COVID-19 exposes regional vulnerabilities — says economist

COVID-19 exposes regional vulnerabilities — says economist

NASSAU, BAHAMAS — The vulnerabilities of the Caribbean are being ‘laid bare’ as a consequence of COVID-19, according to a senior regional economic adviser.

Deodat Maharaj, former deputy secretary general at the Commonwealth Secretariat presented this assessment at a Rotary Club of Southeast Nassau meeting yesterday via Zoom.

The senior international development consultant said unemployment, migration and increases in crime are to be expected, adding the Caribbean can no longer expect business as usual going forward.

“Business as normal can’t work for the Caribbean moving forward.,” Maharaj.

“It can’t work for Trinidad and Tobago, it can’t work for Jamaica, it can’t work for Barbados and I don’t think it’s going to work for The Bahamas. We know the challenges that our economies face and in the case of the Bahamas which is heavily tourism based.”

On the tourism front, he predicted that the cruise industry will likely be in a “state of limbo” for the remainder of the year.

Maharaj said: “In terms of visitors who come by air I think those numbers will also be reduced. When you look at your tourism product, in the case of the Bahamas, the Bahamas is a high cost destination.

“Still, you have to start reflecting on how you can change your tourist product to focus a bit more on niche markets, the wealthiest of the wealthy. Secondly, you have highly skilled people in the Bahamas.

He said: “You should look at niche industries in terms of medical tourism for example. You need to think about your product as you go forward because mass tourism is not going to be the same and you are going to be competing with other countries who rely heavily on tourism.”

Maharaj noted that one of the biggest challenges facing countries in the region is the fact that they produce very little.

“It is impossible going forward, for the Caribbean and Caribbean people to build resilience if we continue to relegate agriculture to the back waters,” he continued.

“I know agriculture has a lot to do with the climate, the soil, typography and the Bahamas is not known as an agricultural country but you also have technology. The Israelis have a successful agricultural industry in the desert.

“It is important to use innovation and technology and link it to agriculture. We in the Caribbean are among the most food insecure on the planet,” said Maharaj.

With COVID-19 crippling various sectors and reducing employment, Maharaj said poverty is expected to increase.

“People are not working, sectors are closed and so you can expect poverty to increase,” he said.

“Expect poverty to increase across the Caribbean. The Bahamas, like Trinidad and Tobago is in a better position. That is good for the Bahamas but there are implications.

“Associated with an increase in poverty, you will have greater interest in outward migration,” he said, noting that country’s like the Bahamas are ‘magnets’ for regional migration.

Still, Maharaj said he did not think hope is lost.

“I think we have opportunities,” he said.

“We have to find new sectors and new industries. Like food insecurity, we are the most highly indebted region on the planet.

Maharaj said: “The Bahamas is not an outlier, the Bahamas is a part of the problem. For us in the Caribbean financing is precious because we need it but we need to balance the need to get finance with increasing debt.

“The problem we have is that we are classified as middle or high income countries. The Bahamas is classified as a high income country and therefore ineligible for concessional financing.

Maharaj suggested that countries in the region work together and advocate to entities such as the International Monetary Fund (IMF) and World Bank for concessionary financing.