Instability in the Middle East is directly jolting the management of women-led businesses in Korea. Analysts say the double burden is mounting as raw material prices rise and domestic demand contracts at the same time.
According to a "survey on the impact of Middle East developments, including U.S.-Iran tensions, on women-led businesses" conducted on the 30th by the Women's Economic Research Institute under the Korea Women Entrepreneurs Support Center, 82.2% of responding corporations said their current business activities are being affected.
Including responses that impacts are expected going forward, 94.5% said they feel the risks stemming from the Middle East crisis.
Cost burdens and falling demand were simultaneously cited as the main causes of deteriorating management.
Rising raw material prices (49.4%) were cited as the biggest factor, and instability in raw material supply (12.7%) and higher oil prices (11.8%) also added to the burden. At the same time, a decline in domestic demand due to weakened consumer sentiment (30.1%) and reduced or canceled orders from clients (28.5%) were found to be adversely affecting corporations' operations.
But the capacity to respond is far from sufficient. Only a little over 8% of corporations said they are "already implementing response measures," while 43.1% said "measures are needed but have not yet been prepared."
More than half also projected that recovery would take at least six months, suggesting the fallout from this crisis is likely to be prolonged.
Women-led corporations identified emergency management stabilization funds and financial support as the most urgent needs. There were also calls for indirect support such as regulatory easing and management consulting.
Park Chang-suk, chair of the Korea Women Entrepreneurs Support Center, said, "Risks originating in the Middle East are posing a serious threat to the business environment of women-led corporations," adding, "Swift government-level funding support and effective institutional improvements are urgently needed."