BPSA boss says uncertain times ahead

Having survived a tumultuous 2020, in which thousands of workers lost their jobs, and businesses closed, Barbadians are being put on notice that a most uncertain 2021 awaits them, as the island battles a wave of the COVID-19 pandemic.

On Wednesday February 3, the country started a 15-day shut down until February 17, dubbed a ‘National Pause’ by Government. The pause, in which, non-essential businesses and other operations ceased, also involves a community evaluation survey for COVID-19 and dengue fever, known as the “Seek and Save” operation.

Even as efforts ramp up to curb the growing number of COVID-19 infections on the island, which now stands at 1 814 overall cases, 324 active cases and 20 deaths, head of the Barbados Private Sector Association (BPSA), Edward Clarke, said the road ahead is likely to be erratic for those in business, and the island’s path to economic recovery from the pandemic, unpredictable.

Clarke, an experienced business executive, knows the current administration is confronting challenges on several fronts, and life has become very difficult for the average citizen.

With deaths increasing and confirmation that the British variant of COVID is present in the population, there is growing anxiety about the disease overwhelming the health care system and further undermining the quality of life on the island.

“The Government thought it was essential to shut things down and we will support them,” Clarke committed.

Government has spent millions so far to shore up the health care system and establish the Harrison Point Isolation Facility.

It has also launched several poverty reduction programmes in response to elevated unemployment numbers, the latest being the provision of 60 000 care packages for families in need.

Moreover, additional funding was provided to the National Insurance Scheme’s (NIS) unemployment benefits fund to respond to the thousands of layoffs and several business closures.

Money keeps things moving

In his effort to get Barbadians to appreciate the connection between Government’s ability to respond to the effects of the pandemic and the need to keep businesses running, Clarke reminded Barbadians that money needed to keep Government operating needs to be generated from economic activity.

“We simply cannot afford to lose revenue at the current rate as a business sector and expect to survive or grow. That is the situation,” he said, noting that many small businesses, particularly, are on the brink and could fold.

“Even the large businesses just don’t have the revenue streams to support many of the plans they had,” he added.

While he wished he was the bearer of positive news after nearly a year of human and economic tragedy, Clarke told Barbados TODAY: “We do not foresee any great improvement in the situation soon. The first quarter of this year is very tough, and the second quarter is not expected to be any better.”

Of the shutdown, Clarke said: “We are hopeful the Government will be able to reach its targeted objectives within the two-week time frame. We are also hoping that this will be swift, the impact will be positive, and that we can get back to business and keep more people employed.

“If we don’t, then we are going to have more problems . . . . Even now, some businesses have had to lay-off people,” the private sector leader disclosed.

Clarke explained that COVID-19 has effectively disabled the local private sector as a major contributor to the state coffers in recent months. Therefore, this reality is likely to confront Government as it prepares the Estimates of Revenue and Expenditure, which is effectively the national budget for the financial year 2021 to 2022.

COVID battered

According to BPSA head: “It is a very different market that we are operating in. Government’s revenues are certainly under tremendous strain. The expenditure related to COVID and other demands are increasing.

“Certainly, the capital projects Government had planned, we would love to see them started because that will result in employment and greater income circulating in the economy. The projects would help businesses and Government as well.

“There is only so much that Government can do when you have limited and declining revenue. We are under an International Monetary Fund (IMF) programme and the country has great challenges ahead in 2021/2022.”

The private sector leader offered some advice to Barbadians about the COVID-19 induced crisis and how they should respond.

“It is a reality check and Barbadians need to understand the very real and serious impact this disease is having on the country and will continue to have on us well into 2021.

“COVID-19 very negatively impacted us last year, and given the way we have started 2021, things are not looking great. Barbadians need to be frugal. We need to manage the money that we have very well and certainly every Barbadian needs to be aware of what is happening to us economically.

“This country is at a very tender stage. It is at a stage where we are lucky to have the IMF programme in place. We are also lucky that Government, in 2018 and 2019 sought to bring the fiscal management back under control, otherwise we would be much worse off today.

“Government will have to manage this economy very tightly and people cannot expect the unrealistic from the Government and businesses . . . . We are in a very difficult position as a country at this time. And we all must try to hang in there with the hope of better
days to come.”

As the BPSA tried to make a case for an alternative to a national shut down, Clarke responded to critics who suggested the private sector was putting business ahead of the welfare of citizens.

“We in the private sector are very aware of what we need to do to manage the health risks in the country and we are supporting Government wholeheartedly in that regard.

“We are trying to keep our businesses going for the long term and keep Barbadians employed.

“People see the private sector as interested only in profits but that is far from the case. It is an image that the private sector needs to improve,” he explained.

No time for greed

Clarke was adamant that businesses are simply in survival mode and not seeking to profiteer at a time of national hardship.

“This is not a time for businesspeople to be greedy. That is far from the reality. People are simply trying to protect the businesses that they have taken years to build. They want to keep their businesses going, support their families, keep employees in their jobs and try to survive this crisis.

“We certainly have to convince the public that we are in this for all of Barbados and not just for ourselves,” he pointed out.

Clarke surmised: “It is almost impossible to forecast where we will be a year from now. Nobody knows what is going to happen globally. We are a small country and we are extremely dependent on external factors and that is something we have no control over.” (IMC1)