The International Labor Organization (ILO) has warned the coronavirus pandemic could destroy up to 24.7 million jobs worldwide, surpassing the damage done by the 2008 financial crisis, which caused 22 million job losses.
The Latin American region, which counts millions of workers in informal employment or self-employment, is likely to suffer badly as its governments are not able to offer billion-dollar bailout packages to support workers, such as those seen in France, the UK or the US.
Nonetheless, governments have offered some measures to buoy up businesses during the crisis.
The Chilean government, for instance, has announced a raft of tax measures for all SMEs, including the postponement of monthly payments of corporate income tax, VAT and property tax, and 0% stamp duty for all loan transactions during the next six months.
Last week the Argentinian government announced a relief package including financial assistance and credits to SMEs while the Brazilian government, through the National Bank for Economic and Social Development (BNDES), announced an initial injection of R$55 billion to help companies, including suspending payments of direct and indirect financing and expanding credit to the tune of R$5 billion for microbusinesses and SMEs through partner banks.
‘Highly relevant solutions’
Some start-ups and SMEs are also adapting their business models to the new conditions where consumers are confined to their houses and trying to minimize physical contact with others.
The Inter-American Development Bank's IDB lab has created a list that maps out “highly relevant solutions” dealing with the health and social implications of COVID-19 for Latin America and the Caribbean ranging from healthcare to education, recreation to retail.
The list features a number of food industry players, such as the start-up Supermercado Now, bought by retail group B2W in January this year, which is offering free shipping to customers over 60 years old, allowing this high-risk group to stock up on groceries without leaving the house.
Brazilian nutrition company N2B said its tracking app, which features a processed product scanner, helps users pick the best products to buy during confinement periods, offering advice on nutritional content, how best to store food products and which ingredients boost immunity.
Aiming to help small retailers weather the COVID-19 storm is Wake Up Cobranças a financial start-up based in Brazil’s Mato Grosso state that offers automated billing Software as a Service (SaaS). It says it can help shop owners recover money from lost sales during the pandemic period by providing one month of free credit recovery as well as financial advice, limited to four months.
Sell food experiences not food products
Some food companies are trying to reduce the boredom of self-isolation and physical distancing by selling experiences rather than just products.
“Almost overnight, people all around the world have had to rethink one of the most basic parts of their lives: food,” said Foodlosofia, a Mexican food design agency. “Desperation and a growing uncertainty on what’s coming next has led businesses and people to take action in these times of chaos.”
In the Mexican economic and financial capital of Monterrey, for example, a local bakery is selling raw cookie dough that it delivers to consumers’ homes so they can bake themselves. Similarly, meal kits are currently experiencing a boom as people have more time than ever to cook at home.
Massive job losses
These, of course, are a few cherry-picked success stories in the COVID-19 narrative that will be overwhelmingly dominated by debt, bankruptcy and job losses.
According to IBD, more cross-border collaboration is needed. “This situation is not comparable to recent economic shocks, which is why companies and governments navigate in unknown waters,” wrote Nicolás Cañete, IDB's competitiveness and innovation consultant in an online post.
“In this line, collaborative work with business associations and research institutes is essential to carry out studies and analysis of massive data and implement massive surveys that allow understanding the impact on companies […].”