The head of the International Chamber of Commerce (ICC) has written an open letter calling on major institutions to protect small businesses impacted by economic sanctions on Russia.
John W.H. Denton AO, secretary general of the ICC, said he is worried that the escalating conflict in Ukraine could lead to widespread loss of business for emerging markets that export to Russia.
In an open letter to the heads of the World Bank and International Monetary Fund (IMF), Denton drew attention to the impact of the Ukraine crisis on the legitimate business activities of small and medium-sized enterprises (SMEs).
“While we fully respect the decision of several governments to impose economic sanctions on Russia in recent days, a growing body of anecdotal evidence from our network suggests that the uncertainty caused by the conflict – and related policy interventions – is impacting SME trade in a broader range of sectors than may have been previously envisaged,” said Denton.
“Most immediately, we are deeply concerned about the effects of the crisis on SME performance in sectors with a high reliance on exports to Russia.
“This is especially the case in a number of developing and emerging economies where trade disruptions (beyond the immediate intent of any applicable sanctions) appear to be biting heavily on small businesses and smallholder farmers.”
As Denton explained, such economies include, but are not limited to:
- Ecuador (a major exporter of bananas to Russia)
- Sri Lanka (a major exporter of tea to Russia)
- Nigeria (a major exporter of cocoa to Russia)
- Kenya (a major exporter of tea to Russia)
On behalf of the ICC’s global network of over 45 million businesses in more than 100 countries, Denton therefore urged the IMF and World Bank to urgently consider making available any “institutional assets” that can be deployed to help national governments cushion the unintended effects of the crisis on SMEs.
“This disruption comes at a particularly unfortunate time given the well-known impact of the COVID-19 pandemic on SME balance sheets, with a significant proportion of small businesses in our global network still facing an uncertain outlook entering 2022,” said Denton.
“In this context, we firmly believe that your respective institutions are uniquely placed to guide, support, and enable the decisive interventions that will be needed to mitigate the economic ripple effects of the Russia-Ukraine conflict, and avert the risk of it causing lasting damage to the productive capacity of many developing nations.”
In closing, Denton added that the ICC is ready to provide support in any way possible to mitigate risk and protect SMEs in emerging markets.
“As an organisation devoted to promoting peace and prosperity through international trade, we would be happy to assist,” he said.