#BTEditorial – Small businesses need help too

The decision of the Caribbean Development Bank (CDB), along with other agencies to make some $1.2 million in support available to micro, small and medium-sized enterprises (MSMEs) is a significant development, as small enterprise operators try to pick up the pieces of their businesses that have been shattered by the COVID-19 pandemic.

The CDB is working in conjunction with the Caribbean Export Development Agency (Caribbean Export) and the European Union to facilitate processing of the grants and technical assistance.

While many still seek to marginalize the importance of small businesses to the overall economic life of most Caribbean economies, it was instructive that one of the bank’s senior executives reminded us that small businesses contribute to about 45 per cent of all employment opportunities in the region.

Daniel Best, the CDB’s Director of Projects noted too, the significant contribution of small businesses to the Caribbean’s gross domestic product (GDP). While it is generally believed that large enterprises were the big economic generators, it was actually MSMEs as a group, that created about 50 per cent of GDP.

In those circumstances, the bank’s decision to allow these businesses, which are significant in number, to apply for a maximum of $30 000 in support, is a commendable move. With many tourism-dependent nations like Barbados struggling to breathe life into their economic sectors, it is important that our Governments not only focus on the big players.

As has been demonstrated in the Barbados scenario, it was the small and micro businesses that were hardest hit by the pandemic. And to make matters worse, they were the least prepared for the shock. While big businesses possessed the reserves and institutional capacity to pivot, shifting in many cases, to the online delivery of services, many small enterprises were left to fend for themselves. Sadly, many have closed their doors, and this is likely to be a permanent situation for a significant number of them.

Emphasising the pandemic’s devastating impact on trade, investment, and employment in the Caribbean, Best correctly noted the CDB/Caribbean Export initiative was “a perfect opportunity for stakeholders to recommit our willingness to work towards a strategic and effective way forward” in the face of the COVID-19 pandemic.

New CDB President Dr. Hyginus ‘Gene’ Leon, is assuming office of the Barbados-headquartered regional institution at a most troubling time for businesses and governments of the CDB’s 19 borrowing member countries.

As the sixth president of the CDB, he carries on his shoulders the responsibility of charting a new path in which BMCs are calling on the bank to be more responsive to the needs of Caribbean people and be less bureaucratic.

Soon after his appointment was confirmed, Dr Leon prioritized support for member countries through their COVID-19 recovery process.

“A solid foundation for the evolution of a financially strong bank that responds to the development needs and priorities of its BMCs has been laid by successive leaders. Going forward, we will need to emphasise innovation, to generate and refine new ideas and create opportunities; enhance measurement and evaluation for more effective implementation; foster effective partnerships and knowledge-sharing to promote transformation; build on our collective ingenuity and experience, and improve quality of life for our citizens,” the economist pointed out.

Like his predecessors, goals are one thing, being able to successfully implement them is another matter. The CDB is expectedly, going to be leaned on heavily by Barbados and other Caribbean Governments to shepherd them through this period of great upheaval.

It is an accepted fact that the COVID-19 pandemic has wiped out many of the gains countries in the region have made to strengthen their economies and position them for growth.

For us in Barbados, the enormous sacrifices that institutional investors, including our National Insurance Scheme (NIS) made under Government’s debt restructuring programme, have been undermined by significant new borrowing which Government has been forced to undertake, to keep the country from total implosion during the last 14 months.

Though his responsibility is region-wide, the new CDB boss is familiar with the Barbados economic landscape, having served as a Director of Research at the Central Bank of Barbados and an economist at the CDB before expanding his extensive resume with global institutions.

The CDB has been an important partner for us, providing financing for major projects which not only filter in foreign reserves, but help to create employment and strengthen outdated and weakened infrastructure.