At least 75 per cent of the tens of thousands of unemployed Barbadians in the hospitality and tourism sector are expected to be retained, earning 80 per cent of their salaries again under the newly implemented Barbados Employment and Sustainable Transformation (BEST).
This was disclosed by Governor General Dame Sandra Mason, as she delivered her Throne Speech to mark the second session of Parliament today.
Making reference in her wide-ranging delivery to the stimulus package to help the tourism sector, Dame Sandra said it would be funded by Government to the tune of $300 million.
“By providing this assistance, it is envisioned that the beneficiaries will be better positioned to retain at least 75 per cent of the workforce, create sustainable jobs, honour their statutory obligations and manage their debt,” said Dame Sandra.
It is estimated that close to 40,000 people became unemployed during the height of the COVID-19 pandemic, the majority from the tourism industry, which is said to account for about 45 per cent of the Barbados’ gross domestic product.
With an estimated 15,000 people employed in direct tourism and another estimated 32,000 in tourism-related fields, it is expected that the $300 million will go towards three main areas for hotels and tourism facilities as a response to the COVID-19 pandemic.
Describing the stimulus package as the largest being offered to the country, Dame Sandra said it was intended to “protect jobs, support the balance sheets of our companies in the tourism sector and those of direct tourism services, and ultimately, ensure that our physical infrastructure remains fit for when some level of normalcy returns”.
“Barbados must be fully prepared for that moment,” she said.
“The BEST plan has three main features. The first is that the Government will make an investment in tourism firms which will enable these companies to re-engage all of their workers on 80 per cent of their normal salary for up to two years should the need arise. Workers entering the scheme will not lose their existing rights to severance pay if they are laid off again at any point within the next 12 months,” she said.
“The resources will only be available if tourism numbers and revenues remain below the levels required for the survival of the sector. This job support programme is a strategic intervention that is a win-win for all. It is conditional on a number of measures designed to strengthen the competitiveness of the tourism sector specifically, the economy generally, the quality of workers and the opportunities given to them,” she explained.
One of those measures is the substantial upskilling of workers in the sector in areas needed for their specific job as well as soft skills that will be provided through citizenship education.
“Bajans should note that this citizenship training will be offered to all Barbadian employees and employers, all students above class 3 and any other citizen wanting to benefit from state benefits. It is our intention that as many of our citizens will become ‘Star Bajans’, instilling a stronger sense of national pride and purpose and of course, respect and tolerance for fellow Bajans,” she said.
“Second, there must be a transformation of the tourism sector by committing to greening through water conservation and water harvesting measures where applicable and the installation of renewable energy capacity to reduce reliance on fossil fuels,” she added.
Dame Sandra said: “Third, there is a requirement to review all processes, payments and systems to ensure their suitability in today’s world and where necessary, to undertake a digitisation of the same. My Government will support these last two elements by the establishment of a dedicated Green and Digital Investment Fund for which firms that have re-engaged their workers will be eligible.”
She further explained that the funds would primarily be distributed through investment in the companies by way of a class of shares that mirrors preference shares, and there will be some limited opportunity for grants.
This method of support, she said, will help to strengthen the weakened balance sheets of these firms.
Government will make the Green and Digital Innovation Fund and training available to small businesses and to manufacturing and agricultural enterprises, provided that they too, have retained a significant portion of their workforce.
“The sums available for investment and grant will be capped to ensure that as many entities benefit as possible,” said Dame Sandra.
Another condition of benefiting from the programme is that firms must invest in localizing the value chain and making deeper connections with farmers, manufacturers, artists of all types and contractors and providers of professional services.
“Investments in collaboration across the sector such as joint websites, tours, marine sculptures parks, water ferries, and similar initiatives will also be strongly encouraged,” said Dame Sandra.
She said Government was refining the Tourism Loan Guarantee Fund, given the reluctance of local banks to participate in spite of the need for many of our tourism establishments to be able to access cheaper forms of capital.
She said the Government investment to save enterprises was preferred to “simply paying pensions and social security for workers to remain at home”.
“It also helps our enterprises and their staff to remain fit for purpose while supporting employees in maintaining mental wellness. It allows Government to protect, and in some instances, to expand the nation’s hotel stock and to help save our enterprises from bankruptcy and insolvency,” she added.
“While my Government will help these businesses stay afloat, they will not be permitted to draw dividends or unreasonably increase the compensation of management and owners before repaying the investment in their enterprises,” the GG noted.