The Role of Small Business in the Context of Covid 19 Challenges

Abstract

Small business development is one of the most important elements and the most active form of the economy. Despite the strengthening of small entrepreneurial activity in the regions of Georgia in recent years, the growth rate of small business development is gradually declining. The problems are caused by the difficult socio-economic situation in the country which was compounded by the damage as a result of the pandemic and eventually the majority of the population faced the problem of hunger. According to Geostat, the total number of employees in small enterprises has decreased by 6.6% in the last fi ve years. At the initiative of the government, a preferential tax regime was introduced in small businesses and the registration of individuals was simplifi ed, but this simplifi cation also caused problems. In particular, those who want to start a small business turn out to be unqualified staff and their businesses close down again with bankruptcy within a year.  In addition, a second complicated problem appeared: due to the lack of sanctions, the closed down enterprises still remain registered and as a result we receive negative statistics.

The current crisis has shown the government responding to the COVID-19 pandemic. In particular, the government tried to help businesses through various mechanisms, however with small and ineffective results. Today, the small business sector is facing difficult times due to the temporary termination of businesses as a result of the pandemic.

It is noteworthy that even before the crisis, cases of political stubbornness and uncompromisingness led the country to economic stagnation. Foreign debt liabilities continue to rise. Debt service is not a problem when a country is sustainable and has income.

Therefore, in this situation, I consider it important that the government and the business sector work together to deal with both the economic crisis and the potential dangers posed by the pandemic.