Tag Archives: SMEs

Donbas Entrepreneurs Reopening and Expanding Businesses in Ukraine

donbas-2

By Anastasiya Baklan

The war in Ukraine has been especially difficult for small businesses in the conflict-affected regions, despite a ceasefire agreed to in February 2015. According to the data of the State Statistics Service of Ukraine, communities in Luhansk, Donetsk, Kharkiv, Dnipropetrovsk and Zaporizhia suffer from a severe economic crisis, which is especially stressful for small and medium business owners.

Analysis of business owners’ attitudes in the Donbas region shows that the stressful situation provokes a fear of investing in illiquid assets such as real estate and land. So entrepreneurs in the region are revising their business models, leasing assets where possible and limiting immobile capital investment.

With the goal of assisting SMEs affected most by the economic downturn, as well as those businesses displaced by the conflict, CIPE recently supported at-risk entrepreneurs in six towns (Berdyansk, Pershotravensk, Slavyansk, Lozova, Svatovo and Kreminna) through a business training and mentoring program for 119 people. The USAID-funded project was based on strategies that promote specific business sectors in each of the target communities, which business owners are now beginning to operationalize.

Given the dire economic situation in Donbas, CIPE was pleasantly surprised to encounter several social impact business models. For example, Oleksandr Gadenko from the village of Osypenko near Berdiansk, has a business concept that will extend the public water supply to the villagers who suffer from a complete lack of water.

The business would bring fresh running water to residents of 800 housing units, which currently have no access to water at all. The novel business financing model, involving a mixture of state investment, private funding, and donor support, will allow villagers to access running water while earning a modest rate of return for the business owner.

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Privatization in Ukraine: Not So Fast

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In Ukraine, thousands of companies are still owned and operated by the government — a legacy of Soviet central planning that bleeds money from the already strained state budget. With the country in economic crisis, there have been renewed calls for Ukraine to speed up its privatization process and sell these firms to private owners who can restructure them and run them more efficiently.

Ukraine’s former Minister of Economic Development and Trade, Aivara Abromavicius, recently made a well-reasoned argument for faster privatization on the Atlantic Council’s blog. Similarly, the IMF has also urged Ukraine to speed up the pace of privatization.

However, focusing on the pace rather than the quality of privatization will likely result in a botched privatization process — which will undermine the little bit of faith Ukrainians have left in the free market and state institutions, potentially leading to the growth of populist movements and destabilizing the current government.

Ukrainian state-owned enterprises (SOEs) remain a drag on the national budget. They serve as incubators for corruption and gray market deals and in some cases serve as piggy banks for Ukrainian politicians. While I agree with Abromavicius that “simplicity, clarity, and transparency,” must be maintained in order to successfully privatize Ukrainian state owned enterprises, his concept of creating a simplified privatization procedure (without advisers) through an online auction of over 1,000 smaller SOEs will likely lead to public anger over a process that would surely enrich insiders.

Without independent advisors overseeing the due diligence process and hiring independent auditors, bidders will not have transparent access to information about the companies listed. This would, in effect, be like buying from an unrated seller on eBay with only a vague description of what is for sale – something that would not inspire confidence in potential buyers.

A lack of independent advisors–and the transparency and investor assurances they would bring to an auction—can lead to lower realized prices for the Ukrainian government, attracting only those bidders with inside knowledge of the true status of the enterprises for sale.

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Ukrainian Business Community Comes Together to Develop Local Business Agendas

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By Bogdana Aleksandrova and Anastasiya Baklan

For the first time in Ukraine’s modern history regional business associations, in cooperation with Chambers of Commerce and Industry and think tanks, are developing and promoting local business agendas.

Historically Ukrainian business associations, chambers, and think tanks have not cooperated closely to form a single voice of business in advocacy efforts.  In view of this history, CIPE developed and delivered training programs to various business support organizations over the past several years, the latest of which occurred over the winter and spring.  The training, encouragement, and support from CIPE have helped to foster the development of coalitions of these organizations following the trainings in several regions around Ukraine (see CIPE’s Bogdana Aleksandrova speak about the advocacy campaigns – in Russian).

The most recent participants in CIPE’s training program will receive ongoing consultations from CIPE experts, including Sergiy Pancir, Head of the Center of Social Partnership and Lobbying under the National University of Kyiv-Mohyla Academy, Denis Bazilevich, Director of the Institute of Professional Lobbying and Advocacy and Ruslan Kraplich, business trainer of the Ostrog Princes Foundation. Now these coalitions are taking the next step, applying their training, and are developing local business agendas.

CIPE recently announced that five regional coalitions, from Sumy, Mykolaev, Ivano-Frankivsk, Kirovohrad, and the city of Kyiv, each consisting of business support organizations and regional think tanks, would receiving small grants and ongoing technical support to develop regional business agendas.

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Democracy that Delivers Podcast #18: eBay’s Brian Bieron On How Global E-Commerce Platforms Enable SMEs Around the World to Export at an Unprecedented Rate

Podcast hosts Julie Johnson and Ken Jaques with guest Brian Bieron (right).

Podcast hosts Julie Johnson and Ken Jaques with guest Brian Bieron (right).

Executive Director of eBay’s Public Policy Lab, Brian Bieron (@ebaygr), discusses how global e-commerce platforms are helping small and medium-sized enterprises around the world to export at an unprecedented rate, and how this is opening the global economy like never before. Bieron also talks about how online commerce is changing the dynamic of who can export where, the logistics challenges that companies face, and the policy reforms that can help micro, small, and medium-sized enterprises harness the potential of e-commerce to reach new markets

Find out more about the Public Policy Lab’s work at their website.

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Democracy that Delivers Podcast #15: Business Development Expert Toki Mabogunje on How Small and Medium-Sized Businesses Are Faring in Nigeria Today

Podcast hosts Ken Jaques and Julie Johnson with guest Toki Mabogunje (right)

Podcast hosts Ken Jaques and Julie Johnson with guest Toki Mabogunje (right)

Business development consultant Toki Mabogunje (Twitter: @tmc_nig) talks about the current business climate in Nigeria, how the new government is tackling economic, security, and corruption challenges – and the private sector response – and how Nigerian entrepreneurs find ways to thrive in even the most difficult circumstances. Mabogunje also talks about how her American school education still shapes the way she approaches issues today. Visit her website.

Subscribe to the podcast on iTunes or on your Android device.

Listen to past episodes of our show here.

Like this podcast? Please review us on iTunes to help other listeners find the show!

How Selling Online Helps Small Businesses in the Developing World Break into Export Markets

From the report on page 14. It shows that in 2014, eBay was the primarily an export platform for the eBay-enabled SMEs in Chile, Colombia, South Africa, Indonesia, and Thailand

From the report on page 14. It shows that in 2014, eBay was the primarily an export platform for the eBay-enabled SMEs in Chile, Colombia, South Africa, Indonesia, and Thailand

Can e-commerce markets help create a more inclusive global economy where small and medium enterprises (SMEs) from developing countries can export their products overseas without facing major obstacles? According to a recent report published by eBay Public Policy Lab, Small Online Business Growth Report: Towards an Inclusive Global Economy, the answer is yes.

As the World Economic Forum notes, internet-based commerce sites have a positive impact for SMEs around the world because they open up new export opportunities, facilitate access to low-cost imported inputs, and e-commerce marketplaces make it easier to globally sell and source goods by reducing non-tariff barriers to trade, such as access to information.

The eBay report looked at its own data to examine if these arguments were true. The datasets of transactions from small online business (sellers with sales of more than USD $10,000 on eBay marketplace) from 2010 to 2014 in 18 countries, including emerging markets like Brazil, Mexico, Colombia, Chile, South Africa, India, Indonesia and Thailand.

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Small Business in Egypt: the Heavy Burden of Following the Rules

Sayed Diab makes his living providing sound systems and digital services for events like this CIPE discussion. (Photo: CIPE Egypt)

By Ahmed ElSawy

This post originally appeared in Arabic on the CIPE Arabia blog.

Sayed Diab spent 26 years of his life working as a technician supplying organizations with sound systems and related digital services for their events and conferences. Six years ago he started his own business in this field and has since made his living providing his services to CIPE, other NGOs, business associations, and think tanks in Cairo, Egypt.

Diab recently sat down for an interview about his experiences running his own business in Egypt and what he has learned as a small business owner from the many CIPE events and discussions he has worked on.

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