Battered Caribbean businesses set hopes on resilient recovery
Trinidadian entrepreneur Stacey-Ann Pi Osoria has built her one-woman business on emergencies. Selling inflatable sandbags, flood barriers and mobile shelters, she provides the vital equipment and training her clients need to reduce their disaster risk.
But when COVID-19 hit, she faced her own crisis as the equipment orders her company PODS Marketing Mix relied on dried up overnight. As a single-parent, she had little option but to put her business on the backburner and take a full-time job to support her three children.
“It was just horrendous, everything came to a sudden standstill, I had at least three to five big projects that were about to materialize and every single one was shelved,” said Pi Osoria, who also set up the Emergency Management Association of Trinidad and Tobago. “COVID has really reinforced the need to prepare and not take things for granted.”
Pi Osoria’s PODS is just one of thousands of small companies across the Caribbean that have been rocked by the pandemic lockdowns and travel bans that has forced many to lay off staff or go bust.
Tourism - one of the Caribbean’s biggest employers - has been dealt a body blow. Many hotels are empty and the plunge in visitors has taken a devastating toll on myriad support businesses from taxis to scuba dive operators.
Business experts said the pandemic has exposed just how unprepared most small and medium enterprises (SME) were to deal with any crisis, let alone a once-in-a-lifetime event.
As SMEs make up the lion’s share of businesses in the region they have a vital role to play in driving recovery. But now, more than ever, they need to better equip themselves to face the next emergency, they said.
“It’s never too late to make a plan to help reduce disaster loss because it’s compounded. The more we don’t take action, it gets even worse,” said Lizra Fabien, executive director of the Dominica Association of Industry and Commerce. “Now they’re starting to think more about putting plans in place, it’s creating a positive change for the business community.”
A survey by CARICOM and the Caribbean Export Development Agency of micro, small and medium-sized businesses showed 77 percent were impacted by the pandemic and 47 percent forced to temporarily cease operations. Importantly, 88 percent of those surveyed had no contingency plans in place.
UNDER THE RADAR
“COVID-19 offered an opportunity to stress test what you already have as a plan. Large businesses are fine-tuning their enterprise risk management and disaster risk reduction frameworks,” said Indianna Minto-Coy, academic director at the University of the West Indies’ Mona School of Business & Management in Jamaica. “The lingering problems that have plagued our small business sector prior to COVID have come into play here as well.”
Bigger companies were more likely to have business continuity plans in place, a stronger online presence to turn to and cash reserves to cushion them during the crisis, she said.
Often operating on a shoe string even before the pandemic, few SMEs had money set aside to draw upon during a crisis.
Additionally, informal businesses operating under the radar have struggled to tap into emergency business grants, loans or cash transfers to help get through the crisis while workers have often found it harder to claim social security payments after losing unregistered jobs, she said.
The UNDRR´s 2020 report on SME resilience showed that providing practical guidance on how to integrate risk reduction was critical to helping businesses become better prepared.
Highlighting how difficult it can be for small businesses to access credit, the report said companies needed to better understand how to assess risk and integrate scenarios analysis into their continuity planning.
Despite SMEs making up 85 percent of Caribbean businesses, only 17 percent are taking steps to prepare for disasters, it showed.
And even then, plans are often ad hoc. While nearly 70 percent of SMEs surveyed in Dominica and the British Virgin Islands had business continuity plans in place, only 15 percent of these were actually on paper, the report showed.
“There is a tremendous need for economic resilience through business continuity planning. It’s something a lot of Caribbean businesses are just really desperate to have,” said Alexander Mirescu, founder of the Resilient/City consultancy. “This has been a massive game changer in the way we look at risk.”
To ensure they are better prepared, businesses now need to look at how they can tighten their operations, ensure employee safety and get a firm grip on their financials to calculate how much they can afford to set aside for emergencies, said experts.
Ramping up their online presence and cybersecurity, conducting more transactions virtually while ensuring vital documentation is stored in the cloud can further reduce risk, they said.
Across the region, universities, chambers of commerce and organizations such as the UNDRR-backed Private Sector Alliance for Disaster Resilient Societies or ARISE, are walking entrepreneurs through the steps they need to take.
“Putting business continuity plans in place helps them to understand the capacity of the business in being able to work within a constrained environment,” said Fabien, who is a member of the Global ARISE board. “It helps mitigate all the future challenges that businesses are faced with.”
Myriad resources are now available to help businesses boost their resilience. UNDRR has run intensive workshops with the CARICHAM chambers of commerce network to show small business owners how to use its tools to help better prepare for disasters.
UNDRR’s COVID-19 Small Business Continuity and Recovery Planning Toolkit is designed to help firms protect their employees, customers and operations, while its online Quick Risk Estimation (QRE) tool is helping entrepreneurs gauge their risk exposure.
"A big percentage of SMEs do not reopen after disasters, emphasizing the need to better integrate risk into business practices and decisions, and build support networks with different partners,” said Raúl Salazar, chief of the UNDRR’s Regional office for the Americas & the Caribbean. "If we are to improve the lives and livelihoods of people in emerging and growing economies, we must aim for multisectoral development."
In Trinidad, Pi Osoria is increasingly optimistic about the outlook for her company. Customers are once again showing interest and she plans to stock up on popular products such as inflatable sandbags to avoid future supply chain upheavals.
Additionally, the digital transformation sparked by the pandemic has opened up the possibility of expanding her disaster management training across the region and adding new health and safety modules, she said.
“I would encourage everybody to just rally through this unique situation, learn from it… there are so many challenges financially, socially, emotionally. It has changed the way we live,” said Pi Osoria, an ARISE committee member. “I would love to realize my vision of being the Caribbean's hub for emergency management and business continuity, but we just have to take it slowly and see how things evolve.”