Jan 25, 2021 Last Updated 3:51 PM, Jan 25, 2021

Pacific Trade Invest says 78% of respondents to its latest survey of Pacific businesses are confident their businesses will survive the COVID-19 crisis.

However the impact of COVID-19 on businesses has slightly worsened according to the survey, with 60% reporting a very negative impact, and 89% a negative impact.

62% of the resondents report a negative impact on their mental health.

Businesses continue to identify the three main challenges affecting them as poor cashflow, uncertainty over how long the crisis will last, and the impact of closed borders.

They say the three most needed areas of assistance are financial support, review of their financial position, and improved online commercial capabilities.

PTI has been running fortnightly surveys for several months and says it will continue to monitor business health and perceptions into 2021. This particular survey had 113 respondents.

The full survey can be viewed here: https://pacifictradeinvest.com/covid-19-response/pti-pacific-business-monitor

 

Worry for PNG business leaders

At a brief sitting of Papua New Guinea’s parliament in November – with all Opposition MPs absent – the James Marape government passed its 2021 Budget, before abruptly adjourning until next April.

Treasurer Ian Ling-Stuckey told the 51 MPs present in parliament that government expenditure was expected to reach K19.61 billion (US$5.58 billion) in 2021.

It was, he said, “a very substantial increase of 9%” on the 2020 fiscal year. “The domestic and international context for our 2021 budget is the most challenging in our nation’s history. Since 1975, there has never been … a global crisis as the one we are now facing today,” he said. The Budget for 2021 also reveals lower government revenue at K12.9 billion (US$3.67 billion), and the largest planned deficit of K6.63 billion (US$1.88 billion).

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“From capital to develop and export goods like coffee, to training and support with digital platforms, Pacific businesses – especially female-led business – are in urgent need of tangible support,” says the Pacific Trade Investment (PTI) Australia Trade & Investment Commissioner, Caleb Jarvis.

The economic impacts of COVID-19 on female-led businesses in the Pacific continues to rise, according to the latest Pacific Business Monitor survey conducted by PTI.

The fifth survey in PTI’s ongoing series has found that 92% of female-led businesses have reported a fall in revenue.  In comparison to the previous survey, the number of fully operational female-led businesses has declined from 29% to 23%, while partially operational businesses have increased from 19% to 41%.

Jarvis states that despite the COVID-19 free status of most Pacific Island Countries (PICs) “the economic impact of closed borders has been debilitating, especially for nations that are reliant on tourism – a sector with a high proportion of female employees.”

“Many women are performing a juggling act – balancing work with being the primary care givers,’ explains Jarvis- a trend correlating to findings published in a recent report by the United Nations titled, ‘Policy Brief: The Impact of COVID-19 on Women’.

The UN report notes that girls and women are ‘suffering more’ due to many factors: home schooling, disproportionate lack of access to digital tools, work capital, skills and higher care responsibilities. 

The latest PTI survey finds that COVID-19 has had a ‘negative impact’ on the mental health of 31% of female-led business in contrast to 14% of male-led businesses.  Levels of happiness and optimism continue to decline as 45% report felling worried ‘most of the time’ or ‘all of the time’. 

Despite the negative impacts, more female-led businesses are implementing adaptive measures such as pivoting to online business, and seeking rent reductions or relief. 

Jarvis states that “it’s a long road ahead, and its vital that we continue to champion the voice of businesses in the Pacific by continuing to provide quantitative results to governments, donors and regional organisations so they can see the realities facing Pacific businesses.”

The Fiji government has welcomed the World Bank’s decision to pause publication of its 2021 Doing Business Report.

In a statement released last week, The World Bank said a number of irregularities had been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports.

“We are conducting a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports,” the Bank says in its August 27th statement.

“We have asked the World Bank Group’s independent Internal Audit function to perform an audit of the processes for data collection and review for Doing Business and the controls to safeguard data integrity.”

While the Bank does not specify what data changes occurred, international media have reported it relates to four countries-none of them in the South Pacific.

However Fiji has long been critical of the report.

"Fiji has been raising concerns for a number of years on the authenticity and the manner in which the survey for the Doing Business Report is being conducted", said Shaheen Ali, Chair of the Doing Business Taskforce.  "The Fijian Government at various levels had indicated to the World Bank Group that there were data errors in the Fijian Reports. Through these consultations, the World Bank Group worked closely with the Ministry and the Taskforce to identify errors."

The Government believes impovements to business processes, including digitalisation, construction permits and taxes, have not been adequately recognised.

Fiji’s Ease of Doing Business ranking dropped one place, to 102 (of 190 countries ranked) in the 2019/2020 report. Papua New Guinea’s ranking declined further  to 120th position (from 108 the previous year). Marshall Island ranked 153, Kiribati 164, the Federated States of Micronesia 158,  Palau 145,  Samoa 98, Tonga 103 and Vanuatu 107th.

It is a season of surveys across the Pacific. Governments, international organisations, industry bodies and chambers of commerce are surveying the private sector to assess the impact of the COVID-19 pandemic.

While the sample size of most of those already published has been small, the hope is that the results will inform the type of support provided by governments and multilateral agencies in the middle to longer term.

The Pacific Trade and Invest (PTI) Business Monitor is surveying a small number of businesses every two weeks over a six-month period.

In its most recent report (the second in the series) released in early June, PTI says the impact COVID-19 is having on businesses is starting to decline; 88% reported this impact compared to 91% in survey one. The second survey had 143 respondents, all online and all decision makers or owners in small and medium sized enterprises (SMEs).

Almost three-quarters of businesses in Fiji reported a “very negative” impact from COVID-19. Across the board, 90% of businesses reported a decline in revenue of some magnitude.

70% of businesses were confident they will survive COVID-19 but half do not expect revenue to return to pre-COVID levels until next year or later. A quarter of businesses expect to return to business as usual this year.

The three main challenges identified by respondents were not knowing how long the crisis will last, the impact of closed international borders and poor cash flow. A lesser challenge was a lack of knowledge and skilled staff.

40% of the respondents said they needed support to access new markets, either locally or overseas, slightly more than in the first survey.

The PTI survey also asked respondents about their mental health. Nearly a quarter of them said that COVID-19 is having a very negative impact on their mental health, and almost two-thirds said it is having a negative impact.

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