Former president of the Private Sector Organisation of Jamaica Howard Mitchell explains that capitalism, globally, and to some extent in Jamaica, is moving towards the point where human capital is considered more important than other inputs, but he stressed that this will always be subject to financial ability.
Companies may boast healthy profits on their balance sheets, but an interruption in cash flow can be detrimental almost immediately for some, president of the Jamaica Manufacturers and Exporters Association (JMEA) Richard Pandohie explained.
It's the cash flow that is the lifeblood of the organisation, and when that cash flow is interrupted — and with the pandemic is completely wiped out for some companies — they have no money left to pay for their inputs and to pay workers,” he outlined.
“You have to look at not just the profit and loss, but at the company's balance sheet… How companies operate is by using debt; so they borrow money and they use that money to work, that money creates profit, and some of that profit is used to pay back debt, pay dividends, so that profit is doing a lot of things,” Pandohie added.
A little over a month after Jamaica recorded its first case of COVID-19, Restaurants of Jamaica (ROJ), operators of the KFC and Pizza Hut franchises, in a social media video, said as a result of a more than 50 per cent drop in sales because of the outbreak, the franchise has been left with no choice but to cut staff.
