One year after T&T reported its first case of COVID-19, hundreds of businesses have been forced to permanently close their doors, while others that have remained open continue to see a drastic fall in sales. Hundreds of people have been laid off while others have been asked to work fewer hours as employers struggle to keep them on their payroll as they face their worst crisis in decades.
The statistics paint a depressing picture. 25 per cent of businesses in San Fernando and the environs have been closed permanently. Ten per cent of businesses in the Sangre Grande area have closed their doors while sales in that area have fallen by 35 per cent. In some other areas, sales have almost collapsed by 50 per cent. Stores in some malls across the country have had to shut their doors, leaving what was once a vibrant entertainment centre looking like ghost towns in some instances.
Closed borders that restrict trade, the shortage of forex, lockdowns on some operations such as pubs, limited operating hours for bars and stringent COVID regulations on how patrons can be served have put businesses under pressure.
CEO, T&T Chamber of Industry and Commerce Gabriel Faria has estimated that at least 1,000 businesses closed their doors since T&T tested its first COVID-19 case one year ago.
He noted that he is not basing this figure on empirical data but it is his “perception” after speaking to business owners throughout the country.
The other statistics he gave also reflects the poor state of the economy.
He believes that unemployment is “in excess” of ten per cent. To make it worse, he said, people are working but the number of hours have been cut so they take home less pay.
“There is reduced aggregate demand so that consumers are not spending and businesses have to reduce their costs and they are using different types of mechanisms to keep their employees employed.”
Some sectors are doing worse than others, he added.
“At the moment, restaurants, casinos and bars are most impacted and it is in these sectors where unemployment and underemployment are at the highest,” he said.
He also estimates that T&T’s GDP decline in 2021 was at least ten per cent, one of the steepest declines in T&T’s economy in the last 40 years.
Now, concerns about the pace with which the Government will be introducing the vaccines have added to the grim situation.
Faria said the Chamber’s members are concerned about the time it takes to acquire the vaccines.
For the economy to fully reopen and to start growing again, he said there needs to be an “aggressive” vaccination campaign which he hopes will happen before the end of 2021.
Countries around the world have also been experiencing economic problems.
But after most economies worldwide experienced negative economic growth in 2020 as a result of COVID, the rollout of vaccines is giving a boost to countries as it offers the promise of more normal travel, entertainment and business options later in the year.
In the United States, the world’s largest economy, Goldman Sachs is predicting Gross Domestic Product (GDP) growth of 6.9 per cent, the fastest growth since 1984.
China, the world’s second-largest economy is expected to see GDP growth of 6.9 per cent.
In Europe, Greece will be accepting tourists who are vaccinated as they open their borders.
Meanwhile, economist Dr Ronald Ramkissoon said what T&T and the world have been going through is of a “historic proportion.
“We have not had any disease like this in our lifetime. Maybe the last time was 1918. This global crisis has impacted most countries.”
This health crisis has had an impact on what some economists call the human capital that is the ability to work and to produce.
He is not surprised that business owners are in such deep distress as he said the way the economy is structured, businesses feed off the wealth generated by oil and gas. The problem now is that most of that revenue is gone.
He said the recovery of the T&T economy will be predicated on how many people are vaccinated. That will then influence how quickly the economy is fully reopened.
“I would not be surprised that by the end of the year, I expect that companies will be doing an assessment of where they are in terms of sales and cost operations. I expect that by early next year we can expect the situation to improve and to see a turnaround in employment.”
Business leaders throughout T&T shared some of the challenges that they face.
Eastern Business and Merchants Association
President of the Eastern Business and Merchants Association (EBMA) Ricardo Mohammed, expressing concern about businesses in the Sangre Grande area, estimated that more than 30 per cent of the bars have closed down over the last year.
“We hope that the Government changes its policies with regard to bar owners. They should put a structure in place similar to the restaurants to operate with a certain number of table settings and have them abide by COVID-19 regulations.”
Mohammed also spoke about dismal sales in the retail sector. Divali, Christmas and Carnival are usually periods where consumers spend freely, however given people’s loss of purchasing power businesses are experiencing a steep decline in sales in the area, he said.
“We are facing the first quarter of 2021 with a significant decrease in sales. We are experiencing up to 35 per cent decline in sales daily from our members. There is no cash flow. People’s spending power has been significantly reduced.”
Speaking on the need to urgently vaccinate citizens, Mohammed said the longer the Government takes to do this, the longer it will take to reactivate the economy.
He said the Government should have been more proactive in trying to access vaccines for the country.
“The mere fact that vaccines could have been shipped to this region and we didn’t take steps to ensure that a significant number of these vaccines reached T&T, begs the question, what is really being done? The world leaders are saying to reopen the world economy we need to have vaccination programmes. Many businesses are unsure of what will happen for the rest of the year.”
Chaguanas Business Chamber
President of the Chaguanas Business Chamber Vishnu Charran described the last year as “traumatic” for the business community and the wider national community.
“We are seeing businesses folding up and some downsizing. If the Government does not step in to do something, you will see layoffs. To avoid layoffs, business owners are just cutting back the hours employees work.”
Charran said he has been speaking to business owners in Chaguanas and other parts of the country and there is a consensus that there has been a fall in sales over the last month.
The businessman said the Government has to implement a strong programme to implement the rollout of vaccines and begin to reopen the economy as soon as possible.
“If that does not happen, there will be more cuts of working hours for employees, more loss of jobs and it is tragic what will happen. Even if the country begins to reopen we will not see an immediate recovery, it will take time to rebuild. I don’t think we will see an uptick in business until next year.”
Confederation of Regional Business Chambers
Coordinator of the Confederation of Regional Business Chambers (CRBC) Jai Leladharsingh estimated that 700 businesses in the confederation have closed over the last year.
He said most businesses are operating on a quarter of their revenues.
“Business people have been dipping into their savings to pay salaries from their own money and to pay bills.”
Leladharsingh said the Government must take quick action to have the country vaccinated.
“The Government must step up their game and put a lot of focus on obtaining the vaccine as an emergency step. The Government must understand there is a crisis, a deep crisis. Then we can work together to bring about an economic recovery.”
Barkeepers and Operators Association of T&T
Director, Barkeepers and Operators Association of T&T Anil Maraj estimated that out of 3,000 bars in T&T, 60 of them closed permanently. Also, there were 40 to 50 bars that changed ownership as previous owners could no longer manage those businesses.
Maraj said more than 300 bar employees have lost their jobs over the last year and he was sure that of the remaining workers most of them operate on reduced incomes.
Maraj projected that the economy and specifically bars will not be fully reopened until enough people are vaccinated.
Gasparillo Business Chamber
President of the Gasparillo Business Chamber Anil Ranjit said well-known businesses like Linda’s Bakery and Burger King have moved out of the area recently.
Ranjit recounted a conversation he had with a coconut vendor in his area who said that he now has to take one week to sell the number of coconuts he used to sell in two days. A gyro vendor told him that his sales have fallen by 50 per cent over the last year, he said.
Tobago Chamber of Commerce
President of the Tobago Chamber of Commerce Martin George said businesses in Tobago, on the other hand, have been benefiting from closed borders as many Trinidadians have resorted to going to the sister isle for vacation.
He said this has positively increased market activity there. He said taxis, restaurants, hotels and other sectors have been getting business from this and they appreciate that.
George hopes that Tobagonians will be given priority in the vaccination rollout.
“Given Tobago’s population of 50,000 and if they do the vaccination of Tobago first and they create a bubble and the population fully inoculated, then Tobago can be opened up for international business.”
Greater San Fernando Business Chamber
President of the Greater San Fernando Business Chamber lamented the 25 per cent of businesses in downtown San Fernando and surrounding areas that have permanently closed their doors.
Arima Business Association
Reval Chatergoon, president of the Arima Business Association pointed out that businesses continue to close daily in Arima because of the economic depression in the country.
In a statement to the Sunday Guardian, Excellent Stores, which has already closed down three of its outlets, said the distribution of vaccines was a welcome sign for both the local and international community.
“It shows some light at the end of the tunnel. With global vaccine trials in children still in its very early stages, the global differential in the vaccine availability and administration, we should expect a continuation of the new normal for the near future here in T&T as transmission of the virus to the unvaccinated population would still be a concern.
“For Excellent Stores, the strategy remains on track to continue to invest and enhance our online presence both locally and regionally, redirect resources to optimise and enhance our in-store experiences and expand our export partnerships with our local suppliers to regional markets and contribute to the increase in inter-Caricom trade that has already started.
“As the vaccines continue to roll out globally, we expect to be ready for a 2022 international travel boom with pent up demand for sunny destinations and the positive economic impacts it has on both the local and regional economies.”
Too much hassle for government-backed loans and moratoriums
Mohammed, speaking about the Government-backed loans and moratoriums that were offered to businesses in 2020 at the height of the lockdown, said these packages were not as attractive as they were made out to be and so none of the EMBA’s members accessed the loans.
“The mere fact that more interest had to be paid in some situations would have been more difficult for some businesses. The banks gave options of increasing loans over the same period or they would have extended the duration of the loan with additional instalments at the same rate. In essence, it was not a true benefit.”
Maraj said the vast majority of bars did not qualify for the loans that the banks were offering.
“There is VAT registration. Most of the bars do not make the revenue and income to be registered for VAT. So the bar owners did not meet those criteria. The Minister of Finance met with us and said he did not see that as a problem. But remember, it was offered through the banks and they had their own criteria.”
Maraj, meanwhile, said the Government had promised their industry a $10 million payout late last year and they are still waiting for the money. Once disbursed, he said, this will be used to assist employees as it is similar to a salary relief grant.
Chatergoon said that the moratoriums offered by banks were not worth it.
“Moratoriums do not come free. To get those loans the amount of hoops that you have to jump through it was nearly impossible. A business owner also had to get a NIS compliant certificate. To get that, an auditor had to come an audit. That could have taken months. The masses of business could not have gotten it.”