UWI expert predicts further setback as businesses close

By Emmanuel Joseph

Leading university academic is predicting a setback to any potential economic growth for Barbados, if the ashfall from the La Soufriere Volcano in St Vincent and the Grenadines keeps businesses closed for another two weeks.

Director of the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES) at the University of the West Indies, Cave Hill Campus, Dr Don Marshall is further warning that the next few days will therefore be crucial for the country as it undertakes a government-sanctioned national cleanup of the ash with water that is in scarce supply.

Dr Marshall said while those businesses which are permitted to open to sell cleaning items will do a brisk trade, other sections of the economy will drag on.

“Government will have to make a decision however, sooner than later on water use. This to my mind is the tipping point in relation to the kind of economic repair and post-COVID recovery.

“This is the tipping point that can prove quite frustrating because at this point I can’t think of any other substitute that can be easily made available to households across Barbados and to businesses that can assist the cleanup better than potable water on offer,” the top economist stated.

“Obviously we are being told we shouldn’t use potable water for that reason. But the supplies of brackish water, rain water and so on may be thin across the country . . . so the temptation to use potable water will be high and will no doubt force a reaction from the Barbados Water Authority. That may end up frustrating residents who may already have had to deal with no water coming through their taps,” he added.

“So Government is in the unenviable position in trying to manage the post-lockdown environment at a  time when the immediate urgency is to proceed with a cleanup that has to be water-based . . . and how do you do so at a pace that is going to lead to a quick resumption of normal business, while also paying attention to the water scarcity challenges the island faces,” Dr Marshall told Barbados TODAY.

The UWI economist suggested that this is going to be the first great public policy challenge for the government and may even provide the country with clues as to how long the post volcanic transition would last.

“For now, if we can’t get past this volcanic transition in another 10 to 15 days, I expect that we would have, by the end of June, a far more deleterious position in relation to growth in the economy than say, last year,” Dr Marshall cautioned.

He recalled that around June last year, the economy reflected an 11 to 12 per cent contraction.

“If we can’t within 10 days have the post volcanic cleanup done without too much of an impact on time or and water reserves, I do anticipate that we will come in for an even worse return.

“So the next couple of days are really crucial…and we have had two volcanic explosions already today, Tuesday. So Barbados is in nervous anticipation of what is to happen in the next couple of days to the volcano,” the SALISES head said.

However, Dr Marshall noted there may be an upside to the ashfall from La Soufriere for Barbados, as he pointed to possibilities for research and experimentation of the material in the tropical agriculture sphere.

“I imagine that there will be some value to the inert material that is being produced out of the magma ashfall. So there is an opportunity to perhaps look to the extent to which this can be ploughed back into the fields to make for richer soil content,” he declared.

Meanwhile, President of the Barbados Economic Society (BEC) Simon Naitram has said there is too much uncertainty for him to make any assessment of the impact from the volcanic ash.

“To be honest, I have no idea. I really don’t have any clue about it at this point. Just like at the beginning of the pandemic, my view is that there is too much uncertainty to have any clue as to how this is going to play out,” Naitram told Barbados TODAY this afternoon.

“And at this point it is best to leave it to the scientists to figure out how long this thing is going to last, how it is going to affect us and how life is going to be going forward. There is far too much uncertainty . . .

“There is very little beyond that that we can say as economists. Economists deal effectively with real world issues.

“All we can do is deal with the next step at a time and at this time there is far too much uncertainty for us to have any idea of how life is going to look and how this is going to affect the economy,” he stated.

Barbados has already lost close to $2 billion in economic activity in 2020 due to the COVID-19 pandemic.

(emmanueljoseph@barbadostoday.bb)