SHTA survey: Long-lasting economic decline if swift action not taken to combat COVID-19 | THE DAILY HERALD

PHILIPSBURG–There will be acute job loss, lack of income for households and long-lasting economic decline in the country if swift measures are not taken to mitigate the financial impact of the COVID-19 pandemic.

  This is a summary of the results of the St. Maarten Hospitality and Trade Association (SHTA) business survey, which was held from Thursday, March 26, to Sunday, March 29.

  More than 580 companies – approximately 20 per cent of the total count of operational businesses supporting more than 8,000 employees – contributed to the survey.

  SHTA said in a press release that the effects of the pandemic are not only causing a worldwide health crisis but also a financial one. “There have already been more than three million people laid off in the United States, thus impacting our largest segment of visitors. The cruise industry has taken a major hit with recommendations from major countries against travelling via cruise,” SHTA said in the release.

  “Essentially we do not know when demand for travel will resume and whether we will be able to be in the forefront of it. These are examples of the influencers of St. Maarten’s economy and some of the challenges we will have to face together in climbing out of it.” 

  According to the association, given that travel and tourism are disrupted business sectors and demand has dried up, it means it will not rebound as soon as curfews are lifted. “St. Maarten will have to reinvent itself in the face of a changing tourism without knowing how it will change.”

  To alleviate short-term unemployment which is inevitable  – with only very few types of businesses allowed to operate and earn turnover – SHTA has proposed a reduction in the Turnover Tax (ToT) tariff to zero per cent and a 90 per cent payroll subsidy for all sectors. The proposal has been endorsed by St. Maarten Timeshare Association, St. Maarten Marine Trade Association, Indian Merchants Association, and Workers Institute for Organised Labour (WIFOL).

  “The proposal, while it may seem high, is aimed at keeping businesses alive and employees paid.” 

  SHTA said the results of the survey echo its concern that the prolonged effect of the COVID-19 pandemic will force businesses to close and staff to be laid off. Most businesses have been struggling to rebuild – both their reserves and physically – since the passing of Hurricane Irma and do not have the necessary resources to weather prolonged closure.

  “The business landscape will likely be very different this time next year and perhaps we will no longer be known as the ‘Culinary Capital of the Caribbean’.

  “The results of the survey worryingly indicate that within three to six months 45 per cent (best-case scenario) of the labour force of private sector will be laid off. If this data reflects the reality, extrapolation to all active businesses would mean the total number of unemployed could grow to well over 9,000 not including new graduates entering the labour force,” SHTA said.

  Just over 75 per cent of the businesses indicated that if no financial assistance is given by government they anticipate that they will have to reduce their workforce.   

  “That means that we should also anticipate a retraction in the total number of businesses able to survive post-pandemic. Like Irma, this is a non-discriminatory event. Unlike Irma it is world-wide. So, our normally strong tourist base of visitors will also be severely impacted.”

  SHTA said it is imperative that all parties find a solution for reducing the effects of “this formidable challenge St. Maarten is facing. It does not just impact the private sector. The value of tax revenues collected will also dwindle with reduced private sector jobs. In fact, turnover and room tax are already nearly at zero per cent with only a few businesses remaining open and generating turnover or room tax.”

  SHTA said in 72 hours more than 580 companies responded. SHTA thanked the involved associations, as well as the independent entrepreneurs and non-governmental organisations (NGOs) for supporting the survey and for sharing vital information.

  “With the vast number of participants in the survey across all business sectors, it is safe to say that no one will be left unharmed. Continued lack of financial assistance or a clear indication of what to expect would result in layoffs happening even sooner.”

  SHTA advocates that maintaining job and income certainty for private sector employees is the key to maintaining households and businesses.

  “Though the amount might seem high, SHTA points out that other countries, including Holland, have already announced comparable subsidies to save their economies and businesses. Thus far, no comprehensive plan addressing the acute crisis has addressed the various fallouts as the suggestion outlined above; and many people still believe that all we have to do is open our borders again for the tourists to return,” SHTA said.

Source: The Daily Herald