Raphael John-Lall

raphael.lall@guardian.co.tt

While busi­ness lead­ers re­main un­cer­tain of the fu­ture of the re­tail sec­tor, which re­opens to­day af­ter three and a half months of clo­sure, econ­o­mists are al­so not op­ti­mistic about the sec­tor’s im­me­di­ate re­cov­ery.

In yes­ter­day’s Sun­day Guardian Busi­ness, en­ti­ties such as the Cou­va/Point Lisas Cham­ber and the Con­fed­er­a­tion of Re­gion­al Busi­ness Cham­bers warned that con­sumers may not be ready to spend heav­i­ly when stores re­open. Econ­o­mist Dr Ronald Ramkissoon told Guardian Me­dia that econ­o­mists de­scribe this as “un­cer­tain be­hav­iour,” not­ing un­der these cir­cum­stances, con­sumers hold on to mon­ey they have.

Adding his voice to the de­bate, Uni­ver­si­ty of the West In­dies (UWI) econ­o­mist Dr Vaalmik­ki Ar­joon warned that if more peo­ple are not vac­ci­nat­ed and the spread of the virus is not con­trolled and elim­i­nat­ed, the coun­try is very like­ly to un­der­go a third wave of lock­downs and re­stric­tions, which will lead to an al­most “vir­tu­al oblit­er­a­tion” of the pri­vate sec­tor, ex­ten­sive job and pro­duc­tiv­i­ty loss­es and se­ri­ous dam­age to house­holds’ pur­chas­ing pow­er.

Ramkissoon said fac­tors such as ris­ing un­em­ploy­ment, some busi­ness­es not be­ing able to re­open and the vac­cine hes­i­tan­cy among some em­ploy­ees will im­pact how quick­ly the re­tail sec­tor re­cov­ers.

“This is what econ­o­mists call un­cer­tain be­hav­iour and such an en­vi­ron­ment is not good for busi­ness and busi­ness growth. Even those who have mon­ey will tend to with­hold that spend­ing, as they are not sure as to what will hap­pen. To add to that, the in­crease in prices across the board is the ef­fect of in­fla­tion and this means less con­sump­tion. In this en­vi­ron­ment, there will be not many chances of in­creased in­come,” Ramkissoon said.

How­ev­er, Ramkissoon con­ced­ed there has been some “pent up de­mand” last few months.

“That is go­ing to dri­ve some lev­el of eco­nom­ic ac­tiv­i­ty. The ex­pec­ta­tion is that will lead to some in­crease in out­put from an in­crease in con­sump­tion, in­crease in in­vest­ment, which will dri­ve Gross Do­mes­tic Prod­uct (GDP) ul­ti­mate­ly. The fore­cast will show for T&T and else­where, there is some ex­pec­ta­tion that the econ­o­my will move from neg­a­tive growth in­to some small growth this year.”

Asked if he was con­fi­dent there will be an in­crease in com­mer­cial ac­tiv­i­ty this Christ­mas, he said it is left to be seen.

“Giv­en that the econ­o­my and peo­ple’s be­hav­iours to a large ex­tent have changed, the un­cer­tain­ties re­main, but if you com­pare the fourth quar­ter of this year to last year, I think we will see a bit of growth.”

Ar­joon ex­plained how the rest of the econ­o­my will af­fect spend­ing in the re­tail sec­tor.

“In the short run, we are like­ly to see a K-shaped re­cov­ery in re­tail sec­tor spend­ing af­ter the sec­tor re­opens. For mid­dle and high-in­come house­holds, those who kept their jobs and were able to main­tain healthy cash flows, we may see a surge in their re­tail spend­ing due to a pent-up de­mand to make up for the loss in spend­ing in the 2020 and 2021 lock­downs. Some of this re­cov­ery in spend­ing may al­so come from those who re-ac­quire jobs and their pur­chas­ing pow­er in­creas­es, as some el­e­ments of the pri­vate sec­tor re-open.”

To counter the cur­rent de­pressed busi­ness cli­mate, Ar­joon ad­vised busi­ness cham­bers to part­ner with or­gan­i­sa­tions such as the In­ter-Amer­i­can De­vel­op­ment Bank (IADB) to train and ed­u­cate small re­tail­ers on bet­ter fi­nan­cial man­age­ment, so­cial me­dia mar­ket­ing and how to ma­noeu­vre sup­ply chain prob­lems.

“They al­so ought to fur­ther em­brace the dig­i­tal plat­form for run­ning their busi­ness as op­posed to tra­di­tion­al phys­i­cal spaces such as malls etc., while some can ex­plore the pos­si­bil­i­ty of di­ver­si­fy­ing or chang­ing their busi­ness mod­els com­plete­ly and sell items that are in high­er de­mand lo­cal­ly.”

T&T Cham­ber of In­dus­try and Com­merce CEO Gabriel Faria mean­while said al­though the busi­ness com­mu­ni­ty is not sat­is­fied with the num­ber of em­ploy­ees who have been vac­ci­nat­ed, progress is be­ing made in the re­tail sec­tor. He said feed­back from mem­bers is that they have seen some “pos­i­tive move­ment’” from those will­ing to be vac­ci­nat­ed.

“Un­for­tu­nate­ly, we are not where we would like to be. Many peo­ple over the past cou­ple of days, more and more em­ploy­ees are re­cep­tive and get­ting vac­ci­nat­ed. From talk­ing to mem­bers, some busi­ness own­ers have seen lev­els as high as 90 per cent. Then we have had oth­er busi­ness­es where vac­ci­na­tion lev­els are less than 50 per cent.”

He said they have been try­ing to per­suade em­ploy­ees to get vac­ci­nat­ed.

“We have brought med­ical prac­ti­tion­ers on in pri­vate ses­sions with com­pa­nies to an­swer em­ploy­ees’ ques­tions. At the vac­ci­na­tion site at the Na­tion­al Acad­e­my for Per­form­ing Arts (NA­PA), we have found that many of the vac­ci­na­tors have spent time ex­plain­ing to peo­ple who have had con­cerns. Em­ploy­ers are af­ford­ing train­ing, ad­vice on the risks among oth­er ini­tia­tives.”

Cou­va/Point Lisas Busi­ness Cham­ber pres­i­dent Mukesh Ram­s­ingh said they have been en­cour­ag­ing em­ploy­ees to get vac­ci­nat­ed, adding he does not use any form of co­er­cion but rather ed­u­cates peo­ple.

To­ba­go Cham­ber of Com­merce head Di­ane Hadad mean­while said she stands against manda­to­ry vac­ci­na­tions, adding peo­ple should be al­lowed to freely de­ter­mine if they want to be vac­ci­nat­ed. She said more em­ploy­ees are go­ing to get vac­ci­nat­ed af­ter hear­ing about new vari­ants, but said in To­ba­go, not many To­bag­o­ni­ans seem in­ter­est­ed in get­ting vac­ci­nat­ed.