Editorial | No time for false hope

A survey carried out by the Chamber for Small and Medium Enterprises among its members on the prospects for 2021 is an eye-opener.

It confirms the problems that commercial enterprises have been facing for almost a year now as a result of the COVID-19 pandemic.

The three major problems businesses are facing can all be traced back to the lack of consumer spending, whether this results from changed behaviour or decimated markets such as tourism.

A quarter of businesses indicated low sales as a problem, followed by 17% who indicated cash flow and 15% that faced problems in collecting payments.

Significantly, 65% of surveyed businesses said they were benefitting from the publicly-funded COVID wage supplement.

This picture provides the context for the bleak prospects businesses are seeing in 2021.

Asked for how long they can survive, 32% said longer than 12 months but 28% indicated up to six months and 27% up to 12 months. A significant 13% said they would only survive for the next three months.

And there is no doubt that survival for most also depends on continued wage support. The survey found that 69% of businesses would require wage support for at least another year, while a quarter indicated six months.

Only 10% of businesses believe normality will return by summer.

These figures paint a completely different picture from that which Prime Minister Robert Abela would like us all to embrace.

It appears that very few businesses share the Prime Minister’s optimism for a return to ‘business as usual’ by May.

It is likelier for the situation to start improving in the second half of 2021 and not without continued wage support.

Much will depend on the vaccination roll out and the impact this will have on bringing down the pandemic numbers but even then, recovery will not be quick. Recovery in tourism will not only depend on the situation in Malta but also on the source markets.

At this stage, the business community does not need loose talk or false hope but a sober, ongoing assessment of reality and clear measures to address it.

This is no time for over-optimism. Everyone wants a quick return to normality but getting there is going to be painful.

Abela’s optimistic outlook may be intended to keep spirits high but the Prime Minister must be careful of not appearing cut off from the realities on the ground.

To be fair, the government has responded to the problems the business community has faced as a result of the pandemic but loose talk has at times sent mixed messages.

There are many facets to fighting the pandemic. There is the medical and health side of the battle, there is the financial aspect but there is also the psychological aspect.

Psychologically, it is important that morale is kept high but this must not translate into false hope. False hope can rebound in an ugly way and disrupt progress.

The government has to strive for a balanced approach that keeps in mind all these facets, which is why this leader appeals for moderation in Abela’s words.

The survey results released by the Chamber of SMEs must not be ignored or painted over by the brush of positivity simply for the sake of it.