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‘Another lockdown will lead to bankruptcy’

20 Aug 2021

 
  • Business sector fears possible lockdown
  BY Cassendra Doole As the Covid-19 situation worsens by the day, speculations of a nation-wide lockdown have caused the private sector to re-evaluate their situation. According to the majority of the private sector, a nation-wide lockdown will have a massive impact on their businesses and even lead to bankruptcy. For instance, speaking to The Morning Business, Kapruka.com Founder and Chairman Dulith Herath said Sri Lanka cannot afford another lockdown. “I am very negative about the possibility of a lockdown. Sri Lanka cannot afford that. Large companies like ours might be able to weather it for a while, but thousands of small shops like small barber shops to the small handiye kade (corner neighbourhood shop) and the petti kade will drain to zero,” he said, adding that: “Especially small shops that have stocks will not be able to sell their wares before expiry, and if we shut their business down that will in turn drive down consumer markets. This will of course eventually affect us as well. I think countries like Sri Lanka should do what we’re doing now, vaccinate ourselves and continue the way we are.” The Ceylon Chamber of Commerce Chairman and the Sunshine Holdings PLC MD Vish Govindasamy said that the private sector will have no choice but to adhere to the guidelines set forth by the health authorities even during a lockdown. “I don’t think we have a right to make any comments on a lockdown because it is the health authorities who have to make that decision. Based on their advice we will have to adhere to it. As the Chamber, we have advised all our employees to follow all the instructions given by the government,” he said, adding that many sectors, such as the essential services sector, are aware of what needs to be done during a hypothetical lockdown. “However, the retail sector will face quite a few issues, but this is a global crisis and there is absolutely nothing we can do.” Meanwhile, Rovin Ads Creative Services (Pvt.) Ltd. MD Yamuna Fernando said that the private sector is still suffering ever since the first lockdown, and they might not survive another lockdown. “It’s been two years since the pandemic hit the country, and I’m sure many of those in the private sector will agree that we are all facing many difficulties. We’re carrying out our day-to-day activities amidst the greatest difficulties, and if this is further impeded by yet another lockdown, most of the Small and Medium Scale businesses will have no choice but to close down,” she said, adding: “The private sector is teetering on the very edge and I fear that we will not survive another lockdown. It is true that we need a sustainable solution for this pandemic, and if the health authorities impose a lockdown, we will have to adhere to it. But we will have to continue providing the salaries to our employees and also manage all the bills, and with no income, we will not be able to carry on. A lockdown will not solve the issue of this pandemic. And unless the government has a well thought out plan on how to keep the private sector afloat, I’m afraid the private sector will completely collapse.” However, speaking to The Morning Business, Pixaraptor Founder and Art Director Rehan Fiyaz said that another lockdown will be the perfect opportunity for e-commerce and businesses in the digital field to flourish. “The first lockdown forced many private businesses to re-evaluate the way they run their companies. Many of them caught up with the digital present and managed to build or get on board digital platforms. The ones that have not done so will not be able to survive. But companies such as ours, which primarily work on digital platforms, other e-commerce businesses, and digital agencies have a very good space to expand,” he said, adding that many traditionally-run businesses, even in retail and food services, have now embraced the digital methods and thus, they will be able to weather a lockdown via digital platforms. “Even during normal times, those who prefer to buy online will do so. The others who prefer to visit the shop to buy their wares will embrace online purchasing methods albeit reluctantly,” he said. University of Colombo (UoC) Department of Economics senior lecturer and Attorney-at-Law Dr. Shanuka Senarath also said that the best option for the country considering the situation is to go for a lockdown and allow the local economy to function. “We can analyse this situation through dimensions and say we go for a complete lockdown that will definitely hurt the economy at large. The private sector will be affected and especially small and medium scale businesses will be affected. There is no doubt that any sort of a lockdown, especially a complete lockdown, will definitely be an obstacle for the private sector companies. The other option is to keep the country open the way it is now and although we have restrictions imposed, they are not always being followed,” he said, adding: “What I can predict is in another few weeks of time the number of deaths and Covid cases will sky rocket and people will have no option but to stay at home like in happened in Italy, Europe, India etc. When the risk is higher, people will self-quarantine for their own safety. Because of the very nature of this situation, most private sector companies are already suffering losses. We are facing a dilemma here. The best option right now considering this situation is to ensure that the local economy can still function while the country is closed from outside.” Leading epidemiologists predict that Sri Lanka’s current third wave of the Covid-19 pandemic might kill over 20,000 Sri Lankans by the end of 2021 if the situation does not change and the local health authorities do not make drastic changes.


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