sectors, the most active participants being small manufacturers of small, lightweight finished goods, such as car parts, an important sector in Sao 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 kind of sectors Peru and Uruguay have targeted for their respective “Exporta Fácil” services that will be implemented under the MIF program.

Chasqui: Why is Exporta Fácil an attractive service for small business ?

Mauro Marcondes: Logistic services for exports have been traditionally expensive throughout Latin America. In Brazil, micro and small business had to add an additional 16 percent to the value of their products in order to cover export costs (including shipping and customs) before the Exporta Fácil program. Now the cost is down to only one percent. These affordable services have allowed small enterprises (whose products tend to be cheaper and therefore suffered more from higher export costs) to compete on the regional and global market, leading to a 15 percent increase in the number of micro and small business that export.

Chasqui: So does Exporta Fácil compete with private services like DHL or FedEx? Are they lower cost or more reliable?

Mauro Marcondes: Not really. The program supports the implementation of a simplified postal export system in the public postal services of Peru and Uruguay (the ones that have a presence in poor, remote areas), but also introduces new procedures to allow streamlined exports through postal services under certain conditions. These procedures are creating a new market segment that didn’t exist before and are open to commercial shipping services as well as the public postal operators.

In the case of Brazil, the postal service (known as Correios) accounts for just 20 percent of shipments by the over 3,000 small enterprises that use the system regularly. The remaining 80 percent are covered by other operators. With the streamlined export procedures, Brazil is expected to export nearly $200 million in 2007, up from just $160,000 in 1999.

Chasqui: What development impact will the program have?

Mauro Marcondes: It is important to bear in mind that the amounts that can be exported through Exporta Fácil may be a mere fraction of overall exports for the countries in which the service will be implemented, but will make a significant contribution to small business development by opening up more opportunities for small entrepreneurs to gain access to new markets.

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.

Chasqui: What leadership role has Brazil played in the program and in other areas involving postal services?

Mauro Marcondes: Exporta Fácil was designed and launched by Brazil in 1999 and 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 the support of the MIF.

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.

Chasqui: What value added does the Bank’s participation contribute?

Mauro Marcondes: The IDB is playing a dual role here: first, it has been supporting IIRSA, as part to its contribution to regional integration, since the initiative was launched in 2000 by providing technical coordination; and secondly, 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.