Under threat of extinction: micro, small businesses need emergency state attention
As COVID-19 persists, small and micro businesses in Guyana continue to be particularly vulnerable to the impacts its effects. Many of them are, in the first instance, structurally fragile, lacking the resilience to withstand a shock of this nature, given the fact that they run on the sole engine of day to day turnover.
Reduced and more selective consumer spending have led, in an overwhelming number of instances, to significantly diminished revenues and consequential serious liquidity crises. To these must be added the fact that there has been no meaningful state-sponsored support designed to keep these businesses buoyant during the prolonged crisis period. Vastly reduced and in many instances vanished earnings and attendant liquidity crises, reduced production and in many instances complete shutdowns and compulsory layoffs are now commonplace among local micro- and small-business enterprises.
The Stabroek Business’ research has indicated that the vast majority of these enterprises are involved in agriculture, agro-processing, small-scale vending, and public transportation, and that they account for the vast majority of the informal economy. More significantly, women, who have increasingly become the breadwinner in Guyanese families are at the forefront of a significant number of these micro and small enterprises.
While the initiative undertaken through the Small Business Bureau to provide a measure of ‘holding support’ for micro and small businesses is noted, it has not been anywhere near enough nor has it reached those businesses in sufficient numbers. That would have required a combination of immediate and targeted short and medium term measures as well a more long term measures to build resilience.
Given the nature of the crisis now confronting small and micro businesses in Guyana and the implications of these for livelihoods and families that are likely to be felt well beyond the ‘lifetime’ of COVID-19, we believe that there is much merit in a recent report commissioned by the Commonwealth Secretariat that posits five recommendations that speak to ways in which governments can help ensure the survival of small businesses.
The first recommendation addresses the issue of “health and safety guidelines and support schemes for informal workers” who are vulnerable to infection in their frequently congested and (often) insanitary work spaces with lack of access to running water and sanitation. In the context of Guyana what this would mean is the significant upgrading of the historically neglected Government Analyst-Food & Drugs Department (GA-FDD), which, simply put and by the admission of the institution itself, lacks the capacity to properly oversee all of its responsibilities including those in the food services sector in order to guard against irregularities and their consequences.
There is a need for upgraded health insurance schemes for workers in the informal sector that afford them more significant protection than they enjoy at this time.
The Commonwealth Secretariat’s list of recommendations also include:
• Targeted short-term welfare support aimed at reducing the risk of poverty and insecurity;
• Liquidity support for firms and help, where necessary, in rethinking operating models;
• Adjusting to supply chain disruptions that impact particularly on businesses in the informal sector that rely on day to day sales for their survival;
• Implementing structural policies that speak to issues like training and resources that can help strengthen efficiency and build resilience.
These, one feels, should help micro and small enterprises adopt new working modes as well as digital technologies “that respond to the new reality of COVID-19” such as teleworking, online repair or home delivery.
With a significant percentage of the Guyana population still lacking reliable internet access (or any access at all) increasing access to this and other communicationsrelated services will have to be a prerequisite to taking the process forward.
Going forward and using the guidelines provided in the recommendations made by the Commonwealth Secretariat, the responsibility is now left to policymakers to assess the situation and be innovative and adaptive in responding to gaps in their proposed measures. Overall, short-term measures to help the informal Micro, Small and Medium Enterprise (MSME) sector should be linked with longer-term resilience programmes for more sustainable post-COVID-19 recovery. Diligent and sustained work in these areas can help support the survival of a micro- and small-business sector much of which may well be facing imminent threat of disappearance.