With an impending war between the United States and Iraq, “caution” is the watchword for small business owners.
Already, Governor of the Central Bank of the Bahamas Julian Francis has predicted that tourism could fall off by 20 percent if war breaks out in the Middle East. A similar drop in tourism activity occurred in the Bahamas during the Gulf War in 1991.
This possible 20 percent slowdown in the tourism industry would undoubtedly trickle down throughout the economy, affecting other industries, including small businesses, according to Marlon Johnson, who said that small businesses are particularly vulnerable.
“From what we hear from policymakers and experts, if there is a war, the tourism sector would be hit substantially,” Mr. Johnson said. “It appears that for many small business operators, there will be a spin-off down the road.
“What we’re telling our members is that it’s time to be approaching very cautiously and to mind their expenditure outlays and to expect the worse. We would expect at least a 20 percent fall-off in business during the duration of the war as is the same for tourism, and so our hope is that if there is a war, it is short.”
Twenty-one businesses are members of the Small Business Association of the Bahamas, which was formed in July, 2002. The association serves the interests of small businesses that have 50 employees or fewer, or an annual income of less than $5 million.
The associate aims to provide an advocacy voice for small businesses, so as to influence government policy decisions, while educating members on how to better market their products, in addition to global trends and how their businesses may be affected.
As countries around the world monitor developments relating to a possible war in the Middle East, small businesspersons should be particularly concern about the impact that such an event could have on their operations, according to Mr. Johnson.
He advised small business owners to contain costs by being prudent regarding any new investments or expansion of product lines or facilities.
“I think it is important that they move cautiously,” he said. “I think for the entire 2003 calendar year, it will be best for small business people to delay expansions and new substantial investments, especially if these are businesses that deal directly with the tourism product.
“Once tourism goes down, there will be less money in the economy, fewer people would be employed, some will be working shorter workweeks and, of course, they will be spending less and that will trickle down to small businesses.”
By Hadassah Hall, The Bahama Journal
