By guest columnist Thomas Christopher Famous
What’s next? Where do we go from here? Two questions, on the mind, of just about every human being, presently on earth.
If one looks at the thoughts of the leading financial minds, things are not looking too bright for the world economy. By extension, the economies of the Atlantic/Caribbean, which are overly dependent on a healthy global economy, are facing strong headwinds.
Here are some of the global outlooks:
“We anticipate the worst economic fallout since the Great Depression,” IMF Managing Director Kristalina Georgieva quoted on Loop Cayman.
“Caribbean nations are facing their biggest shock in at least a century as tourism slumps amid the coronavirus pandemic, according to Marla Dukharan, an independent Barbados-based economist. Even under the most optimistic scenario, the region will lose about 50% of its tourist revenue this year.” – Bloomberg.
“Business and tourism leaders are preparing for the possibility that Cayman could be closed to visitors until next year.” – Cayman Compass.
The list of bad news, both internationally and regionally goes on and on. However, today we will focus on some solution or option based dialogue.
With the slump in tourism, many, if not all workers in those sectors, will be faced with 3 choices:
Option A: Depend on government help, which will run out
Option B: Learn a new skill set
Option C: Starve
Logic will dictate that option B, is the most likely course for the majority.
So the question now becomes what skill set can they learn? Here are some professions that are always in need of workers:
- Medical staff
- Auto Mechanics
- Chefs / Bakers
- Construction related occupations
It is now for them to seek to retool themselves in short order.
For those who run AirBnb facilities, that sector is not likely to see any volume of demand anytime soon. So, many will look to convert their properties back into long term rental units.
The knock on effect of this, will see the lowering of rental rates, specifically for 1-2 bedroom units.
The upside is that all rental units will, eventually, need some form of upgrade and maintenance. This then opens the door, for those in the construction industry, to have some form of steady work.
Business, both large and small, will have to adapt in order to survive.
Restaurants, due to social distancing rules, will see less and less “sit in customers” and become more and more dependent on take out and delivery services in order to see revenue.
Salons and Barbershops, if allowed to reopen, will be required to use PPE, during what used to be routine procedures such as; waxing, shaves, and hair treatments.
Grocery stores will have to build protective plexiglass booths for their cashiers, among other measures including offering more and more home delivery services.
Individuals will, out of necessity, become more frugal in their spending and more and more innovative in their long term planning.
With many being unemployed or underemployed, there will be less and disposable income for luxury items such as; cell phones, clothes and eating out on a daily basis.
Many will begin to consistently cook at home, while others will begin to do more and more home repairs on their own. Some will take up more home gardening, in order to lower their costs and to ensure fresh healthy food options.
Repatriation of workers
In economies such as; Bermuda, Cayman Islands and the Virgin Islands, which are heavily dependent on guest workers, there will undoubtedly be some financial pain, as many of those guest workers, now unemployed, will be returning to their home countries.
This will result in less economic activity in sectors such as real estate, grocery stores and vehicle usage. The knock on effect, will put negative downward pressure on landlords looking to pay their mortgages.
Too Big to fail
Banks will be, or should be, forced to lower their mortgage rates in order to avoid mass foreclosures.
In the aftermath of the 2008 global financial crash many countries bailed out the banks from a disaster entirely of their own making. It is now time for these financial institutions to now come to the aid of the masses by lowering their rates on loans and mortgages.
Other financial institutions should be offering grants, not loans, to small and medium sized businesses.
Regional governments are working in solidarity, to ensure that we will mitigate the loss of life and simultaneously, through a variety of actions, including food security, in order to rebuild our social and economic lives.
In this time, we are united and in unity, we will not fail.
- Thomas Christopher Famous is a government Member of Parliament in Bermuda. He is the Bermuda government representative for Caribbean Relations and Caricom and writes weekly columns for various Caribbean news sites. Famous can be reached via WhatsApp at (441)-599-0901 or via email at [email protected]