NASSAU, BAHAMAS — The government must be creative but understand its own limitations as it seeks to mitigate the economic impact of the COVID-19 pandemic in the Bahamas, according to a local economist and University of The Bahamas (UB) professor.
Rupert Pinder told Eyewitness News, the state “cannot save everyone”.
“We just had a devastating hurricane and now there is the fall-out from this virus,” Pinder said.
“Within the next two years we will be heading toward another general election. There will be temptation to do more than they can realistically do. There will be that temptation.
“The danger with that is however it will put The Bahamas in a vulnerable and unsustainable position long term.”
Pinder continued: “Everything has to be carefully managed. Dorian and COVID-19 are not of our making but what is in our control is how we are going to respond.
“We must narrow our options in terms of how we respond . It has to be a careful and well thought out response. The reality of it is that you cannot save everyone. You just cannot.
“You have to be creative but there is no way to save everyone. You cannot provide the level of assistance you would like to everyone.”
According to Pinder, there will be no more ‘business as usual’, with the impact of the COVID-19 fallout likely to be felt for some time.
“I think that over the years we have done our people a disservice by not encouraging them to wherever possible be self reliant,” he said.
“It’s not business as usual any more. Even when the economy starts to recover employment numbers tend to be the most stubborn to recover.
“Identifying the problem is easy, identifying the solution is another thing. There is no question that we are headed for a recession. The only question is for how long and how deep. Conservatively 70 percent of the economy is based on tourism, 40 percent directly and 30 percent indirectly.
“There is no one at the major resorts like Baha Mar and Atlantis. They ave shut down. Right off the top tourism’s contribution to our GDP is gone.”
Further underscoring the country’s fiscal reality, Pinder noted that unlike the United States, the Bahamian government is limited in terms of what it can do via stimulus packages and social safety nets.
“The demand on the foreign reserves may not be as great a concern when we have continued earnings through tourism and foreign direct investment but when you look at what is happening right now, the world is almost at a standstill,” Pinder said.
The external reserves stood at just over $1.86 billion at end-January 2020.
Pinder added: “While the government may wish to do a lot of things they have to be mindful of how the foreign reserves are going to be impacted, given that we import a lot of what we consume.”