This is
in reaction to an academic note “COVID-19Policy Response for the Caribbean” by Justin Ram. This is a summary
targeting a wider audience with opinions on the presented facts.
The world is in for it! As politicians and other persons in
leadership roles, many without the necessary training, must make decisions to
save lives or protect lifestyles. A likely two years away from a potential
treatment, social distancing is the only way to stop this virus pandemic
spread, saving lives but damaging, Taxation Revenue, Sales Income, Salaries and
Jobs, the very economy. Institutions, Local, Regional and International, with
political and financial power are being asked to discuss and consider actions.
As any action will be at a cost. Money which would be firstly needed for
increased medical demands, the social distancing and related economic
inactivity, and then, to restart and rebuild.
Leaders, hopefully, will choose to save lives before lifestyles! Global
social distancing strategies will result in GDP forecast, Productivity
output, showing declines, across all SIC sectors and industries. The
Caribbean region depends heavily on the Transportation and Tourism Industries, which
involves air and sea travel and hospitality to earn hard currencies, to
purchase its basic supplies. The financial sector will be hit, as job loss and
operation closures, will affect loan repayments and revenue from new lending.
Governments will have to find funds by any means necessary, leading to
increasing public debt and poverty. Hence, the need to support social services
and basic food prices.
Medium term economic support for debt relief, unemployment and
increased social services, will be added to the expansion needs across the
Healthcare system. As stay apart and stay home policies may last for 12-18
months, with another 3-6 months to reboot. Such support would have to be in
hard currency, as the region imports most of what it consumes, inclusive of
medical equipment and supplies to treat the pandemic, which means dealing with
international financial agencies. Hence, leaders would have to morally persuade
its population to respect and strictly adhere to its social distancing to
shorten the projected two years of economic pain. While managing the demand for
foreign currency.
The timing dictates all actions! If a suitable treatment is
available within 3-6 months (Triage Period), the Caribbean can count its
blessings. Apply for or absorb some soft borrowings and move forward to rebuild
the economy. If this triage period is longer, approaches to regional and
international financial agencies will be needed to access loans and grants,
with a mix of strict conditions attached and the awareness that it would be
over 150 countries in much the same economic position. With this triage period
closer to the predicted 18 months, the international financial agencies,
themselves, may be in desperate need. The calls would have been to support countries
overburdened health systems and basic living expenses for its stay at home
population.
After the triage period, no matter its duration inclusive of the expected
virus rebounding or future cycling, the need is for rebuilding (Resuscitation
and Resilience). Breeding life and confidence into the economy by firstly,
measuring the damage and assessing the size of the stimulus needed. Permanent
and long-term damage is expected, from job losses, operation closures and
reduced taxation revenues. But in the short to medium term, fixes must be
applied to the Transportation and Tourism industries and supporting associated sectors,
as these will be still the region’s key Economic Drivers, sources of jobs.
Caribbean Entertainment, having been the region’s main draw (Economic Drivers SYNERGIES), to fill
rooms, restaurants and bars, and to earn essential foreign currency, must now
be redesigned, using stimulus funds. With the emphasis placed on revenue
resilience, such as, implementing patenting laws and supporting the search for
new home-grown talents. So that, Governments could depend on and would continuously
earn royalty revenue throughout any future disaster periods. Diversifying the
Caribbean region away from traditional island resources, internationally dependent
revenue, into Creative Industries; People drives Diversification and Services‘An Economic Driver’.
Rationale
T.A.J &
Associates Company Limited uses this occasion
to comment on topics that have been covered, both academically and by the mainstream
media, to add its opinion and point out investment opportunities, not to invoke
any social action.
