Monday, Jun 05, 2023

Business people: reactivation does not work, refocus is needed

Business people: reactivation does not work, refocus is needed

Entrepreneurs said this Sunday that the block reopening that is underway in the country "does not allow an effective reactivation" of the economy, and asked the government for a new approach that includes the start-up of construction and a financial assistance plan for MSMEs.

The reopening in Panama has been divided into six blocks, of which two are operational from May 13 and June 1, respectively, and involve fishing, internet sales with home delivery, industry, banking and technical services.

Only in the Panama capital and in the neighbouring province of Panama Oeste (West Panama), workers in the open sectors mobilize through safe-conducts, since there are strong restrictions on mobility due to the high numbers of COVID-19 cases.

The Panamanian Association of Business Executives (APEDE) explained that the blocks are not working because under this scheme "many companies that have been allowed to open depend on the demand that will be generated with the activation of other blocks, preventing the expected reincorporation of workers."

According to figures from the Mitradel, after the opening of blocks 1 and 2, 13,500 of the 250,671 workers with suspended contracts have reactivated, which represents 5%.

In this context, APEDE asked the Executive of President Laurentino Cortizo to reactivate it by region in Panama, a country that before the pandemic registered a high informality rate of 44.9% and unemployment of 7.1% .

The APEDE proposed that the construction sector be reactivated "due to its multiplier effect on job creation and its low risk of contagion, versus other activities, when it takes place in open spaces."

Also to establish "a detailed plan of emergency financial assistance through the banking sector that makes viable the actions of reopening and economic recovery of the sectors and companies most affected", which are micro, small and medium-sized enterprises (MSMEs).

This Association was very concerned about "how the pandemic has sharpened Panama's unemployment projections with estimates above 20%, while confinement measures fail to stop the transmission progress."

The health authorities linked the escalation of infections with the opening of blocks 1 and 2 and with the lack of attention of the population to measures of social distancing.

"We face a strong loss of formal jobs as a result of the fall in demand and consumption. If no immediate action is taken, before the end of 2020 we would be facing an imminent economic collapse, with the loss of between 250,000 and 300,000 jobs," APEDE alerted this Sunday.

Between 125,000 and 150,000 of those formal jobs would be lost particularly from MSMEs, in the commerce, industry, logistics, hotel / restaurant and financial services sectors, the Association said.

The APEDE asked the Executive to agree with the living forces and sectors of the country "a strategy to overcome this health and economic crisis."

The Chamber of Commerce, Industry and Agriculture of Panama (CCIAP) urged the Government to pay the debts it maintains with "different national productive sectors", without specifying a figure, because this would represent "an important injection of liquidity" that "it would allow different companies to resume their activities."

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