Covid-19 And SMEs: Five Important Areas To Focus On During Tough Times

It is evident that the COVID-19 pandemic would create a significant economic impact globally.

- Dr. Nirmal De Silva

Whilst it is rather premature to predict the overall impact, one can safely conclude that the impact will last for a number of months (best-case scenario) post COVID-19.

In Sri Lanka too, we can expect our economy to be impacted severely. The tourism industry, which currently employs around 600,000 people both directly and indirectly, will be an industry which will be affected not only at present but also post COVID-19 as well, since tourists will probably not travel out of their home countries for a while at least.

Similarly, the tea and apparel industries in Sri Lanka will also suffer due to this pandemic, as a result of the reduction in consumer demand, supply chain issues and stringent cost reduction strategies by both customers and partners. However, no industry will be spared by this pandemic.

Out of the approximately eight million total employed population of the country, around 1.5 million are daily wage earners and around 2.3 million are self-employed. Hence, people such as labourers, carpenters, lottery ticket sellers, street vendors, salon workers, ‘buth’ packet vendors, to name a few, will definitely struggle in the short to medium term, as a result of this pandemic situation.

Unfortunately, this segment of the country is often ignored when it comes to various government incentives and stimulus packages. One can argue that this time around, it is not going to be ‘survival of the fittest’ but rather ‘survival of the most adaptable’.

Around 70 percent of the Sri Lankan economy is contributed by the small and medium enterprises (SMEs). Whenever there is a crisis, it is the SME sector that is hit the most. Considering that we are just 12 months after the horrific Easter Sunday terror attacks, the COVID-19 pandemic is definitely a deadly and unwelcome blow for SMEs.