UN Trade and Development says disruptions in the Strait of Hormuz could push small firms out of global value chains, even after trade volumes recover.
The agency calls the danger an exclusion effect. It argues that Hormuz risk lands hardest on companies that cannot spread costs across multiple suppliers, markets, and lenders.
Small Firms Carry the Heaviest Share of the Bill
Smaller companies sit under most of the world’s economy. The report counts micro, small, and medium firms as 90% of global businesses, 70% of employment, and 50% of GDP, drawing on International Labour Organization figures.
The cost exposure for small and medium firms runs wider than that of larger rivals. Importing is the clearest case. Small firms in developing economies spend 19.4% of import value on customs fees, broker payments, and other requirements. Large firms spend 14.7%.
Electricity follows the same pattern. One in four small firms in developing economies pays more than 4.2% of sales for power, against 3.7% for large firms.
Financing is the third pressure point. Some 48% of small firms in developing economies treat access to finance as an obstacle, compared with 38% of large firms. Average SME borrowing costs there ran near 15.8%, versus 10.3% for bigger borrowers.
“As energy, transport and financing costs climb, margins shrink and supply chains become disrupted. The pressure can force firms to scale back production, postpone investment or exit altogether. Exclusion becomes a constant risk,” the report read.
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The Pandemic Already Wrote This Script Once
Past shocks back the warning. During COVID-19, 88% of small firms in developing economies reported falling sales, against 81% of large firms. Those declines also cut deeper, averaging 57% for small firms and 47% for large ones.
UNCTAD wants governments to shield SME access to trade finance, liquidity, and working capital. It also asks policymakers to monitor whether smaller firms keep their market connections through a shock, rather than watching trade flows and sales alone.
“As engines of job-creation, micro, small and medium-sized enterprises are critical to every country’s future,” António Guterres, UN Secretary-General, said.
UNCTAD lists what follows when smaller firms drop out of value chains. Unemployment rises, household incomes fall, and social vulnerability deepens. That is the argument for treating firm size as a trade statistic rather than a footnote to one.
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