08 April, 2021
Panel Study: Impact of COVID-19 on Small- and Medium-Sized Enterprises in Iraq details the main findings of a joint International Organization for Migration (IOM) in Iraq, Food and Agriculture Organization (FAO), and International Trade Center (ITC) panel study. The study followed 893 small- and medium-sized enterprises (SMEs) throughout 2020 to measure the losses and investigate how firms are coping with the economic impact of COVID-19.
Overall, all the sectors in the study reported a decline in production or sales between February, the pre-COVID-19 period, and December, the end of the study period. Over the year, more firms incurred new debt due to the pandemic, the majority of which were through informal means.
The proportion of SMEs reporting risk of permanent closure of their business halved between June and December. After big losses of employees at the beginning of the pandemic, employment began to recover between June and November but did not reach pre-pandemic levels by the end of the year.
Over the course of the study period, the mechanisms SMEs adopted to cope with the financial difficulties of the pandemic changed. Initially, SMEs laid off employees. Later, requesting leniency in repaying financial responsibilities and increasing marketing efforts emerged as the dominant strategies.
The same 893 SMEs were surveyed three times in 2020: 22 June to 7 July, 9 to 18 September, and 29 November to 15 December. The firms represent 16 different sectors across 15 governorates of Iraq.