Small Businesses: A Neglected Necessity

Introduction:
Small businesses are commercial, industrial, or agricultural activities that start with limited resources compared to other enterprises, i.e., modest capital and few employees. These businesses are characterized by their ability to adapt and innovate in a rapidly changing business environment.
Small businesses provide opportunities for individuals to improve their financial returns and enhance their skills, employing them to increase productivity. They pave the way to large-scale enterprises and require efficiency and proper planning for a small business to be profitable. Business owners need to identify needs and manage financial and human resources wisely. Over time, as a small business succeeds and becomes profitable, resources increase, and the scope of business expands. This expansion may include increasing capital, hiring more employees, expanding geographical operations, and improving infrastructure and technology. Starting with limited resources, small businesses grow with success and profitability, gaining a unique identity and becoming known to their target audience. Customers recognize and trust the business, and the brand becomes a symbol of quality and trust in the market.

Small Businesses in Syrian Regime Areas:
In Syria, small businesses play a significant role in the national economy. According to some studies, these enterprises contributed 41% to the GDP in 2019, which decreased to 37% in 2020 due to the COVID-19 pandemic. Small and medium enterprises (SMEs) constitute about 99% of establishments in Syria. However, this sector faces significant challenges. According to reports, 58% of these businesses are operational, 16% have ceased operations completely, and 6% are in preparation. Most of these businesses rely on family savings or the owner’s funds for financing, with about 88% of Syrian small businesses resorting to bank loans. In the same context, entities like the “Small Enterprise Development Authority” work to develop and support this sector according to the government’s vision.
Despite challenges, the small and medium enterprise sector in Syrian regime areas continues to play a crucial role in the economy and provides employment opportunities for many people.

Small Businesses in Liberated Northern Syria:
Small businesses also play an important role in improving the economic conditions in Northern Syria due to population density, displacement waves, and the spread of camps. With the increasing phenomenon of unemployment, small businesses have been activated as a solution since 2018. Some organizations and institutions have started promoting and supporting small businesses, many of which have succeeded and benefited the beneficiaries. However, it is essential to emphasize the capacity of these enterprises to employ the largest number of unemployed individuals to reduce unemployment. In terms of governance, Northern Syrian areas lack specific laws regulating small and micro-enterprises, and there is variation across different areas in licensing mechanisms and the level of tax evasion.
In 2024, civil and economic events held the first investment conference in Northern Syria, attended by businesspeople from Turkey, the United States, and Western countries, most of whom are of Syrian nationality. Despite challenges, the small and medium enterprise sector in Northern Syria continues to play a crucial role in the economy and provides employment opportunities for many people, and can be considered the main carrier for combating unemployment.

How to Support Small Businesses:
There are several ways to support small businesses in Northern Syria:

1. Financial institutions can offer profit-sharing projects or interest-free loans to small business owners.
2. Offering training programs to small business owners to enhance their skills and increase their chances of success.
3. Support from humanitarian organizations for small businesses in Northern Syria.
4. Holding exhibitions and festivals for small businesses to market their products and services.
5. Establishing non-banking financial institutions like some experiments that provide credit services to enhance livelihoods in Northern Syria.
6. Collaborating with governmental and international entities and benefiting from programs and initiatives offered by these entities.
7. Providing technical and administrative support to small businesses to help them achieve their goals.
8. Encouraging innovation and technology to improve their efficiency and increase their competitiveness.
9. Offering support to agricultural projects through larger loans.
10. Offering support to innovative projects through facilitated loans.
    It is worth mentioning that these measures require cooperation and coordination between various concerned parties, including local and international governments, NGOs, financial institutions, and small business owners.

Conclusion:
The Syrian economic reality largely relies on revenues from small businesses, as large factories do not meet the need to alleviate the impact of economic collapse. Therefore, it is essential to have social interest in enhancing and supporting small businesses. Thus, we recommend the following:

1. Changing the religious mindset and directing it towards spending zakat and charity on supporting small businesses.
2. Establishing a national economic fund supervised by a social committee in cooperation with major Syrian businessmen based on a method of monitoring and transparency, aiming primarily to support and finance small businesses with the help of economic experts.
3. Directing international support towards enhancing the concept of small businesses.

Finally, we at the Syrian Future Movement put all our capabilities towards nurturing small businesses, making it a national, economic, and religious issue as well.

Ammar Al-Amouri
Economic Office
Research and Studies Department
Studies
Syrian Future Movement (SFM)

References:

• Exhibition to support small businesses in Northern Syria (alaraby.co.uk)
• Coin Economy – Supporting small businesses in Northern Syria: Opportunities and Challenges (youtube.com)
• Omran Center for Strategic Studies – Determinants of success of micro-enterprises in the private sector in Northern Syria (omrandirasat.org)
• Role of small businesses in reducing unemployment – Northern Syria as a model (Nma for Contemporary Research) (nmaresearch.com)
• A review of the experience of small businesses in Syria (2001 – 2017) (shamra-academia.com)