Five Reasons Why MSMEs are Important for Syria’s Economic Recovery and Social Development
Under a protracted crisis of over 12 years, the Syrian economy is subject to repeated shocks, increasing humanitarian needs reaching an all-time high and worryingly limited livelihood opportunities. This is as much constraining to the economy as it is to the people.
The situation continues to deteriorate, adding unimaginable suffering amid a devastating earthquake that hit Syria and Türkiye and resulted in loss of lives and severe damage to essential services and critical infrastructure, a Cholera outbreak, climate change, and water and electricity shortages. Close to 90 percent of the population is living below the poverty line. The Syrian currency remains at historic low levels, leaving people little margin to afford daily life. According to the UN, about 70% of the total population — or 15.3 million people — are in need of humanitarian assistance this year. Some 12 million people, 54 percent of the population, suffer acute food insecurity, and 1.9 million are at risk of becoming food insecure.
Micro, Small, and Medium-sized Enterprises (MSMEs) in Syria, which constitute about 95% of the total enterprises, have remained dominant in private entrepreneurship, playing a key role in providing jobs, reducing poverty, and fostering social cohesion. Despite their limited access to finance and almost no access to the external market, MSMEs in Syria had to adapt to the emerging situation and demonstrate remarkable resilience. They have been connecting people, addressing grievances, expanding space for civil society, and reducing unemployment and vulnerabilities, especially among women and youth.
With the 2030 Agenda as a guiding thread, the United Nations Development Programme in Syria works with its partners to advance MSMEs’ important role as peace- and resilience-builders and young people’s economic empowerment. Here are five reasons why MSMEs are important for driving economic recovery, and fostering social development in Syria, even in the face of unprecedented challenges:
Economic Resilience: MSMEs in Syria are crucial drivers of economic recovery. Prior to the conflict, these enterprises contributed around 60 percent to Syria’s GDP; now, even with the ongoing challenges, they still contribute about 40 percent to Syria’s GDP. Supporting these enterprises strengthens the economic fabric, fosters job creation, and lays the foundation for sustained growth.
Sustainable Livelihoods and Employment Generation: MSMEs are engines of employment, particularly in a context where formal job opportunities are limited. These enterprises are improving the livelihoods of approximately 70 percent of the Syrian workforce, helping reduce poverty and enhancing socio-economic stability.
Preservation of Traditional Skills and Cultural Heritage: Some MSMEs specialise in traditional crafts and artisanal products, representing an invaluable cultural legacy. By supporting these enterprises, we contribute to the preservation of these crafts, fostering a sense of pride and ensuring the transmission of traditional skills to future generations. This preservation is enhancing cultural identity, boosting tourism potential, and creating sustainable revenue streams.
Source of Innovation and Adaptation: Many emerging MSMEs in Syria are catalysts for innovation and adaptation. By leveraging digital platforms, technology, and alternative business models to navigate through turbulent times, those MSMEs are driving economic diversification, positioning Syria as a hub for entrepreneurship, and contributing to technological advancement. By supporting eco-friendly practices and embracing renewable energy solutions, MSMEs are also actively promoting green recovery.
Community Revitalisation and Social Cohesion: MSMEs hold a transformative power in community revitalisation and social cohesion. When investing in local enterprises, we are contributing to the restoration of local infrastructure and services. By supporting agricultural and rural enterprises, we are promoting sustainable farming practices and enhancing food security and sustainable value chains. By unlocking the potential of women-led enterprises, we are benefiting the community as a whole, empowering individuals and fostering gender equality and inclusivity.
The list goes on, and there are more than five reasons why MSMEs are important for Syria’s economic recovery and social development.
By their very nature, MSMEs possess the potential to address multiple dimensions of sustainable development, creating a ripple effect that transcends economic boundaries. But, MSMEs thrive when they have a conducive business environment and are integrated into global value chains. It is, therefore, critical to put access to markets for MSMEs at the heart of any support strategy. UNDP’s programming is anchored in empowering and uplifting communities towards inclusive economic growth through business development services, demand-driven capacity and skills development together with placement and employment, and access to financing, among others.
Looking at UNDP’s current interventions and given its distinctive position at the country and global levels, UNDP has extended its engagement in supporting the MSMEs sector in the context of early recovery and has adopted an area-based approach which allows for a more integrated and strategic process-based perspective that also engages with the private sector at different levels; working upstream (macro — policy) as well as mid-stream (meso — market services, trade and institutional support) and downstream (micro — business and productive capacities). UNDP also nurtures an ecosystem of innovation that works closely with aspiring entrepreneurs and start-ups, providing access to innovation hubs, incubators, and mentorship programmes.
In numbers, during the past two years, UNDP, with the support of its partners and with a focus on women-led enterprises and persons with disabilities (PWDs), was able to create over 4,000 long-term job opportunities and economically empower over 1,500 women through the revival of over 3,800 microbusinesses, including social enterprises, self-help groups, and green recovery businesses, with focus on women-led enterprises and persons with disabilities (PWDs).
In addition, UNDP adopted the Making Markets Work for the Poor (MMW4P) approach focusing on supporting the value chain of wheat in the North East, almond, dairy, vine in the central areas of Syria, and textile and handicrafts in Aleppo. Over 75,000 people benefited from these interventions. It also set up three business incubators/accelerators and supported building the capacity of over 18,000 people.
Empowering MSMEs in Syria can give agency to the people, to aid a sustainable bottom-up economic recovery focused on the people and their needs. By supporting the different types of enterprises in Syria, UNDP is laying the foundation for economic growth, contributing to community resilience, restoring hope, and promoting a sense of collective ownership in shaping a better future and ensuring that Syria is not left behind.