SMEs in ASEAN get aid in difficult times to fight coronavirus
Entrepreneur Pacita Juan is relieved that she and her partners in the Philippines had the foresight to develop an e-commerce site for their organic products retail chain.
The founder and chairwoman of ECHOstore said the online shop keeps her business afloat at a time that the novel coronavirus outbreak has pushed the government to lock down the capital region of Metro Manila.
But the higher online sales cannot compensate for the losses the company has incurred from the shutdown of all its physical outlets in mid-March in line with the government’s enhanced community quarantine measures.
Juan has also had to spend more for her business as the absence of public transportation has compelled her to provide free shuttle services for employees who are part of the company’s e-commerce site.
“This will hit our annual revenues badly, (which) maybe down by 75 to 80 percent because we have had to close all the stores located in malls,” she said.
Juan’s plight reflects how the lockdown in Southeast Asia continues to challenge the owners of small and medium-sized enterprises, or
SMEs. The situation is especially acute in countries which are enforcing social-distancing measures to stem the rise in COVID-19 cases.
Brunei, Indonesia, Laos, Malaysia, the Philippines, Thailand, Singapore and Vietnam have enforced either a partial or total lockdown to contain the outbreak.
Impact on economy
With shopping malls and public facilities closed and customers forced to stay at home to “flatten the curve” — to avoid a sharp increase in the infection rate that exceeds the capacity of the healthcare system — SMEs are barely coping.
Some, like Juan’s, are trying to get by with online shops and home deliveries, while others have been forced to retrench their staff amid a lack of revenue.
“Businesses are suffering as there are very few physical transactions, and so a lot of SMEs need subsidies to pay wages to weather these difficult times,” said Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs.
Oh said this has had a significant impact on the regional economy as SMEs account for a huge percentage of each country’s GDP and are among the biggest employers in Southeast Asia.
ASEAN governments have recognized the predicament businesses face and have rolled out fiscal stimulus packages which include subsidies for SMEs.
In Singapore, the government has issued a comprehensive suite of measures to support businesses, including SMEs, according to Lawrence Low, the director of the Center for Governance, Institutions and Organisations at the National University of Singapore.
He cited the Job Support Scheme where the government will co-fund the first S$4,600 ($2,814) for nine months for every local employee. To help with their cash flow, SMEs will also get a corporate tax rebate of 25 percent, capped at S$15,000 per enterprise.