Decisions to cushion economy from COVID-19 effects yet to be realized

KUWAIT CITY, May 18: Weeks after the statement of the Higher Steering Committee for Economic Stimulus chaired by the Governor of the Central Bank of Kuwait Dr Muhammad Al-Hashil saying its decisions to cushion the economy from the effects of the outbreak of coronavirus on the local economy, the practical and executive measures for those decisions have yet to be achieved on the ground, reports Al-Jaridah daily.

Owners of small and medium enterprises and those working in private sector are mostly affected by the crisis, as their businesses are at a free fall due to slow implementation of government’s procedures in terms of soft financing, which contradicts the nature of crises wherein decisions must be fast and flexible to amend in the event of deviations in their implementation, adding such decisions will lose value and become futile if delayed, and they’ll lead to greater costs in the future, the daily added.

It’s been more than one month and the National Fund for Small and Medium Enterprises has yet to start financing the companies under its umbrella and those affected by the pandemic, given that the Higher Steering Committee for Economic Stimulus had set the conditions for soft financing at 80 percent from the fund, and 20 percent from local banks, the daily said.

According to the daily, repercussions of the delay in implementation fall on the shoulders of entrepreneurs, which is more burdensome when considering the financial obligations to be met to avoid the closure of businesses or even footing multiple expenses such as salaries and rents, which may cause many of them to falter or fall into bankruptcy; thus missing the objective of the fund that encourages Kuwaiti youth to initiate value added projects to boost the national economy.

Nonetheless, if government’s mechanism continues on such a slow decision-making pace by treating the crisis as an ordinary problem, then we fear that failure of small and medium enterprises would greatly affect the bigger entities, especially sectors that depend on small enterprises in their dealings, it noted.

It said proposals having positive impact on the Kuwaiti youth who are employed in private sector even remain at the mercy of bureaucracy and slow decisionmaking mechanism despite the clarity of data and completion of studies for that purpose. Foremost of which is the decision to raise financial support for the national manpower employed in private sector by 100 percent, as the delay in issuing such decisions will take a toll on the young people in terms of salary reduction and layoff.

Ultimately, the situation will increase the burden on the state, besides holding the state responsible for appointing a greater number of them in public sector due to limited job security in private sector, it added.