The United Nations Development Fund (UNDP), the International Labor
Organization (ILO), and the Arab American Chamber of Commerce cooperated to
produce a valuable study on Jordan titled, “Impact of COVID -19 on Enterprises
in Jordan: One Year into the Pandemic.” The 30-page study and its seven page summary
had good insights on the resilience of Jordanian enterprises and their ability
to cope with emergent situations.
اضافة اعلان
The study mainly focused on SMEs (Small and Medium Enterprises) and
micro businesses. Two thousand owners or managers of such enterprises were
interviewed over the phone. The study
covered the first year of the pandemic and provided some revelatory insights that
should be taken seriously. On July 14, 2021,
Jordan News published a front
page feature summarizing the main findings.
The study made it clear that SMEs were less able to cope with the COVID-19’s
acid test. Large enterprises, in comparison, showed more resilience and managed
to survive better. That is a forgone conclusion. Bigger companies in comparison
had more room to sustain costs, adjust their cost structures, and capture more
attention.
The other substantive observation was the absence of a unifying
umbrella under which SMEs could act and muster larger attention by the public at
large and the public sector in particular.
To further underscore the previous point, SMEs failed to acquire
any noticeable share of the funds that were allocated by the Central Bank of
Jordan (CBJ) and the
Social Security Corporation (SSC). Both institutions earmarked
almost JD2 billion (mostly from CBJ), but all that money went to large
corporations. Instead of using the money to protect laborers, it was used to repay
high-interest loans borrowed from banks and replace them with low-interest soft
loans.
Thus, SMEs were left high and dry under the sun. Many of them went
bankrupt, and those that managed to survive laid off large percentages of their
employees.
The study, however, did not consider the fact that the demise came
at a bad time, only to ratchet up the ill-effects of a five year slowdown in
Jordan.
Also noteworthy is the fact that the informal sector in Jordan proliferated
due to unprecedented influx of refugees and that unemployment cushions the rise
of unlicensed and/or home- based activities.
These groups are vulnerable, and they sustained the first impact
of COVID-19 onslaught. Denying mobility or restricting it immediately hit those
who live on a daily hand-to-mouth routine. The migration of a notable number of
large companies to more lucrative markets have denied many SMEs the outsourced
business generated by large enterprises.
SMEs need to be restructured and enabled with social advocacy to make
them survive and cross the threshold into the world of globalization. There are
good examples which attest to Jordanians’ potential to achieve that. Better
management is required.
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