Over 80 percent of the businesses in Palau have reported a decline of revenue due to the COVID-19 pandemic.
While Palau remains one of the few nations in the Pacific with zero cases of coronavirus, 87 percent of Palauan businesses believe that the COVID-19 has negatively impacted the economy, according to a survey of businesses across the Pacific.
On June 29 Pacific Trade Invest released its Pacific Business Monitor Report – Wave 3, which includes the insights of 126 businesses from across the region including Palau.
In a statement Caleb Jarvis, Trade & Investment Commissioner, Pacific Trade invest Australia said that businesses continue to feel the economic impact of the pandemic.
“Over half of businesses across the Pacific are continuing to reduce operational costs and staff working hours in an attempt to minimize the cost/damage to their business as impact of COVID-19 continues,” Jarvis said.
Uncertainty and COVID-19-induced restrictions are also causing difficulty.
“Most businesses are finding it challenging not knowing how long the crisis will last and continue to struggle with closed borders and poor cashflow. The need to diversify their business is becoming more important but closed borders continues to be a major barrier preventing tourism and export,” Jarvis said.
In the Wave 3 survey conducted from June 15 to 21, Palau was one of the top three Pacific countries that provided responses. The other top three nations are Papua New Guinea and Tonga.
The survey is looking into the impact of the pandemic on small and medium-sized enterprises (SMEs) in the Pacific.
Tourism plays a major role in Palau’s economy. With borders closed, the private sector is being hit hardest, with thousands of jobs lost.
Only sixty-three percent of Palau businesses are confident that they will survive the pandemic.
Elsewhere business confidence is stronger and across the Pacific confidence has been increasing since the first survey more than four weeks ago.
“It’s encouraging to see that confidence of businesses in Pacific is continuing to increase with 74% of respondents reporting they are confident their business will survive COVID-19 up from 70% in the last survey,” said the three PTI Commissioners who commissioned the Pacific Business Monitor.
Governments across the region are announcing special measures to help their businesses through the COVID-19 pandemic but Pacific businesses reported there are still barriers preventing them from taking initiatives that will help them recover. These include lack of finance, lack of government support/stimulus and closed borders.
Palauan businesses appear more satisfied with initiatives by their government than are businesses in PNG and Tonga.
In Palau only 25 percent of businesses expressed dissatisfaction over the support the government is providing whereas in PNG 88 percent expressed dissatisfaction with their government and in Tonga, 79 percent.
Emotional impact of COVID-19 is felt by the businesses too, with 95 percent of the responses in Palau saying the pandemic continues to worry them while 69 percent are feeling angry over the uncertainties that the pandemic brings.
In the latest survey 60% of business-people across the region reported that COVID-19 and its consequences are having a negative impact on their mental health.