Small business pay heavy price for Covid protection

DUBAI: Staying in business through the COVID-19 pandemic has not been cheap for retailers, hoteliers or eateries — to name just a few types of small- and medium-sized enterprises (SMEs). All over the world,  including the Arab region, SMEs have suffered the double whammy of lost custom combined with new expenditure on cleaning, testing, protective equipment and hand sanitizers.

Companies have spent hundreds of thousands of dollars on hygiene protocols in a desperate bid to keep their doors open. Contact-intensive sectors such as leisure, hospitality and tourism have suffered more than most. Airlines, spas, gyms and galleries have all been forced to limit footfall.

Although the rollout of vaccines has raised hopes of a turnaround this year, with people itching to book summer getaways and nights out on the town after months stuck indoors, a mixture of new virus mutations and the uneven distribution of vaccines means the world is still a long way from returning to normal.

According to an April report by the Organization for Economic Co-operation and Development (OECD), which assessed the impact of the pandemic on SMEs over the past year, such firms have been hit far harder than their larger counterparts.

“SMEs are overrepresented in the sectors most affected by the crisis, in particular in wholesale and retail trade, air transport, accommodation and food services, real estate, professional services, and other personal services,” the report said.

“Smaller firms are typically more financially fragile and have smaller cash buffers than their larger counterparts. This makes them less resilient to crises.”

Small companies also tend to have weaker supply chains and can “lag behind in terms of the uptake of digital tools and technologies which can help to build resilience in the current pandemic crisis.”

Crucially, it would seem, SMEs are also “less likely to have managerial capability to comply with new regulatory frameworks to guarantee customers’ and employees’ safety.”

For Tala Badri, founder and executive director of the Center for Musical Arts in Dubai, most of the past year’s excess expenditure has been spent on COVID-19 safety and hygiene measures for her patrons and staff.

When businesses in Dubai were cleared to reopen in the second half of 2020, under strict public health guidelines, Badri was legally obliged to hire an approved cleaning company to sanitize the entire premises, its equipment and its musical instruments.

“We have to set up systems where you have a sanitization station everywhere that is accessible,” Badri told Arab News. “You have to buy the sanitizer. These are all additional expenses that we never had to face before.

“We also have to put up special screens for teaching, which cost AED 2,000 to AED 3,000 ($545 to $820) and are just plastic screens, not even that big, but they cost money,” she said.

“One of the other things we have to do is increase our Internet usage (for remote teaching). You have (limited) choice (in selecting an Internet service provider). You have just to go with whatever is there. We are paying on average about AED 15,000 ($4,000) per term, and this is like someone’s salary. It is like having another person on staff.”


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