As unemployment rises dramatically in Barbados and hopes for the immediate recovery of the tourism industry fades, the Minister for Investment appears to be banking on Barbados receiving its first post-pandemic visitors by July to lift the industry out of its worst-ever crisis.
Minister in the Ministry of Economic Affairs and Investment Marsha Caddle made the revelation while trumpeting several measures to help sustain individuals and businesses through the COVID-19 crisis and beyond.
Declaring that Government has been proactive in its response to the COVID-19 pandemic, which has crippled tourism and most related industries, she said: “In terms of the tourism sector, we are negotiating with airlines on the public health protocols that would be in place at such time we are able to return to flights,” she announced.
Caddle explained that the protocol would include rapid testing of every passenger, with results being presented before they could board the flights.
“It may be possible for flights to return by July if we start to look very carefully and closely and seriously at some of these protocols,” she said.
Data shows the island could experience a double-digit fall in gross domestic product, based mainly on the slow return of the tourism industry, Caddle said, adding that while officials hoped for the best they had to plan for the worst.
On the unemployment rate, Caddle said: “Between March 23 and April 23 unemployed claims at national insurance rose by about 24,500, and that is about 18 per cent of our work force, mainly from the tourism sector.
“If you take those numbers together, the fact that we were at 10 per cent and we have up to 18 per cent new claims, without doing any arithmetic it suggests there is a tremendous increase in unemployment.”
She added that she expects the majority of employees would return to work at the same establishments after the pandemic.
She disclosed that Government was looking at a “three-phase” approach to the reopening of island-wide economic activity, adding that “right now we are in phase one”.
“We are getting some very positive public health results. We really have been able to start to flatten the curve and we want to maintain that,” she said.
While not providing details of the plan, Caddle suggested that phase two would include some physical distancing and the resurrecting of “the kind of economic activities that can easily fit in a physical distancing environment”.
“Phase three is then what is the new economy, because there is going to be a new economy. And that new economy is going to be heavily digital – whether it is helping citizens to create digital products that have low transportation cost that they can stay in a safe environment and create export via digital path way or whether it is a new digital ID card,” she said.
In outlining several economic plans, which she said were designed to help citizens, businesses and government during and after the pandemic, Caddle said they “depend on tourism not returning much before the end of the year and into next year”.
She highlighted the Government’s “survival” stimulus measures that were announced by Prime Minister Mia Mottley on Friday, March 20, including a $20 million Household Survival programme, funds to assist hotels upgrade and refurbish, and supporting measures for individuals placed on a shortened work week.
In relation to hotels, Caddle said: “We are looking to develop a green energy fund for the tourism sector.
“One of the things we are looking at is innovative ways in which hotels could pool investments in a large inland solar farm that feeds into the national grid, and then the hotel gets repaid for its investment in clean energy.”
.She provided no details but spoke of the planned establishment of an asset management company to“own all of the government’s land and other physical but non-operational assets and will manage them better and pay each citizen a dividend”.
The Minister for Investment said: “Another important piece of the recovery for us is what we call our ‘homes for all’ programme… where Government is going to use land that we have been able to acquire from our planning applications.”.
Caddle, a trained economist, said while ‘homes for all’ “might seem like a strange kind of pandemic response, it is anticipating that incomes have been decimated and people are going to have to spend time re-examining savings and assets”.
She said: “We have to plan to help support households in that process and so the objective is to enable low income households to offer collateral for construction mortgage to own their own home. So using the $40 million Housing Credit Fund we are going to develop services on this land and we anticipate that will help unlock financing from banks that will inform the development of about 1,400 affordable homes.”
Government is also “using planning condition to require investors in tourism projects, to offer to the public of Barbados, at least ten per cent of the equity in investments,” she said.
“This ten per cent has to come no later than when a constructed hotel opens up. We already have one hotel that is an example of this, and we anticipate when open that will be in place.”
On the subject of National Insurance Scheme unemployment benefits, Caddle said provisions are made for individuals who are placed on short-week to get 60 per cent of their earnings for the days they are not working and this could be extended to include other groups.
She added: “We are looking to extend the eligibility to cover more of the self-employed and more of the informal sector.
“What we do realise is that we have such a large informal sector, we are looking at how do we reach them, what are the mechanisms, what are the databases, what are the ways that we can make sure the informal sector, casual workers are not left out.
“So right now we are working quickly to be able to develop those kinds of systems.”
She said while commercial banks have agreed to offer a moratorium on personal debt, Government is in talks with some landlords to give an ease in rent payments during the pandemic and the response has been “very positive”.