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3 NEWS 14.01.2021 FROM PAGE 1 e first round of vouchers included €80 that covered dining and accomodation. An- other €20 could be spent in retail outlets that did not sell so-called essential services or goods, and were therefore forced to shut down for many weeks as part of the measures introduced to between March and June 2020 to combat the spread of coronavirus. e second round of vouchers will now only include €60 to spend on accomodation and dining. Many had argued that the sum allocated to retail should be increased. In fact people will now receive €40 vouchers to spend on retail, but it is as yet unclear which sectors will be identified as possible benfi- ciaries in the second scheme. A spokesperson for the economy ministry would not give details and only said that the vouchers would be distributed "at a better time, when it would also be possible for bars, clubs and kazini to benefit". ese outlets have been forced to shut down since the beginning of November, as a means to enforce social distancing measures. MHRA wants vouchers by mid- February e Malta Hotels and Restaurants Associ- ation agreed with this redistribution of the voucher allocation, albeit reluctantly. "Of course, we would have preferred if those €80 were still destined for hotels and restaurants, but we also recognised the need to offer greater assistance to the retail sector which is also suffering amid the pandemic," MHRA president Tony Zahra told Business- Today. "At the end of the day, this is not the end of the world for our members." But wheras the MHRA might have acqui- esced to a reallocation of the voucher money, it has definitely painted a target on itself by insisting that the vouchers need to be distrib- uted as early as possible, definitely mid-Feb- ruary. "We understand the concerns of people and other stakeholders who insist now is not the right time for the vouchers to be distributed, with the number of daily cases spiking in the past few day," Zahra said. "However, once this wave related to the holidays is over and we reassess the situation, we believe we will once again be seeing a decline in the number of daily cases." He said if daily cases recorded return to pre-holiday levels, there should be no reason not to distribute the vouchers. "e vouchers could make a huge difference to the cash flow of many restaurants and op- erators in the hospitality industry," Zahra said. "e money currently going through the tills of many businesses at the moment is too little to sustain by businesses who have seen so little income since March." e MHRA's position is at loggerheads with that of other stakeholders, mainly the Chamber of Commerce and the Association of Catering Establishments, which insist now is not the time to distribute the vouchers and that the government was correct to postpone their distribution. Holiday fallout Philip Fenech, deputy president of the Mal- ta Chamber of SMEs, said these coming 10 days will be crucial in determining the full extent of the damage caused during the Christmas and New Year festivities as peo- ple got together, possibly ignoring social dis- tancing rules. He said that the current spike in daily COV- ID-19 cases could be attributed to the holi- days. "If the number of cases drops in the com- ing days, we could well be over the surge ex- pected as fallout from the holidays," he said. "Once certain we are over this fallout, then we need to examine the situation again and decide how to proceed." Fenech said it definitely does not make sense to distribute the vouchers at a time when the number of cases has risen to over 200 daily. Most people will still be wary of going out to enjoy themselves at a time like the present, he said. It is also imperative, he said, that the dis- tribution of the vouchers be timed in such a way so as to assist as broad a spectrum of business sectors as possible. "It would be highly unjust of the vouchers were distributed at a time when clubs, discos and nightclubs, bars and kazini are closed," Fenech said. "Everyone needs to be in a posi- tion to benefit from the scheme." COVID-19 has brought about increasing challenges on both Gov- ernment and the private sector, with some industries having more pronounced implications, compared to others. Two of the badly impacted industries included tourism, wholesale and retail. e voucher scheme, an extremely successful scheme among con- sumers, has given the opportunity to various sectors to overcome the challenges of the pandemic in the short-term. Government in- tervention, including the voucher scheme, has helped in mitigating the economic impact and in lifting the sentiment of consumers and producers. is was done through direct interventions that limited the borrowing costs, enhanced liquidity, and prevented a surge in unemployment. e present voucher situation is a situation whereby both parties have justifiable reasons with regards to the opinions they are shar- ing. It is totally understandable that the unions and associations are encouraging government to issue the next batch of vouchers at its earliest. eir members are facing economic and financial challenges which no one was ever prepared for. It is also under- standable on the other hand that Government is cautious in trying to prevent additional pressures on the health system while at the same time achieve a balance between health and well-being and the economy. is is especially the case due to the increased num- ber of cases after the holidays. It is truly a case of a double-edged sword. Encouraging people to go out and spend more would surely help the economy, how- ever, if the cases had to increase, this would restrain the economy once again. Abstaining from issuing the vouchers could imply that a number of businesses in the retail and tourism industry, in par- ticular those which were struggling even prior to the pandemic, to shut-down. is is especially so after considering the toll COV- ID-19 took on retail outlets, restaurants and so on. is is a situation where the power of compromise should prevail. A compromise that finds a balance between the impact on health and the economy. One option could be to have a gradual launch of the vouchers. Having said this, it is also important to look at the situation from a bird's-eye view. e role of the vouchers has to be analyzed within the grand scheme of things, that is, within the economic eco-sys- tem. While the voucher scheme had positive implications on the economy, economic recovery requires businesses to establish plans for both the short-term and the period when the effects of COVID start diminishing. Business should be encouraged to re-engineer their processes and operations in a way that they become more resilient, agile, and adaptable to different economic situations. On a final note, something else that one needs to take into con- sideration is that it is not only businesses that are experiencing financial difficulties and increasing uncertainties. Government is also facing such turbulent time, the fiscal situation is expected to deteriorate for a while, which puts Government in a more difficult position when it comes to designing and implementing measures. at is why we should stress on cooperation between the private sector and Government. Ultimately, the final goal is a common one, that of having an even better economy than the one we had pre-COVID. Dr Stephanie Fabri Economist and Lecturer at the University of Malta 'Not the end of the world' - Zahra

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