As anyone who has studied business or economics learned, and as many small business owners know from personal experience, about 90% of small businesses go bankrupt soon after starting.
There are many reasons contributing, but most often it’s because they don’t earn enough revenue to cover expenses.
Even during times of economic growth, it is difficult to successfully grow a business; finance is just part of the story, businesses also need to be effective at operating the business, managing staff, and maintaining sales as well. Then covid came and was like adding a bag of concrete on our economic backs, with massive limitations on commerce and tourism, and strict local restrictions requiring businesses to close or operate at partial capacity for over a year, all heavy challenges to endure. Now Costa Rica is considering following the questionable example of some hyper industrialized debt-consumed countries by implementing a QR system to require businesses to discriminate against their customers by vaccination status.
Though health ministry data showcases have dropped to their lowest levels since the pandemic began, and the pandemic appears to be nearly over as the country is approaching herd immunity (on schedule with the health ministers estimates from around August that herd immunity would be reached between October and December 2021), now business owners are being asked to suffer a tremendous and unnecessary financial burden, economically and socially discriminating against (what was on the 10th of November) 42% of their customers, people who are their friends, their colleagues, their families.
The proposed program does not care that ~40% of the country has yet to take two vaccines, whether because of access or not feeling they need them. Likewise, the proposed program does not consider the contribution to herd immunity of those individuals who have previously been infected with covid and recovered and then developed immune system protection comparable to the protection offered by vaccines. Various experts from the health minister of Costa Rica, to a McKinsey & Co report, to my own analysis estimated that between 30-40% of the country has already developed natural immunity. And though studies show that some additional protection can be added by then also getting vaccinated, the incremental benefit is relatively small, and while vaccine side effects are rare studies show that people who have been previously infected with covid are 2.5-3x more likely to have serious side effects, all of which makes vaccination for someone who already recovered from covid a very different risk/benefit analysis.
After almost two years of tremendous economic burden on most small businesses in Costa Rica, and after following all the required restrictions and public health mandates, now business owners are being told that their businesses are non-essential, they must additionally invest their time and money to implement a QR program whether they want to or not, and all the while tell almost half their customers that their business isn’t welcomed there.
The critical issue here isn’t about whether vaccines work, or whether an individual should consider taking one as part of their personal choice for responding to risks, but rather about if it is rational or even helpful to put such additional stress on businesses that would force many to go bankrupt. It’s not just the business owners who suffer in that scenario, all their employees lose their jobs, all the money they put back into the economy is lost as the business stops buying supplies and services, and so also a portion of their supply chain goes out of business as well. Likely the loss of business will be in excess of the 40% of the country that hasn’t taken two vaccinations because there will also likely be boycotts by vaccinated and unvaccinated people because very few people want to support businesses and an economy that puts so many people out of work and discriminates against their friends and families.
Even before the proposed program would go into effect, a massive portion of Costa Rica’s economy is being misdirected that could instead be allocated to programs to improve health and help people address the underlying conditions that make them more vulnerable to covid, which would save more lives than this program ever could. The simple announcement of the QR system has caused businesses throughout the country to have massive cancelations as foreign tourists who were excited to enjoy Costa Rica without draconian apartheid-Esq systems of discrimination in an atmosphere they had thought was more freedom-loving, changed their plans to destinations more accepting of people’s personal choices.
Already there are delays and last-minute changes in the program implementation, intending to give more time for businesses to acclimate to the new mandates, but also adding confusion and stress as very few people truly know what is going to happen.
People are unsure if the program will actually be implemented, and many people say it would be practically unenforceable, before gauging the economic impacts, and the possibility of being overturned by any of the dozens of subsequent lawsuits. Yesterday the courts in Costa Rica have granted an injunction to pause and more carefully consider the economic impacts such a program would have on the country, understandable since the program was announced as a near-total surprise last month, without discussion with various affected groups throughout the country. With leaders of tourism, restaurants, chamber of commerce, hospitality, and mayors all bringing up strongly held concerns about the unintended consequences of implementing a vaccine passport.
Many express worries about how damaging the proposed program would be, with some pointing out how these programs disproportionately affect people with low incomes who have already faced the greatest challenges during society’s response to covid. These business owners and community leaders are doing everything they can to ensure that Costa Rica’s economy isn’t crippled by implementing a well-meaning but economically and socially ruinous policy.
To be continued…