One in every five workers in Barbados could be jobless soon, says a university professor, as the COVID-19 pandemic continues to rock the local economy.
Assessing current data of best and worst case scenarios, Dr Justin Robinson, Professor of Finance at the University of the West Indies, Cave Hill Campus said unemployment could jump to in excess of 20 per cent, spawned by the number of people who depend, directly and indirectly, on the now decimated tourism sector.
Professor Robinson a former director of the Central Bank of Barbados and a former chairman of the National Insurance Scheme (NIS), expressed particular concern for the self-employed, small and micro business owners, who are likely to face great hardship if the situation is prolonged.
The self-employed, he stressed, may not have access to unemployment benefits provided by the NIS, thus worsening their situations.
As the local tourism sector, which has virtually collapsed, with international travel halted, Professor Robinson said if the impact of COVID-19 lasts until the end of June, about 25 per cent of tourist arrivals could be lost. However, if the blow to the leisure travel business continues until the end of the year, the result could be a staggering 75 per cent reduction in arrivals.
In the United States, more than 10 million workers have applied for unemployment assistance in just two weeks, immediately pushing the once record-low unemployment level there to ten per cent.
The university academic told Barbados TODAY: “The United States’ jobs report and travel restrictions on the United Kingdom, Canada, Europe and Trinidad and Tobago, make it likely that the tourism impact may well last at least up to June. We seem likely to lose at least 75 per cent of arrivals . . . therefore we can expect to lose at least 6.4 per cent of GDP. GDP losses of this scale can translate into significant unemployment in Barbados likely in excess of 20 per cent.”
More than 40,000 Barbadians are employed directly and indirectly in the tourism sector and following the outbreak of the global pandemic, most of Barbados’ hotels and independent restaurants have closed their doors indefinitely, as operators monitor the spread of the highly infectious respiratory disease.
With the main foreign exchange earner in distress, Professor Robinson noted: “The pandemic will impact negatively on the Government’s ability to meet the targets in the International Monetary Fund (IMF) BERT (Barbados Economic Recovery & Transformation) programme as designed.
“The slowdown in the economy is going to sharply reduce Government’s revenues, and expenditures may have to increase in certain areas. The government has already been forced to engage in additional borrowing.”
However, the management specialist said, the unique nature of the pandemic “makes it likely” that the Government can re-negotiate terms with the IMF. “The inability of the Government to meet [any] targets is not due to lack of commitment or incompetence, the inability arises from a unique external shock.”
Professor Robinson, who is also Dean of the Faculty of Social Sciences and Executive Director of the Cave Hill School of Business, expressed worry for the island’s small business sector.
“Small businesses and self-employed persons are especially vulnerable to these types of shocks. Firstly, they may not have the cash reserves or a larger parent company to help sustain them during a sustained period of low to no revenues and self-employed persons may not be able to access unemployment benefits,” he pointed out.
He said Government will have to be “creative” in finding ways to provide assistance to these groups or many will “go under”.
Professor Robinson said in the US, self-employed persons are being allowed to file for unemployment benefits while the British government is paying around 75 per cent of employees’ salaries.
One Reply to “UWI dean: Unemployment could climb to over 20 per cent”
Maybe on the positive side this fallout will be the creation of a new breed of forward thinking leaders and a supporting populous that will accept the reality that the rich nations are not going to help the 3’rd world out of a love for humanity.
Both the local media and the UWI dean are missing the point; Bajans are not stupid they can see or sense what is coming. The Dean was not held accountable for making an effort to help plot a path out of this mess and spoke as an analyst when we need an analyst and a solution provider.
The reality here is that hard power and soft power is at work and the plan for depopulation and one world government is real.
Barbados is full of intellectuals but what a waste if they simply line the gutters and provide arm chair analysis. The PM needs help in steering the boat and the water right now is very rough.
Smell the coffee family, when the leader of the USA dictates that 3M an established supplier cannot sell medical masks to Canada you have to ask if not for us here in Canada then what will they do for you. Then consider that with rich countries and states stepping up and providing living allowances and billions of dollars in aid, 2 billion is being requested by the UN for the entire 3’rd world and no takers have stepped up. Consider this, what would be your share of 2 billion not much.
Our economies have been based on giving away what we have in exchange for 5 cents on the dollar which essentially amounts to a pay check if you can get work.
So here are a few solutions from an ordinary guy from a place you love to hate called the Pine, a Modern High School grad not a Harrison College or Lodge boy ( no disrespect intended just saying I am as close to grass roots as they come)
1. Build vacation resorts in the islands that are owned and operated by Caribbean governments and include an invested reserve fund that belongs to the workers. Companies that want to own and operate resorts in the islands would not be discouraged but by law will contribute to the reserve fund.
2. Regional governments to invest in Guyana in 2 sectors food production and resources ( oil and mining) and promote the expansion of a food manufacturing sector supported by the community colleges that will enhance food security.
3. Do not allow UWI excesses such a simply granting degrees and or providing free education ( I have a degree and paid 100% for mine over a 6 year period). Lawyers and doctors are necessary but do little to create jobs use the food science program and the university and community college to develop a vibrant food sector with strong export potential, help young graduates to become entrepreneurs.
4. Liaise with developed countries (Canada, USA, etc.) via technical specialist working out of the offices of the CG ( counsel General) to work closely with the provinces ,states, etc. to identify and supply technical graduates from our community colleges. Additionally negotiate for co-op programs to assist these students so that they get the critical on site local experience needed to hit the ground running.
5. Change the business plan to a regional model for example in terms of hospitals plan for island specialties for example cardiology may be Barbados, Neurology may be St Vincent, Orthopedics may be St Lucia. Sure this means compromises but the upside is the creation of centres of excellence
Speaking to regional partnerships I see at a minimum 2 alliances with Barbados participating in an alignment that includes Belize, St Vincent, Grenada, St Lucia, Dominica and Grenada