Asia Small and Medium-Sized Enterprise Monitor 2022: Volume II—The Russian Invasion of Ukraine and Its Impact on Small Firms in Central and West Asia

By Asian Development Bank

This thematic chapter shows how the Russian invasion of Ukraine and related sanctions are affecting micro, small, and medium-sized enterprises (MSMEs) in Central and West Asia and suggests policy responses to mitigate the impact. It draws on the results of business surveys in Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan carried out six months after the start of the invasion. It assesses the invasion’s macroeconomic impact, outlines its effect on global supply chains, and explores MSME responses. Highlighting how countries are converting risks into opportunities, it notes that strengthening domestic commodity markets and increasing digitalization and available capital could help make MSMEs more resilient.

• Language: English
• Publisher: Asian Development Bank
• Release date: Dec 1, 2022
• ISBN: 9789292699086

Book preview

ASIA SMALL AND MEDIUM-SIZED ENTERPRISE MONITOR 2022

VOLUME II: THE RUSSIAN INVASION OF UKRAINE AND ITS IMPACT ON SMALL FIRMS IN CENTRAL AND WEST ASIA

NOVEMBER 2022

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2022 Asian Development Bank

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Some rights reserved. Published in 2022.

ISBN 978-92-9269-907-9 (print); 978-92-9269-908-6 (electronic); 978-92-9269-909-3 (ebook)

Publication Stock No. TCS220543-2

DOI: http://dx.doi.org/10.22617/TCS220543-2

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Notes:

In this publication, $ refers to United States dollars unless otherwise stated, AMD refers Armenia dram, AZN refers to Azerbaijan manat, EUR refer to euro, GEL refers to Georgian lari, KGS refers to Kyrgyz Republic som, KZT refers to Kazakhstan tenge, SUM refers to Uzbekistan sum, and TJS refers to Tajikistan somoni.

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Cover design by Claudette Rodrigo.

Contents

Tables, Figures, and Box

Foreword

The Russian invasion of Ukraine added stress to a global economy that was just recovering from the effects of the coronavirus disease (COVID-19) pandemic. In Asia and the Pacific, the greatest economic impact of the invasion has been among economies in Central and West Asia due to their geographic proximity, historical ties, and strong economic links with the Russian Federation. The region has not yet fully absorbed the macroeconomic effects as some are longer term than others. The region may be close to both the Russian Federation and Ukraine, but countries still showed some degree of economic resilience to impact of trade sanctions. Nonetheless, disruptions to global supply chains will continue to affect the region, particularly as economies seek alternative trade routes or invest in import substitution.

The invasion and associated global sanctions against the Russian Federation have affected the region’s business operations, including those of micro, small, and medium-sized enterprises (MSMEs), as one-third of them export at least some products. In Central and West Asia, MSMEs contribute a significant share of gross domestic product (GDP).

The Asia Small and Medium-Sized Enterprise Monitor (ASM) 2022 Volume I of the Asian Development Bank (ADB) showed that in Central and West Asia MSMEs accounted for an average of 98.9% of all enterprises, absorbed 46.1% of the labor force, and generated 40.7% of a country’s GDP, based on available data through 2021. Thus, it is critical to