Answer to Question #209222 in Management for Ashneel

Question

Question 1 (20 marks)

Using appropriate examples, critically discuss the various types of problems small businesses are encountering and the effects the COVID-19 crisis had on these businesses in the Pacific Islands countries. What policies can be utilized to overcome these problems? Use examples from Pacific Island countries to explain your answer.  

Answer 1

During the Covid 19 pandemic, small businesses have been affected on both the supply and demand side. On the supply side, quarantines and illnesses have reduced the amount of labor resources available to these businesses . Additionally, the supply chain has been disrupted leading to shortages in raw materials to facilitate production of goods and services. This has led to operational challenges.

On the demand side, consumer spending greatly decreased, resulting in drastic decrease in revenues for these businesses. As such, most enterprises could not meet their financial obligations and resolved to reduce the size of their workforce to remain profitable.

To overcome these problems, the governments of the various pacific countries should ease border restrictions to boost movement of raw materials, goods and services. Similarly, the governments should provide tax reliefs and emergency loans to these businesses to ensure they can meet their obligations such as salary payment and other operational costs.