Micro, small and medium- sized enterprises in the Arab region: structural vulnerabilities at a time of multiple shocks

Micro, small and medium- sized enterprises in the Arab region: structural vulnerabilities at a time of multiple shocks

Dec 28, 2021

The COVID-19 crisis has hit the region at a time when many economies have already been limping their way through a wide range of long-standing downturns, structural problems and fragilities. Following a series of largescale protests in 2011 calling for economic and political reforms, countries such as Libya, Syria and Yemen have slid into civil armed conflicts, leading to destruction, high death tolls, and humanitarian and refugee crises which spill over into their neighbouring States. Most middle-income countries have all suffered episodes of political instability. Oil-dependent economies, such as Algeria, Bahrain, Qatar, Saudi Arabia and the United Arab Emirates, have been struck by the 2014 oil price free fall – the result of surplus supply and fading demand.

The COVID-19 crisis is unprecedented in terms of the danger it poses to health globally. Most countries – including Arab countries – have introduced full or partial lockdown measures to save lives. But protecting human life has had an economic cost in terms of slowed growth and productivity, massive job losses, enterprise closures and broken value chains.

Micro-, small and medium-sized enterprises (MSMEs) account on average for over 90 percent of all enterprises in the region and provide a major source of new job creation, thus occupying a central role in the economies and livelihoods. These MSMEs have been disproportionately affected by the crisis. This paper examines these effects.

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