In its latest survey, the Asian Development Bank said that the impacts of the Russian invasion of Ukraine on small businesses in Central and West Asia underscore the need for improved strategies to strengthen the entrepreneurial base in the region.
The document also says that while the region made a quick initial rebound from the COVID-19 pandemic, the Russian invasion of Ukraine and related sanctions have since upended the operations of micro, small, and medium-sized enterprises (MSME). Exports have been especially affected, due to the high reliance on the Russian Federation as a trading partner.
«Governments in Central and West Asia should refine their strategies for supporting MSME foreign trade, as well as develop domestic commodity markets,» said ADB Chief Economist Albert Park.
According to the expert, «supporting growth-oriented entrepreneurs will help unlock new productivity, and this support should continue to target youth, women, agribusiness, and tech startups.»
The international entity also underlined that upgrading digital skills and infrastructure is critical, along with diversifying financing sources for small businesses.
«Bank lending to MSMEs averaged 9.0% of GDP and 31.4% of total bank lending during 2015–2021. The small lending markets have led governments to offer financial assistance to MSMEs. Shifting from a high reliance on subsidy-backed finance to more market-based finance – capital markets and digital finance platforms – should be a focus of policy discussions,» the bank said.
Earlier this year ADB improved its forecast for the GDP growth in Uzbekistan from 4.5% to 5% for next year.