As with past crises in Kuwait, businesses faced with falling sales have called on the government to bail them out. Manufacturers, retailers, travel agencies and service providers have all been lamenting the lack of business following the emergence of COVID-19 infection in the country. Each business has been attempting to outcry the other in voicing the losses they have suffered as a result of the virus, and seeking immediate government assistance and support to see them out of the crisis.
The newest group to join in the litany about failing businesses is restaurant and cafe owners who have urged the government to intervene and save them from the huge losses they have incurred after the government implemented precautionary measures to curb the spread of COVID-19 infections in the country. The government as usual is caught in a ‘damned if we don’t, and damned if we do’ situation.
A number of restaurant owners warned that they faced the risk of bankruptcy or closure as a result of the fall in sales, by as much as 50 percent in the month of February, which was supposed to be one of the highest selling months in light of Kuwait’s National Day and Liberation Day celebrations. Restaurant owners stressed the need for the government to intervene immediately before the crisis became more convoluted.
Restaurant owners also called on landlords and real estate owners to sympathize with their cause and waive off rents for the months of February and March, as the fall in sales were due to exigencies beyond their control. But then, would that not lead to landlords and real estate owners back-tracking on their loans to banks, and joining the long line in front of the government seeking loan write-offs and support for the losses they incur?
Another restaurant owner had a different opinion. He said that though many customers had stopped visiting restaurants, they have been ordering out, and the business of delivering food to homes was doing relatively well. But he too, voiced complaint against the insistence by the municipality that restaurant workers should wear masks and gloves while serving customers. He said this scared away many customers.
Kuwaiti Municipality’s decision to ban ‘shisha sessions’ was also cited by some restaurant owners as “the straw that broke the camel’s back”, because that led to a further fall in footfall to restaurants and cafes. However, there was no one around to discuss whether the camel’s back was intrinsically weak and not capable of carrying any sort of load, let alone a straw.
A few saner voices among the crowd calling for government dole outs, said that the current problem facing the food and catering sector was not new. They pointed out that the fault was with the National Fund for Development of Small and Medium Enterprises (SME Fund), which had opened the doors wide for novice entrepreneurs to enter the food and catering business.
The SME Fund provided the money for these ‘entrepreneurs’ to establish restaurants and cafes without verifying whether they had experience to run the business, or if they had conducted due diligence or in-depth project studies on the market. Many of these ‘entrepreneurs’ are now likely to face bankruptcy as they will be unable to meet their financial obligations to banks and the SME Fund. In all probability, the government will end up having to write-off these debts to the Fund, said one perceptive restaurant owner.
