Supporting socio economic recovery of Micro, Small Enterprises in Sri Lanka during Covid–19 | Daily News

Supporting socio economic recovery of Micro, Small Enterprises in Sri Lanka during Covid–19

In the Asia-Pacific region alone, as many as 81 million jobs have been lost due to COVID-19, and labour markets are facing significant slack in terms of unemployment, underemployment and inactivity.

“COVID – 19 has triggered an economic slowdown in Sri Lanka that has particularly hit the tourism, manufacturing and MSE sectors,” said Country Director for the International Labour Organization (ILO) in Sri Lanka and the Maldives, Simrin Singh.

She spoke to Daily News Business on the impact of the COVID-19 pandemic on the world of work - discussing adapting to the new norms of  working, the future of remote working, the most hard-hit due to the pandemic and the plight of local Micro and Small Enterprises (MSEs).

She elaborated on how the COVID – 19 pandemic impacted Sri Lanka’s MSE sector and ILO’s role in helping the recovery process, and building back better. Following is an extract from the interview

Q: How has the pandemic affected the MSE sector?

Country Director ILO, Simrin Singh

A: In terms of its impact on micro and small enterprises this has happened in a number of ways - cash flow is the first one that comes to mind, there is also access to raw material that is curtailed, disruption in delivery and distribution of finished products, challenges in employees returning to work, amongst other things. Being a largely informal sector also makes MSEs extremely vulnerable as there is a lack of social protection and as such no safety net to rely on.

The situation is further exacerbated for women owned MSEs, who have to balance the dual role of caregiver to the elderly and children at home, and business continuity. It is also important to bear in mind that many of these MSEs were likely running on borrowed money - loans to start the business, to pay their workers, so they would have already been in debt and are now facing significant pressure when it comes to access to finance and debt repayment. Since they are often not diversified businesses, they cannot repurpose easily, and therefore rarely have other income streams that they could rely on.  

With the MSE sector being the backbone of the national economy, supporting these businesses to restart is essential to re-starting the economy as well as creating jobs, and will be of paramount importance once the immediate health crisis is over.  In the meantime, we need to help small businesses face the pandemic with resilience and through employing pragmatic, appropriate actions.

Q: How is the ILO responding both globally and locally to the situation?

A: Our response to the crisis has been multi-pronged across the globe, and we have initiated a number of actions / interventions in Sri Lanka to address country specific issues. ILO’s key project in the country seeks to facilitate the healthy socio-economic recovery of the Micro and Small Enterprise Sector of Sri Lanka, and is funded by the United Nations Multi-Partner Trust Fund (UNMPTF).

During the first quarter of 2020, we convened a tripartite meeting to discuss OHS (Occupational Health and Safety) and employment in the COVID – 19 era, with representatives from the WHO (World Health Organization), Ministry of Labour, Sri Lanka, Employees Federation of Ceylon, Joint Apparel Association Forum, National Institute of Occupational Safety and Health, Department of Labour OSH Division, Trade Unions (garments, industries, plantations, public corporations etc.). Since then, we have continued engagement with the above parties to sustain discussions, find solutions and promote rapport. The changing world of work has meant looking at existing labour laws and standards through a new lens to ensure decent work.

Apart from the above organizations, we work with a number of other organizations to effectively execute our objectives through the healthy socio-economic recovery project. We have partnered the Ministry of Industry and Commerce, Small Enterprise Development Division of the Ministry of Youth and Sports, the National Institute of Occupational Safety and Health, the Central Bank, and the Ministry of Health. Others include, WFP, various Commercial Banks, the Women’s Chamber of Commerce, the Institute for Mental Health, medical anthropologists, psychologists, the media, and filmmakers

Q: Could you talk about the key initiatives of the healthy socio-economic recovery project targeted at MSEs?

A: Our key aspiration through this project is to ensure the socio-economic recovery and build the resilience of the MSE sector. The project interventions were informed by a rapid assessment carried out at the grass root level in the Kalutara and Gampaha district, in partnership with the Small Enterprise Division of the Ministry of Youth and Sport. This provided an understanding of what are some of the entities that have been hardest hit by COVID-19, and in what manner. The project takes a two-pronged approach; the first being  the health and safety aspect from a MSE workplace setting, including necessary COVID-19 precautionary measures as well as psychosocial support needs, while the second component focuses on facilitating access to finance. 

With regards to strengthening occupational safety and health (OSH) of small businesses and employees to enable business continuation, the ILO has partnered with the United Nations Office for Project Services (UNOPS) to purchase and supply Personal Protective Equipment (PPE) worth LKR 47 million to MSEs in the Kalutara and Gampaha Districts. We are also providing virtual training to these MSEs through NIOSH on implementing OSH measures and use of PPE.  Similarly virtual training is also being provided to labour officers, SEDD officers, and several bank staff on psychosocial sensitivity when interacting with employers and employees of MSES.

Complementing this, we are rolling-out a number of campaigns to educate MSE business owners about pragmatic steps to ensure both physical and mental wellbeing of themselves and their employees across the country.

Q: You mentioned a series of safety and health interventions to assist MSEs, could you elaborate?

A: First of all, we believe that small businesses need guidance on preventive measures to operate, and re-open businesses while the health crisis continues. We address this concern through providing guidance to ensure health and safety of all concerned in the workplace and assisting business owners to become aware of psychosocial risks involved and minimize such risks through timely and proper intervention.  In partnership with local organizations, we continue to reach out to MSEs to provide them with practical and definite guidelines to stop the spread of COVID – 19 virus.

These guidelines include steps on establishing OHS practices such as frequent hand washing, correct mask wearing etiquette and social distancing. The guidelines instruct business owners about establishing appropriate work area layouts, training employees to work from home, maintaining a transparent screening system and providing employees with PPE whenever necessary. The guidelines also detail effective methods to develop and agree on a response plan in case someone shows symptoms or gets infected.

The psychosocial guidelines first and foremost assist MSEs to identify such risks and hazards that may arise due to the OSH measures adopted to prevent spread of the virus, and new work processes, including long hours, risks associated with working from home and fears of losing employment.

In addition to drafting and disseminating guidelines, we continue with ongoing demand for inputs into social protection responses from the Government together with the United Nations Country Team (UNCT).

Q: What is your involvement in assisting women workers during the pandemic?

A: Women’s participation in the Sri Lankan labour force prior to the pandemic was already low - hovering at between 32% to 34% for decades.  And this is very much an anomaly considering the high female literacy rate, and girls’ participation including participation in higher education in Sri Lanka, which exceeds that of many countries in the region.

Its raises a concern as to why the female participation in the workforce is low in comparison to compared to other achievements of women in the country. It is something that needs to be addressed going forward.  It is possible that the current work structures of flexible working hours and teleworking introduced due to COVID-19 might help navigate some of the cultural-barriers that have been in place in terms of women returning to the workforce during and after childbearing periods.

Women led MSEs are beginning to take shape in the country, but they are facing daunting challenges during the pandemic. The vulnerability factor is more due to lack of consistent social support and financial vulnerability.

The lockdown and subsequent school closures have added pressure on women to balance their business concerns and children. As a result, their business ventures have suffered, subsequently affecting their financial stability.

One possible remedial means could also be a greater investment made in terms of care work in the country, which then relieves women from caregiver roles in home settings and enables their increased participation in the labour force. An example would be reskilling or upskilling some of the current returnee migrant workers   towards being a part of the caregiving sector, and providing some of the services in terms of the elderly and the young.

These  kind of provisions need to be thought about strategically and put to practice to allow more women to participate and not opt out from working because of pressures that are very real, and have to be tackled in their day to day life.

Our COVID-19 related project has a specific focus on addressing challenges faced by women entrepreneurs in the MSE sector and involves targeted training programmes on how to operate their businesses during the pandemic, mentorship, psychosocial support, and enabling access to finance.