Most Caribbean countries will be exposed to the sudden drop in tourism.
Government will need private-sector help to fill the gap.
A condition of resuming business could be employing furloughed tourist workers as cleaners and temperature-checkers.
We are all in the same COVID-19 storm, but not all countries are in the same boat. Here in the Bahamas, 70% of our GDP is generated from tourism. Tourist-based economies like ours throughout the Caribbean region have limited social safety nets. This means our people, economy and future are far more likely to be wrecked by COVID-19 than nations with more diversified economies. Today, airports and hotels here are shuttered, unemployment throughout the region is soaring, and nobody knows when these tourism sector jobs may come back.
The Caribbean countries of Barbados, Belize and the Bahamas are among the most exposed in the world to the sudden pause in global tourism. This pandemic shock is unlike any shock that these sovereigns have seen in their history, said Julia Smith, an analyst at S&P Global Ratings. S&P expects that tourism in the Caribbean will probably decline by 60-70% from April to December compared with last year. In fact, due to COVID-19, the ratings agency downgraded the Bahamas and Belize this month further to junk status, while lowering the credit outlooks in Aruba, Barbados, the Dominican Republic and Jamaica to negative.
To put the magnitude of the problem into perspective, these countries are accustomed to welcoming three to six cruise ships a day. That is 12,000-20,000 new tourists hitting their shores every day. They have no cruise ships now and havent had any since February. Right now, 95% of the 80,000 hotel rooms in the Cancun Hotel Zone are vacant. Without the Cancun-to-Cozumel tourist sector income, countries as large as Mexico are suffering.
Tourism money is very important for one reason: It pumps cash (dollars) into the economy. Without tourists to pay (with cash) for para-sailing, scuba diving, deep-sea fishing, taxis, groceries, etc. tourism-dependent countries risk running out of US dollars, which they need for the importation of food, fuel and for servicing debt obligations. No tourism, no cash.
These economies need to be diversified, but this cant be done overnight meanwhile, every night, I fear these countries are on the cusp of civil unrest. Tourism-dependent economies are collapsing.
Tourist-dependent economies need to create thousands of jobs for furloughed tourism-sector workers. They need them quickly. Unlike the EU, UK or US, governments in the Caribbean cannot afford to offer wage subsidy furlough schemes. With unemployment levels soaring past post-war peaks in the US, analysts are looking at the Great Depression for guidance. Some commentators say that battling COVID-19 is akin to fighting a war. But this is far from a wartime economy where production runs full tilt, and everyone is needed to work.
What can be done? Here is a plan that would allow the private sector to work with the government in winning the unemployment war without any additional investment. Real jobs are based on real needs. In order to open our economies, even domestically, we will need the equivalent of a small army of workers to carry out health tasks testing, temperature checks, and contact tracing as well as the additional sterilization that will be necessary in businesses and public spaces.
If the private sector in Caribbean countries were asked to share the governments burden of creating employment, thousands of jobs could be created overnight in a mutually beneficial way. Leaders of Caribbean nations might consider mandating that the condition upon which high traffic businesses such as grocery stores, home improvement stores, retail banks, malls, large office buildings, ferry companies, gyms, etc. may reopen is the employment of repurposed tourism sector COVID cleaners and temperature-checkers at a fixed hourly rate during opening hours.
If that were the condition that enabled the private sector to get back in business, it would be the CEOs that were queuing outside the hotel union workers building to hire COVID cleaners and temperature checkers. Governments could make it clear that this is a temporary measure that will be in place until COVID-19 is under control and hotels are reopened.
A new strain of Coronavirus, COVID 19, is spreading around the world, causing deaths and major disruption to the global economy.
Responding to this crisis requires global cooperation among governments, international organizations and the business community, which is at the centre of the World Economic Forums mission as the International Organization for Public-Private Cooperation.
The Forum has created the COVID Action Platform, a global platform to convene the business community for collective action, protect peoples livelihoods and facilitate business continuity, and mobilize support for the COVID-19 response. The platform is created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.
As an organization, the Forum has a track record of supporting efforts to contain epidemics. In 2017, at our Annual Meeting, the Coalition for Epidemic Preparedness Innovations (CEPI) was launched bringing together experts from government, business, health, academia and civil society to accelerate the development of vaccines. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.
Repurposing human potential would give thousands of tourism sector workers dignity and purpose, as well as assisting these fiscally fragile nations. It would allow businesses to reopen sooner. Customers would feel safer going out to spend, which would get the domestic economy moving again. And yes, everyone benefits, even the regions debt ratings.
License and Republishing
The views expressed in this article are those of the author alone and not the World Economic Forum.
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