Beyond COVID

Though there are positive signs on the economic horizon with the restart of tourism, Bahamians cannot yet breathe a collective sigh of relief as vaccination rates are low, the economic damage caused by the coronavirus incalculable and the state of government finances so critical that generations yet unborn will have to shoulder the burden.

As of late, Prime Minister Dr. Hubert Minnis, with a record of low achievement and an election nearing, has been touting the narrative that The Bahamas is “coming back”. 

Minnis was at Baha Mar resort on Cable Beach last week for the opening of the property’s $200 million waterpark, which has created 500 jobs.

As we noted in our editorial the day after, Minnis and now Minister of Tourism Dionisio D’Aguilar while in opposition had both had uncomplimentary things to say about Baha Mar, and that’s putting it very mildly.

D’Aguilar had said Baha Mar’s Chinese owners were “unsuited” to invest in The Bahamas; and Minnis had called the resort’s 2017 opening “fake”, stoked xenophobic fears by repeatedly referring to the owners as Prime Minister Perry Christie’s “Chinese allies” and threatened to sell Baha Mar to a “qualified buyer who believes in Bahamians”.

Now, Baha Mar is an integral employer in the country and an important generator of economic activity. Its success is tied to The Bahamas’ success, and its reopening after the COVID-19 pandemic forced a months-long closure, is a positive development the prime minister is now able to point to as he seeks to position himself and his party for re-election.

Minnis now appears confident that Christie’s “Chinese allies” fully believe in Bahamians.

Baha Mar President Graeme Davis told us that 3,500 employees are back to work and bookings for the rest of the year are outpacing 2019. This does not include group bookings, which traditionally have accounted for a significant portion of the resort’s business. 

Atlantis officials also report that for the rest of the summer, bookings at the resort are strong. Most of the Paradise Island resort has reopened.

Margaritaville General Manager Larry Magor told us on Monday the new property in downtown Nassau is also seeing strong bookings. The 155-room hotel at The Pointe is due to open in mid-July. The 145-unit condo hotel, One Particular Harbour, opened in December 2020.

Magor, however, noted the challenge with airlift.

On the weekend, Crystal Cruises started its inaugural voyage through the islands of The Bahamas with D’Aguilar declaring “cruising is back”.

We know that cruising is far from being fully back – downtown remains a virtual ghost town and the straw market is shuttered – but the ship’s presence was a sign that tourism is improving.

 A year ago, the government had embarked on a botched reopening of tourism, triggering a deadly second wave of the coronavirus.

By no means are these improvements in tourism to be discarded. Thousands of Bahamians are back to work, but our economic situation is far from stable, and many Bahamians still face dire circumstances.

The government’s unemployment assistance program and its food assistance program remain in operation. 

The Central Bank said in its report for May 2021, released on June 28, the unemployment rate is projected to remain elevated over the near term, with any job gains mainly concentrated within the construction sector, and the limited re-employment of tourism sector employees.

The bank said that globally imposed travel restrictions continued to impede tourism sector activity, although the sector is showing signs of recovering due to vaccination efforts.

But it said the high value-added air component remained at historic lows and the sea segment largely offline. 

The prime minister, however, reported on Thursday, “In recent months our visitors have returned in large numbers. Airports are busy. Resorts are reporting increased occupancy levels. Cruise ships have returned – and there are more to come. Some ships are even homeporting, bringing added economic benefits to our country for resorts, taxi and tour drivers and other tourism service providers.”

Our economic circumstances are certainly a far cry from 2020, but the outlook is not for robust economic activity, and a high level of uncertainty persists.

The Central Bank said expectations are that the domestic economy will register modest growth in 2021, undergirded by the gradual resumption of tourism sector activity.

It said, “In this environment, the recovery of the tourism sector will be dependent on the elimination of all globally imposed travel restrictions, the pace of progress on the international health front, the effectiveness, availability and distribution of vaccines.”

The vaccine factor

A study commissioned by the International Chamber of Commerce (ICC) Research Foundation found that the global economy stands to lose as much as US$9.2 trillion if governments fail to ensure developing economy access to COVID-19 vaccines.

Similarly, the United Nations Chief Economist Elliott Harris said in May, “Timely and universal access to COVID-19 vaccinations will mean the difference between ending the pandemic promptly and placing the world economy on the trajectory of a resilient recovery, or losing many more years of growth, development and opportunities.”

Prime Minister Minnis happily observed last week that The Bahamas is benefiting from pent-up demand of American travelers and its close proximity to the United States.

“They have one of the highest vaccination rates in the world, and their economy is growing robustly. After over a year and a half of challenges, Americans are ready to travel. The Bahamas is a nearby, well-known destination that managed the pandemic well,” he said.

The Bahamas government, meanwhile, is currently challenged in the availability and distribution of vaccines.

On Sunday, the government’s COVID-19 vaccine committee said 95,992 doses of AstraZeneca vaccine have been administered in The Bahamas. They also said without explanation that only 92,200 doses had been received in country – fewer doses than they claim were actually administered.

The government is so low on vaccine doses it is borrowing from other Caribbean countries and has closed most of its vaccine sites.

Speaking to reporters on Monday, Minister of Health Renward Wells suggested the vaccine shortage issue is a sign that Bahamians are enthusiastic about getting the vaccine.

“It really speaks to the fact that Bahamians are now stepping forward in a major way to be vaccinated that we’re actually at the point that we’re at in looking to source vaccines from elsewhere,” Wells said.

In its most recent report, dated July 2, the Pan American Health Organisation ranked The Bahamas near the bottom of the list of countries and territories in the non-Latin Caribbean in terms of their vaccination efforts.

Just 8.3 people per 100 had completed their vaccination. This compares to 71.61 people per 100 in the Cayman Islands, 37.7 in the Turks and Caicos Islands, 27.92 in Antigua and Barbuda (from which The Bahamas recently borrowed 5,000 doses), 24.74 in Barbados, 14.01 in Guyana and 11.94 in St. Lucia.

The Bahamas is, however, ahead of Jamaica (2.59) and Trinidad and Tobago (6.34).

Speaking in the House of Assembly three weeks ago, Wells said that based on Department of Statistics’ population projections, it is estimated that in the year 2021 there are 272,160 adults aged 20 years and older. 

This translates to 18.8 percent of our population receiving the first dose and 7.2 percent of the population completing the vaccine schedule, he said, projecting that by September, 30 percent of the population could be vaccinated.

The Bahamas expects to get another 33,600 doses from the COVAX Facility at the end of July. It will have to give back whatever doses it borrowed from other countries.

While we are all anxious for “normalcy” given the very difficult period we have lived through and are living through, experts say COVID-19 is here to stay and we must coexist with the virus.

“Going through the five phases of grief, we need to come to the acceptance phase that our lives are not going to be the same,” said Thomas Frieden, former director of the US Centers for Disease Control and Prevention in a Wall Street Journal article earlier this year.

“I don’t think the world has really absorbed the fact that these are long-term changes.”

The virus is expected to become endemic, circulating in certain areas of the world’s population with outbreaks popping up.

“Our aim must be to keep the community as a whole safe, while accepting that some people may get infected every now and then – just as we do with the common flu or dengue fever, which we now manage through public health measures and personal precautions, and in the case of the flu, with regular vaccinations too,” Singapore Prime Minister Lee Hsien Loong said in May.

Uncertain future

The post-pandemic Bahamas then will likely be a Bahamas where the coronavirus is not completely eradicated, where our challenges with a deeply fractured healthcare system persist and one in which the pace of economic growth is far from enough to stave off the financial storm headed our way.

Over the course of the pandemic, the level of borrowing undertaken by the Minnis administration buried us even deeper into debt.

In 2020/2021, proceeds from borrowing totaled $2.073 billion. The government projects to take in $1.8 billion in proceeds from borrowing this current fiscal year. 

The government debt level is expected to rise to $10.4 billion in 2021/2022, equating to roughly 84.3 percent of GDP.

The Central Bank observed, “Projected revenue shortfalls should persist in the near-term, with taxable economic activity expected to continue to remain below capacity, recovering mostly in pace with the rebound in tourism output.”

Speaking last week, former Central Bank Governor Julian Francis said The Bahamas has to take a serious look at innovating the productive economy.

“…The (government’s new) budget doesn’t say anything about that, it doesn’t say anything about innovation,” Francis said.

“Yes, it makes a few points about some capital spend, which hasn’t happened to the extent that is proposed now in the past, and yes there are a few elements there relating to some innovations, dabbling in solar in the islands as opposed to New Providence and those types of things,” he said.

“But that’s only really scratching the surface.”

In discussing our post-pandemic reality, we focus here on economic and fiscal forecasts because those areas will largely shape the kind of country we will have.

There are, of course, other considerations.

The pandemic has exposed the need for technological improvements in healthcare, education and the wider economy, and for businesses to be more creative in how they function. 

It has shown that in many respects, workers can still be productive in a virtual space and much of the business we were doing in person could be done more efficiently through the use of technology.

The Bahamas must emerge from its COVID-19 experience better prepared for the next crisis. There is an urgent need for greater focus on improving food security and when resources permit, strengthening our social safety net.

Much of this will need to be driven by innovative thinking in the national political sphere, which sadly is a critical area lacking in dynamic leadership.

Prior to the onset of COVID, the greatest hindrance to national progress was widespread political tribalism. Beyond the pandemic, it is likely to cause even more significant damage and pull us deeper into quicksand.

Shaping the kind of Bahamas we have in the lead up to our 50th year of independence and beyond must take collective action, will and sacrifice from a population that understands that we are nearing the brink of fiscal and social disaster. 

Blind allegiance to any political party will do nothing to get us back on course. 

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