Mubasher: Bensirri Public Relation (BPR) has conducted a survey to measure the impact of the coronavirus (COVID-19) on Kuwaiti businesses during the period between 24 April and 28 April.
The survey has been conducted during the previously announced partial curfew period in Kuwait on 498 Kuwaiti firms, all of which are stable and successful entities that generated profits in 2019, according to a press release on Sunday.
The survey showed that 56% of local companies could not afford to cover their fixed costs for an additional two months, given the shutdown of businesses and the partial curfew imposed nationwide from 22 March.
Two months into the crisis, businesses continue to be closed, fixed costs remain, a situation that is foreseen to become even worse in May as the GCC state enacted a nationwide full curfew on 11 May.
As covering fixed costs remain the biggest challenge local business currently face, 56% of respondents have requested flexibility in payment of rent, while 21% have granted their employees an unpaid vacation in clear violation of the state’s labour law amidst the absence of stimulus economic decisions.
To date, 45% of business owners have suspended their activity. Combined together, the COVID-19 crisis and the inability to cover fixed costs will have a double effect on the economy as more business will resort to layoffs, closure, and bankruptcy without legal grounds.
When asked about appropriate stimulus subsidies for small and medium-sized enterprises (SMEs), 60% of participating respondents said that priority should be given to rent relief by means of a law or a decree, while 53% asked for a direct financial grant to cover operating costs for six months.
With regards to the soft loans provided by the Central Bank of Kuwait (CBK) to companies affected by the implications of the coronavirus, 81% of business owners do not think government policies are supportive particularly after imposing the total curfew as it became difficult for them to reach out to banks for financings.
It is worth pinpointing that the survey has been developed, analysed, and authored by BPR, an independent communications consultancy firm based in Kuwait.
Translated by: Amal A. Wahaab
