BRUSSELS, BELGIUM / ACCESSWIRE / April 3, 2020 / The effects of COVID-19 on Latin American markets are crippling local economies. While two-thirds (68.7%) of business executives say the corona crisis will affect their businesses on the long-term, nonessential workers are deprived of their incomes and spending abilities. Governments including Brazil, Mexico, Colombia and Argentina have each built stimulus funds to increase liquidity and provide a safety net for their citizens. At a time where forecasts place Latin America in worse positions than the 2009 recession, businesses can make a difference to lessen the impact.
A safety net from local governments, businesses and banks to boost liquidity
Unemployment rates are peaking on a global scale while Latin American markets suffer from a decrease in spending and an increase of businesses shutting down affecting local cash influxes. Governments are stepping up to provide financial safety nets that ensure access to basic necessities and unemployment insurance.
Brazil is an example of measures being taken to increase cash flow for banks with a $234.2 billion package. For informal or nonessential workers to access healthcare and supplement lost income, a $24 billion spending program was announced in addition to financing 1.4 million impacted companies and a temporary credit line from the central bank. Colombia and Mexico have followed similar policies by setting up an emergencies mitigation fund (FOME) of $2.98 billion and deferring capital and interest payment to financial institutions.
Most notably, Chile has offered a 5% of GDP recovery package. These cash injections do not come without consequence. Brazil has suffered a 20% loss in currency value while the Mexican peso has tumbled 1.8% to the US dollar.
A major change in consumer behaviour as businesses step in to lend a helping hand
Consumer spending patterns are changing due to prioritization, businesses shutting down amid quarantine measures and surging global unemployment rates. The Latin American consumer market is displaying similar trends to the rest of the world, as shoppers are steadily transferring their purchasing habits to online stores. According to studies conduct by Kantar, 44% of internet users in Argentina are opting to buy the majority of their household items online to avoid going to a physical store.
The prioritization of shopping amid the corona crisis has left many industries in shambles as consumer focus on buying only the essentials including cleaning, personal hygiene and food items. Some online businesses are chipping in to help consumers. MercadoLibre, a major online market place in Latin America, has agreed to waive fees for sellers on basic necessity products. The move is said to impact vendors and raise their incomes considerably for basic cleaning, hygiene and non-perishable food. In Mexico alone, the pharmacy and home products sales rose 114% and 403%.
Companies that are playing role in fighting COVID-19 include Ikea, Johnson & Johsnon and Brosnan Adivsors
The initial response in Latin America was similar to other global initiatives, as it is widely known that complying to emergency measures and overcoming the virus determines the outcome of long-term economic impact. Stimulus packages must also be followed by quarantine recovery responses to curb confirmed cases and of course death rates.
Companies in this case have the power to directly influence the outcome of their employees in a significant way. Businesses have been redeploying their expertise to fight the corona pandemic on the ground. Alcohol distilleries have been producing alco-gel products in-house amid supply shortages, IKEA has been helping to kit-out hospitals and Johnsons &Johnson has donated a million surgical masks to Chinese health workers.
To join the list of corporate responsibility champions, Brosnan Advisors are reaching similar heights with extensive CSR measures. Firstly, ensuring safety of all essential staff by supplying protective gear such as masks and gloves in addition to sanitary gels for everyday use.
With the increase in access to testing kits, the company is also getting ready to offer testing kits to a majority of employees in the near future.
Increasing distribution efforts of essential items has also been a crucial benefit for employees. Providing access to delivery of food, cleaning supplies and medicine to staff and their communities is an important part of keeping quarantine without jeopardizing employees that are forced to stay home or unable to work during lockdown periods.
Brosnan Advisors also vows to help the scientific community in developing research to combat the virus and do the utmost to remain prepared for all developments ahead.
Any corporate entity with a large enough safety net should be helping not only those close to them, but increase outreach to larger communities in need as our collective response to this pandemic is the best way to combat it and save the job market in the future.
SOURCE: Melissa De Roock
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