One year since Thailand announced a law to boost its social enterprises, the sector faces collapse due to COVID-19
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By Nanchanok Wongsamuth
BANGKOK, May 12 (Thomson Reuters Foundation) - Poonchai Chitanuntavitaya's Bangkok clinic, which employs vulnerable Thai women as masseuses, reopened this month with staff wearing masks to protect against the new coronavirus, but its future remains in doubt - like scores of ethical businesses.
With less than 15 clients a day, there is not enough work for its 60-plus therapists, who usually go to the offices of some 40 firms that provide massages as an employee benefit. But they have been shut since March because of the pandemic.
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"Since the coronavirus crisis, we have had zero income but are still paying our staff," said Poonchai, chief medical officer at Social Health Enterprise, which has ex-prisoners and Muslim women from Thailand's restive south on its staff.
"If the situation lingers on, we plan to ask hotels if we can use their conference halls to massage people and sell healthy food."
Social enterprises like Poonchai's - businesses that aim to deliver a positive social impact while turning a profit - have helped to narrow inequality and create livelihoods across Southeast Asia.
But business leaders in Thailand said they needed financial support to continue to support vulnerable communities and outlive the coronavirus, which has infected some 3,000 people and killed more than 50 since January.
Some 130 businesses, with a combined revenue of about 4 billion baht ($125 million), registered as social enterprises in Thailand after March 2019, when a new law granted incentives like tax breaks to ventures that reinvest 70% of their profits.
WORRYING
A handful of businesses, including hair salons and small restaurants, were allowed to reopen with social distancing measures last week, after a decline in new coronavirus cases. A state of emergency remains in place until the end of May.
A March survey by the Social Enterprise of Thailand Association found that all of its 50 members only had enough cash to survive for three to four months.
"Most small and medium enterprises in Thailand don't have a lot of cash, and if they still have to support their staff, it's very worrying," association chairman Dispanadda Diskul told the Thomson Reuters Foundation.
"These enterprises are helping society but are left to struggle alone."
Dispanadda said the association had approached commercial banks for special loans but had not yet heard back from them.
The government's Office of Social Enterprise Promotion, which was set up last year, declined to comment as it was in the process of selecting a new director.
Local Alike, a travel consultancy that promotes sustainable tourism in 200 villages, has adapted to the crisis by going online to sell products made by villagers and ready-made meals using local ingredients.
"Some of our staff have voluntarily lowered their salary to help the company, but we hope that by next month we will be able to go back to providing their usual salary," said founder and chief executive Somsak Boonkam.
Other social enterprises were less optimistic about surviving without financial support.
Organic milk-seller Dairy Home has seen revenue drop by 40% since March, when its two restaurants were ordered to close and it switched to a delivery service in four provinces.
But the new business has not been able to cover fixed costs, as it continues to buy raw milk from almost 100 farmers and has not laid off any of its 170 staff.
"We need low interest loans to compensate the loss in revenue or else it would be difficult for us to survive," said managing director Pruitti Kerdchoochen.
"Our cashflow can probably last for another three months."
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($1 = 32.1000 baht)
(Reporting by Nanchanok Wongsamuth @nanchanokw; Editing by Katy Migiro. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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