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Syria: Research Terms of Reference - Cost of Business Assessment SYR2211, Northeast Syria (September 2022, Version 1)

Pays
Syrie
Sources
REACH
Date de publication
Origine
Voir l'original

2. Rationale

2.1 Background

Economic activity in Syria has halved since the beginning of the conflict in 2011 as a result of large losses of human capital that has disrupted social and economic networks, destroyed infrastructure, degraded basic services, and disrupted trade. Compounding this, the Syrian economy has suffered from COVID-19, prolonged droughts and changing climate conditions, rapid currency depreciation, high inflation, and the knock-on effects from the crises in Lebanon, Türkiye, and Ukraine. Such factors have contributed to pushing commodity and fuel prices up greatly eroding the purchasing power of the population, one of the key drivers of humanitarian need. A Multi-Sector Needs Assessment in 2021 showed that a majority of respondents in NES reported that they could not afford essential items in the market where prices are highly volatile. According to the Syria Joint Market Monitoring Initiative, the price of the food component of the Survival Minimum Expenditure Basket in NES has increased by 70% in the past six months. Insufficient income and lack of employment opportunities forces households in NES to rely on negative coping strategies, including borrowing money to buy food or other essentials, sending children to work, and purchasing items on credit.8 Recent Labour Market Assessments in NES revealed that over two thirds of respondents in both Al-Hasakeh city and Ar-Raqqa city reported that lack of job opportunities prevented them from finding employment, while an additional one-third of respondents in both cities cited high competition for jobs as a key barrier to finding employment.9 In addition, 38% of respondents in ArRaqqa and 22% of respondents in Al-Hasakeh reported wanting to start their own business but lacking resources to do so.

In this context, the NES Economic Recovery and Livelihoods (ERL) Sector has prioritised implementation of livelihood interventions to help households meet immediate needs and support socio-economic actors, including individuals and MSMEs, to be drivers of local economic activity and employment growth within targeted communities. This has involved, among other activities, the provision of cash value grants to businesses, primarily focusing on micro and small enterprises to date. With the aim of expanding and better targeting such support to include a greater variety of business sizes and sectors, ERL actors need more information on the actual operating costs faced by MSMEs in NES across different sectors, as well as the key challenges business owners face in maintaining or growing their businesses.

2.2 Intended impact

Access to livelihood opportunities is consistently reported as one of the main priorities for Syrians in NES to enable greater self-reliance and agency.11 Support to MSMEs can increase employment opportunities and community resilience given they are a primary source of net job creation and therefore play a major role in improving welfare at the individual, household and community level, ultimately reducing dependence on external assistance. There is currently, however, limited information on the actual costs of business expenditures in NES, particularly for businesses larger than micro-enterprise size, to enable actors providing or wanting to provide financial support to ensure grants meet the economic realities on the ground. As such the CBA would enable the development of evidence-based guidelines for organisations to set the value of their business grants by consolidating what is already known about the cost structures of micro-enterprises that provide important household level support to vulnerable families, while also providing new information to support larger enterprises in different sectors that have the potential to impact employment generation within the community. Further, a deeper understanding of the barriers business owners face in maintaining or growing their business would support ERL actors in the design of their grant value transfer programs as well as support closer linkages with other ERL activities that aim to enhance livelihoods, improve access to basic services, or rehabilitate value chains. As such REACH in partnership with the NES ERL Working Group will conduct a CBA in selected markets in NES to assess the cost of expenditures for MSMEs and support the development of a MEB that could in turn guide financial support provided for MSMEs.