As businesses get ready for the ‘new normal’ due to easing of restrictions, the International Trade Centre (ITC) is recommending the need for governments to facilitate increasing cross-border trade in goods and services to strengthen the ecosystems in which small businesses operate.
According to the Centre, this would streamline the Coronavirus recovery process as the surge in movement of essential goods and services across borders are key for both economic and social recovery.
This has become necessary as the United Nations Conference on Trade and Development (UNCTAD) estimates that cross border investment flows will plunge by as much as 30 percent to 40 percent between 2020 and 2024 as the Coronavirus pandemic has severely impacted on the activities of the private sector, most especially Micro, Small and Medium-sized Enterprises (MSMEs).
The Centre insists that to begin this move, it is imperative to expand and facilitate access to trade finance for small businesses, including those run by women or young entrepreneurs.
This measure is expected to enable internationally minded micro, small and medium-sized enterprises be on the forefront of generating resilience, inclusiveness, sustainability and growth in the future.
The ITC insists that the current situation points to a need for more robust ecosystems to support operations of small businesses and their production.
This is contained in an action plan for MSMEs recently developed by the ITC to support small businesses through the COVID-19 crisis and as well as post Coronavirus era.
“Better access to information, addressing logistical issues and other barriers, better access to finance, public procurement, e-commerce, tax abatement among others are some important elements to help MSMEs face and survive the pandemic’s consequences”, the report added.
The International Monetary Fund’s April 2020 World Economic Outlook forecasts an aggregate contraction of 3 percent across the globe in 2020, but goes on to warn of ‘severe risks of a worse outcome’ if the pandemic does not fade in the second half of 2020.
The International Labour Organization also estimates that the crisis has caused a decline in aggregate working hours of 6.7 percent in the second quarter of 2020, equivalent to the loss of 195 million full-time job.