Inclusive Trade for Peace

WTO Deputy Director-General Xiangchen Zhang; Axel Addy, International Executive, World Bank Group; Daniel Leong, coffee entrepreneur, Board of Directors of Associação Café Timor of Timor-Leste; Josie Lianna Kaye, CEO and Founder, TrustWorks Global; Eric Buchot, Head of Programme, ITC in Iraq; delegates, distinguished guests, ladies and gentlemen, good afternoon and thank you for joining us.

We are living in a world where fragility and conflict are no longer isolated challenges.

They are reshaping economies, displacing millions, while testing the resilience of entire regions.

According to the NGO ACLED, the number of conflicts today is nearly twice that of five years ago.

And it is a world where progress on the Sustainable Development Goals—from ending poverty to tackling inequality—remains at risk, including as a result of conflict and fragility.

We must start doing things differently—and that means that we must articulate a far clearer role for the private sector, while ensuring that our own interventions are coordinated, tailored, and responsive to the specific challenges of fragile contexts.

That is why events like Trade for Peace Week are so important.

Because they set out, in no uncertain terms, that trade policy and practice can help lay the foundation for lasting stability and peace, and why these are interventions that must be crafted with, and alongside, our humanitarian and development partners.

Over the years, more of the micro, small, and medium-sized enterprises, or MSMEs, that our ITC team works with are operating in fragile and conflict-affected settings.

And what we have seen, in countries ranging from Iraq to South Sudan, is this: they are the ones keeping their communities going, even against extraordinary adversity.

MSMEs are often the only remnants of the private sector left in fragile and conflict-affected settings—with multinationals often having stepped back.

In fact, MSMEs usually make up at least 90 percent of local firms in fragile settings, compared to roughly 78 percent in non-fragile environments.

As the only ones left, that means that MSMEs are effectively standing on the frontlines—creating not just jobs and incomes, but providing essential goods and services that their communities need to function.

In other words, they aren’t just economic drivers: they are also social stabilizers.

It is imperative that we prioritize targeted, conflict-sensitive support for these businesses, ensuring they not only survive but also drive local stability and economic resilience in ways that are responsive to the realities of fragile contexts.

These same social stabilizers are often facing painful challenges, not just to their ability to function, but even to ensure their own safety.

It’s a very different reality than for those MSMEs in other settings—meaning that these firms are often underserved, and their specific needs, as well as the broader ecosystem they operate in, are often not fully understood.

MSMEs in fragile and conflict-affected settings need support that’s tailored to their unique circumstances—and which recognizes their unique roles in their communities’ social structures.

But by the numbers, they usually face an uphill climb.

In fragile settings, it costs over 15 times more to start a business than in high-income countries, our latest SME Competitiveness Outlook showed.

Businesses that are small, led by women or youth, or that operate in the informal sector tend to experience fragility more acutely—either due to tears in the social fabric that limit their protections, or limited access to credit or other forms of finance, or a wariness of undertaking risk.

And for those small businesses able to keep their doors open, the path to exporting is a difficult one.

The infrastructure often isn’t there, or isn’t of sufficient quality.

The market barriers are often high, especially if the country is not well integrated into the global economy and global supply chains.

And limited finances, technological skills, and other hurdles like shifting exchange rates can effectively close off the path to exporting entirely.

But with the right support, and the right tools, these MSMEs can become even more resilient—and our research and experiences show that if they are able to keep going in fragile situations, then when peace returns, they can often experience a boom in growth and entrepreneurship.

With that resilience, and that growth, they can place their economies on stabler footing, and their communities too.

Iraq is a clear example. It’s home to one million MSMEs, many of them in the agricultural sector. Yet Iraq still imports much of its food, despite having farmers ready to fulfil that demand at home, and consumers willing to pay a premium for high-quality products.

We worked to bring many of these Iraqi agribusinesses together into alliances, helping them make connections to buyers and markets, while developing new business models and investment plans.

It’s yielding impressive results. Now, major international retailers in cities like Baghdad and Erbil have on their shelves tomatoes grown by small agribusinesses in Mosul.

And if any of you ever have the opportunity to visit the Iraq National Trade Forum, you’ll see on display MSMEs from a host of economic sectors—engaging in business-to-business meetings, talking with policymakers, showcasing their sustainable production practices, and meeting with investors and other finance providers.

I want to make clear, however, that building MSME competitiveness in fragile and conflict-affected settings is only part of the equation.

If we really want to make sure countries can break out of a “vicious cycle” of fragility, we need a two-pronged approach, one where governments and other institutions, such as business support organizations, have an essential role to play in creating the right environment for MSMEs to thrive.

Again, Iraq is showing what that looks like, providing a compelling example of how coordinated policy reforms can create a more resilient private sector.

The Iraqi government, both at the federal and provincial levels, has been hard at work ensuring that these MSMEs have an environment that meets their needs.

And that includes advancing its WTO accession process, which is helping the country shape, prioritize, and implement domestic economic reforms in a structured and strategic way.

Because they know that these reforms, and progress in their accession, will send a powerful signal to investors and trading partners that Iraq is a good choice for doing business.

That’s one of the most valuable benefits that WTO accession makes possible—and on that note, I would like to congratulate Somalia for the hosting of its first Working Party meeting just days ago.

It’s a historic milestone, and one of many still to come. And our ITC team stands ready to support you along your WTO accession journey.

Today’s conversation—and indeed, all of Trade for Peace Week—is, of course, about how trade policy can help support the hard work of peacebuilding.

But it is also about the solutions we can apply on the ground, together—and the people and institutions that must play a part, from local governments to development partners, from international agencies to the private sector.

And that means ensuring that peacebuilding interventions include market-led approaches so MSMEs can both survive, and thrive—and that don’t focus solely on fulfilling immediate humanitarian needs.

Now, we all know how limited current budgets are for official development assistance—even as crises seem to lurk around every corner.

But we don’t want to risk a scenario where the vicious cycle of fragility becomes more entrenched, or where conflict begets more conflict.

That means all of us working in international development—whether we’re in the realm of trade or humanitarian action—must be coordinated and strategic in how we craft our interventions and how we approach resource mobilization.

Because when MSMEs thrive, then peace and stability have a firmer chance of taking hold—and growing stronger over time.

Thank you all, and I wish you a productive session.