Blog by Mr. Erol Kiresepi
27 June marks International Micro, Small and Medium-Sized Enterprises (MSME) Day. In recognition of their valuable contribution to local and global economies, the International Organisation of Employers (IOE), a partner of B20 Saudi Arabia, has authored a guest blog post on how the G20 can support efforts to ensure business continuity for MSMEs in the wake of COVID-19.
The health, economic and employment impact of COVID-19 makes international cooperation more important than ever before. B20 Saudi Arabia has a key role to play in coordinating the voice of the business in the G20 in these testing times. The International Organisation of Employers (IOE), representing more than 50 million companies, serves as a partner of the B20.
Micro, small and medium sized companies (MSMEs) have suffered tremendously following lockdown measures and the disastrous impact on the economy and supply chains. According to estimates from the International Labour Organization (ILO), around 436 million enterprises in the hardest-hit sectors worldwide are currently facing significant risk of serious disruption. More than half of these – some 232 million – are in wholesale and retail trade. The large-scale collapse of companies is leading to a catastrophic impact on employment opportunities. MSMEs, for instance, account for more than 70% of global employment in retail trade and nearly 60% in the accommodation and food services sector. These statistics reflect the need for urgent support aimed at ensuring business continuity.
The G20 Leaders’ Summit of March 26 made important commitments with regards to safeguarding the global economy and addressing international trade disruptions. However, national economic stimulus packages that were pledged have too often failed to reach the real economy. This is because processes to access financial support are too complex and difficult to activate. There needs to be more direct support to businesses to ensure their continuity, particularly for MSMEs.
We, the IOE, have engaged together with organizations, International Trade Union Confederation and IndustriAll, in an initiative to address the impact of the pandemic in the garment industry. We are committed to supporting manufacturers to survive the economic disruption caused by COVID-19 and to protect garment workers’ income, health and employment. The garment sector plays a central role in the formal and informal economies in many countries and is a key driver for employment and development. Particularly in countries without proper social protection floors, business collapse easily can lead to a humanitarian catastrophe. ILO, ITUC and IndustriaAll therefore call on the G20 to support this important initiative.
ILO Director-General Guy Ryder demands that “the new normal must be a better normal”. We are not yet sure what the new normal will look like, but the idea behind this slogan is very much shared by the international business community: We need to address the immediate crisis, but we also need to ensure when coming out of the crisis that we have better and more conducive policy frameworks for job creation, entrepreneurship and skills development. We do not wish to return to business-as-usual. And because of the devastating employment and economic effect of the pandemic, it is even more important to undertake comprehensive reforms to come to more dynamic, open and inclusive labor markets.
Mr. Erol Kiresepi, is Co-Chair of the Future of Work & Education Taskforce at B20 Saudi Arabia and President of the International Organisation of Employers (IOE).