Micro and small businesses can act as peace builders
In an international context where conflicts have reached their highest level since the Second World War, what role can micro, small, and medium-sized enterprises (MSMEs) play in fragile and conflict-affected settings?
Two sessions at the fourth edition of the WTO’s Trade for Peace Week showcased how the private sector can foster economic recovery and support long-term stability in the wake of conflicts.
However, to ensure these companies reach their full potential, they need support. According to the ITC SME Competitiveness Outlook 2023, it costs over 15 times more to start a business in fragile settings than in high-income countries.
Beyond access to finance, panellists highlighted other barriers that hinder the potential peacebuilding role of small businesses. Daniel Leong, coffee entrepreneur and Board Member of Associação Café Timor in Timor-Leste, argued that these businesses also need skills training and capacity building.
Josie Lianna Kaye, CEO of TrustWorks Global, stressed the need for tailored support to help companies in conflict zones navigate challenges like security threats, corruption, and conflict sensitivity.
Axel Addy, World Bank Executive and former Liberian Minister, stressed the power of public procurement to foster small business growth. He urged governments to use budgets to support small businesses, as seen in Liberia where targeted policies helped them expand into larger enterprises.
Trade as a peace enabler
The high-level session marking the official launch of the Trade for Peace publication reaffirmed that trade can encourage economic stability and peace, particularly in states at conflict or with a fragile peace.
The publication shows that WTO integration drives reforms, boosts economic integration, and supports peacebuilding in fragile states. Membership also improves market access, reducing reliance on primary commodities and promoting diversification.
By integrating into the global economy, fragile states can establish stronger economic interdependencies that contribute to peace and stability.
However, violence severely impacts trade. The 2024 Global Peace Index reports that conflicts caused a $19.1 trillion economic cost in 2023 (13.5% of the global economy), stressing the need for trade-driven peacebuilding.
MSMEs' resilience has its limits
At the same time, the publication acknowledges that trade alone cannot prevent or resolve conflicts. While it plays a crucial role in post-conflict recovery, reducing internal conflict drivers, and aiding in peacebuilding, it is not a standalone solution.
Panellists agreed that the trade ecosystem must view trade through the lens of small businesses, as they are key actors in fragile economies.
