Government measures benefit a third of companies, says TNG owner.
The founder of the clothing store chain and president of Ablos, businessman Tito Bessa, told TV 247 that the emergency economic measures announced by the federal government are not, in fact, reaching the companies' accounts. "Where are these billions?" he questioned. Watch.
247 - Tito Bessa, founder of the TNG store chain and president of the Brazilian Association of Satellite Retailers (Ablos), spoke with TV 247 about the situation and the role of the business community amidst the coronavirus pandemic and the economic paralysis that Brazil is experiencing. According to Bessa, the economic aid measures for companies announced by the Jair Bolsonaro government are not, in fact, reaching their accounts.
According to him, much more help is still needed than what the government has promised. “A lot is still missing; I believe the government needs to provide much more help than has been announced so far. Some measures are already effective, others are not, but especially for businesses, there is still a lack of clarity and assurance that we will all have the resources for the 'day after,' that there won't be a wave of bankruptcies.”
Tito Bessa stated that the relief measures are focused on smaller businesses, but stressed that large businesses also need help. “I realize that the measures implemented so far, or those nearing completion, are covering only one-third of companies; two-thirds are left out. You are protecting the small businesses, those with R$360 to R$10 million in annual revenue, but what about the other ends? The other ends represent two-thirds of the entire chain. I don't just want to save my own payroll and stores; I want to save the payroll of my employees, my suppliers who have been with me for 36 years, others for 20, and still others for 25. They are also experiencing this insecurity. Today I tell them this: I think the smaller you are, the easier things are becoming, at least for now. The aid is focused on the less fortunate, but what about the more fortunate? We need to take care of that.”
The founder of TNG demanded that the promised revenue be actually passed on to companies and stated that the country will have to go through a kind of Marshall Plan, that is, an economic plan aimed at rebuilding the Brazilian economy after the coronavirus. “The minister, the president of Caixa Econômica, they all talk about billions, billions and more billions. Where are these billions? What I hear, even from small businesses, is that when they go to the bank to ask for money, it's blocked. 'You need collateral.' What collateral? How can we guarantee it? We've already pledged everything we had and then some; I'd have to give my arms, my head, my legs as collateral. We're going to have to go through a situation like this at some point, like a Marshall Plan. Part of this money will have to be a non-repayable grant; people might not be able to pay it back, it's a 30-day disaster.”
The president of Ablos also reported that financial institutions are increasing interest rates to take advantage of the current economic vulnerability of businesses. “You know what I know? People who were paying a certain amount in interest, and then they went and doubled that amount. Some financial institutions are taking advantage of this moment to gain their own benefit. I had a situation like that; it almost doubled, it was 80% more than it was a week ago. If they are borrowing money cheaper than before, if the government is signaling that money will be cheaper, then why are interest rates higher?”