Friday, April 3, 2020
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas failed to plan for the possibility of a total tourism shutdown because it was lulled "to sleep" by years of record arrivals and earnings, a former finance minister said yesterday.
James Smith, also a former Central Bank governor, told Tribune Business that no planning was ever done to prepare for the reality The Bahamas faces now because no one foresaw that it could happen.
Speaking after the prime minister warned Bahamians to prepare "for generational changes to the economic structure of our Commonwealth", which seemed to imply a diversification strategy to reduce this nation's reliance on tourism, Mr Smith said the past several weeks had brought home just how "fragile" the country is in terms of its exposure to external shocks such as COVID-19.
He warned, though, that it would be "a tall order" to accomplish what Dr Hubert Minnis seemingly wants to achieve overnight, although he backed the Prime Minister's desire to convene a group of economists and others to develop "a masterplan to rebuild our economy" for the long-term.
"It's critical," Mr Smith added of the Prime Minister's call for ideas. "We're now seeing how fragile the economy is, and we will see more of it over the next few weeks and months."
Acknowledging that The Bahamas had experienced a tourism shutdown before in the aftermath of the September 11 terror attacks, albeit only for one to two weeks, he added that no one ever believed there could be a repeat for potentially much longer.
"Once it was over it was back to normal," Mr Smith recalled of the September 11 aftermath. "I don't think anybody contemplated it happening again. We didn't do any planning for what if it happens again.
"Looking back in retrospect, we should have been looking at strategies focused on what happens if we were shutdown for three to six months. It might have called for the stockpiling of food to feed ourselves, which would have needed resources in the Budget.
"It's easy to fall asleep. Year after year we've been getting record amounts of visitors. Even after the recession we were getting record amounts of visitors. It puts you to sleep, and now we're going to pay for that. That's where we are now. Now it's here, and here in full force."
Mr Smith said the Prime Minister's comments indicate the Government is also looking beyond the immediate COVID-19 crisis to the Bahamian economy's jump-start once the pandemic is over, and what can be done to make it more resilient against future external shocks.
"The question is what happens at the end of the period: Do you go back to business as usual, and simply reboot the economy from where we left off, meaning which means shuttered production units are to be restarted? Whatever we want to do, we have to do that first in The Bahamas," he added.
Mr Smith said The Bahamas first needed to look at generating more local production/manufacturing, and developing alternative access to goods and services. He expressed particular concern that Florida, a major source market for tourists and imports, appeared to be late in responding to COVID-19.
He also argued that The Bahamas had yet to maximise the benefits from tourism, pointing to Dr Minnis's recent House of Assembly speech in which the Prime Minister suggested unemployment pre-COVID could be substantially reduced if vacant rooms in existing hotels were filled.
And Mr Smith said linkages between the tourism/hotel industry and sectors such as agriculture stood to be better developed.
Comments
moncurcool says...
For years there were people who were telling successive governments to diversify and top relying on tourism alone. Where was James when he was Minister of State for Finance when those calls were being made? Oh, guess he was sleep.
Posted 3 April 2020, 2:42 p.m. Suggest removal
Well_mudda_take_sic says...
....ditto that....
James Smith is both a pseudo-economist and a certified dork of the highest order.
The Tribune's Business Editor (Neil Hartnell) must be connected to him in some way because he's always giving this despicable PLP dinosaur, who will kiss anyone's butt for his supper, the time of day.
The moment I saw Smith's very dated photo above, I just had to write this comment.....knowing full well that it would be a waste of time reading whatever garbage he had to say.
Posted 3 April 2020, 5:19 p.m. Suggest removal
ThisIsOurs says...
exactly..
I don't know what this nobody knew talk is...more like nobody listened
Posted 3 April 2020, 9:51 p.m. Suggest removal
mckenziecpa says...
Diversify with what? the Bahamas is broke, their are no geniuses here we cannot sell off the little seafood. We have a GDP more than a billion, we have nothing but snd and sea and location. The local businesses here of them are killing the people (acholol) some taking all their money number house and then you have Shane and others stealing
Posted 3 April 2020, 3:37 p.m. Suggest removal
ThisIsOurs says...
wrong. we have intellectual capital
Posted 3 April 2020, 10:46 p.m. Suggest removal
Well_mudda_take_sic says...
The likes of James Smith have played an important role in causing the enormous and very devastating brain-drain that our country has experienced over the past three decades or so. This man never should have been allowed a say in the monetary or fiscal policies of our country.
Posted 4 April 2020, 10:37 a.m. Suggest removal
sheeprunner12 says...
Hindsight is 20/20 ……… Tourism and low wage employment was accelerated in the past 30 years with little regard for self sufficiency and skills diversification …….. Then we got hooked on the illusion of Tech without the required HR skills and Govt platform base ............… If you love something so much, let it kill you.
Posted 3 April 2020, 3:44 p.m. Suggest removal
Socrates says...
I'm not sure how we can diversify.. no fertile areas so farming very expensive, unskilled workforce, a workforce accustomed to pay and benefits incompatible with their job function, etc. Its a shocking reality with no apparent solution but prayer..
Posted 3 April 2020, 4:35 p.m. Suggest removal
ThisIsOurs says...
you swallowed the koolaid. They tell you Bahamians can't innovate so when they suppress innovation you werent expecting anything else and then produce the comment above. Does everyone need to be able to? No an army of 100 is sufficient. Thats more than Bill Gates, Zuckerberg or Jobs had. If you get more that's a bonus. They don't want it. They want things to remain as is so they control the economy and everyone else fighting over maid and butler jobs at the hotel and they have the power to determine who eats.
Posted 3 April 2020, 10:43 p.m. Suggest removal
ThisIsOurs says...
the taxi drivers and the ride sharing people is a prime example. there are a thousand others
Posted 3 April 2020, 10:44 p.m. Suggest removal
Ironworker says...
The Bahamas could be one of the richest countries in the world.
Posted 3 April 2020, 7:17 p.m. Suggest removal
BahamaPundit says...
You didn't fall asleep. You were wide awake to dollar, borrow, spend instead of think, plan, save.
Posted 4 April 2020, 6:37 a.m. Suggest removal
sheeprunner12 says...
The consumer rage bug has infected The Bahamas ever since the 1990s …….. now most Bahamians are deep in debt and living paycheck to paycheck (or spin to spin) …… The lucky One Percenters or the "diligent smart savers" can survive for a while, but banks, insurance, salary deduction friendly businesses, numbers houses and churches have fleeced the average Bahamian almost to "financial death" in the past 25 years.
Posted 4 April 2020, 9:03 a.m. Suggest removal
BONEFISH says...
The Bahamas is not a practical or prudent country.A SWOT analysis of this country and it's economy should have been gone years ago.Development plans could have been developed from that.This country has fail to leverage to it's advantage, it's nearness to the US and it's tourism industry.Some bahamians may up doing what they laugh and throw jeers at caribbean nationals for doing.That is going to a next country to work.
Posted 4 April 2020, 6:27 p.m. Suggest removal
happyfly says...
Reopening the construction industry would at least give us an economic cushion for now. It is absolutely insane that we have lost tourism due to this global corona crisis and the first thing the government does is shut down the next most important foreign income earning sector of the economy, to what, save some lives. Anyone thought about how many lives are going to be lost when hundreds of thousands of people can't afford to pay for food ? Let the construction workers sign a waiver that they understand the risks. Let them wear their hi-viz shirts so people can keep away from them. Make sure they make arrangements to not be cohabitating with high-risk family (or any family) Make them stay in man camps. The government HAS to find a way to get the construction industry back to work !
Posted 5 April 2020, 4:45 p.m. Suggest removal
concerned799 says...
It would be called banning cruise ships which would then lead to new hotel construction when the COVID issue is over.
Posted 6 April 2020, 1:14 a.m. Suggest removal
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