Doing Business in Crisis Areas: hope for the future?

In many countries, conflicts, instability and health crises are weakening both the economy and social ties. But, under such conditions, development of the private sector can help create jobs, provide people better opportunities, and diversify the economy. In Iraq, Libya, and Burkina Faso, supporting entrepreneurs and developing a business climate conducive to their activity are thus reliable ways to ensure that entrepreneurship contributes to the stabilization and, in the longer term, the development of these countries.

Crisis areas face both difficulties and opportunities

It is said that countries in crisis or in conflict often face obstacles to entrepreneurship, due to contraction of business activity and to the risks and disorganization linked to instability. But Antonis Tsamoulis, Cooperation Officer with the European Union Delegation to Libya, says this assertion should be qualified: “Libya is an example that shows that war economies—while admittedly informal—are very dynamic, because even in times of crisis people have to live, produce, and eat.”

Crises can thus also create opportunities for doing business: “In contexts of fragility or war, a broader process of economic reorganization takes place, with major changes in different sectors and also among economic actors,” he adds, emphasizing the dynamism and capacity for innovation among young people, who are inspired by new technologies.

The potential of digital technology is also emphasized by Hanan El-Abed, a Libyan entrepreneur who benefited from the STREAM incubator, whose development was supported by the United Kingdom, Expertise France, and Libyana. As the creator of the “Spatula App,” she was able to train more than 100,000 women via Facebook and advise them on how to promote their business on the Internet. Her wish is to make starting a business as easy as creating a Facebook page.
 

A “start-up mentality” in the making

Such energy can also be seen in Iraqi Kurdistan, where young people are highly connected, motivated, and keen on finding solutions. Eileen Brewer, Director of Takween Accelerator in Iraqi Kurdistan observes this. “The citizens growing up in these areas are very resilient,” she says. She also notes that most are self-taught in such skills as coding and computer engineering. In this region, she explains, “a whole new generation is stepping forward, saying, ‘We can create a private sector and develop the economy, via technology companies’.” This is a real turnaround for an Iraqi economy historically focused on the exploitation of raw materials and construction.

However, “countries in crisis lack advisory and support services for entrepreneurs,” says Antonis Tsamoulis. In those cases, emphasis is put on support. That is the purpose of the accelerator managed by Eileen Brewer, who says, “We can offer entrepreneurs a space to meet, work together and develop businesses.” Takween Accelerator is the first organization of its kind to be created in Iraq. It supports the development of start-ups by offering training as well as networking with mentors.

In Burkina Faso, support and training are also key aspects, including in non-technological sectors. This is the case in the Boucle du Mouhoun region, known as the “breadbasket of Burkina Faso” because of its considerable agro-pastoral activity. Tigoni Jacques-Armand Tiegna, coordinator of the agro-pastoral business incubator of the Boucle du Mouhoun Regional Council, explains: “Vocational training is the royal road to employment. That’s why we carry out training as well as actions to help guide business creation.” These are indeed the kinds of support that companies need to become sustainable.

Decisive public action to improve the business climate

However, working with entrepreneurs and the private sector is not enough: there can be no sustainable entrepreneurship without a supportive ecosystem. That is where public actors come in. “You can train people and upgrade their skills, but if the government is unstable and hasn’t set up a policy to support the kinds of businesses they want to create, they go nowhere,” says Eileen Brewer. There are in fact a number of subjects that public policies need to address to support the development of the private sector: company registration, corporate tax system, administrative procedures, access to financing, and the famous “Startup Act” legal frameworks dedicated to innovative companies.

To support this process, the international community can offer technical assistance and share best practices. “This is the approach we’ve adopted in Libya with Expertise France: we are committed to giving the public authorities the means they need to do their job of regulating and stimulating the economy,” says Antonis Tsamoulis, referring for example to the SLEIDSE and EU4PSL projects. He emphasizes the virtuous circle of private-public cooperation, as businesses contribute to the development of the economy and to tax resources, while the State, in turn, provides a secure and transparent framework for growth and employment.

Local actors and the diaspora as a driving force

It is therefore all the stakeholders who must work together, from the public actors who create and structure an ecosystem that promotes business initiatives, to the actors in financing and training who help guide and support entrepreneurs.

In this respect, involvement by local actors is decisive, as shown by the example of the Boucle du Mouhoun Regional Council. As Armand Tiegna explains, “We set up the regional council incubator to give impetus to local development.” The incubator, with backing from the European Union and Expertise France, has supported projects by young people and women in these difficult areas far from the capital, thereby helping to stimulate and diversify local production.

Diasporas also have a key role to play in the development of local entrepreneurship. “We regularly reach out to the diaspora, asking them not only for investment, but also for business advice,” says Eileen Brewer.
 

“The diaspora brings innovation, shares its expertise with local actors and is a go-between between actors in the South and actors in the North,” confirms Aïssata Diakité, founder and CEO of the Zabbaan Group. Specialized in fair trade food, this group works with Malian small-scale farmers and sells its products both in Mali and internationally. “[The diaspora] can provide a new perspective, via preexisting models or innovation, as well as financial and technical assistance,” says Awa Dembelé, founder and CEO of DAMEGREEN, which offers a model for composting green waste and turning it into organic fertilizer.

“What did we learn from the workshop? That there’s a great deal of hope, innovation and dynamism among young people... but also need for support, both at the central and decentralized levels,” concludes Séverine Peters-Desteract, moderator and head of the Economy, Private Sector and Trade Unit within the Economic and Financial Governance Department of Expertise France.
 

View the workshop