Impact of the Coronavirus (COVID-19) crisis and recommendations on the Spanish foreign sector

Interview with Jaime Montalvo, director of International Affairs at the Spanish Chamber of Commerce

Today we pay attention to the emergency situation caused by the coronavirus. We want to know what its impact is on the Spanish foreign sector, and what recommendations companies in our country that are internationalized can follow at this time. 

---

 

And for this we count on us Jaime Montalvo, director of International Chamber of Commerce of Spain. 

 

 

 “Unlike wars, we are not going to witness the destruction of the productive fabric, but we will witness the need to rebuild trust”

 

 

It is still early to know how far this crisis we are experiencing, which is health and also economic, will reach, but we can sense that the impact will be high... What effects are expected in the short and medium term on the economy, in the foreign sector? 

 

Jaime Montalvo: “It is difficult to predict, without a doubt it will be a very big impact. We are faced with an enormous drop in economic activity, which affects a considerable number of companies and which will have an impact on jobs.

 

We are in a practically war situation, but unlike wars we are not going to witness the destruction of the productive fabric, but rather the need to rebuild trust, which is key to the development of economic activity.

 

The cost is going to be great and the recovery process is going to be long. We find ourselves in a society that shares values, has the means and once the health crisis can be overcome we will begin a reconstruction process.

 

Companies are authorized to continue the activity, many teleworking but there are sectors that have closed such as the , in general the industries What do they have to do with him? best before date, and in the longer term those that have to do with industrial equipment. 

 

We are going to have to face a process that will require liquidity measures, to make staff more flexible and meet financial needs, and that help ensure that the system remains operational. In fact, the circulation of goods It is happening, the borders have not been closed, we have a measure that has to do with customs that will allow our products to continue passing through there... but the problem is that what is falling is demand. 

 

34% of our GDP are exports, two thirds of them are going to Europe, and in Europe they are in a similar situation and although the flow of goods through merchandise, orders are going to fall and companies are finding it difficult not only to sell but also to collect.” 

 

What are the recommendations for Spanish exporting and importing companies? Are their difficulties similar to those they sell in the domestic market?

 

JM: “Yes, without a doubt, the measures adopted in the Royal decree law, which are to alleviate the difficulties due to coronavirus. The recommendations? Of course, follow the instructions that are being given by the administrations, contribute through the organizations in which the companies are to contribute proposals that can complement what has already been approved. 

 

Of course teleworking; and maintain contact with suppliers and customers, which is essential in foreign trade. It is important to maintain these relationships, strengthen them, we have telecommunications infrastructures that allow this.

 

And above all, don't stop. There are ways to reactivate the system that will require each of the companies to have prepared contingency plans; it is difficult to prepare them in an uncertain scenario.

 

First, consumption will recover, then investment will come. The measurements of fiscal supports and liquidity are aimed at enabling companies to weather this situation in the short and medium term.”  

 

The Spanish Chamber of Commerce has requested urgent and decisive measures from the Government to guarantee the survival of the economy, and this Tuesday the Government approved a Royal Decree Law with many of these measures. Any proposals that have not been attended to?

 

JM: “We are satisfied with the measures that the Government has put in place. Additional measures will probably have to be taken in tourism, retail trade, or the automobile sector, which is a very important export sector and will be greatly affected. And even some industrial sectors.  

 

You have to see the evolution; New needs may arise. The priority is disease control. “We are in an emergency situation and in the coming weeks it is key that efforts focus on containing the virus.”

 

What help lines or tools of the Chamber can companies turn to so that their activity is affected as little as possible?

 

JM: “We have been running programs for many decades for the initiation and consolidation of SMEs in international markets, or programs in areas such as digitalization, competitiveness, and innovation. 

 

Many international fairs and events are going to be canceled and there is a general decline in all markets, it is a global problem... there is a possibility that companies, I don't know if I should call it an opportunity, develop their digital business and their way of accessing their markets and strengthen clients without having to physically attend these meetings.”

 

A last message to our viewers, who in many cases are internationalized companies.

 

JM: “I cannot give a message that is not one of hope and trust. 

We have references of those who are already overcoming this crisis such as China y South Korea, in an open world with communication, despite having contributed to the spread of the virus, they will also contribute to the spread of solutions.

 

I think we all have to be prepared for a formidable recovery, although it will not be as quick as we wish. There is a great effort and solidarity that will help overcome this situation.  

 

It is a stoppage that leaves companies and people very damaged but there is always a possibility of recovering and I believe that in the direction that this country is, we are going to achieve it sooner rather than later.”