Ladies and Gentlemen,
I am pleased to join you in celebrating this year’s Micro- Small and Medium-sized Enterprises – MSME – Day.
Before the COVID-19 crisis, micro-, small and medium-sized enterprises comprised over 90 percent of business entities around the world and were contributing to the achievement of the Sustainable Development Goals.
However, the COVID-19 pandemic has had a devasting impact on these small businesses. Many micro and small enterprises – owned in particular by women, youth, ethnic and religious minorities, and migrant workers – have gone bankrupt. This has led to loss of employment and livelihoods for millions of workers, while those that survived are facing an uncertain future.
With the unprecedented collapse of small business enterprises, levels of unemployment and underemployment have soared, and extreme poverty and inequality increased.
The crisis has also exacerbated pre-existing decent work deficits. It has laid bare:
- the destructive impact of labour market inequities,
- the digital divide, and
- discriminatory access to public resources, particularly stimulus measures meant to protect the most vulnerable small business enterprises.
In most countries, support measures did not consider the highly uneven impact of the pandemic on different sectors in the economy. While financial support benefited large firms, such support hardly reached MSMEs in the informal sector.
In addition to the limited access to stimulus packages, the informality of MSMEs in most developing countries, and the lack of social protection, have enhanced the vulnerability of small business enterprises to the pandemic.
Yet, despite this disappointing picture, the global economy is on the rebound.
In its mid-year update of the 2021 World Economic Situation and Prospects, the UN Department of Economic and Social Affairs, UN DESA, reported that global growth prospects have improved. Growth is projected to expand by 5.4 percent in 2021, following a contraction of 3.6 percent in 2020.
This rebound is occurring against the backdrop of rapid vaccination rollouts in some advanced economies. But the pandemic is far from over for most countries, especially the poorer countries. This is further constraining the ability of economies and small businesses to rebound and contribute to the achievement of the SDGs.
The stark disparity in vaccination coverage poses a serious risk of an uneven and fragile recovery. Not only of the world economy, but a rebound of micro-, small and medium-sized enterprises.
Recovery policies should therefore address the disproportionate impact on MSMEs – if they are to restart, recover and build resilience. Resilient MSMEs can unleash not only short-term economic growth in countries. They can also accelerate medium to long term economic growth and sustainable development.
It is therefore important that financial institutions target liquidity and financial support for MSMEs. Especially for businesses owned by women and disadvantaged groups.
Further, coherent policy environments, innovative financing solutions, and improved access to infrastructure, are essential for MSME’s to recover better.
Partnerships – including south-south, north-south and triangular cooperation – are also important in expanding access to knowledge, good practices and capacity building opportunities.
Together with partners, UN DESA continues our commitment to building an inclusive and sustainable recovery from the COVID-19 pandemic, with shared prosperity for all.
I thank you.