NASSAU, BAHAMAS — The Bahamas must develop and articulate a post COVID-19 ‘recovery strategy’, particularly in response to the domestic environment, according to well-known accountant.
Gowon Bowe said: “I believe that one of the critical things we are going to have to do is develop, articulate and communicate a recovery strategy. That should be the primary focus of the Ministry of Finance, not even just in response to Moody’s, S&P and others but more so in response to the domestic environment.”
Last week, credit ratings agency Moody’s predicted a contraction in economic activity in The Bahamas of about eight per cent this year due to the COVID-19 fall-out.
The ratings agency has placed the country’s Baa3 rating on review for downgrade to so called “junk bond” status.
Stressing the need for the development of a recovery strategy, Bowe said: “The requirement to develop a recovery strategy is going to involve a number of factors that ideally would have been better positioned had the national development plan been progressed like it should have.
“What that would have done was effectively put the country on a course and even it got knocked off we would have a course to come back to. In the absence of that I think the Ministry of Finance, the business community and the community at large need to sit down and develop post COVID-19 recovery strategy.”
Bowe continued: “We know that the tourism product is effectively going to be in a stalemate for a period of time until confidence rebounds. What we need to know is what the major development properties, the Ministry of Tourism and the promotion boards are planning in terms of how we get the word out once The Bahamas has gotten over the hump. What we need to be focusing on is quality tourism and not quantity tourism.”
Bowe explained that The Bahamas should pursue visitors in the upper income brackets or those with greater disposable income.
“Those are the types of persons we are going to have to pursue. That may not result in high room occupancy rates but have that quality visitor return as quickly as possible is going to be important,” said Bowe.
He further noted that the Airbnb market is also another area that could provide an opportunity to get tourism dollars back into the economy.
Bowe said: “You may find persons are more open to private dwelling homes in various islands including New Providence; allowing them and their family to self contain and still enjoy the benefits the Bahamian sun, sand and sea. We have to look at how we stimulate the primary economic driver, while understanding that we are not fully in control of that.”
Still, Bowe note that with a slow down in tourism expected over the next several months, a keen focus must be placed on domestic developments and industries that can be tapped.
“We need to focus on those industries, in construction in development and innovation that would employ the greatest number of Bahamians now furloughed or who may be unemployed over a longer period of time until tourism rebounds,” he said.
“What is going to be important is the government identifying those sectors and industries that are able to rebound the quickest by virtue of employment. It may not be the highest employment levels but what is going to be important is that the government demonstrates that it targets the industries for its own spend.”
Bowe said: “In order to see our economy jump start we have to figure out ways to get money circulating throughout the economy. There’s a lot of focus on government being able to inject but that is only going to come from the tax dollars they are able to collect.
“If they don’t have tax dollars then the borrowing is certainly going to have a significant impact if we are on track for a downgrade in the near term simply because as you have a lower credit rating that increases your borrowing cost.”