Predicting that meaningful economic growth and business travel were highly unlikely to return to the region any time soon, one noted economist is warning of the urgent need for “disruption” of how things are done in the region in several industries.
Regional economist Marla Dukharan said most countries were unlikely to witness economic growth similar to that of 2019, while noting that in 2020 the Caribbean had weak economic performances.
She insisted that the outlook for this year looks “promising”, but nothing that would put the economies of the region “anywhere near” the levels of economic activity of 2019.
“As a matter of fact, for many countries it will not be felt until 2022, 2023 and in some cases 2024, until we get back to 2019 levels. So most countries will not reach that kind of level of activity for about three or four years, unless we disrupt our own way of doing things,” said Dukharan.
She was speaking on Thursday during a virtual session of the 17th annual Royal Fidelity Economic Outlook (RFEO) conference, which was held under the theme Global Digital Disruption: Threat or Opportunity.
Dukharan said it called for bold and agile leadership to make the kind of changes required in the economy and businesses.
Pointing to the recent Caribbean Policy Research Institute study Insult to Injury: The Impact of the COVID-19 on Vulnerable Persons in Business, Dukharan said she was disappointed that 53 per cent of businesses in the region made no changes to their sale strategy to adapt to social distancing and other pandemic related protocols.
“Only three per cent changed the products and services they offered; only 19 per cent used the internet for sales or marketing and only 23 per cent used the telephone for the same. It makes you wonder what the rest were doing,” she said.
“This data tell us that we are not disrupting our own business model even to meet the demand of a pandemic. In fact, it seems we are reluctantly adapting to a digital first mentality,” she said.
However, Dukharan pointed out that there were several areas in which countries and companies could “cause disruption” to achieve long-term prosperity.
“First, we must support and prepare our workforce for a new world,” said Dukharan, while indicating that the region had an oversupply of primary and secondary educated individuals but “a severe undersupply” of vocational and university graduates.
“Secondly, we must create higher economic value, based on higher-skilled jobs and of course, higher wages. And third, we must disrupt our own business models lest we be disrupted,” she said.
She said support for the workforce and especially women could be done by offering greater flexibility for employees to maintain their productivity, mental and physical wellbeing.
She also recommended a “disruption” to the education system by creating “the best environment for children to learn”, while pointing out that recent studies have shown that about 65 per cent of households were unable to provide an environment conducive to learning over the past year.
Dukharan said disrupting education is also about the skills that are taught.
“Education training [and] getting the right people to do the right job is what will create a more prosperous future for our countries. We need to take a look at the skills gap of today and going forward and define intentionally what skills we want to adopt and learn,” she said.
She also suggested that training in technology skills, data mining, gaming, and education technology be high on the agenda, adding that a disruption in business models meant looking to sectors we never have before and never tapped into.
“Are we going to prepare our people to fill these gaps or will our people continue to prepare cocktails, earning low wages while we outsource our higher skills and higher value jobs abroad?” said Dukharan.
“Countries have as much as one-third of their workforce employed in this low wage sector (tourism). In addition to this, we have had a severe skills mismatch in this region for quite some time. Retraining doesn’t have to be teaching a low skill worker another low skill in another sector,” she added.
Dukharan, who sits on Government’s Jobs Investment Council’s Finance and Insurance Committee, also suggested that we can use opportunities like virtual education to disrupt tourism.
“I have my doubts as to whether business travel will in fact come back to the levels we saw in 2019. I think it is highly unlikely,” she said.
However, the economist said the region could also become a “premier destination” for university students, fellows and lecturers who are not required to be physically on campus.
“We can intentionally use tourism to solve our demographic problems and our skills gap by attracting people from high-skilled sectors that contribute to developing expertise in our economies,” she added.
The economist also proposed a disruption in the agriculture sector by doing things “in a more data-informed, climate-controlled, automated way”, and disrupting the financial services sector by allowing more online payment solutions and fintech companies.
“These are the things we can control. These are the ways we can disrupt the course we have been on in the whole post-independence era – 50 plus years. And this is how we can get on a more prosperous course for generations to come in this region. We will never experience true freedom and the magnificence of this region unless we set our own parameters on how it is going to be,” she said.