Wednesday, June 12, 2024

Without support, 50,000 small businesses in formal sector at risk

The decision to close all nonessential businesses in Mexico City and México state December 19 means that 50,000 formal-sector small businesses in the Valley of México are at risk of shutting down for good.

Gerardo Cleto López of an organization representing small businesses told the newspaper El Universal that without adequate and better-planned government financial support, businesses with permanent physical locations facing rent, utilities and salary costs won’t be able to survive.

Businesses who try to take their sales online are only managing to make 10% to 15% of their normal earnings, Cleto said.

“This has an impact when you are carrying debt and overdue bills,” he said.

While he acknowledged that government sources are handing out some financial support, in the neighborhood of 10,000–15,000 pesos, that is only enough to help an informal business survive, he said, such as a food truck or vendors in open-air markets, both of which have fewer overhead costs.

He also said that businesses would not be facing another lockdown if the federal government had been more proactive in maintaining a clear and consistent message regarding the use of masks and the practicing of hygienic measures and social distancing.

“The vast majority of formal businesses have complied very responsibly with the sanitary protocols that authorities have put into place [in reaction to the coronavirus],” he said. “However, it seems to us that the government lost time in constructing efficient strategies and using resources to avoid the catastrophic scenario we are now facing … with more than 123,000 Mexicans dead, according to official figures.”

He also accused authorities in the Valley of México of not doing enough to enforce lockdown measures in the informal business sector, saying that many businesses in the formal sector were declared nonessential, while informal-sector ones continued operating.

In the middle of a red stoplight, “mobile businesses carry on without any sanitary controls in parts of Mexico City and México state,” he said. “And established businesses [with permanent physical locations], classified as nonessential, have been closed since December 19 …”

The closure came when both declared a red, high-risk designation on the coronavirus stoplight map, a move that was triggered by higher hospitalization and case numbers. It was also a move that was criticized for being too late.

The closure is in effect until January 10.

Source: El Universal (sp)

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