IDB study finds GOJ COVID CARE programmes wanting

IDB study finds GOJ COVID CARE programmes wanting

Senior staff reporter

Monday, September 21, 2020

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AN Inter-American Development Bank (IDB) study designed to gauge the impact of the novel coronavirus pandemic on Jamaican businesses has found that a large number of businesses were not impressed with the Government's cash support programmes, leading to a call for an assessment of the overall initiative.

The study, conducted in July this year, assessed the various government interventions implemented and offers recommendations on how the country can better manage the impact on the businesses community, particularly micro, small, and medium-sized enterprises (MSMEs). It was led by The University of the West Indies Professor David Tennant and surveyed 390 non-financial businesses across all sectors and parishes.

It found that “the large proportion of businesses facing issues with awareness of, applicability of, and ability to qualify for the GOJ's [Government of Jamaica] business support measures, even in areas where there was specific targeting”.

Professor Tennant, speaking on Friday during a virtual meeting where the findings of the study were disclosed, said while the Jamaican Government's response was on par with that of other countries regionally, and even adhered to international best practice for support programmes, “it fell down on the nuts and bolts issues”.

“So, yes, on paper it looks good; the Best Cash, Set Cash etcetera, it all looks good, but when you talk to the businesses they are saying it looks good but we didn't get much of that and we have to look at issues of flexibility moving forward,” Professor Tennant told the forum.

“It is something that needs to be said repeatedly, because it is the same issue that MSMEs face with regards to accessing financing and so, we need to structure our programmes so businesses can actually have access rather than having support programmes where businesses look at it, want it, but are frustrated because they can't get it,” he said.

The Government has implemented a number of measures in an effort to mitigate the impact of the novel coronavirus pandemic across several sectors of society. They include the waiver of import taxes on critical, medical and other supplies, broad-based tax cuts – specifically a reduction in General Consumption Tax (GCT) from 16.5 per cent to 15 per cent – and monetary grants for the most vulnerable small businesses and individuals. The latter was packaged under the GOJ's COVID Allocation of Resources for Employees (CARE) Programme.

On Friday, Professor Tennant said businesses surveyed were asked to assess the accessibility and adequacy of critical elements of the GOJ's efforts to provide COVID-19 support to Jamaican businesses and their employees. They were given the options of indicating whether the specific measures were perceived as being accessible and adequate, accessible but inadequate, or inaccessible. They could also have indicated that their business did not qualify for the particular support measure, that the measure did not apply to their business, or that they had never heard of or seen that specific measure.

He said the results presented were “instructive”.

Based on the findings, the measures that were targeted at specific sectors (the Tourism Grant, the Jamaica Centre of Tourism Innovation training programmes for tourism workers, the BESTCASH programme for businesses operating within the tourism industry, the assistance programmes for small farmers, and the general grants made available to owners of specific types of businesses) had large proportions of the respondents indicating that the specific measure “did not apply to their business”.

The same is true of the SETCASH programme, which provided temporary cash transfers to individuals who lost their jobs post March 10, 2020, the research found.

The study further pointed out that some businesses indicated that despite closely following GOJ's COVID-19 updates, they did not hear anything about the business support measures and advocated for improved communication through mainstream and social media. Other respondents noted that while being aware of the support measures, they did not have sufficient information about them to assess whether they were applicable to their businesses. It was further noted that “attempts to get explanations were futile, as queries went unanswered”.

Some respondents also noted that they had not applied for the grant because they had not filed taxes in the 2019/20 financial year. Notwithstanding this, a few respondents indicated that they did not qualify for any of the support measures despite being tax compliant.

The breakdown by sector revealed that 40 per cent of businesses operating in the tourism industry indicated that they either did not qualify for the tourism grant, or that the grant did not apply to their business. Some respondents indicated that this was because of the requirement for the firms to be registered with the Tourism Product Development Company (TPDCo).

In agriculture, the study found that half of the businesses were either not aware of, or did not qualify for the assistance programme for small farmers. In some cases, respondents indicated that the programme was not applicable to their business.

The research said the majority of comments submitted by the respondents related to difficulties they faced accessing the support measures. Respondents noted that the support measures seemed potentially beneficial, but were not accessible. They pointed to: difficulties in applying for the programmes through the website; the length of time taken for approval (particularly in a period of crisis when the need for support is urgent); perceptions that the system for making payments was chaotic; onerous requirements for accessing the grants (particularly those relating to the provision of financial statements); and a lack of information about the forms required in the application process. The S01 form, for example, was repeatedly mentioned.

Meanwhile almost a fifth of all the respondents assessed the Small Business Grant as being inadequate.

“The comments made by respondents suggest that the inadequacy of the grant precluded some businesses from even applying for it. The inadequacy of the small business grants was confirmed by most of the stakeholders interviewed, some of whom qualified the description to note that the grants are woefully inadequate. The general grants were also assessed to be inadequate by 11.9 per cent of respondents. Some respondents suggested that the value of the grants took no consideration of the needs of all categories of small businesses, and the extent to which the COVID-19 pandemic impacted businesses. While some respondents acknowledged the fiscal challenge that the GOJ would face in providing larger grants, others lamented the fact that the funds provided would only be a 'drop in the bucket',” the document said.

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