The Covid-19 viral pandemic has brought out several unprecedented changes across the global economy – Maldives is one such example where the economy took the worst recorded brunt in recent history following the viral outbreak.
But perhaps there were no other businesses that tasted the bitterness of an economic recession unlike the small to medium tier ventures constantly struggling and striving in the island nation against larger corporations.
In 2020, the island nation was struck with the Covid-19 outbreak which saw the country’s commercially busiest zone coming to a relative standstill after positive cases were discovered in the mainland of Male’ City. The following was a state imposed lockdown measure running from the entire geographical length of Vilimale’ all the way to Hulhumale’ – including Male’ City as well as the airport island Hulhule’.
Internal travels, within the Greater Male’ Region (which includes the aforementioned islands) were heavily restricted with permissions given exclusively for certain employment fields as well as certain commercial practices.
Members of the general public were sequestered into their residences with limited permits provided strictly for basic needs such as shopping for basic necessities or for medical emergencies.
The lockdown and the resultant restriction on the public’s movement proved disastrous for several small to medium businesses, especially the ones established in food and beverage services such as cafeterias and restaurants.
All dine-in options were legally prohibited while takeaway options were made available through a specific operational time-frame. This brought down the number of daily customers by half or more for many of these businesses which had their outlets sprung up on buildings and plots not necessarily owned or under proprietorship of the businesses itself.
Meaning, restaurants and cafes were facing loss of business value at the expense of mounting expenditure such as overhead costs and rent.
The decision for a loan moratorium by Bank of Maldives (BML) had acted as a saving grace amid the chaos. However, many entrepreneurs in the SME tier drew criticism towards the moratorium policies while several others lambasted both the state and the bank for favoring larger corporations and resort owners with the said moratorium.
Another move by the state, that seemingly was presented as mean to satiate the financial predicaments of the businesses was the Economic Response Packages or the financial stimuli. However, this too was mired by criticism with the same batch of small time business owners complaining that the favors exclusive towards big-buck as well as state-owned corporations and resorts.
The rumors may hold some semblance of truth to it or not at all. But what is evident is that several small-time businesses had indeed faced unprecedented commercial losses from which some had not been able to recover at all.
Earlier, local media sources pushed headlines with regards to Maldives Ministry of Economic Development that close to 200 small-time businesses had in fact placed locks and put seals on their corporate doors over threats of insolvency.
Moreover, local cafes and restaurants were not the only such businesses that were affected. Retail shops with specific goods or merchandizes such as cloth and garment outlets, salons, sportswear shops and several such businesses ran aground following the lockdown measures that ran for close to three months or more in the commercially most active region of the country.
However, there were some unexpected businesses that made through despite the pandemic such as home-made food delivery services or plant and flower merchants.
Although larger economic industries such as tourism or aviation may have taken sighs or relief, it may not be the case for the economic segment which encapsulates all of the SME category businesses, given the economy has still not made a significant recovery.
To add insult to injury, the Greater Male’ Region went into another ‘lockdown’ in May 2021 which ran for almost 02 months. The effect was much the same as last year’s lockdown with restaurants and cafes once again slapped an operational limitation with dine-in options barred and takeaways permitted for specific periods.
Members of the general public were once again restricted from moving freely during the said period, which meant several businesses had lost their daily customers all over again.
While many are hopeful that the recent relaxation on restrictive measures will eventually pave way towards a sense of normalcy, at least with regards to businesses, it will still take a considerably longer duration for the economic to actually recover fully.
With several small-time businesses already hitting rock bottom and several more barely inching away, a realistic take on the situation will be that the larger companies or corporations with comparatively stronger resources will make commercially strategic moves to fill the voids left by the shutting down of smaller businesses.
In short; companies with a relatively stronger fiscal and business capacity will attempt to gain a foothold on the areas where smaller businesses were excelling before they were abruptly put on hold.
So, the question remains whether there will be any saving graces for the local SMEs even in a post-pandemic scenario considering larger corporations may aim to take advantage of the situation already. After all, commerce is war!