Lockdown saves lives, but hurts businesses

Omi Gurung ►

In these difficult times or situations it is important to stand united and help one another in whatever way we can.

As a result of the COVID-19 pandemic, an estimated 2.7 billion people, or more than four out of five workers in the global workforce, have been affected by lockdowns and stay at home measures. Out of all the economic shocks, consumer emotion is the most harmful. Since the global outbreak of coronavirus (Covid-19), the panic and fear among the public throughout the globe is spreading faster than the virus. The impact of Covid-19 is not only limited to the demand side of the market, but the supply chain is also hampered equally. On March 24, Nepal’s government announced a nationwide lockdown to contain the spread of COVID-19, closing schools and non-essential businesses, and suspending air travel.

Throughout history, a pandemic has had a negative impact on business across all levels. The 1918 influenza pandemic also called the Spanish flu had a devastating impact on the businesses across the US and Europe. Although the exact amount of the total loss remains unavailable, researchers estimated that the overall economic loss to US-based businesses revenue was in double digits percentage drop among others. The sectors impacted the worst were service providers and entertainment. In 2020, the coronavirus pandemic has created a similar ripple effect in the global economy, where the total loss from the impact is estimated.

Coronavirus is shaking up business and consumer behavior on a massive scale. Both the public and private sectors are scrambling to slow the spread of the illness and contain COVID-19 infections. While the full economic consequences of this black swan event are still unclear, we know that the effects that the virus and the drastic measures being taken to contain it are already precipitating change across industries.

Hit by the Covid-19 crash followed by social distancing and a nationwide lockdown, businesses are experiencing major impacts no matter how established they are and are having to re-look at how they manage and operate their business including re-visitation of their business plan. Factories, offices and markets have fallen silent for now. As the lockdown drags on and movement remains restricted for all in Nepal, consumer companies are assessing the impact of the shutdown on their businesses. It has become challenging for most businesses to keep their financial wheels turning during the lockdown period due to less revenue churn and the general uncertainty in the global financial environment.

Harka Bahadur Basnet 35, works as Electrician, Painter and Plumber. Bansets’s wife, his one son and two daughters left for their home village in Surkhet, just before the lockdown announced by government. “I was planning to go my hometown to receive my childrens but due to the lockdown there is no work to stay here and have no money to feed my family and  hire the vechile to return hometown and I have no access of getting pass from government too”.

“I was out of business,” said the 40-year-old Sanjeev Karki from Dolkha. His two employees had nothing to do. After a week at home with no work, he started getting restless. Karki then realized that there are certain essential things that people cannot do without, for example selling vegetables and fruits.

“Before I used to go to the Kalimati for vegetable market to buy what I needed for my restaurant. Now days, I bring vegetables and fruits in wholesale,” said Karki. For the last four weeks, Karki go to the Kalimati vegetable market as early as 4:00 AM in the morning, and by 6 AM he sets up a shop in front of his restaurant to sell, the shutters still down.

“My income is not as much as it used to be from the cafe but something is better than nothing,” said Karki. Altogether 8 members, 6 children’s are there in my family, have to feed my children’s, “Of course I will go back to my own restaurant business once the lockdown is over, but what I am doing right now will help tide me over during the crisis.

Business has led to a sudden halt in demand, and a near- total lack of revenue for many firms even while they continue to pay rents, waged and interest payments, Analysts says the paid for the business owners looks set to continue. Restaurants in Kathmandu were the first casualty of the COVID-19 pandemic, as they stopped seeing customers long before the lockdown.

“I was also planning to go. But I got stuck,” said Upreti 35 years, from Sarlahi who lives in Town planning, Pepsicola Kathmandu in rent. “I thought the lockdown would be lifted soon but it did not. There was no work. I was running out of money.” Upreti pays Rs 8,000 for 2 rooms in Pepsicola and Rs.10,000 for shutter of shop. “I was afraid of getting evicted if I failed to pay rent.” Shop was closed since from 1 months, it’s difficult to feed family members. All the monthly expenses are managed from the profit income of shop but there is no hope said, Upreti.

Upreti decided to sell fruits going door to door. I save up to Rs. 500 a day by selling fresh Maize, Saag and other fruits for hours in the morning and evening time in the locality said, Upreti. With the saving income she manage the household chores and the medicine of her grandmother patient of paralysis, who cannot even wakeup from bed since from 5 years.

With tourist arrivals suddenly dropping, restaurants in Kathmandu were already without customers. Long before the government announced lockdown, it cancelled all international flights. Nepal so far has reported 258 upto 15 May 2020 Covid-19 cases, but globally infections and death toll are rising.

Though the current lockdown is applicable until May 18, there are chances that it could be extended further. Neighbouring India has extended the lockdown until May 17, 2020 and according to officials, Nepal may not lift the lockdown until India lifts it, given the chances of spread of the virus through the open border. Factories, offices and markets have fallen silent for now. As the lockdown drags on and movement remains restricted for all in Nepal, consumer companies are assessing the impact of the shutdown on their businesses.

In an address to the nation, government said that all shops and businesses will be closed except for pharmacies, laboratories, banks, supermarkets, petrol stations and healthcare providers. Most organizations crisis response has first prioritized the health and safety of workers. Now, as organizations begin to emerge from this initial phase, leaders are focusing on the next set of workforce challenges as they plan for recovery plan for recovery. The biggest challenge organizations will likely face next is the tension between getting back to work and embracing a new reality. How leaders and organizations handle the recovery may define their brands for years to come and ultimately define whether they are truly operating as a social enterprise. All the facilities of health facilities like; sanitizer, gloves, and lunch, breakfast, dinner as well as the facility of accommodation should be given to their staffs as guaranteed. The picture hardly inspires confidence in companies, keen to protect their employees even as they aspire to continue business operations.

And while the government has extended some financial help for many of the poorest and relaxed some financial regulations to help the country’s larger firms and banks, small and medium sized business seem to be falling through the safety net.

With the growing number of cases and rising fear among the public, it would not be pessimistic to say that the worst is yet to come. However, it’s just as important to take stock of the situation right now.