No one can predict the full economic impact of the Covid-19 pandemic. The World Trade Organization (WTO) estimates a trade drop between 13%-32% for 2020. All economic forecasts look very worrisome, surrounded by so many uncertainties that could turn out even worse in reality. The outbreak is going to last long and affect many countries. We have to mobilize and sustain a coordinated, concerted, fast-track policy response. We need to prioritize action in support of small and medium-sized enterprises (SMEs) and the informal sector, being the driving force for the recovery of jobs and livelihoods.
Small enterprises need dedicated support measures
The International Labour Organization (ILO) highlights in its third Covid-19 monitor that 'while small enterprises around the globe play a major role as providers of jobs, particularly in low- and middle-income countries, they often lack access to credit, have few assets and are the least likely to benefit from fiscal measures in general and from the stimulus packages related to the current crisis.' Joint global action and dedicated support to SMEs is therefore even more crucial in times of Covid-19.
There is a need for full cooperation at the international and national level, including from Geneva (International Trade Centre, UN Conference on Trade and Development, WTO, ILO). International organizations have undertaken several initiatives to support SMEs in response to the Covid-19 pandemic: transparency schemes regarding government measures, capacity-building opportunities and capital buffers for SMEs. And I am very pleased to see that the International Trade Centre (ITC) is one of the recipient UN organizations of the UN COVID-19 Response & Recovery Fund to which the Netherlands contributed almost $17 million. This multi-donor Trust Fund is an excellent example how cooperation among different UN organizations will strengthen the results of each against higher impact and lower costs.
Netherlands' support for SMEs in least developed countries with the Netherlands Trust Fund
For many years now, the Netherlands has been supporting SMEs in developing countries with a variety of instruments; helping increase the trade of small businesses, improve access to finance, and facilitate start-ups and innovations that help realize the Sustainable Development Goals.
The Netherlands Trust Fund's (NTF) Export Sector Competitiveness Programme has funded a range of successful projects implemented by the International Trade Centre in partnership with the Centre for the Promotion of Imports from developing countries (CBI). The two organizations have a remarkable, long-standing partnership since 2004, re-enforcing each other's strengths. ITC on the regional level, focusing on developing new products and services by local communities across the whole supply chain and assisting in development of country-thematic or sector policies, is complemented by CBI providing marketing tools, instruments and expertise for developing economies to expand export to European markets. The programme is active in least developed countries such as Guinea, Liberia, Myanmar, Senegal, Sierra Leone and Uganda.
Fast forward digital solutions as way out of the crisis
The most recent Netherlands Trust Fund project (NTF IV) focuses on the digital sector. ITC is one of the first organizations that operationalized and introduced innovative digital solutions to SMEs. The programme has laid the basis for the survival of small businesses in developing countries during Covid-19. In this period of lockdowns and restrictions, digital trade and digital platforms are more than ever essential for our economies and societies. Remote learning, teleworking, online health services, e-commerce, payment by phone - they really make the world go round. Senegalese and Ugandan start-ups, beneficiaries of NTF IV, have come up with concrete solutions during Covid-19. They can serve as an example to other SMEs as a way out of the crisis.
Emphasis on women in information technology
And let us not forget that women, who generally have less opportunities to engage in the digital economy, are a potentially mighty force in the digital economy. Women empowerment is a topic that is close to my heart. It is also one of the crosscutting themes in the trade and development policy of the Kingdom of the Netherlands. The COVID-19 pandemic risks reinforcing the existing inequalities.
I am therefore happy that this topic has the full attention of many organizations. The Netherlands for example, cooperates with UNCTAD on eTrade for Women. And the Netherlands Trust Fund actively contributes to increasing the share of women in the information technology (IT) sector, especially in leadership positions. The Fund cooperates with ITC's SheTrades Initiative to tackle gender-related constraints in the sector, including access to finance - because women and men deserve equal opportunities to recover better from the crisis.
Looking forward
In an increasingly digital world, there is a need for clear rules and regulations. The Netherlands, as part of the European Union and together with other WTO-members, is involved in negotiations that aim to adopt modern rules on domestic regulations, which facilitate digital trade. Among other topics, we discuss rules on consumer protection, e-signatures and the protection of personal data. These rules should thus create opportunities for the most vulnerable to benefit from digital trade and can possibly provide SMEs in developing countries a way to recover better from the crisis.