Colombian businesses call for more aid after quarantine extension

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(C) Reuters. FILE PHOTO: Health workers protest with an ambulance caravan demanding payment of their wages, in Bogota

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BOGOTA (Reuters) – Colombian businesses on Tuesday called on the government to expand measures to help companies weather coronavirus, after President Ivan Duque extended a nationwide lockdown by two weeks.

Additional quarantine until April 27 will save lives, Duque said on Monday, but businesses say many could face bankruptcy and increased unemployment.

The government has promised credit guarantees of up to 12 trillion pesos (about $3 billion) for small and medium-sized companies. The one to three-year credits will have a payment grace period of 4 months.

Private banks, meanwhile, have announced wide-ranging refinancing options.

But the business community says the measures are insufficient to keep people employed during the shutdown, adding cash flow for many will last for about two months.

“It’s about how we maintain the business community, given that between 80% and 85% are medium and small-sized businesses,” said Sandra Forero, president of the Guild Council, an umbrella group for industry representatives.

“That’s the way to guarantee security for workers, the health of workers is important, but it’s also important to maintain the employment of those workers and that is achieved by guaranteeing stability for companies,” she said.

The top sectors affected by the lockdown are restaurants, stores, tourism, airlines and factories that do not make food or health-related items.

“It is necessary to deepen the economic relief measures in the labor, tax and economic sectors so we can stand these new 15 days of confinement,” Jaime Alberto Cabal, president of merchants association Fenalco said in a video.

The extended quarantine could have grave and nearly irreversible economic impacts, economic thinktank ANIF said in a report.

“The longer we wait to restart economic activities, the more time it will take to reactivate the labor market and recover economic growth,” it said.

Analysts have reduced economic growth predictions for the year to 2.5%, well below the original government target of 3.7%. JPMorgan (NYSE:JPM) predicts expansion of 0% for Colombia.