Commentary By Felicia J. Persaud
News Americas, NEW YORK, NY, Fri. April 24, 2020: For too long, many countries in the Caribbean have been content to tango solely with one fiscal partner – tourism. Sadly, COVID-19 has slammed dunked that dance partner and left it struggling to breathe, as many Caribbean nations now clamor for an economic ventilator to keep them breathing.
It is very bad, no matter what some who say the region has bounced back from hurricanes and more, claim. Hurricanes cannot be compared to COVID-19 as no hurricane has ever taken a wrecking ball to an entire world or regional economy at once.
And at no time in modern history can anyone remember all resorts and hotels being forced to shutter, cruise shipped grounding to a halt, airports closed and almost every business at a stand-still.
To highlight exactly how bad it is for the region, S&P this week claimed that the tourism sector in the Caribbean will probably decline by 60% to 70% from April to December this year, when compared to last year.
The Caribbean Development Bank has forecast a 50% slump if restrictions continue until September and a 100% fall if the policies stay in place all year. The World Bank, the Inter-American Development Bank and The International Monetary Fund (IMF) all have laid out their own picture of doom and gloom even as the IMF also claimed the eastern Caribbean, heavily dependent on cruise lines, will be among the hardest hit.
There was even worse news from S&P on the three Bs – Barbados, Belize and the Bahamas as the company downgraded the ratings for the Bahamas and Belize while lowering to negative, the credit outlooks in Aruba, Belize, the Dominican Republic and Jamaica.
So, what is the Caribbean regional and governmental plan? In this COVID-19 era, it cannot be a return to business as usual. There is not going to be a flipping of some magical switch as we all roll out of self-quarantine and go back to “normal.”
Cruise ships are not going to simply return to the seas in May or June once the so-called experts think it is safe to climb out of our bunkers. People are not going to magically decide they need a vacation from this and so book flights and get on planes to hit a Caribbean hotel and a Caribbean beach and burn away the anxieties and fears of the last month, and hotels definitely are not going to just throw open their doors and return to full-occupancy as soon as governments decide to re-open airports.
That means there has to be a ‘differentiation’ plan for regional economies in order to avoid a return to tangoing with one partner in the post-COVID-era. National and regional governments in the Caribbean must do what they should have done decades ago – build up new streams of revenue via new industry.
There is much to be learned from this pandemic as to what the new needs are in this world order. Caribbean governments must engage their local private sector to launch a visionary ‘differentiation’ plan to move their national and regional economies forward and away from the economic apocalypse that is forecast.
Here are a few ideas on moving beyond a return and reliance to simply ‘sun, sea and sand.’
1: A focus on boosting local and regional the agricultural sector
With concern of food shortages globally, the time is now for governments to seriously invest in a plan to boost food production that will lessen dependence on imports while creating jobs and building up a growing export sector for organic food products.
2: Boosting Manufacturing
Regional economies must grow the middle level of their economies, where the private sector sits by boosting the manufacturing sector, especially for the creation of masks, sanitizers, etc. that can become exportable industries quickly and create jobs. Investing in small to medium enterprises is the key to help them grow into major enterprises.
3: Legalization of marijuana and its by-products
It is time to move out of procrastination estate and into making this a reality. The legal marijuana market has proved itself largely COVID-19 resilient. The Lebanese parliament on Tuesday passed legislation to legalize cannabis cultivation for medical and industrial purposes, a move that was recommended by economic advisers even before the coronavirus pandemic dealt a devastating blow to the Mediterranean nation’s struggling economy. And countries like Paraguay have begun to export medical marijuana to countries like Canada, Italy, Germany and the Czech Republic. The Caribbean needs to lean in, in the post-COVID-19 era, to this sector.
4: Boosting technology and energy efficiency businesses
In this era where many have been forced to telecommute and depend heavily on delivery businesses, appreciation of technology and the Internet is at an all-time high. Regional economies need to boost technology to be more competitive and stay competitive by ensuring solid and cost-effective energy, mobile and Internet data services, and the provision of grants and loans to the best and brightest entrepreneurs who can grow small digital companies into big companies. There is so much that can be done in this sector to build the region’s own ‘Silicon Valley’ and techo-pole.
It is time to innovate and set up a think tank from within now, which will include the youth, to come up with an action plan to emerge from the economic tsunami wrought by CVOID-19. Returning to business as usual is not an option.
EDITOR’S NOTE: Felicia J. Persaud is the founder and CEO of Invest Caribbean, the global private sector investment agency of the Caribbean.