THE READ: POLICY IN THE DARK – UNDP REPORT REVEALS LESS THAN HALF DISASTER-HIT MSMEs RECEIVED AID

THE READ: POLICY IN THE DARK – UNDP REPORT REVEALS LESS THAN HALF DISASTER-HIT MSMEs RECEIVED AID

NASSAU, BAHAMAS — The United Nations Development Programme’s (UNDP) sobering assessment of the socioeconomic impact of Hurricane Dorian and the COVID-19 pandemic on micro, small and medium-sized enterprises (MSMEs) in The Bahamas has brought stirring clarity to the anecdotal reports and lived experiences of many Bahamians.

Disaster and pandemic relief have not effectively penetrated the deep level of need spread thick across the country and magnified by existing gaps in equity that have plagued every sector of the country. And it’s not for lack of trying.

It continued: “The Government and Private sector have done much to support MSMEs during these crises through timely and innovative programming that offers both financial and technical assistance. However, according to the gathered responses through the SEIA (Socio Economic Impact Assessment) survey, these efforts have only reached less than half of the MSME sector and may not be reaching those that are most vulnerable.”

“The report establishes that the public policies designed to respond to Hurricane Dorian and COVID-19, particularly those coordinated by the Access Accelerator: Small Business Development Centre and National Insurance Board, have been both quick and responsive,” the report read.

“However, the full impact of the range of Government support policies and programs for MSMEs remains difficult to assess without access to a comprehensive set of data. Without strong and integrated data to drive policy development, it is difficult to determine a true return on investment.”

“These measurements of effectiveness are best determined prior to the launch of policy or programming to avoid subjective determination of the impact on the intended beneficiaries. The absence of policy design, implementation and monitoring plans leaves the government open to risks such as incongruence of the programme with the needs of the groups that they attempted to serve, over or under-investing, or misplaced investments altogether.”

The report, titled the “Socio-Economic Impact Assessment of Hurricane Dorian and the COVID-19 pandemic on Micro, Small and Mid-sized Enterprises (MSMEs) in The Bahamas (SEIA)” was released last month and sets the losses inflicted by the twin tragedies of Hurricane Dorian and COVID-19 at $7.5 billion.

The staggering sum leaves no room for doubt that the country social and economic development will “likely be inhibited for years to come”, as the report suggests.

Notwithstanding the proximity of the two tragically timed crises, and their unprecedented scope, the report pointed to data limitations as a critical challenge to the development of effective policy.

“Three out of five MSMEs are impacted by the COVID-19 pandemic,” the report read.

“As many as half of MSMEs in Abaco and 1 in 10 MSMEs in Grand Bahama have had to close their businesses permanently as a result. Those that remain open continue to remain vulnerable to the ongoing impact of the prolonged COVID-19 pandemic and their capacity to recover is in question.”

It continued: “The Government and Private sector have done much to support MSMEs during these crises through timely and innovative programming that offers both financial and technical assistance. However, according to the gathered responses through the SEIA (Socio Economic Impact Assessment) survey, these efforts have only reached less than half of the MSME sector and may not be reaching those that are most vulnerable.”

“Coordination and monitoring have proven difficult given minimal access to prior and current data on a significant portion of MSMEs in The Bahamas. Proactively building an institutional base of more comprehensive and timely information on MSMEs can serve to improve the government preparedness to intervene in times of disaster and develop programs to foster resilience of the sector.”

The UNDP report read: “The current government policies to support MSMEs rely heavily on formal activities and registered employees, and these may not be the most effective given the significant portion of MSMEs which are informal or do not provide regularly updated information to government.”

According to the report, micro-businesses in The Bahamas are those that earn less than $250,000; small business grosses less than one million dollars; and medium businesses earn between one million dollars and $10 million.

These businesses are a critical component of the local economy – accounting for up to 99 percent of all business licenses but just seven percent of the revenue collected.

They are even more vital to small Family Island communities where they bring economic opportunity and flexible employment practices.

“They tend to serve as a “crucial conduit for lifting people out of poverty and generating employment for lower-income and underprivileged sections of society, including women and youth.” (FSG, 2020),” the report read.

The report was commissioned by the UNDP and UNDP SURGE Data Hub, Country Support Management Team, and Crisis Bureau, working in partnership with the Ministry of Finance, the Small Business Development Centre (SBDC), and the Organization for Responsible Governance (ORG).

Data from 486 MSMEs on Abaco and Grand Bahamas were obtained between November 2020 and February 2021.

It found that 63.2 percent of MSMEs were affected by both Hurricane Dorian and COVID-19, with more than 23 percent affected by COVID exclusively.

Approximately 82 percent of the respondents were owners or co-owners of a business; approximately 53 percent were women, and 40.7 percent were sole wage earners in their households.

While 80.3 percent of MSMEs that responded were formally registered as businesses, only 54.4 percent reported positive advantages associated with the registration of their business.

According to the report, over 78 percent of MSMEs indicated that they received no support from non-governmental organizations (NGOs).

Among recommendations for policy design, implementation and enforcement, the report underscored over $4.3 million dollars has been spent on disaster recovery grants. However, only 21 percent of businesses in Grand Bahama and ten percent in Abaco indicated having received aid from the government.

“The SBDC indicates a 30 percent success rate for funding applicants,” it continued.

“This combined data leaves questions about which businesses have been served or if the focus was on individuals, and what measures need to be implemented to improve equity in access to funding.”

The concerns leveled in the report over the effectiveness of relief and recovery dollars are an important feature in the burgeoning political war over the work of the Disaster Relief Authority in the aftermath of Dorian, its efficacy, and the outcome of the 2020 pledge conference.

To date, we understand that the government received a combined $1.77 billion in value toward the Dorian recovery from some 49 pledges made during that event. It was later revealed that year that actual cash donations only amounted to $109,000. Further, it has now been characterized as a public relations exercise.

The pledge event was organized in partnership with the United Nations Development Programme. Are there any parallels to be found in its latest assessment of the government’s capacity to deliver the recovery aid with local partners – to the disappointing outcome of the conference?

As government spending continues to grow to meet the rising social and economic needs of the COVID-19 pandemic, more focus must be placed on data-driven policy not only to shore up donor confidence but to ensure that the millions allocated will get to where it’s needed most.

About Ava Turnquest

Ava Turnquest is the head of the Digital Department at Eyewitness News. Her most notable beat coverage spans but is not limited to politics, immigration and human rights, with a focus especially on minority groups. In 2018, she was nominated by the Bahamas Press Club for “The Eric Wilmott Award for Investigative Journalism”. Ava is deeply motivated by her passion about the role of fourth estate, and uses her pen to inform, educate and sensitize the public.