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C2C Digital Magazine Spring-Summer 2022

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Book review: COVID-19 impacts on small and medium-sized businesses in developing world

By Shalin Hai-Jew, Kansas State University


COVID-19 and its Reflection on SMEs in Developing Countries
Tulus T.H. Tambunan and Himachalam Dasaraju, Editors
Nova Science Publishers
324 pp.

From late 2019, SARS-CoV-2 / COVID-19 spread to over 225 countries in the world and all the continents in mere months.  This pathogenic virus, thought to originate with bats but reaching humans through an intermediate mammalian host, spread through human-to-human airborne transmission and fomite transfer, among others.  So far, COVID-19 has resulted in some 6.23 million deaths and counting.  In addition to the loss of so many potential life years, there have been losses of healthful years as well, with prevalent “long COVID” and heightened likelihoods of heart problems and strokes with the infections.  While scientists still have much work to do to fully understand the pathogen, the pandemic, and other related factors, some early research findings are emerging.    


The pandemic has not only been a mass health phenomenon.  It has had far-reaching impacts on geopolitics, economics, and other aspects of human lives.  Some suggest that the extended isolations and fears have led to social deficits, with repercussions on globalization and international relations.  There were fears that the global community itself was enervated and fatigued from the setbacks of the pandemic and perhaps unwilling to engage a needful world. 

Experientially, humanity has suffered mass trauma due to the various losses—of people, of lifestyles, of livelihoods, of education, and of so many opportunities.  The initial lockdowns and social distancing required to protect human life, before the creation of effective vaccines, resulted in many businesses shutting down, some temporarily, some for good.   In 2020 alone, the global GDP fell some 4.5%.  Wealthier countries were able to provide some stop-gap funding to protect businesses and payrolls for a time.  Developing countries, however, often lacked sufficient government resources to support their businesses.  Especially hard hit were small and medium enterprises (SMEs), with fewer staff and resources to survive.  Tulus T.H. Tambunan and Himachalam Dasaraju’s edited collection COVID-19 and its Reflection on SMEs in Developing Countries (2022) explores this space.  

In the Preface, the co-editors emphasize the importance of micro small and medium enterprises (MSMEs) and small and medium enterprises (SMEs) in job creation:  

According to World Bank estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world.  In emerging economies, most of the formal jobs are generated by SMEs, which create 7 out of 10 jobs.  SMEs in the formal sector contribute up to 40 percent of national income in emerging economies.  (Tambunan & Dasaraju, 2022, Preface, p. vii)

Governments have an interest in supporting entrepreneurship, job development, job skills, and an active economy.  

Micro Small and Medium Enterprises in Indonesia

Tulus T.H. Tambunan’s “COVID-19 and its Reflection on MSMEs in Indonesia” (Ch. 1) provides a survey of the losses accruing to smaller enterprises during the pandemic, based on “declined turnover” of goods and “increased cost” of running a business (p. 1).  This most recent downturn is set against a backdrop of the 1997 – 1998 Asian financial crisis and the 2008 – 2009 global financial, both of which had outsized effects on small enterprises.  In these episodes, they were “encumbered by many problems, especially regarding financing, alongside difficulties in marketing, distribution, and procurement of raw materials” (p. 3).  In the 1997 – 1998 event, the country went into recession and experienced the dropping of value in their fiat currency. The government and peoples learned lessons from the prior crises.  A cited study found the following:  “…early evidence indicates that the impact on MSMEs was worse than the 2008/09 global financial crisis, and the major hurdles were cash flow problems, closure of operations, laid-off workers, retrenchment, and the diluted capacity for future expansion” (Craven, et al., 2020; Smith-Bingham & Hanharan, 2020, as cited in Tambunan, 2022, p. 12)

Economic systems are not self-correcting ones, and even with governments managing various levers, there are various ways these can go.  Misguided policies can magnify the crisis.  

Indonesia experienced a contraction of 2.07% due to the pandemic, with “business fields that experienced the deepest contraction” as “transportation and warehousing with 15.04% and the provision of accommodation, food, and drink, which amounted to 10.22%.  Furthermore, company services contracted by 5.44%, other services by 4.10%, while large trade and retail, car and motorcycle repair amounted to 3.72%.  However, some sectors experienced positive growth, including health services and social activities by 11.60%, alongside information and communication by 10.58%.  Also, procurement water, waste management, waste, and recycling grew by 4.94%, real estate by 2.32%, while agriculture, forestry, and fisheries increased by 1.75%” (BPS,, as cited in Tambunan, 2022, pp. 2 – 3).  Tourism was hard hit, with losses of foreign currency.   The lockdowns, restrictions on internal movement, and the stoppage of international travel all had suppressing effects on business activities.  Large enterprises (LEs) also suffered negative effects given labor shortages and constrained resources as inputs.  

A survival analysis of businesses found that those without inflows of funds were expected to make it only 8 – 19 weeks, in one study.  MSMEs are by nature “financially fragile” because they are not well resourced and without much in the way of reserves (Tambunan, 2022, p. 15).  The fragility is especially magnified in start-ups and businesses in the informal sector.  Some 7% of the working population was unemployed in the pandemic at one point.  At the human lived level, making do with thin resources can be highly difficult.  The pandemic “disproportionately affected women entrepreneurs, as their firms are younger and smaller” (p. 17).  

This work shares some global insights:  

Of the 1,000 MSMEs surveyed from eight countries across four continents, 70% had to shut down operations.  Meanwhile, 50% temporarily closed their business following direct instructions from the authorities, while the other 50% closed temporarily, or more sadly, permanently due to a reduction in orders, cases of staff COVID-19 infection.  Furthermore, over 75% were experiencing or expecting a reduction in revenues through 2020, which were very high in some cases, and one-third (33%) anticipated losing more than half.  This reduction was due to a more than 50% drop in customer orders, hence, nearly 9 out of 10 businesses were experiencing a shortage in cash flow.  (ILO, 2020d, as cited in Tambunan, 2022, p. 16)

Indonesia suffered a major decrease in world demand for their products, particularly to China. Domestic supply and demand were also problematic due to a drop in market demand (p. 20).   

A study conducted by the Association of Business Development Services Indonesia a few months into 2020 found the following:  

From the total sample of 6,405 MSMEs, 48.3% experienced difficulty securing the supply line, 92.6% needed debt restructuring, while 26.6% were facing cash flow problems and were unable to pay off the debt. (Tambunan, 2022, p. 22)

Those particularly affected were small and medium-sized enterprises in “the food and beverage, tourism, and business sectors that rely on people’s activities and mobility” (p. 22).  COVID-19 affected larger companies including “textile, apparel, and electronics industries” and those in which people gathered, like “cafes and restaurants, entertainment venues, cinemas, hotels, and malls” that closed during the pandemic (p. 28).  

Some “micro-businesses that utilize below five (5) workers” were unaffected (Tambunan, 2022, p. 28).  Also, “car repair shops, car washes, and shops, or business units without workers, such as craftsmen, small traders, and food stalls” mostly remained open in Indonesia (p. 28).  

COVID-19 and MSMEs in India

The weight of the pandemic affected economic sentiments and expectations, in developed, developing, and underdeveloped economies.  Himachalam Dasaraju, Siby Abraham, Kishore Somalraju, and S. Aparna’s “Reflections of COVID-19 on MSMEs in Developing Economies:  A Case of India” (Ch. 2) describe the importance of micro, small, and medium enterprises for India’s gross domestic product (GDP), job creation, poverty alleviation, hunger fighting, and other aspects of national well-being.  For a large country with so many citizens, the pandemic had outsized effects.  The GDP in India fell by a fifth.  Foreign direct investment (FDI) also fell.  

MSMEs help achieve the U.N.’s Sustainable Development Goals.  “In emerging economies, most of the formal jobs are generated by MSMEs, which create 7 out of 10 jobs” (Dasaraju, Abraham, Somalraju, & Aparna, 2022, p. 45).  There are “63 million MSMEs in India which are employing 110 million workers and producing more than 6,000 products for domestic and global consumption” (p. 50).  

MSMEs are entrepreneurial spaces, and they help harness human resources, natural resources, funding, and other forms of raw potential.  Would-be entrepreneurs benefit from supports around finance, business expertise, technologies, and other practices.  Indigenous industries may be supported as MSMEs.  Globally, MSMEs represent “95 percent of all business enterprises around the world” and accounts for “60 percent of the total employment” (p. 42).  [Side note:  There seem to be varying definitions and thresholds for businesses to be considered small or medium enterprises even though the terms are used as if there is a common definition across various national contexts.]  This work shows the importance of government supports, beyond stimulus, to shore up MSMEs.  

Factors in Impact of COVID-19 Pandemic on SMEs in Vietnam

Xiem Thuy Cao, Huan Van Do, and The Doan Truong’s “Factors Determining the Degree of the Impact of the COVID-19 Pandemic on Small and Medium Enterprises in Vietnam” (Ch. 3) involves research identifying four factors that affected the enterprises.  The four include the following: “a decrease in financial resources; a decrease in working hours and wages; a decrease in demand; lack of government support” (p. 59).  Most SMEs in Vietnam  suffered in the pandemic, even as “Vietnam was one of the few countries in the world that had positive economic growth in 2020,” with a 2.8% GDP (p. 60).  The average per capita income in-country in 2019 was $2,700 USD.  The country has a citizenry of 96 million people. 

Figure 1.  Village in Asia (by Quangpraha on Pixabay)

In Vietnam, SMEs contribute to 45% of the GDP, and government revenues to 31% of GDP  (Cao, Do, & Truong, 2022, p. 63).  SMEs experience various challenges, such as attracting, training, and retaining employees, given the wages.  Many lack sufficient collateral to borrow funds at high interest rates.   Vietnam detected its first COVID-19 cases on January 23, 2020, and these were from Wuhan.  The Ministry of Health in Vietnam set up hotlines and websites to share information.  Citizens were asked to focus on handwashing.  There were restrictions of movement by March 2020 to reduce the person-to-person spread.  Social gatherings were also limited.  Flights were reopened June 2020.  The fourth wave started May 24, 2021; the Vietnamese government was able to track and trace for more real-time understandings of the spread of SARS-CoV-2 / COVID-19 (a claim which many developed countries were not able to make given their lack of control).  

The country seemed to have come out relatively unscathed.  

According to Nguyen Thien Nhan (2020), with a population of 96.5 million people, the epidemic safety threshold of Vietnam is 970 people being treated simultaneously in hospitals. At the peak, there were 178 infected people being treated.  This means in Vietnam there was a first infectious wave, reaching its peak on March 30th, 2020, but no pandemic.  In the third wave, the rates of infection per 1 million people in Hai Duong and Quang Ninh are 330/1,000,000 and 53.5/1,000,000, respectively (Nguyen, 2020).  So it can be said that in all other provinces and cities there were no epidemics, only infections.  (Cao, Do, & Truong, 2022, p. 65)  

The responses to the pandemic resulted in various costs imposed on businesses:  

These costs were labor costs (38.0% businesses in the sample), costs of debt servicing (24.1% businesses), operating expenses (19.2% businesses), and rental costs for production space (16.5% businesses).  34.1% of businesses laid off their workers and 32.6% of businesses reduced wages. (Cao, Do, & Truong, 2022, p. 66)  

Also:  “50% of businesses had limited access to output markets; 38% ran into cash flow problems; 33% of businesses faced disruption of supply chains; 38% businesses had troubles with labor availability” (p. 66).  A cited study suggested that micro enterprises were able to “meet one-fifth of their demand” (Nguyen, 2021, as cited in Cao, Do, & Truong, 2022, p. 66), and performance was worse for bigger enterprises perhaps because of more snarls to supply chains for larger enterprises, more complexity, and more knock-on effects from the pandemic.  

SMEs, by nature of their size, have few resources to enable resilience.  The researchers write:  

In normal times, the majority of SMEs often operate in a maintaining manner; only a few of them can grow at a high rate, thus the dissolution of high-growth SMEs in pandemic times would severely affect all SMEs’ post-pandemic recovery. (Cao, Do, & Truong, 2022, p. 62)  

High-growth SMEs should be selected for government supports in times of crisis, given their criticality to society.  Some Vietnamese government supports included a reduction in income tax for 2020 for businesses and organizations; the extension of tax and land rental payment deadlines; the extension of the payment of excise tax for domestically manufactured or assembled cars, and other forms of relief.  There were also various endeavors to loosen monetary policies to enable more liquidity in the economy.  

Based on a self-administered survey and a factor analysis, the researchers found four variables that had the highest impacts on SMEs in Vietnam during the early years of the pandemic.  They write describe the four variables and some sub-element factors:  

decrease in financial resources (DFR) [decrease(d) sales, bad debts receivable, deferred payment, bad debts receivable, decrease in the price of goods, decrease in profits, unsold goods], decrease in working hours and wages (DWW) (laid off workers, temporarily shut down the business, reduced working hours, reduced wage), decrease in demand (DD) (decrease in demand of foreign customers, decrease in demand of domestic customers, complicated merchandise export procedures increase the cost / impossible exports), and lack of government support (LGS) (no government support received, unchanged rental and interest costs). (Cao, Do, & Truong, 2022, p. 71)  

This research article is one of the few works that focused on relative positives from the pandemic, such as the opportunity for business leaders and policy makers to learn how to support SMEs, such as by helping them go digital, such as helping business owners with financial knowledge and technical knowledge (p. 74), and others.  One finding was that “9.27% of the respondents experienced an increase in income,” such as businesses in the “health and information technology industries” spaces whose services were in high demand during the acute phases of the pandemic (Cao, Do, & Truong, 2022, pp. 72-73).  

The co-authors suggest the need for more activist governance in times of mass crisis, given the supply and demand shocks, the financial challenges, the sharp drops in sales, the falls in profit, the losses of personnel (to everything from sick days to death).  Vietnam, interestingly, was one of the countries considered a success story, with effective mitigations of COVID-19 in the successive waves.  

COVID-19 Impacts on MSMEs in India

S. Aparna, Siby Abraham, and Himachalam Dasaraju’s “COVID-19 and Indian Economy:  Impact on Micro, Small and Medium Enterprises (MSME) Sector” (Ch. 4) identifies the MSME sector as the worst affected one during the pandemic.  The pressures of the pandemic resulted in declining purchasing power of consumers and the destruction of demand, leaving many MSMEs at threat of non-survival.  This study examines listed stock price trends of MSMEs during the acute early phases of the COVID-19 outbreak to understand the performance of the sector.  [Apparently, smaller size enterprises can be listed in the Indian National Stock Exchange (NSE).]  The researchers used a variety of information sources:  annual reports from various ministries and the nation’s reserve bank and the national stock exchange.  In the pandemic, they observed the falling of blue-chip stock values, even to “multi-year lows” (p. 85).  The researchers write:  

The analysis shows that the worst economic sentiments are reflected in the price movements of listed small and medium enterprises.  It also explores how the stimulus packages declared by central government can revive the sector. (Aparna, Abraham, & Dasaraju, 2022, p.  79)  

Various small and medium sized businesses went to digitalization to survive, given that most had their “liquidity mainly…from the daily demand for their products” (p. 81).  MSMEs in India are incubators for innovations (p. 80) and the source of “the second largest employment” generation after agriculture (p.  80).  However, many others lacked infrastructure for digitalization.  

As to actions, they suggest government packages “to the most vulnerable MSMEs like textiles, manufacturing, metals and chemicals” (Aparna, Abraham, & Dasaraju, 2022, p. 89). They emphasize the need to support contract workers, perhaps with wage guarantee programs, given their vulnerability to economic downturns.  They advocate digital infrastructure upgrades.  They propose readjusted supply chains with more inclusion of local provisioning.  They point to the importance of increased liquidity in the economy.  This work suggests adhering to the nation’s aspirations, such as to “become a $5 trillion economy by 2025” and other ambitions which depend in part on MSME recovery and performance (p. 90).  

Yoruba Market Women during COVID-19

Ezekiel Olagoke’s “Descriptive Study of Yoruba Market Women in the Context of COVID-19” (Ch. 5) focuses on religious beliefs (nativist African, Christian, and Islam) and syncretist versions of their beliefs as a salve in a time of mass chaos and pressure.  This work situates the predicament of Nigeria as a developing country in relation to the West.  The author writes:   

…when great countries with advanced technology are bent and bowed by COVID-19, where will a developing country like Nigeria take refuge?  In a country where there are less than 100 doctors to over 50,000 citizens, what recourse do they have to sustain life and health? ... In the case of market women who can hardly afford buying masks, how can they keep body and soul together without succumbing to nihilism and despair?  (Olagoke, 2022, p. 93)  

The Yoruba market women are a small part of the Nigerian population.  They are part of the larger dispossessed, and as such, shed light on a microcosm of the larger population (Nigeria has a population of some 200 million people, so the responses of a sub-group are not expected to generalize.  Also, this is qualitative research, which comes with limited expectations of generalization.)  Yoruba market women exist in both urban and rural areas.  The author writes:  

Yoruba market women, especially in the rural areas for the most part do not have formal education, their voices are either unheard or altogether voided by the powers that be.  These are by and large sellers of wood, corn, bread, water, yam, potato; tomatoes, vegetables, cassava, herbs, okra, and other important ingredients used by Nigerians in keeping the body and the soul together.  Other shops owned and operated by market women may also include sewing and selling of used clothes, fried beans, gari and prepared jollof rice and other snacks edible by Nigerians.  Some may have the means to purchase a small shop while others simply manage to sell their goods by wayside in shacks and small shops…In recent years, recharge cards and other forms of digital wares have joined the list especially by young girls eager to make a little money to help their parents.  It is not unusual for girls as young as eleven to assist their parents in selling various wares after coming back from school during the regular school year.  (Olagoke, 2022, p. 95)  

In one of the deadliest pandemics in human history, the Yoruba market women turn to their heritage of religious and cultural beliefs and traditions.  This study is based on a survey in Yoruba and pidgin English.  The research instrument includes elements like the following:  Iru oja wo ni onisowo nta (What kind of products is sold?)  (Olagoke, 2022, p. 96)  The instrument questions read as multi-pronged (double-barreled or multi-barreled) but also humanistic and respectful.  There is a sense that respondents might enjoy answering the questions.  The instrument elicits how Yoruba women as individuals and subgroups coped with the many challenges of the pandemic.  

In a sociology of health approach, health issues are not purely biological phenomena but involve the whole person beyond the physical, to include the spiritual and emotional, the individual and the social, among others.  The researcher taps into the “triple heritage” idea of the spiritual as a response:  “Three religious world views shape the lives of most Nigerians especially the Yoruba market women under study:  African or Yoruba traditional religion, Christianity, and Islam” shaping Nigerian thought (Olagoke, 2022, p. 99).  For the Yoruba women, according to the research, more than a physical viral spillover had occurred, with applications of scriptural understandings from Christianity, Islam, and ancient beliefs.  

Some of the market women who were practicing Christians had various interpretations:  

Some of the market women who are conversant with both the Old and New Testament would often allude to prophets like Amos basically looking at (a) pandemic as a judgment of God on the nations and the need for repentance and turning back to God.  In essence, God would reveal his secrets to his servants according to the prophets. Some would look at the ways young people have accepted immorality from the outside world without questioning, as well as the leadership of the country, where politicians merely serve to enrich their own pockets with little or no regard to the welfare of the common people. The pulpits where these women attend churches also either confirm the words of the prophet or in some cases see the pandemic as a result of national sin itself in need of collective repentance.  These are sins associated with corruption, tribalism, ritual sacrifices, and loss of respect for tradition.  Some of these churches have dissuaded their congregations from even taking the vaccines available to few seeing medical intervention of this nature as getting the mark of the beast or the beginning of the causes of other forms of illness that will be apparent in the future.  All these are read in one form of interpretation of the Bible or another especially the Book of Revelation. (Olagoke, 2022, p. 102)  

Some of the Islamic faith trust that “Allah will direct their affairs and that of the family as they go through the pandemic…” but with some of this faith turning to “diviners or native medicine men or women” (p. 102).  Some used “protective charms, the invocation of incantations on one’s bodies and even erecting or buying such charms inside the stalls or shops to ward off forces of darkness is not unusual” (p. 103).  The Yoruba women lacked masks to wear for their safety, apparently not even cloth ones.  This study found that some of the women engaged syncretist approaches by combining different belief systems and trusted in the power of their own deeply held convictions.  

This work concludes with the observation that figures in authority do not necessarily share accurate information, in the West either. The author wrote:  

It is also noted that complete or undue reliance on faith whether monotheistic or traditional belief system is not tenable not just in Africa but also in the Western world. We have witnessed pastors and preachers of health and wealth dismiss the pandemic as bogus and curable by faith alone. The death of some of these preachers in the United States and other parts of the world debunk the irrational belief.   (Olagoke, 2022, p. 104)  

Effective Marketing during a COVID-19 “Recession” in Indonesia

Yolanda Masnita, Kurniawati, and Husna Leila Yusran’s “Effective Marketing Strategy Applied in Economic Recession due to the COVID-19 Pandemic:  CHSE Approach” (Ch. 6) asserts early on that surviving a pandemic requires “unusual strategies” (p. 107), perhaps some forms of thinking outside various boxes.  This work combines the Service Dominant Logic (SDL) approach “used to create value between producers, consumers, and related elements” in a collaborate way to create value for consumers (p. 107) and the Clean, Health, Safety, and Environment (CHSE) certificate (by the Indonesian Ministry of Tourism and Creative Economy) to encourage consumer confidence in “hygiene, health, safety, and environmental sustainability protocols” (p. 107).  This study is built on a survey by the Central Bureau of Statistics (BPS Indonesia) in 2020, in which 35,559 businesspeople participated in the research “throughout Indonesia including Sumatra, Java, Kalimantan, Sulawesi, Bali, and Nusa Tenggara, as well as Papua and Maluku” (Masnita, Kurniawati, & Yusran, 2022, p. 109).  The study of micro and small enterprises and large medium enterprises and agriculture found that “…6 out of every 10 companies still operated as per usual,” with physical distancing.   There were a diversity of approaches and various company policies:  

8.76% of companies stopped their operation, 5.45% of companies operated with the implementation of WFH (remote or teleworking) for some employees, 2.05% of companies operated with the implementation of WFH (remote or teleworking) for all employees.  24.31% of companies operated with a reduction in capacity of 24.31% (working hours, machinery and labor).  0.49% of companies still operated, even exceeding the capacity before COVID-19. Finally, 58.95 % still operated as usual…  (Masnita, Kurniawati, & Yusran, 2022, p. 109)  

“WFH” refers to “work from home.”  Many businesses changed their business strategies to adapt to the environment.  “The application of the CHSE certificate is very important. Public safety in consuming the product must be guaranteed” was the concept (Masnita, Kurniawati, & Yusran, 2022, p. 114), even as the steps could not fully protect patrons from an invisible highly transmissible pathogen from person-to-person transmission, fomite transfer, and other challenges.  The various potential indicators of CHSE (cleanliness, health, safety, and environment) were designed into an instrument.  In a data table with various items, the researchers offer various elements:  

  • “Food and drinks are served in a la carte or family style.”  (P11)
  • “Changing, washing and sanitizing the equipment as often as possible.” (P15)
  • “Advise guests (consumers) to make non-cash payments.  (P39)
  • “The kitchen room must be healthy and have good air circulation.” (P50)
  • “Limit the number of consumers, based on the room capacity.” (P54) (pp. 115 – 116)

They placed the questionnaire instrument in Google forms and elicited some 400 respondents from various groups:  “72%...customers, 5.8% entrepreneurs or business managers, 13.3% company employees, 3.4%...government employees… and professional associations” to see how they responded to the various requirements (p. 117).  They found that 95.9% of respondents “agreed that the government should require such business to have a CHSE certificate” (p. 117) and further that a principal components analysis found that the indicators mapped back in statistically significant ways to the four elements of the CHSE certificate variables.  

Strategies for SMEs in Sri Lanka during the Pandemic

R.P.I.R. Prasanna, Sisira Kumara Naradda Gamage, J.M.H.M. Upulwehera, G.A.K.N.J. Abeyrathne, J.M.S.B. Jayasundara, E.M.S. Ekanayaka, and P.S.K. Rajapakshe’s “Challenges and Proposed Strategies of SMEs amidst COVID-19:  Evidence from Sri Lanka” (Ch. 7) opens with the observation that the SME sector accounts for 45% of domestic employment and 52% of GDP.  The research literature offers little in the way of survival strategies for SMEs under conditions of global health crisis and duress.  This work explores some collective cases based around five areas in agriculture:  dairy, spice, green products, handicrafts, and cashew products. The research team conducted interviews with the SME owners.  They note that the  workers in the case studies “are mainly from low-income, low educated, and women categories” (p. 136).   

One major challenge involved changes in the “demand schedule,” with heightened demands for food products “significantly high during festival periods, such as the New Year and Ramadan” (Prasanna, et al., 2022, p.  137).  Missing out on large celebrations and human gatherings meant a loss of consumers and unsold goods.  Another challenge involved the distribution channel. One respondent described turning a tourist business into a vegetable delivery one, to meet changing needs in the pandemic.  Another respondent described losing a green tourism business, with the business properties reclaimed by the loaning bank (p. 139).  This work helps humanize the challenges of Sri Lankan business owners in difficult times.  

Asharikandi Terracotta and Pottery Crafts in the COVID-19 Pandemic

Abhigyan Bhattacharjee and Anulekha Bhagawati’s “A COVID-19 Analysis of Asharikandi Terracotta and Pottery Crafts” (Ch. 8) shares an interesting case of crafters and artisans who practice an ancient art of creating various objects from dolls to earthenware to idols for festivals to toys and other objects.  The focus of the qualitative interviews by the researchers is Asharikandi (Madaikhali), in Dhubri district in Assam, India; this is a “craft village is India’s single largest cluster where both Terracotta and Pottery crafts are located and practiced in traditional ways” (p. 152), and homes include showrooms of such work.  Terracotta and pottery are “among the first crafts introduced to the world by humans” (p. 148).  Terracotta is “a work of art constructed of clay and sand and baked with an earthen hue, a brownish red” (p. 152).  At present, many in the village engage in various aspects of the production and sales of these works to wholesalers who sell the goods further out in other parts of the country and possibly abroad.  The quality of soil, known as hiramati, is the main raw material in these crafts, and it affects the resulting pottery and terracotta artworks (p. 152).  The geographical location and even the weather can have an effect on the local hiramati as well.  

Figure 2.  Terracotta Crafts in India (by Magictype on Pixabay)

In the pandemic, vital commodities were still required based on inelastic demands.  This was not so for such artisan goods.  In India, the ministry overseeing MSMEs have made it a priority to support terracotta and pottery sector by providing financial assistance for related equipment.  There are programmatic efforts to enhance the creation of new products by the pottery artisans (some mentioned include pen stands, folding tables, water filters, picture frames, candle holders, tubs, ashtrays, fruit containers, vases, statuary, and others.  There are efforts to introduce modern equipment, including automation, for the making of such products.  The researchers write:  

Apart from ancient technology, no modern technology has been used in the terracotta production process at the Asharikandi cluster.  Traditional technology, such as manual Hiramati conditioning, terracotta and pottery production by bare hand and large hand driven wheels, firing of items in traditional kilns, and traditional packaging by common hey (sic), causes the cluster’s artisans to face problems in production, transportation, marketing, and cost effectiveness, among other things.  (Bhattacharjee & Bhagawati, 2022, p. 154)
There are efficiencies to be had and more precision in manufacturing terracotta objects and pottery. The Q&A section in this work reads especially interestingly, with insights about the work of the village. While the industry did not show a downturn early in the pandemic, as the mass-scale event progressed, the industry was “in distress” (p. 156), with severe drops in sales.  The villagers were looking to digital means to sell terracotta pottery.  This work shows the importance of being able to share stories globally.  

Finally, the researchers asked the government to step in to support “the continuation of one-of-a-kind, centuries-old creative and business enterprises, because it is not only a question of business unit survival but also of the centuries-old legacy” (Bhattacharjee & Bhagawati, 2022, p. 157).  

Competition Law in ASEAN in the Pandemic

Rachel Burgess, Michael Schaper, and Benjamin McCarthy’s “COVID and Competition:  The Role of Competition Law and Regulation in ASEAN During and After the Pandemic” (Ch. 9) opens with a basic question:  “Do regulatory structures and competition laws have a role to play in helping businesses recover from COVID-19?” (p. 161)  And how can these rules be brought to bear to protect the 70 million MSMEs (“99% of all businesses in the region”) and 140 million personnel who work in small and medium-sized enterprises in S.E. Asia?  (p. 162)  

This work captures some of the volatile uncertainties of research during a pandemic. They write:  “Much data has become quickly outdated; is difficult to collect; and is distorted by recent developments such as second- and third-stage lockdowns and emerging mutations of the virus” (Burgess, Schaper, & McCarthy, 2022, p. 163).  Still, ASEAN economic ministers realized the damaging potential of SARS-CoV-2 early on and put out policy statements on how to promote economic resilience, such as through leveraging digital technologies (p. 163).  A study by Susantono (2020) is cited to show various interventions to shore up the economy:  “capital buffer safeguards, deferral of debt repayments, relaxation of lending conditions, new lending, credit guarantees, (and) regulatory forbearance” (p. 164).

They describe competition policies:  

Firstly, there is a broad set of government policies that promote competition in local and national markets. These include enhanced trade policies, elimination of restrictive trade practices, facilitating market entry and exit, reducing unnecessary government interventions and putting greater reliance on market forces. The second element is a formal competition law which typically includes legislation, regulation, and judicial decisions.  Competition law commonly prohibits anti-competitive agreements, abuse of market dominance by a particular firm, anti-competitive mergers and acquisitions and, sometimes, also includes restrictions on unfair trade practices (such as misleading or deceptive conduct, false or misleading advertising and disclosing business secrets). (ASEAN Secretariat 2010, as cited in Burgess, Schaper, & McCarthy, 2022, p. 168)  

These rules help set shared understandings for fair competition and are in place in part to protect consumers, businesspeople, investors, and society more broadly.  MSMEs do not as often access competition laws and policies as do larger companies.  It is thought that more awareness of the rights of MSME business owners can benefit the sector.  

This work highlights some competition issues during COVID-19:  price gouging, “crisis cartels,” increased “merger filings” from “failing firms,” increased market power for some firms, various distortions of competition (not a level playing field), and other challenges, in the crisis years (Burgess, Schaper, & McCarthy, 2022, pp. 176 – 178).  Various members of ASEAN have further affirmed these competition laws with updates.  Various transnational organizations--UNCTAD, OECD, ICN—released statements supporting the competition laws during COVID-19 (p. 180) because of their especial importance in a time of turmoil.  The researchers propose various policy actions to empower MSMEs in the use of competition laws and policies, through offices, through data collection and sharing, dialogues with industry groups, additional research, and other practical endeavors.  

Sipetek and SME Digital Marketing in Indonesia

Cyber has come to the fore during the pandemic to meet so much of people’s needs—for socializing, for entertainment, for health information, for news, for learning, and other applications.  In Siti Jahroh, Janita Sembiring Meliala, Alfa Chasanah, and Febriantina Dewi “COVID-19 and Digital Marketing of SMEs in Indonesia:  Current Conditions and Case Study of Sipetek” (Ch. 10), digital marketing has proven to be an important tool for SMEs in Indonesia.   MSMEs in Indonesia… “have informal characteristics, namely businesses characterized by the absence of legal entity status, the absence of a financial recording system, a limited amount of capital and expertise, as well as the use of simple technology.  The majority of MSMEs have not used computers and have not established any partnership with big companies to upgrade their existing status, which creates a big challenge in the Indonesian economy today” (p. 194).   With many consumers going online in the pandemic (as part of social distancing, as part of lockdowns), small businesses need to adapt in order to survive.  

This work offers the case of Sipetek, a company involved in the processing of a high-protein Sipetek Crispy Ikan snack food.  The company engaged with mainstream media to share its story and to explain its products.  The owner wrote a blog to share his story and that of the company.  They reached out through social media.  They engaged their resellers virtually, too.  And they are even looking at TikTok as a new platform on which to engage, given its popularity.  For this particular company, their “business performance during COVID-19 is higher than before COVID-19,” a finding based on company strategy (diversifying products) but also distribution partnerships and broader reach (pp. 204-205) and perhaps changes in snacking behaviors in a pandemic.  

COVID-19 Effects on MSMEs in Brunei Darussalam

Alif Azizi, Mohammad Nabil Almunawar, and Muhammad Anshari’s “The Impacts of COVID-19 on MSMEs in Brunei Darussalam” (Ch. 11) describes the criticality of food delivery services and platforms and digital marketplaces to make restaurants more resilient with the ending of dine-in services in the pandemic.  This work uses short descriptions of cases of various platforms, when they were originated, and how they fared during the early months of the pandemic.  One launched a few months before the pandemic started, with serendipitous luck.  The various companies also engaged in biosafety practices to try to protect employees and customers from SARS-CoV-2 infection.  Finally, the government of Brunei also provided a package of supports for MSMEs during the unprecedented pandemic, to protect businesses and individuals with fiscal supports.  They also provided regulatory oversight over the respective platforms and provided information about the validated platforms for food ordering.  (The respective works here emphasize the intelligent awareness of governments in stepping up to deal with the major challenges of the pandemic.)  

Managing Cash Flow for SMEs under COVID-19 Pressures

Eyup Kahveci’s “Surviving COVID-19 and Beyond:  Cash Flow Management Strategies for SMEs in Crisis” (Ch. 12) highlights the “mega uncertainty” of the pandemic (p. 229), which may be an understatement.  Business survival often comes down to having sufficient working capital to keep the business functioning and viable.  The author cites an OECD study in 2020 that found that most SMEs did not have resources “to survive longer than 3 months” (p. 239).  The study included Asian countries, Belgium, Canada, China, Korea, the Netherlands, the UK, and the USA.  In the U.S., some 51% said they would not be able to survive three months, and a third lacked reserves to survive longer “than a few weeks” (p. 239).  [Businesses often seem to function with much debt and edge-survival perhaps to have all resources used.  There may be a purposeful fragility, given assumptions of Schumpeterian “creative destruction” and constant innovation.]  

In the pandemic, in a time of mass pressure and lessening liquidity, businesses need an accurate budget from which to work. They need to shorten the “cash conversion cycle” by focusing on “accounts receivable, accounts payable, inventory, (and) other expenses” (Kahveci, 2022, p. 238).  They need to tap into government supports designed to help SMEs, such as subsidies and debt extensions.  They may use tax write-offs for operational losses, if the tax code enables this.  They need to cut operating costs.  They may need to divest of certain investments and equipment and property.  They may engage in barter to settle accounts payable and accounts receivable (p. 241).  In an ambidextrous approach, they may not only cost-cut but innovate based on their understanding of human needs in the pandemic and positioning to meet those needs. And they may go digital to improve business efficiencies and find new business opportunities.  

Rises and Falls of MSMEs in India during the Pandemic

Ameena Begum and Badiuddin Ahmed’s “A Rise or a Fall of MSMEs During the Pandemic” (Ch. 13) opens with definitions of micro, small and medium enterprises.  Microbusinesses have “a capital investment of less than one crore rupees and a revenue of less than five crore rupees”; a small business has “less than 10 crore rupees in plant and machinery or equipment and a revenue of less than fifty crore rupees”; a big company has “revenue of more than ten crore rupees and a plant and machinery or equipment investment of more than ten crore rupees” (p. 261) where a crore = 10 million, and a rupee = .013 U.S.D.  MSMEs are critical to India’s economy in the usual ways of creating economic value, and especially to industrializing rural areas.  Government plays an important role in helping MSMEs in accessing “domestic and international markets”; training skill development and entrepreneurship, and achieving quality assurance through testing facilities (p. 260).  What follows is a deep dive into various government policy and funding interventions (in sequential tranches) to support MSMEs in the pandemic.  MSMEs were encouraged to create items to combat the spread of SARS-CoV-2, such as UV-light sanitizers to clean “office files and other articles” and “IR thermometers” and “non-contact dispensers” (p. 266).  

SMEs in Sri Lanka in the Pandemic

H. M. S. L. Wijeyewardena and W. J. K. V. M. R. Jayawardena’s “COVID-19 and its Reflections on SMEs in Developing Countries—Experience of Sri Lanka” (Ch. 14) reports on survey results from a structured survey conducted by The National Enterprise Development Authority (NEDA) and the Ministry of Industries as to how MSMEs were faring in the early months of the pandemic.  This survey was part of an outreach by government to understand on-ground impacts of the pandemic to inform policy-making and funding (which ultimately included financial and nonfinancial supports).  The topline discovery:  “Findings of the survey revealed that majority of the MSMEs have collapsed financially and they face different challenges in increasing the number of daily customers due to the prevailing situation in the country” (p. 273).  An upside was that local production was mobilized to meet local population needs, given the depletion of foreign reserves and the inability to purchase foreign goods in addition to supply chain disruptions.  

The initial 14,000 survey responses (in Sinhala and Tamil languages) were collected by December 2020, and these were encoded into computer format from January to April 2021 by graduate students.  The sectors represented by the survey respondents in “agriculture, forestry and fishing, accommodation & food service activities, activities of households as employers, undifferentiated goods and services producing activities of households for own use and Wholesale and retail trade, repair of motor vehicles and motorcycles” among others (Wijeyewardena & Jayawardena, 2022, p. 282).  Owners of MSMEs reported blocked cash flows, a lack of working capital, and a lack of confidence in banks and financial institutions (p. 277).  The researchers point to the importance of fast funding to keep businesses afloat.  They also proposed developing “a long term MSME economic development plan” with forecasted income for the next “3-5 years,” so the MSME sector can fulfill its GDP contribution (p. 297).  

Modeling Small Business Recovery from the Pandemic in India

India spends only 1.5% of its GDP on public health, which left the country ill-prepared for the pandemic.  As the largest democracy in the world, India has experience with mass-scale communicable diseases in the population and past pandemics.  Sunita Tidke’s “The Impact of COVID-19 on Small Businesses and the Economy in India” (Ch. 15) opens with the observation that small companies in India account for 110 million jobs and a third of the nation’s GDP (p. 299).  The pandemic, just a few months in by May 2020, caused output to fall “from an average of 75% capacity to barely 13%” (p. 299).  Further, only 44% of personnel were retained in their jobs.  And “69 percent of companies were unable to survive for more than three months” (p. 299).  Those that did survive went to digital means to try to keep their businesses functioning.  The author writes with a sense of immediacy:  

The economy has suffered a severe setback as a result of the unprecedented lockdown.  Hundreds of millions of jobs and livelihoods are now in jeopardy. Because state borders were locked more than 50 million migrant workers either returned to their original villages or relocated to camps inside cities as activity throughout the country came to a standstill.  While there are stories of some of them coming to the cities in pursuit of work and a better life, the bulk have yet to return, putting a huge strain on the labor supply in metropolitan areas. (Tidke, 2022, p. 300)  

This work offers four scenarios of how India might come out of the pandemic, with predictions of V vs. U shaped recoveries, and extensions in time out to about September 2020.  Such predictive works show just how difficult it is to anticipate a complex world and a novel pathogen amidst naïve humanity.  [This work, by contrast, shows how remarkable some modelers are about the epidemic in near real-time…with the proper indicators and algorithms…  Suffice it to say that economists in general were not as close in their alignment with the real world.  In many cases, there may have been insufficient computation power for the modeling.]  This work offers some reasoned interventions to support the MSME sector, with more liquidity, subsidies, credit guarantees, funds for loan through “informal channels,” loan deadline extensions, and “controlling foreign multinationals’ competitiveness” to enable MSME competition (Tidke, 2022, pp. 312-313)


SARS-CoV-2 / COVID-19 arguably caused the largest public health crisis the world has ever faced, even with modern medicine and technologies (and extraordinarily fast vaccine development and medicines).  Governments experimented with various policy mixes to balance the lives of their citizens vs. economic activity.  In the acute phases, there were very real risks of social destabilization, mass hunger, and violence, and some would argue these risks still exist, now compounded by the Russia-instigated war against Ukraine.  With current geopolitical tensions, some are predicting pullbacks from globalization into nationalism.  

In COVID-19 and its Reflection on SMEs in Developing Countries, Tulus T.H. Tambunan and Himachalam Dasaraju, co-editors, helm a book published while still in the acute phases of the pandemic.   The works highlight the damage to populations and economies globally, but in disparate ways, and with differential responses by governments, including in their responses to micro, small and medium enterprises (MSMEs) in their borders.  The inherent competition between humanity, and the zero-sumness of vaccines, and also the globalness of viral pandemics with high human contagion, show through in how governments try to position to emerge as strongly as possible to protect their own and secondarily to protect others. 

About the Author

Shalin Hai-Jew works as an instructional designer / researcher at Kansas State University.  Her email is  
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