"TOGETHER OUT OF THE CRISIS" - OPEN LETTER FROM EAP SME FOR THE 18 JUNE EASTERN PARTNERSHIP LEADERS' CONFERENCE 2020 - PPD
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“Together Out of the Crisis”
Open Letter from EaP SME for the
18 June Eastern Partnership Leaders' Conference 2020
As representatives of the SME business community* of the Eastern Partnership (EaP), we have come
together during the coronavirus crisis, because of the grave consequences it presents to SMEs (small and
medium-sized enterprises) across the region, to extend an invite to joint action.
The crisis is a further serious challenge to the transformation process of the Eastern Partnership countries
into well-functioning market economies, driven by an innovative and competitive SME segment. A vibrant
SME community is vital not only to employment and a stronger economy, but to a more inclusive and
resilient society. Despite many challenges and some setbacks during the first decade of the Eastern Part-
nership, impressive results have been achieved in many areas. This progress now threatens to be re-
versed by the acute effects of restrictive measures and in the longer term by too slow or insufficient re-
covery of demand on services and goods. While the full picture is still evolving and will be dependent on
the effectiveness of monetary and fiscal support measures, it is already clear that the SME segment of
the region’s economies will be severely hit by the crisis.
We welcome the solidarity and swift support from the EU for socio-economic recovery and grant and
credit access to the Eastern Partnership countries in the crisis and in particular the focused support avail-
able to SMEs. Notwithstanding, many thousand SMEs across the region continue to be heavily affected,
including through bankruptcies and unemployment, by stifled services and retail sales, supply chain dis-
ruptions and by the persevering liquidity crisis.
In this situation, it is now our urgent task to safeguard the thousands of companies and livelihoods the
SME community represents. As our economies gradually begin to restart, our next task will be to ensure
that conditions for SMEs improve, making the SME segment more resilient, able to fulfil its role as back-
bone of the future economy.
We believe that the implementation of much needed reforms can only be successful by involving the pri-
vate sector in the policy-making process. Our aim is therefore for decision-makers to consider SMEs in
each country as key partners for the design and implementation of the reform processes, strategies for
economic development, and regional cooperation. The long-term challenges facing SMEs in the region
should be tackled in a close and stable framework of permanent national public-private dialogue (PPD),
conducted on a regular basis, focusing on concrete topics with appropriate timeframes and in a language
accessible to SMEs. Structured regional cooperation between the countries and coordinated participation
by organised private sector in the policy processes of the EaP should also be a priority.
We therefore wish to reach out to form a broad coalition among the SME associations of the EaP in alli-
ance with the local research community and enter a constructive dialogue with the governments of our
countries and with the European Union. At the same time, we extend a call to the European Commission
and EU representations in the EaP to engage in this dialogue.
There is no better moment to come together than in this time when Europe needs to re-emerge from
crisis more competitive, sustainable, and resilient. At the same time, the process of evaluation of strate-
gic policy objectives of the EaP and development of post-2020 deliverables is underway.
The situation for SMEs is now dire across many sectors in the Eastern Partnership countries and concert-
ed action is needed. The private sector of the Eastern Partnership is reaching out for cooperation in the
months ahead to overcome the challenging times we all face and build a stronger and more resilient re-
gion post-2020.
The undersigning SME Community of the EaP
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 1
Investments & Business Climate
Challenges Recommendation
The COVID-19 crisis showed that SMEs were Raise awareness and support of SMEs in preventive
especially hard hit, having challenges to and control measures and awareness raising for
adapt to new situations, unfamiliar e- companies in labour safety.
commerce and were in other ways unpre- Introduce proper insolvency legislation and execu-
pared, while larger companies coped better tion. Companies should have the possibility to close
with it and got swifter government support. the business easily and have second chance.
This is largely since SMEs are heavily in- Improve e-commerce legislation and give assistance
volved in service provision (from tourism to to SMEs to do e-commerce and be present on the
hairdressers) and small retail business. internet.
Roughly one third of SMEs in most countries
are at the brink of bankruptcy and will have
problems to restart due to poor insolvency
legislation.
COVID-19 showed the lack of public adminis- Improve capacity building for EaP public administra-
trative capacity in the EaP to act swiftly to tion. Invite EaP to Regional School of Public Admin-
mitigate negative impact on the economy istration for South Eastern Europe (RESPA) as a
and SMEs. Strong and effective public admin- quick solution. Create an EaP School of Public Admin-
istration will keep the economy more resilient istration in the long term.
to crisis.
SMEs face significant corruption and with Implement the principle of SMART regulations, fight
other consequences than larger companies. informality and corruption through education, good
Corruption and other malpractice are still implementation of anti-corruption legislation, and
widespread despite anticorruption legislation training of businesses and public officials on anticor-
being in place. Complicated bureaucratic ruption compliance instruments. Adopt the relevant
procedures and administrative barriers in- legislative framework and ensure the implementation
crease the risk of corruption, in particular in of e-government for more transparency in the EaP
the current times of redistribution of assets economies along the European Interoperability Di-
and rapid influx of credit and grants. Tackling rective. Invite the EaP countries to EU Agencies as
the challenges of the COVID-19 crisis might observer countries. Invite EaP SME Agencies to
additionally slow down the regulatory align- EASME EU SME Agency and support such alignment
ment process of EAP with EU. by the EU.
Access to Market
Challenges Recommendations
A lack of fair market competition along with Create and effectively implement efficient competition
weaknesses in public procurement obstructs legislation and establish institutional mechanisms
SMEs in their access to local, regional, and dealing with competitiveness for SMEs. Ensure fair
international markets. COVID-19 risks exac- treatment of SMEs in the EaP within the existing Asso-
erbating the selective preferential treatment ciation and Partnership and Cooperation Agreements.
of state-owned and monopolist businesses, End quota restrictions on DCFTAs in agriculture and
while EaP markets largely collapsed for food processing fully by 1 January 2021
SMEs. SMEs in the EaP need better access to
the home market, EaP markets and the EU
internal market.
A lack of support for sectors typical for SMEs Support typical sectors of SME involvement, draft and
like the tourism and hospitality sector, small implement special policies including awareness build-
retail and personal services, integration into ing for digitalisation, training, and support for SMEs in
value chains and digitalisation of SMEs digitalization including more efforts for digital pay-
makes the situation of SMEs under COVID-19 ment. Join initiatives like the “Better than Cash” global
especially difficult. effort for e-payment. Reduce informality and corrup-
tion by more and better online and digital payments
systems in the EaP.
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 2
Access to Finance
Challenges Recommendations
COVID-19 could bring around 1/3 of all SMEs SMEs call for the Eastern Partnership Leaders' Con-
in the EaP countries close to bankruptcy. ference 2020 and the EAP summit in 2021 to main-
SMEs face a dramatic shortage of demand tain and expand its important support for SME, in-
and broken supply chains, leading to a li- cluding ensuring a continued SME liquidity support
quidity gap and operative losses. A lack of fund. Adopt the EU Payment Directive and ensure
payment certainty and enforcement mecha- debt collection via courts and private bailiffs is work-
nisms create uncertainty for SMEs with big- ing systematically and public procurement is paid on
ger players using the crisis for further delays time.
in payments. A strong support package is
needed to maintain the already low levels of
SME participation in the economy.
Innovations & Skills
Challenges Recommendations
The lack of digitalisation of SMEs and the lack Improve awareness-raising and teaching of digital skills
of digital skills by employees and the popula- in the educational sector. Provide training in digital
tion in general (IT literacy) poses a huge skills for the population. Invite the EaP to the EU Digi-
problem to SMEs. Possibilities to work from tal Union, improve Digital Public Services in the EaP,
home and to maintain and expand client rela- invite EaP SMEs to the digitalization efforts of the EU.
tions are limited. The EaP should adopt EU Data Interoperability Di-
rective.
Rebuilding the economy after the COVID-19 Cooperate to improve environmental governance in the
crisis risks cementing de facto subsidies to EaP countries, remove subsidies to uncompetitive and
uncompetitive and environmentally unsus- unsustainable energy, transport, and infrastructure,
tainable businesses to safeguard short-term while creating incentives in line with the European
priorities, including employment. While seg- Green Deal and each country’s implementation of
ments of the private sector of the EaP are Agenda 2030. Raise awareness among SMEs and in-
prepared to take the lead in transitioning to a vestors about sustainable procurement, eco- and social
socially and environmentally sustainable innovation, product lifecycle management and con-
economy, the power of innovative SMEs is sumer information, boosting SME green market entry
poorly leveraged. and participation in sustainable supply chains.
Cooperation, Integration and Connectivity
Challenges Recommendations
There are no clear common COVID-19 re- Establish a platform for the exchange of experiences in
sponses within the EaP and the crisis has best practices, improving reaction on crisis, improving
shown the weak regional ties within the EaP. the resilience of SMEs and of the economy. Intensify
The cooperation between EaP countries is on cooperation between EaP countries and avoid disrup-
a low level. tions. SMEs call for an EU EaP Digital Union by 2022.
*A Note on the process:
The drafting of this Open Letter 2020 “Together out of the crisis” is partly based on the Regional Position Pa-
per (RPP) “Enhancing Change and Growth” with recommendations for policy makers that was launched in May
2016 by private sector organisations and supported within the PPD Activity of East Invest 2 to be presented at
the Kyiv informal ministerial meeting in July 2016. The process was continued through the annual conference
of East Invest 2 in October 2016. Over 200 private sector organisations (Business Associations) took part in
that process, coordinated by 30 coordinators (one per topic in each of the 6 EaP countries), supported by the
national facilitators for PPD and experts from both the EU and the EaP countries. It was endorsed by business
associations in the EaP countries and supported by business associations from the EU to constitutes a contri-
bution of the business community to the 4th EaP Business Forum in Tallinn in October 2017. The process of
SME associations working together, including within the PPD Network (www.ppd-network.org) under CEE BC
(Central and Eastern Europe Business Council), has since 2018 had advisory support by the International
Council of Swedish Industry (NIR, nir.se) with some funding support by the Swedish MFA.
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 3
Endorsement: We the Business Community, Private Sector Organisations and Business Associations of the
Eastern Partnership Countries endorse the Regional Position Paper and hope it will lead to an improved
business environment for the Small and Medium Enterprises, a stronger involvement of the Business Com-
munity in the Policy Making and an improved Public Private Dialogue.
Enterprise Incubator Foundation (EIF)
http://eif.am/
Bagrat Yengibaryan
The wine and vine foundation of Ar- Director
menia http://vwfa.am/ Tel: +374 11 21 97 97
E-mail: info@eif.am
Zaruhi Muradyan
Executive Director
Tel: +374 95 47 74 11
E-mail: zara@vwfa.am
Central & Eastern Europe Business Council - Armenia
E-mail: office@armenia.cee-bc.org
Armenian Tourism Federation
https://armtf.am/
Mekhak Apresyan
President
Tel: +374 99 20 83 48, +374 99 58 45 46
Business and Education Partnership Foundation https://bep.am/
E- mail: info@armtf.am Marine Jamkochian
Founder/President
Tel: +374 91 40 3416
E- mail: info@bep.am
Business Association “Youth and
Entrepreneurship”
Website: www.mtp-ukr.com
The Public Council under the Ministry of Communities’ and
Territories’ Development in Ukraine
Website: http://www.minregion.org.ua/
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 4
Association of Private The Centre of Advanced
Small and Medium Enterprise Cooper- Investors of Ukraine Training for Public Servants
ation Association (SME Association) http://uaban.org/ in Kyiv oblast
http://www.sme.am
Tigran Gasparyan
Executive Director
Tel: +374-94-275527
E-mail: info@sme.am
Union of Entrepreneurs, Tenants,
and Owners of Sumy Region
http://www.spilkasumy.com
Kharkiv Regional PO "Association of
Private Employers"
61001, Kharkiv, Plekhanivska str., 16 Central & Eastern Europe Business Council - Georgia
Alexander Chumak
office@georgia.cee-bc.org
President
+380949773346,
asprro@gmail.com
apr.org.ua
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 5
Central & Easter Europe Business Council – Moldova
office@moldova.cee-bc.org
Republican Confederation of Entrepre-
neurship”, Association of Legal Entities Chamber of Commerce and industry of Tavush Region
https://armcci.am
220014, Minsk, Republic of Belarus, Vardges Hovakimyan
Zhukova ave., 44-404 Chairman
Tel: +375 17 3222318/96 Tel: +374-77-704777
e-mail: office@rce.by E-mail: tavushcci@gmail.com
www.rce.by
“Endanik” charitable NGO
http://www.gyumriusumnaran4.am/
http://entanik.am/
Knarik Aharonyan
Founder ”Akhuryan” Community Development Association” NGO
Tel.: +374 44 17 09 93 Levon Igityan
E-mail: k.aharonyan@entanik.am President
+374 98 114 991
ls.igityan@gmail.com
akhuryanngo@gmail.com
Business Development Center
"Центр бизнес развития"
ARMENIAN BRITISH BUSINESS CHAMBER (ABBC)
Viber: +375(29)694-22-01 http://www.abbc.am/
+375(29)615-55-75 Naira Manoukian
+375(29)694-22-01 Executive Director
E-mail: fmr-cbr@yandex.ru Tel: +374-55-288680
Facebook: www.facebook.com/fmr.project E-mail: info@abbc.am
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 6
МОЛОДЕЖНОЕ ОБЩЕСТВЕННОЕ ОБЪЕДИНЕНИЕ
"МОЛОДЕЖНЫЕ ИНИЦИАТИВЫ"
NGO “Youth Initiative”
E-mail: YouthInitiativeBY@gmail.com
Mobile: + 375 29 5558880
Facebook: https://www.facebook.com/profile.php?id=634557522
NGO for the Promotion of Private
Enterprise UNITY
+ 375 232 70 12 61
+37529 656 11 97
http://www.edinstvo-gomel.by/
Republic of Belarus,
Gomel region,
247760, Mazyr,
st. Leninsky, 12, building 33.34
+375 (236) 222-225 / 26
+375 (29) 6900157 (Velcom) +375 (33) 6820120 (MTC)
mozyrbc@mail.ru http://www.mbc.by/
«БИКомарово»
Educational and Practical Institution for
the Support of Entrepreneurship “BIKa-
marova”
С о ю з пр е д пр и ни ма те л е й Б р е с тс ко й о б л а с ти
+375 1797 37-3-04 U n i o n o f E n t r e p r e n e u r s o f t h e B re s t R e g i o n
+375 29 627 27 89
center@komarovo.com
222394, Minsk region, Myadel district, +375 (29) 728-40-56
d.Komarovo, st. Green, 14, building 2. info@spbo.by
center@komarovo.com Republic of Belarus, Brest, str.Internationalnaya 17
https://komarovo.com/ https://spbo.by/
АНП
NGO "Association of Employers
and Entrepreneurs" of Vitebsk
region
st. Kalinina, d.14-A, room 2B, Vitebsk, Bela-
rus, 210015
vitebsk-anp@tut.by, vi-
tebsk.anp@gmail.com Брестское областное общественное объединение
«Союз предпринимателей, работодателей и ремесленников».
Phone / Fax: (+375212) 35-09-04,
+375 29 812-24-27,
Brest Regional Public Association
+37529 399-59-39, Union of Entrepreneurs, Employers and Craftsmen
+37525 549-04-74
e-mail: brest.eecu@tut.by
“Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 7
220007, Minsk, st. Artilleristov, 8, 1st floor, building 11 Phones: (017) 205 43 32, (029) 607 99 71; Fax: (017) 222 14 95, Email: apimh@tut.by http://apimh.by/Home.aspx “Together out of the crisis” - Open Letter from EaP SME for the 18 June Eastern Partnership Leaders' Conference 2020 8
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