Pacific business sector's help appeal
The Pacific Islands Private Sector Organisation wants the region’s Governments to be proactive in finding - and funding - solutions for industries struggling to stay afloat during the coronavirus pandemic.
President Stephen Lyon, who runs a diving business in the Cook Islands, said natural disaster recovery models could prove useful when responding to the coronavirus’ effect on the economy.
He said businesses need to articulate what they want and need:
“[The coronavirus] will change significantly our economic landscape for the next few months or through to the end of the year at least, therefore businesses have to be prepared and that is a difficult thing to do, particularly that in our region many businesses are small and micro enterprises.
Because smaller companies have little or no cash reserves or access to credit they will struggle the most, Mr. Lyon said.
“They are volatile anyway, one in ten make it to ten years usually so they do come and go and an instance like this can speed up the attrition process,” he said.
He said Samoa needs to take a “common sense” approach to border closures, as Samoa’s economic centre of gravity remains tourism:
“If your economic centre of gravity is not reliant on tourism, like Tonga, Kiribati, the Marshall Islands which have fisheries or remittances, reducing travelling makes sense because you slow down the spike in infected cases.
“However islands states that have tourism as their core focus, like Vanuatu, Fiji, the Cook Islands and to an extent Samoa, I think there needs to be a bit more of a common sense approach to balancing what can be done.
“Keep the borders open to valid tourists who can prove they do not have the coronavirus either by screening before they arrive… I am against the idea of an all-out ban.
“The Pacific could see a significant long term decline in visitors if we basically shut down for 2020.”
Mr. Lyon said, from an economic perspective, natural disasters and the coronavirus pandemic are not too different, and Governments should find similarities to guide them on how they respond financially.
After Cyclone Winston, for example, the Government provided its people with grants and concessional loans to rebuild their homes and businesses quickly. In more developed countries, wage subsidies, mortgage holidays and freezing bank loan payments are all being tried and tested.
“The private sector is the engine of the economy: it pays the taxes, it keeps the country going and without it the economy quickly winds down,” he said.
“What we don’t want to see is people leaving their economies, shutting their doors and going elsewhere to do their businesses, we want to keep our Pacific Islanders in their respective countries and keep their businesses viable for the future.”
For his part, Mr. Lyon said he has been working to pose questions about prevention, containment and recovery to the Pacific Islands closest neighbours New Zealand and Australia. He said the current work to prevent the spread of disease through severe border restrictions has largely been seen as positive.
“We have not seen anything with regards to potential economic stimulus into the region, though I would say from New Zealand they have been talking Pacific Reset with significant commitments made in dollar terms. This may be an avenue to ramp up some of that programming into the Pacific,” he said.
“But I think Pacific nation states need to make requests to those development partners. They need to quantify the hit to their economy, figure out what they can absorb organically and what is required to get back to business as usual and make those requests.
“I don’t think there will be a blank cheque as such.”
But the private sector will need to take the initiative to articulate their needs to Government, Mr. Lyon said. While leaders could be proactive and open dialogue with their private sector at the earliest opportunity, something else.
“But I think the Pacific needs to bear in mind it is something that needs to be done, they should look at direct support to private sector entities,” he said.
“There is nothing wrong with Government being proactive, going out and building relationships and having discussions with their Chambers of Commerce and business organisations.”