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Público: ...
Lusa - Business News - East Timor: Businesses call for continued state aid as economic recovery falters




Dili, Feb. 25,2021(Lusa)-Businesses in East Timor on Thursday are calling on the government to extend support measures for companies against the backdrop of the Covid-19 pandemic, arguing that the country's economy remains weak and that this year has begun with more declines in revenue.
A number of companies say that they are close to the edge: although the state remains the main engine of the economy, execution of programmes has been slow and the economic recovery has not yet taken off.
Some businesses consulted by Lusa went so far as to say that this year is more difficult than last, because continued economic weakness is amplifying the effects of the pandemic felt last year.
Óscar Lima, president of the country's Chamber of Commerce and Industry (CCI), told Lusa that continued state support "is essential" because the economy "remains very bad" in part as a consequence of the political crisis that has been dragging on since 2017 and now also due to the pandemic.
"We had years of political crisis and then the pandemic and that affected companies a lot," he said. "Many companies have closed, but there are others that have been making an effort not to lay off workers.
"This support that has been given, including ... in the last few months and which has now ended, was good," he said. "I think it would be very useful if it was continued or extended."
With a drop in demand, and as a direct impact of restrictions imposed under the state of emergency, there are companies "on the way to bankruptcy" and that have only survived thanks to the direct injection of state aid.
"We don't have companies with a lot of liquidity," he said. "The aid has allowed many to stay on the waterline, but without it it will be very difficult."
Tiago Barata, the director of the Hotel Timor in Dili, said that continuing the support measures is essential to respond to the still significant impact of the pandemic.
"Life is already difficult, but without this [support] it gets harder," he said. "Two thirds of our turnover is gone and after losses in 2020 we are still falling this year.
"The last thing we are going to do is lay [employees] off, but we are at our wits' end," he went on. "Less than a third of turnover, with very similar costs, make the situation very difficult to manage."
Tony Jape, head of Timor Plaza - the country's largest shopping centre, also in Dili - said that the start of this year has been "even worse than in 2020" as the slight upturn in consumption seen towards the end last year faded this year.
"This support measure should definitely continue," he said of the aid to business. "We look at all countries and see that there are many measures to help businesses survive and here the same has to be done."
"The government here has given support to the community, and that is important of course, but businesses need to survive because that keeps the economy going and jobs," he stressed.
Jape noted that allowing the economy to fall still further would make recovery much more difficult, arguing that it was therefore essential to support businesses that have made an effort to continue operating.
"The support has to come to the big companies as well, because we employ a lot of people and we are helping to keep the economy going," he said. "Some thought that this year, with a state budget approved ... of such a large size, things would improve, but that is not happening. Execution is very slow and this is directly affecting consumption and businesses."
Jape said the drop in revenue is affecting many of his commercial tenants, who also need continued support.
"My clients reported some slight improvement in November and December, but then things dropped off quickly," he said. "The government has to step in for businesses to survive. The measure to subsidise salaries helped a lot and should continue and eventually other measures should even be studied, such as reduction in electricity costs."
The Timor Plaza director recalled that despite the country's difficult conditions, many companies have made an effort to continue operating, but that private sector enterprises - which in Timor already face many difficulties - cannot survive forever.
"People can only last up to a certain point," he said. "People tried to survive last year, but the problems continue and this year is getting tougher."
Earlier this month the director of the Business Verification Service (SERVE), Florêncio Sanches, told Lusa that about 60% of the 31,500 companies registered in East Timor have ceased activity in the last two years due to the economic crisis in the country.
Last year alone 64 companies, most of them owned by foreigners, closed down operations entirely.
"It's a dramatic situation with a big impact on the country and the lives of many people - aAnd something that is causing the country's economy to regress significantly," said Sanches.
Among the worst-affected sectors are construction - which represents more than 40% of the companies that have closed - as well as hospitality, catering and tourism, as well as other services.

ASP/ARO // ARO.
Lusa


Agency : LUSA

Date : 2021-02-26 10:25:00







 

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