A report carried out by the Inter-American Development Bank (IDB) shows that micro small and medium enterprises have received a hard hit from the pandemic, so too has the labour force.
The report sampled three hundred and ninety non-financial firms across the country. It indicates that more than fifty percent of the firms laid off workers up to May 2020. On average firms laid off just over a quarter of their labor force. For firms that have not laid off their workers, salaries were cut by at least twenty five percent.
The President of the Jamaica Employer’s Federation, David Wan, believes the report is an accurate representation of the state of the local economy, however, he is of the view that the IDB projected surplus could be less. Wan adds that he does not agree with certain projections in the study.
Wan says, “we have maintained a fairly significant primary surplus and I believe the primary surplus could be less than they are forecasting.”
The IDB says many of the micro, small and medium enterprises have only about two months of cash reserves, making them especially vulnerable to an economic downturn of this magnitude.
According to the report any measure implemented to reverse the phased reopening of the economy will have a devastating impact on the recovery of small businesses.
The recommendations provided by the IDB include giving businesses greater access to finance, long term structural change and minimizing the likelihood of a second wave.
CVM LIVE‘s Christeen Forbes brought this report: