2020 Economic Impact of Covid-19 on MSMEs and Timor-Leste’s Tourism Sector

Over the course of 2020, the Covid-19 pandemic had an unprecedented worldwide impact. In Timor-Leste, micro, small, and medium enterprises (MSMEs) were particularly susceptible to the economic impact of the pandemic, and MSMEs in the tourism sector experienced the worst setbacks. To improve understanding of the scale of Covid-19’s impact on tourism MSMEs in Timor-Leste and MSMEs in general, The Asia Foundation conducted interviews with 342 MSMEs (59% in the tourism sector) from May to August 2020. Although Timor-Leste’s swift Covid-mitigation response limited the spread of infection throughout much of 2020, the year-long ban on international travel and closure of the country’s international borders had grave economic impacts. The research found that tourism-related businesses in aggregate have been operating at just 23% of their pre-Covid level. Almost half of businesses that depend on international travelers have closed or curtailed their operations. As Timor-Leste lays the foundations for its economic recovery, it will be important for its strategy to be guided by evidence on the impact and challenges faced by MSMEs. This study seeks to understand these challenges to develop inclusive and sustainable recovery options for MSMEs, particularly those in Timor-Leste’s now vulnerable tourism sector.

Economic Plan Recovery

COVID-19 disease has brought profoundly negative effects on the world economy. Ti- mor-Leste naturally was not immune to the sudden stoppage that nations had to make in their economies to fight this new disease. The weaknesses of the world economy and the development models of each country were too exposed, putting to the test their own capac- ities to deal with this great threat to public health.
At the beginning of the pandemic, the 8th Constitutional Government defined a set of nine- teen measures aimed to mitigate the negative impact of this new reality on households and businesses. However, with the prolonged presence of the pandemic, the social consequenc- es and the global economic crisis demanded more robust medium- / long-term measures from the Government, in order to recover from the crisis as quickly as possible, and in a sus- tainable manner. To this end, the Commission for the Preparation of the Economic Recovery Plan was created, to support Timor-Leste economic recovery by creating a clear, objective and realistic plan.

Market Monitor Report

Highlights
• A significant drop in local rice prices as the main harvest nearly complete, signalling increased availability.
• Policy-wise, direct institutional purchases of local rice from local farmers by National Logistics Centre (NLC) is in progress with an overall target of around 4,000mt for stockpiling.
• Imported rice prices continue to steadily decrease reflective of the global price weakness, however, it remains above year-earlier levels.

Getting your workplace ready for COVID-19

In January 2020 the World Health Organization (WHO) declared the outbreak of a new coronavirus disease in Hubei Province, China to be a Public Health Emergency of International Concern. WHO stated there is a high risk of the 2019 coronavirus disease (COVID-19) spreading to other countries around the world.