Whilst the COVID-19 pandemic has struck at the heart of the local economy, severely disrupting it, it has also presented some opportunities and driven Barbadians out of their comfort zone.
Governor of the Central Bank of Barbados, Cleviston Haynes, made this observation as he delivered opening remarks during the annual Pension Investment Conference hosted virtually by Eckler Ltd. yesterday.
Haynes noted that at the beginning of the year, the Barbados economy appeared to be on the cusp of the long-awaited economic recovery. However, sadly, COVID-19 altered the outcome and the outlook.
“COVID-19 has struck at the heart of the economy, derailing activity in the tourism sector. The need to close national borders so as to curtail the spread of the virus locally brought the economy to a virtual standstill. Even as our borders reopened and we welcomed visitors back to our shores, we have only been receiving a fraction of our usual tourists. Hotels have reopened in anticipation of a partial resumption of activity, but a new wave of the spread of the virus in key source markets is jeopardising a speedy recovery of the sector and the economy. Several planned investments have been delayed and overall domestic demand has weakened,” the Governor remarked.
“The central questions now are: when will the recovery start and how quick will that recovery be? What will be impact on businesses and on individuals in the short to medium term?” he noted.
Haynes went on to state that in the interim, preserving viable businesses and livelihoods is crucial. The emerging news about vaccines is an encouraging sign, he said, but the speed with which these vaccines are taken up and the confidence that they engender are critical to the resumption of economic activity. Recovering the loss of output from this year could therefore take at least two years.
Acknowledging that in the early stages of the crisis, Government extended its safety net, while financial institutions offered cash-flow relief to their clients, both businesses and individuals, whose livelihoods were directly affected by the pandemic, Haynes however acknowledged that for many of these clients, the moratorium period is over and they have begun to repay. However, there are others who are not yet able to restart payments, because they are still not back to work or their business has not yet picked up.
He said, “Individuals and firms experiencing ongoing difficulties need to have urgent discussions with their financial institutions to see if and how existing facilities can be restructured or where it is reasonable to provide new financing. This has to be done on a case by case basis, as each situation differs in nature and complexity.”
On the positive side, Haynes stated, “COVID-19 was the last thing any of us wanted – the sheer number of 2020 memes will attest to that. It has sickened some of our loved ones, created additional challenges for our economic recovery, impacted our citizens’ livelihoods. But I want to end on a more optimistic note, because COVID has also created opportunities by forcing us out of our comfort zones. It has exposed us to alternative ways of doing things, and made us do things and adopt behaviours that we have long talked about but were slow to implement.”
“During the lockdown, for many businesses to continue to operate, they had to attempt remote work and it worked. Now some are embracing it. People who had never used e-banking or e-commerce have become pros at both. Many businesses are paying their staff via direct debits and Government has virtually phased out the use of cheques. We are becoming more accustomed to using the technology we have at our disposal,” he stressed.
“We all want this to be over. We want to get our economy firing again. We want to be able to go out and socialise without concern again. We want to see everyone’s entire face again. But when we do throw away our masks, let’s not throw away the lessons we’ve learnt, the new perspectives we’ve gained. Instead, let’s use them to make our economy and society stronger and more resilient,” the Central Bank Governor stated. (RSM)
