Women Entrepreneurs Prevent Dangerous Migration

Autumn 2024 will be remembered as the time when several national elections changed political alliances, institutions, and boundaries. Campaign promises of increased tariffs may well lead to trade wars that are likely to affect supply chains, production costs, and business operations worldwide. Micro and small business owners operating on the margins are particularly vulnerable. Yet, as HERA women entrepreneurs observe, their operations may be impacted not only by the American and European elections but equally or more so, by those close to home in Moldova and Georgia. 

Georgia 

During spring 2024, an estimated eight percent of Georgia’s population participated in mass demonstrations to protest the Government’s “Law of Transparency on Foreign Influence.” Dubbed the “Russia Law” by the protestors, the Law took effect in September. The new law requires non-governmental organizations (NGOs), receiving funds from abroad, to register as foreign agents or specifically as "organizations carrying the interests of a foreign power."[1]  This effectively makes it difficult for Georgian NGOs to receive foreign funding.  Despite, or because of, the ongoing civil protests, HERA received 44 applications from Georgia, representing 28 percent of this year’s total applicant pool from the region, and the most ever to date from Georgia. A panel of ten international judges ranked 19 of the 44 highly. During the summer, three assessors (two from the UK and one from Georgia) visited the finalists at their ventures and awarded 13 grants.  

On October 26 Georgia held its national elections. Irakli Kobakhidze of Georgia Dream (GD), the ruling Parliamentary party claimed 54 percent of the vote to become Prime Minister.[2] The Opposition, comprised of four parties, protested on television channels that the GD party had only won 42 percent. The Opposition is seen as pro-West and GD as pro-Russia so the stakes were high.  

Since 2016 Georgia and the European Union (EU) have signed a “Deep and Comprehensive Free Trade Agreement” (DCFTA), which helped to diversify the country’s trading partners. Georgia’s top five trading partners are: (1) mainland China - $703.5 million (18.1 percent of Georgia’s exports); (2) Russia - $551.7 million (14.2 percent); (3) Bulgaria: $423.1 million (10.9 percent); (4) Turkey: $366.5 million (9.4 percent); and (5) USA: $263.6 million (6.8 percent).[3] Since 2010, HERA has supported Georgian grantees, who trade in both East and West markets. However, increasingly, young HERA applicants are focusing on selling products and services online to Europe and North America customers.   

In 2023, Georgia became a candidate to join the 27 EU countries.  An estimated 80 percent of Georgians support joining the EU and NATO. However, a significant minority is pro-Russian.  GD claims to be neutral and that they could not be “pro-Russian” with 20 percent of Georgian territory lost to Russia in the 2008 War. However, many who voted for GD remember the Soviet Union favourably, are more likely to be older, live in rural areas and/or be unemployed.  Following this year’s October election and Western concerns of election irregularities, the EU froze Georgia’s bid to join, although Orban, the Hungarian prime minister, travelled immediately to Georgia to congratulate the new Government.  

As witnessed last summer, an immediate impact of the country’s ongoing political instability has been a downturn in tourism, one of Georgia’s main sources of revenue.  The country’s strong GDP growth rate estimated at 10.96 percent in 2022 decreased to an estimated 7.47 percent in 2023.[4]  However, during the same period, the estimated inflation rate decreased from a high of 11.99 percent in 2022 to 2.49 percent in 2023. Georgia’s total unemployment rate has remained high and fairly constant estimated at 11.66 percent in 2022. Youth (15-24 years) unemployment is even higher, estimated at 28.7 percent for men and 32.7 percent for women (2023). 

Given these data, it was not surprising that many young aspiring entrepreneurs applied for a HERA grant in 2024. That demand, as some foreign aid programs cut back, is likely to increase in 2025. In terms of the impact of the “Russian Law”, the Georgian our organisers and Board are optimistic that the Government will continue to welcome HERA’s support to innovative, young women entrepreneurs creating new markets, growing their products and services, and hiring and training others.

Moldova 

In 2024, the HERA Board held our Annual General Meeting in Chisnau and organized a workshop for past and current grantees. In this year’s Grants Competition, 57 Moldovan women, representing 37 percent of all applicants, comprised the most in number from the four countries. In September three assessors (German, British, and Moldovan) visited 25 finalists and awarded 16 grants.   

Since the Moldova program began in 2012, HERA teams have witnessed the rural/urban, incountry/expatriate residence, ethnic/linguistic minority and Transnistria/Moldova divides. President Maia Sandu, the incumbent, is EU-leaning and a former World Bank economist. Campaigning on anti-corruption, her re-election for another four years was never assured. During the election there were documented charges of vote buying by the pro-Russian oligarch, Ilan Shor. Shor reportedly spent $39 million in handouts to 138,000 Moldovans to support the pro-Russian candidates.[5] However, none of the five candidates received a clear majority in the first round and on November 3, a run off was held between the top two candidates: Sandu and the former Prosecutor General, Alexander Stoianoglo. In the first round, despite Russian interference, the referendum to change the Constitution to commit to joining the EU passed by a narrow margin.[6]

Stoianoglo, who had been fired by Sandu, favored closer relations with Moscow. In the run off, Sandu won 55 percent to Stoianoglo’s 45 percent. However, Stoianoglo gained 51 percent of the votes of those residing in Moldova. Sandu, in contrast, won her second term with strong support from 1.2 million expatriate Moldovans, young Moldovans, and urbanites. Despite bomb threats at overseas voting points, the expatriates contributed to the very high turnout of 54 percent on the second round. 

Many Moldovans live and work in Western Europe and provide remittances. In 2014, Moldova also negotiated a DCFTA with the EU. By 2023, 65.4 percent of its exports went to EU markets.[7] The EU (2023 data) comprises 53.7 percent of Moldova’s trade followed by Ukraine (13.1 percent) and China (8.1 percent).  Trade with Russia has fallen and comprises 3.7 percent. In the rural areas, many HERA entrepreneurs sell in local markets whereas in the cities, many sell online to buyers in Europe.

Since early 2000, Moldova’s economy has trended upward with two exceptions: (1) following its bank fraud scandal in 2014; and (2) during the COVID pandemic in 2022.  Inflation decreased from a high of 28.74 percent in 2022 to 13.42 percent in 2023 (but was 5.11 percent in 2021).[8] Unemployment rose in 2023 but overall remains low at 1.62 percent (versus 0.91 in 2022) Youth unemployment (ages 15-24) is 4.2 percent.  

Although Moldova remains one of the poorest countries in Europe, many HERA entrepreneurs are optimistic that the Government is working to address corruption and that their economy is improving. The HERA assessors have also witnessed impressive improvements in roads and the country's overall infrastructure. Some HERA entrepreneurs have applied for grants after returning from Western Europe to invest their savings and start businesses in Moldova. Since the war in Ukraine, HERA has also awarded grants to several Ukrainians, who have resettled there. The returns of Moldovan young entrepreneurs and Ukrainians resettling in Moldova are likely to increase the demand again in 2025. Given the election results it will be important for HERA to reach out to more women entrepreneurs in rural communities.

Updates

To date, HERA has awarded 563 grants to women entrepreneurs across Armenia, Georgia, Moldova, and Ukraine.  These entrepreneurs in turn have trained and/or employed over 850 young women at risk of dangerous migration and trafficking.  Since HERA began working in the four countries, the women entrepreneurs have faced down COVID, conflict, and inflation. With the war in Ukraine and a changing political environment, they may now face economic volatility. The key characteristic of the HERA women entrepreneurs is their resilience.  As entrepreneurs, they are used to risk and adversity and finding new opportunities even in the most difficult and precarious of times. 

To develop our strategy to respond to a rapidly changing political and economic context, the HERA Board is holding an open webinar on “Elections and Entrepreneurs” on Saturday, November 23 at noon ET (see registration link below). Three HERA 2024 grantees have kindly agreed to share their direct business analyses and experiences. They include a CEO of a Consultancy in Moldova, a reproductive health physician providing services in rural Georgia, and a manger of two family cafes in Bucha, Ukraine. HERA Board members from Georgia, Ukraine, Moldova, Germany, and France will also comment on the recent European Elections; and a New York investor, on the international business and regional implications of the U.S. election. Dr. Paul Jeffrey Stekler, HERA USA Board member, three-time Emmy Award winner, documentary filmmaker and political commentator, will moderate. The webinar will conclude with an Audience Q&A. 

With an informed strategy in hand, the HERA France and US teams fully expect to launch a 2025 Campaign to provide grants to women entrepreneurs in Armenia, Georgia, Moldova, and Ukraine again. Our focus, as always, will be on those entrepreneurs who are serious about and have the capacity to grow their micro and small enterprises and once that happens, are committed to training and hiring young women at risk of dangerous migration. 

On GivingTuesday, December 3^rd (US East Coast time only), GlobalGiving will provide a match for your early contributions that day. The HERA team and all our entrepreneurs would very much appreciate your support on GivingTuesday.  Thank you for all you have done this past year and know that your support is making a difference.

1.https://en.wikipedia.org/wiki/2023–2024_Georgian_protests and interviews in late July, 2024.

2. https://www.bbc.co.uk/news/articles/c78ddj25kgvo and reports by Georgians involved in election monitoring.

3. Workman, Daniel, https://www.worldstopexports.com/georgias-top-15-import-partners/#?utm_content=cmp-true

4. https://www.cia.gov/the-world-factbook/countries/georgia/ (and what follows)

5. Kirby, Paul. 3 November 2024. https://www.bbc.co.uk/news/articles/cz7w9dglzzlo (and what follows)

6. https://en.wikipedia.org/wiki/2024_Moldovan_presidential_election and interviews

7. https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/moldova_en

8. https://www.cia.gov/the-world-factbook/countries/moldova/

Links:

• HERA Webinar on Saturday, 23 Nov, at noon EST

The way to Kyiv these days is overland from Krakow and Lviv.  The skies over Ukraine are part of the battlefield. Ukraine's airports, except those on bases, are closed. For this HERA assessment, Giorgi, another Board member, and I met up at the Krakow bus station, only to learn that our Polish bus leaving for Lviv at midnight was cancelled.  Fortunately, an earlier Ukrainian bus was just departing when we arrived and the driver kindly sold us the last two seats. We were the only foreigners on board. Other than the two drivers, Giorgi was also the only man on board.  The men were at the front or had migrated.  

Taking a highway across the Polish countryside, the bus reached the border after 2.5 hours. The formalities on both sides then took another hour. The Ukrainian border station had large photographs of the war. A queue of trucks, vans, and cars waiting to enter Poland stretched for several miles. After the border, our bus stopped only once again, at a filling station with a small supermarket.  We arrived in Lviv at 1:30 am and hailed a taxi. The driver, who sped swiftly through empty, dark streets, explained that there is an 11:00 pm curfew.  The young woman at the hotel reception, had been waiting and expecting us.  

Early the next morning our first entrepreneur, a preschool director, arrived to pick us up. She ran an outdoor, year-round program and summer day camp.  Outside it had started to pour. The Director decided to telephone the teachers and parents to delay the opening.  She observed, “the children don’t mind the rain, but their parents worry.” When the rain subsided, she drove us to the outdoor centre. 

Despite the weather, most of the children and teachers had already arrived on time. With rubber boots, the youngest ones were enjoying splashing in puddles.  The Director showed us the new wooden platforms that HERA had funded earlier. The pre-school’s bomb shelter, was located up a hill in the basement of a former public sports complex. It was well provisioned with First Aid supplies but clearly not in use. Since the initial months in spring 2022 when a nearby military installation had been bombed, all had remained relatively quiet on the western front. We agreed to provide a second grant for the preschool to buy a portable charging station and sabre saw.  As our host explained, the outdoor facilities need regular upkeep. Each autumn the parents would help to repair the old and build new equipment. 

The Director volunteered to drive us around to meet the other applicants in Lviv. Everywhere we went in Ukraine from that first day on, past grantees, applicants, drivers, shop keepers, and staff welcomed us warmly. Several insisted on meeting and/or driving us to our next destination.  Their support made our short stay very productive. From 17 – 22 July, we met 14 women entrepreneurs in Lviv and Kyiv and made direct contact with five others.  During a day and half in Lviv alone, we met the women owners of an outdoor preschool, sewing atelier, café, interior design studio, and stone cutting operation.  

With young men are on the frontlines, women-led ventures have become critical. A young stonecutter observed that he could be called up any time and his wife might soon be managing their business alone.  The Government reportedly provides a good salary for those who remain on the battlefield beyond three days in a given week. To control costs, however, soldiers may be sent back sooner and the following week, sent to the frontlines again. Military salaries may not be sufficient to cover families’ costs. Thus, many young women are also migrating to Western Europe to work and send remittances home. While people are leaving Lviv and Kyiv to go abroad, others, such as a café owner, who originally had a café in Kharkiv, are migrating from frontline towns in the east to the two cities. 

By night Lviv was lively with young men in uniform and fashionably dressed, young women.  Groups of young women also dressed up to go out on the town.  The restaurants, cafes, stores, discos, and even an art gallery were crowded. By 10:00 pm, however, all shut down for the 11:00 curfew.   

At our hotel, I spoke with my daughter. In the background an alarm went off. “Isn’t that an air raid signal?” she inquired. “I think so, but people are walking around outside.” “Maybe you should check it out,” she suggested. Downstairs, the receptionist explained that a Ukrainian military flyover from the nearby base regularly sets it off. “But if you are going to Kyiv, you will need our Air Alert app,” she advised and helped me install the English version. She also showed me the hotel’s air raid shelter, a wine cellar.  “We will call if you need to shelter,” she promised. 

The next day, on the 18th, we boarded a packed, mid-day inter-city train to Kyiv.  The train stopped only twice at major towns.  The Ukraine countryside of rolling, golden hills of wheat looked peaceful, even idyllic in the summer sun. Now and again, the shell of a charred building appeared to remind us that the country was at war. 

In the early evening, Kyiv’s Central Train Station was every bit as crowded as I had remembered it before the war.  During the initial siege, the station provided shelter from aerial attacks. Its large, three-story windows were camouflaged in black paper and its chandeliers lit with green, fluorescent bulbs that withstand shaking. Otherwise, the station was little changed. 

Giorgi’s friends had organised a driver, who met and brought us to our hotel, in an upscale, tourist neighbourhood. The hotel turned out to be a kilometre and a half from the children’s hospital that had been recently bombed. Before the war, the hotel would have been too costly for our budget, but prices had plummeted.  The receptionist reported that this month’s guest list of reporters, diplomats, and military advisors, had come from the Netherlands, Norway, France, Belgium, Australia, the U.S., and Costa Rica. Giorgi and I added Georgia and the U.K. to her list.

The next morning, we went to a café that could easily be in London or NYC but was less costly.  As we ate outside, a young man passed on a motorised scooter. The wall of a nearby building depicted a soldier playing with small toy planes.   

That day and the next we visited several women’s ventures: another preschool, speech therapy centre, sewing atelier, kindergarten, and resin studio. Crossing back and forth across Kyiv's bridges, we experienced its ubiquitous traffic and enjoyed the beauty of its monuments from afar.  Faced with rolling black outs, we climbed 24 floors in 30 C (86 F) degree heat to meet a resin producer. The view and her work were well worth the climb.

A few entrepreneurs joined up with others; and some met us at our hotel. One described her online history project and another, her mediation work.  An entrepreneur from Bucha brought photos of her community café.  A founder of a children’s robotics program near the frontlines planned to meet us in Kyiv on our last day.  However, after a Russian missile hit their school playground, she had to cancel so we continued online.  

We met former grantees as well. One, who produces muffin mix boxes, faced a new hurdle in sourcing the paper cups from a firm in Kharkiv that had just closed. She proposed to locate the machinery and produce the cups herself.  A grantee and her husband drove us out of town to one of their pizza/hamburger outlets. Leaving Kyiv on a late Friday afternoon, we got caught in the traffic of people escaping the city heat for the weekend.  I wondered momentarily what we would do if stuck in a traffic jam when an attack starts (most likely abandon the car and head for the nearest shelter). The entrepreneur had invented new recipes and added a delicious sushi burger to her menu.  The next night, another former grantee, the Director of a Family Centre, and her husband took us out for gelato made by a couple who had left their ice cream shop in Odessa and started anew in Kyiv.

Our own assessment work was much the same except for the back stories.  The speech therapist’s caseload had increased from three to 30 new children/month; and she had opened two new centres. Some children refused or were unable to speak since the war had started. The Bucha entrepreneur had hid with her husband and five children in their basement when the Russians invaded. Not being on the main road, they were among the fortunate to survive. Families had been caught on different sides. The parents of one entrepreneur had stayed in Donbas. They had put all their savings into building a country home for retirement only to have it blown up by the Ukrainian Air Force. Meanwhile their children and grandchildren endured the horrors of Russian troops invading their town.  “We cannot discuss politics or cross our own borders, so we had a family reunion in Baku,” the entrepreneur explained. 

We went with the women entrepreneurs to shopping malls and hardware outlets to buy a generator, resin polisher, industrial kitchen ware, etc.  Other equipment (e.g., robotics equipment), we ordered online.  The generator will keep the lights on when preschoolers are forced to shelter. The kitchenware will help to open another community café in Bucha.  A preschool will build a jungle gym. More children will join robotics classes. While the equipment is useful, given what the women confront daily, our being there to hear these stories was equally important. 

I set the Air Alert app for Kyiv. It went off twice at night. Giorgi’s friends reassured us that it was only drones; and we need not shelter. Following an alarm, the app advises: “Attention, proceed to the nearest shelter. Don’t be careless. Your overconfidence is your weakness.” Without an immediate “all clear” the second time, I wondered if people have become overconfident; and headed to the shelter.  Giorgi joined me. We stayed awhile but were the only ones there.  As we headed back upstairs, the app pronounced, “Attention! The air alert is over.  May the force be with you.”

Leaving Kyiv, our train full of young Ukrainians and families leaving for holidays had a happy festive air. Our last night in Lviv, holiday goers were out and about right up to the curfew.  The next morning, we took the Polish bus back across the border, where we saw a line of missile launchers on trucks entering Ukraine. “Maybe they are from the U.S.” a Norwegian passenger offered.   

Putin had promised a reaction.  That night while Giorgi and I were having dinner in Krakow, the Air Alert app sounded again.  This time all of Ukraine was in the red.  Giorgi tried unsuccessfully to contact his friends in Kyiv. “They must have gone to the shelter”, he observed.  The app showed a couple MIGs crossing the country from the East. Shortly after, the app reassured us, “May the force be with you.”