Pandemia can frame “falmission” these businesses in Kosovo

The gastronomial sector is estimated to be the sector that has suffered the most financial losses since March 13th of this year, when they also started implementing emergency measures to prevent the new coronary.

The most damaged segments of this sector are restaurants, hotels, bars and nightclubs, as well as wedding halls, which do not have other business options. Even now, after easing restrictive measures, the only allowed form of part of the event is the delivery of food through distribution.

Some Shops Open Doors

Nongovernmental organisations in Kosovo say losses are estimated to be significant for the sector directly, but also for other sectors that are in any way related to this sector.

The Institute for Free Market Economics, (IETL) established by the Kosovo Economic Oda, has published the results of a research in this sector, money, over and after pandemic.

Over 97 percent of gastronomy businesses closed

The executive director of this Institute, Besa Zogaj-Gashi, in a conversation about Radio Free Europe, says that during the time of emergency measures, only 2.3 percent of all businesses surveyed have carried on the event through food distribution with a symbolic monetary circulation, while the rest have claimed that during these months their monthly circulation has declined to 100 percent.

If we compare the average monthly circulation to last year (2019), about 16.1 percent of the residents were declared to have a circulation of between 10,000 and 15,000 euros, while 13.8 percent of them of 15,000-20000 euros. And the results of the research say that 67.3 percent of respondents have claimed that their monthly circulation has dropped 100 percent”, Zogaj-Gashi says.

The Challenge of Economic Recovery After Pandemia

With such a situation, the victory “Babel Cafe” in downtown Pristina, which before the pandemic had ten employees. Private owner Shpat Hashan earlier told Radio Free Europe that monthly losses are thousands of euros.

Monthly losses are thousands of euros. The damage is huge because by day circulation we cover municipal services, workers and all other expenses. The reserves are very small, as each business wants to make different renovations. We recently made a huge renovation at the bar. We're trying to survive, but it's also hard to survive”, Hashan said.

During this time, according to the research, owners have also stopped investing, while failing to complete obligations to suppliers as well as loan installments at commercial banks in Kosovo.

Most of these businesses are rented

Most of the businesses, says Besa Zogaj-Gashi, their activities are being exercised in rented objects, which presents additional problems in the possibility of their payment.

All these problems, she says, may in some cases bankrupt businesses.

“Based on research results, the situation created by pandemics according to 75.90 per cent of businesses surveyed in the HoReca sector (hotel, restaurant and service provider) in Kosovo will be forced to go bankrupt if the epidemiic situation and monitoring measures, especially social distance will be passed on to us in the coming months during 2020”, she added.

Physical design “scares” businesses

To avoid such a situation, the Kosovo Gastronomic Association seeks assistance from the Government of Kosovo. Veton Zuka, deputy head of the association, tells Radio Free Europe, that the Government of Kosovo must find extenuating forms, mainly in bank loans for the sector, since it is estimated to be the most hit by pandemic. He says, meanwhile, that even in the next phase of easing the measures, this sector will work with half its capacity, due to the space between the tables.

“Gastronomous requirements are to find ways to facilitate the rent obligations and loan installments to banks. The credit instalments that must be paid could potentially create a year-long rush and the interest of this period be guaranteed by the state. Initially these are the requirements, because until the development of activities is resumed, the amount of financial losses is not known. Then more new measures, it is estimated that the work will be carried out in half”, Zuka says.

The Institute for Free Market Economics (IETL) has recommended the Government of Kosovo to continue measures on tax release and labor subsidies, to have direct subsidies with mild criteria for qualifications, as well as subsidy of the rent, even in the coming months for tenants.

Workers to Benefit From Government Emergency Package

Otherwise, Kosovo's incumbent government through the Fiscal Emergency Pack, for the private sector has paid business workers who have not worked because of emergency measures but also 50 percent of the rent. But it has already begun preparing the Pack of economic recovery, under which businesses will be helped through loans, at a low interest rate.

In the gastronomy sector, according to Kosovo Statistics Agency data for 2018, it turns out that about 14,000 citizens work in 3,683 registered businesses.