It will be years, not months, for COVID-19 business recovery

ON THURSDAY, May 7, the RJR/GLEANER Communications group staged a virtual town hall meeting on Television Jamaica titled ‘COVID-19 & Small Business’, focused on the effects of the crisis on small businesses across Jamaica, strategies for survival, and planning for the future in the wake of the severe economic fallout being experienced across all sectors in recent times.

Hosted by journalist and attorneyat-law Dionne Jackson-Miller, the show appears to have been a wake-up call for many business owners trying to navigate the crisis since the partial shutdown of the economy in late March of this year.

The panellists were Harold Davis, deputy CEO of the Jamaica Business Development Corporation; Jerome Smalling, president of the Jamaica Bankers Association (JBA); and yours truly.

It was clear from the format and substance of the event that the production team took great care in representing the true state of affairs for micro and small businesses, which account for approximately 35 per cent of the total employed labour force.

The format of the television show was a combination of interviews and video features with several micro and small business operators from across the country, questions from concerned business owners posed in person by video, text questions and concerns from viewers, and a panel discussion among the host and guests.

During the event, the host asked panellists to respond to specific questions from either business owners featured in the video clips or from social media users, including targeted hot-button questions to Mr Smalling about whether the banks would be prepared to move beyond offering moratoria to affected business customers to the more impactful step of reducing interest rates on existing loans, business credit cards, and other lines of credit.

Another critical question posed to the JBA president related to the issue of access to finance, specifically what steps the banks would be taking in light of the COVID-19 crisis to ensure access to capital for the small-business sector, which has traditionally been starved of capital relative to other market segments such as medium and large enterprises and consumer loans for motor vehicles, to name a few.

It was a riveting and at times emotional television event as the show unearthed the dire personal financial crisis facing some business owners, unsustainable losses being faced by others, and the real possibility of widespread business closures in the near future.

FACING REALITY

Amid the many uncertainties, perhaps the only assurance, was the sobering concession from the panel that the country and the world are now facing a recession beyond the depths of any we would have experienced in our lifetime.

It is a must-watch programme for every Jamaican consumer, worker, business operator, and entrepreneur and can be viewed on TVJ’s online platform – www.1spotmedia.com.

Since the airing of the show, I have received numerous calls, emails, and social media messages from small-business owners, most of whom have said that they found the programme “very eye-opening”, especially when it comes to the likely duration of the current local and global economic decline and actions they may take to mitigate the effects.

Unfortunately, it would appear that some micro- and small-business operators have been expecting and planning for a recovery to preCOVID-19 times within a few months. I cannot stress enough that the economic crisis will not be over in months.

The reality is that the country – not just business owners, but every single person and organisation from public to private sector – must now plan for the economic effects of COVID-19 lasting years, not months.

To drive home this critical point, one of the lessons I underscored at the virtual town hall was that in studying every major recession since World War I, there are at least three implications we must consider deeply:

1. As the world becomes more integrated and interdependent, it takes longer to recover from a global recession. For the last global recession of 2007-2008 known as the Great Recession, it took the United States eight years to recover. In fact, it was only in 2019 that Jamaica began to enjoy economic recovery from our unsavoury history of economic struggle, generally and the global financial meltdown, specifically.

2. The more vulnerable the country and economically reliant it is on other countries, the longer the recovery. Jamaica is highly vulnerable and heavily reliant on tourism and remittances, and with the travel industry not expected to return to pre-COVID-19 buoyancy until 2023, and global consumers and would-be tourists suffering great economic hardship, we expect a significant medium- to long-term tourism fallout.

3. With every major recession, there is a widening of the wealth and income gap and substantial erosion of the middle class.

The reality is that the world has been changed forever, and the businesses that serve customers wherever they are in the world must grasp that they, too, will need to change, and in some cases, drastically.

I can’t stress enough that in these times, businesses will either pivot towards new existences and opportunities or perish in the winds of change.

One love!

■ Yaneek Page is the programme lead for Market Entry USA, a certified trainer in entrepreneurship, and creator and executive producer of The Innovators and Let’s Make Peace TV series. yaneek.page@gmail.com.