Caribbean businesses told to turn COVID crisis into opportunity

Roughly half of businesses across the Caribbean have had to shut shop and lose tens of thousands of dollars in revenue as a result of the pandemic, a regional trade official said Tuesday as he called for businesses and governments to turn the crisis into opportunities.

Executive Director of the Caribbean Export Development Agency Deodat Maharaj said he believed the COVID-19 pandemic had provided the opportunity for businesses to tweak their operations and use more technology.

Addressing the Small Business Association (SBA) Small Business Week 2021 State of the Sector Conference Maharaj cited a survey carried out with the Caribbean Development Bank that revealed that about half of businesses across the region had to close their operations last year at the height of the pandemic.

“Almost 50 per cent of respondents reported having to close their physical operation and halt operation,” he said. “Around 40 per cent of respondents reported having to change the nature of their daily operation including the use of virtual platforms to facilitate remote work.”

He said that when asked how much the COVID-19 pandemic had affected their business on a scale of one to five, with one being least significant and five being most significant, “respondents recorded an impact level average four or five”.

The survey revealed that the areas of the business most affected by the pandemic were finance or cash flow (79 per cent), sales (73 per cent) and operations (54 per cent).

Maharaj said almost 40 per cent of the respondents reported that the pandemic resulted in costs of between $2,000 (US$1,000) and $20,000 (US$10,000) in revenue “in the early stages”. He further reported that a quarter of respondents reported a loss of over $120,000 (US$60,000).

Maharaj said: “Around 30 per cent of survey respondents reported that they had to retrench staff, and the [Micro, Small and Medium Enterprises] MSME sector as we know, account for over 50 per cent of employment in the Caribbean. This is the most worrying because people impacted the most are the most vulnerable in our society.

“Given the acute challenges we face across this beloved Caribbean of ours it is clear [that] for us to fast track recovery and build resilience the durability of MSMEs will surely be a deciding factor in the success of our recovery efforts.”

He said despite the challenges facing MSMEs, he believed there were a number of opportunities for MSME operators to restructure their operations, identify new markets and become more innovative.

“This crisis, we believe, also represents an opportunity to recalibrate our development agenda. We must look to new business processes, new technologies, new sectors, and new partnerships and we must re-imagine existing ones,” he said.

Pointing out that a lot of businesses were already embracing new technologies, the Caribbean Export executive director said this will be critical to the rebuilding firms.

“We need to establish organised and systematic approaches to help our MSMEs embrace technology as a friend and an asset,” he said.

SBA president Neil Corbin said the pandemic was not all bad given that it challenged businesses “to do some different things and to do some things differently”.

“Whereas we need to rebuild, this rebuilding must be better than before,” said Corbin.

Pointing to the research, the SBA leader said the fact that cash flow was so severely affected, it was evidence that “to date we have not addressed the perennial issue of providing the needed financing for the sector, and with every crisis we are reminded of how vulnerable MSMEs are to these existential threats”.

Corbin said: “The SBA’s own internal polling confirms that due to the impact of COVID-19, 82 per cent of members reported capital as their severe need in the next 12 months to recover and strengthen their operations.

“We therefore posit that this matter of adequate financing must be sufficiently addressed in order to facilitate a well resourced sector cable of contributing in a sustainable manner, to the economic recovery needed at this time.”

He added that “this global pandemic has presented us with the opportunity to rebuild in a more sustainable manner with a sector that is adequately resourced for growth”. (marlonmadden@barbadostoday.bb)