Iraq: Enterprise development opportunities and challenges in Fallujah
Summary
Liberation from ISIL occupation in Anbar governorate may be less recent in memory than in locations such as Mosul, but the extent of damage in areas like Fallujah is extensive. Highways, avenues and neighborhoods are pockmarked by explosives. Unexploded ordinance is in abundance. And many remain in camps, unable to be cleared from association with ISIL. To assess the capacity of the market to absorb medium-sized grants, the IOM EDF Market Assessment was rolled out in Fallujah city and surrounding areas in November and December of 2018. The assessment was led by the Returns and Recovery Unit and contributes to the groundwork considered necessary to introduce the Enterprise Development Fund in any location.
Data collection was carried out by members of the Enterprise Development Fund team and the Returns and Recovery Unit. Between November 15 to December 30th. Staff conducted 6 key informant interviews and 87 Employer surveys. In addition, 3 focus group discussions of 5-6 participants each were organized.
Market assessment objectives included determining:
The extent of damage suffered by small and medium enterprises impacted by the conflict between 2014-2017
Market failures that can be addressed through matching grants or business development support
Businesses that would create additional employment opportunities if supported
Potentials for market distortion due to the introduction of cash
Key Findings, below, are organized by the research objectives in four parts.
Key Findings
The extent of damage suffered by small and medium enterprises impacted by the conflict between 2014-2017
High numbers of businesses reported their machines stolen or burned, their factories destroyed, and their equipment damaged beyond report.
For example, 69% of construction businesses reported that from 2014-2017, their workshop had been looted or burned, as did 66% of food related businesses Market failures that can be addressed through matching grants or business development support
The most commonly expressed priority of employers surveyed included Electricity (mentioned by 45% of employers), followed by the high cost of rent (mentioned by 20%), and access to capital (mentioned by 11%).
High rates of reliance on credit, demands from clients to offer lower prices, and the inability to repay debt on time also reflected a liquidity crisis that is concerning Businesses that would create additional employment opportunities if supported
Businesses tended to be older, and to hire from within their families and by word of mouth. Formal job advertisements were only mentioned by 3% of respondents as the way they would recruit more employees.
This was least likely within the drinking water industry, where no business had hired relatives, likely due to the skilled nature of the work Potentials for market distortion due to the introduction of cash
High rates of low or little demand were mentioned, mostly by construction (70%) and carpentry (72%) businesses, likely due to investor fears.
