‘Shift from tourism in economy reboot’ – Marshall

Government needs to look beyond tourism to jumpstart the economy in the short to mid-term, the head of the UWI think tank has suggested.

Predicting that the country’s main economic engine will be out of action for at least another 18 months, Dr Don Marshall, the head of the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES) at UWI Cave Hill said the COVID-19 pandemic is the latest reminder that Barbados cannot continue to depend on tourism.

He told Barbados TODAY: “Anytime that you are relying on the discretionary spend of Europeans and North Americans to drive your economy and you get a pandemic of this nature happening then you have to rethink immediately.

“And it is because we cannot depend on that discretionary spend in the short to medium-term that we have to start looking at inventions, start looking at creations, start looking at what is the best way to incentivize those entrepreneurs and small businesses.”

Responding to Prime Minister Mia Mottley’s recent “mini budget” as well as Governor of the Central Bank Cleviston Haynes’ forecast for the economy, Dr Marshall said there were few surprises.

Last week Mottley announced a “never-before-seen” two-year $2 billion economic plan.

It includes a $400 million stimulus package for businesses to retain staff as well as plans for $210 million to be spent on households across the country.

The PM also revealed that $800 million in investments were expected from six major projects.

While admitting that Government did not have much wiggle room in the current situation, he said the continued focus on tourism has to shift.

He said while he also understood that Government would want to provide relief for everyone at this time it was simply not possible because of financial constraints.

Dr Marshall told Barbados TODAY: “The scope of the plan and the remarks of the Governor of the Central Bank weren’t too surprising.

“I think we can accept that clearly the measures made out by the Prime Minister last week could not be the sum total of what is required going forward, because we have to rebuild a tourism economy by way of looking past the traditional ways in which we do things by way of building into that equation the idea that tourism will not drive this economy for at least another 18 months.

“My only criticism would be the monies earmarked for construction around the tourism-related projects…because judicious choices have to be made about what businesses we wish to stay and what businesses we wish to incentivise going forward in this new environment.

“We cannot postpone the question of diversification of the economy and the Government sooner rather than later has to sit down and tweak its industrial policy and in tweaking it they will have to reorient what it is doing with available money. $200 million earmarked for construction projects around the tourism model that is crashing around us with the collapse of the airline industry is something that I think has to be rethought.”

The respected academic said there was a need now for Government and stakeholders to revise development plans and industrial policy targeting.

In completely agreeing with Governor Haynes’ prediction of a 13 per cent decline in economic activity this year due to the COVID-19 pandemic, Dr Marshall said it could possibly be worse.

He said he had previously forecasted that Barbados’ economy would contract by about 15 per cent of GDP [gross domestic product].

Said Dr Marshall: “The Governor’s predictions are spot on. You don’t want to be the bearer of bad news but unfortunately if the new normal is going to feature periods of reopening and then periods of closures, because we are opening albeit under a 24-hour curfew scenario.”

But while agreeing with the decision to cancel Crop Over 2020, he said a space could have been provided for artistes.

He said he would have preferred to see creativity linked to Crop Over being highlighted by way of productions of online content for plays, music, arts and fashion.

“Once you cancel Crop Over you are more or less telling all the creators in our spaces that there isn’t a market for their cultural creations,” Dr Marshall said.
randybennett@barbadostoday.bb