Whereas the pandemic reduces the export potential of Micro, Small and Medium Enterprises, leveraging the circular economy becomes more urgent for sustainable development

According to official statistics, in Belarus, Micro, Small and Medium Enterprises (MSME) account for about one fourth of the country’s GDP, one third of employment and one half of its exports. Over 80% of such companies have suffered negative impact of Covid-19 pandemic on their business.

This is the case in Belarus as well as other countries with economies in transition where, in addition to challenges posed by the pandemic, MSMEs suffer from structural barriers that limit their overall growth and export growth potential. These include limited access to finance, burdensome taxation and permit systems, and low utilization of new technologies in managing business.

The impact of the pandemic in the MSMES of the UNECE region as well as available policy solutions and country experiences were discussed at the sixth session of the   UNECE Steering Committee on Trade Capacity and Standards in Geneva on 21-22 June 2021.

The event featured an in-depth discussion of the findings and recommendations emerging from the UNECE COVID-19 impact assessments focusing on trade barriers faced by micro, small and medium-sized enterprises in selected countries of the UNECE. Worldwide, the pandemic has deepened challenges, by reducing external demand for exports, complicating trade procedures through additional border controls and quarantine requirement and increasing costs of financing, which led many MSMEs to close down their businesses. But even for MSMEs that kept operating its export potential was diminished, as customs clearance was slowed down by staffing shortages at the borders; consignments were hindered by the special health and safety arrangements in destination countries; and maritime transport costs increased, among others.

Joanna Kazana-Wisniowiecki, UN Resident Coordinator of Belarus, commended the UNECE Steering Committee’s for its work addressing the impact of the pandemic on MSMEs. She also commented on the socioeconomic impact of the pandemic in Belarus, highlighting creative solutions by businesses and pointed out that the pandemic should increase the use of digital technologies in the Belarus MSME sector (currently only 22 per cent of Belarusian MSMEs are using digital systems for the automation of accounting and personnel records in their day-to-day activities).

Looking forward, the UN RC the potential for synergies between trade policies, innovation, and bolstering circular economies.  In Belarus, this could help strengthen value chains so that they contribute to more productive capacities of MSMEs and enhanced community resilience in the context of “building back better”. “For the UN Country Team in Belarus, “green” economic transition and digital transformation will continue to be a strategic priority also in the United Nations Sustainable Development Cooperation Framework (UNSDCF) 2021-2025 and in our COVID-19 Socio-Economic Response Plan (SERP), which has a pillar that specifically focuses on MSME development as a means to build more resilient economies and reduce informality” she said.

The event was attended by over 65 UNECE Member States delegates, UN Resident Coordinators and trade experts. Other Government representatives and UN representatives also reflected on the impact of the pandemic in the wider UNECE region.  

The discussion that followed identified urgent needs for improving policy frameworks to redress the global economic recession. The authorities can help MSMEs by establishing paperless procedures and investing in digitalized economy; also improving border controls; strengthening regional cooperation; limiting burocracy and building institutional capacity of State agencies and expanding the range of enterprise support services for MSMEs.

Overall, open and transparent dialogue with private sector companies is the way forward for countries in the region to quickly identify new policy solutions and strengthen cross-sectoral partnerships for Agenda 2030.