'Govt, firms should take note of ICC's suggestions'

The International Chamber of Commerce (ICC) has called upon governments and large businesses to cooperate and coordinate their responses to ensure that immediate stimulus efforts flow into the real economy, particularly to the micro, small, and medium enterprises (MSME) and their workers, who are the most vulnerable to the economic disruptions caused by Covid-19. 

The ICC wants the governments to provide direct and immediate support to small businesses to ensure their continued operation, provide direct and immediate support to workers and those most vulnerable, ensure that support reaches MSMEs and their workers quickly, and adapt to existing government-led social programmes. Other measures include ensuring open trade and expedited flow of essential goods across borders and implementing dialogues between government, employers, workers, and communities. 

To avert worst-case scenarios, governments should extend and increase social protection for all those without coverage or with inadequate coverage, provide emergency income support and temporary direct cash payments to all vulnerable households to ensure dignified living conditions, the ICC has recommended. 

It has also suggested governments and the companies to provide temporary relief from mortgage/rent payments, personal and household loans and tax payments, and ensure tailored support for the most marginalised workers including women, migrant workers and refugees. 

On global trade, the ICC says governments must keep global supply chains fluid and trade lines open and free of encumbrances because a disruption in one part of the supply chain puts the whole supply chain at risk. The global chamber calls on governments to reverse and ban all tariffs, quotas and other non-tariff measures that affect the deployment of medical equipment, medicines and other essential goods and services, including foodstuffs, avoid or unravel unnecessary trade barriers in key supply chains, ensure the adequate supply of trade finance and take immediate steps to legally recognise the use of electronic trading documentation in lieu of paper-based documentation to ensure the continued shipment and release of goods. The ICC has also suggested ten ways to use trade to save the MSMEs that include immediate responses to limit the damage of Covid-19, short term measures to mitigate further disruption and mid-term measures to level the trading field for MSMEs. 

The ICC says that beyond government action, clear and principled corporate leadership is needed, particularly from multinational companies, for whom many global supply chains exist. Companies that successfully preserve their supply chains, operations and workforce during the pandemic will be able to rapidly resume operations in the recovery phase of the pandemic, benefitting their business and the lives and livelihoods that depend on them. So, the ICC exhorts the large businesses to ensure the health and safety of the workforce in the supply chain, uphold contracts with suppliers/distributors, facilitate continued business operations of the supply chain, insist on integrity and responsible business conduct and advocate for stimulus efforts to flow into the real economy. 

The ICC claims to have spoken to more than 45 million companies in over 100 countries. So, its set of recommendations are addressed to developed countries, emerging economies and poor companies as well as the cash-rich companies and other businesses struggling to cope with the present crisis. Naturally, its suggestions do not take into account the constraints that individual countries or companies may face. Even so, the policymakers in governments and companies should take note of its recommendations while addressing the challenges ahead. 

email: tncrajagopalan@gmail.com

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel