Hearts of Caribbean too big to fail
What's next? Where do we go from here? Two questions that are on the mind of just about every human being.
If one looks at the thoughts of the leading financial minds, things are not looking too bright for the world economy. By extension, the economies of the Atlantic/Caribbean, who are overly dependent on a healthy global economy to feed their own economies, are facing strong headwinds.
Here are some of the global outlooks:
“We anticipate the worst economic fallout since the Great Depression,” IMF managing director Kristalina Georgieva said yesterday in remarks previewing next week's virtual meetings of the 189-nation IMF and its sister lending organisation, the World Bank — Loop Cayman
“Caribbean nations are facing their biggest shock in at least a century as tourism slumps amid the coronavirus pandemic, according to Marla Dukharan, an independent Barbados-based economist. Even under the most optimistic scenario, the region will lose about 50% of its tourist revenue this year”— Bloomberg
“Business and tourism leaders are preparing for the possibility that Cayman could be closed to visitors until next year.”— Cayman Compass
The list of bad news, both internationally and regionally, goes on and on. However, today we will focus on some solution or option-based dialogue.
With the slump in tourism, many, if not all, workers in those sectors will be faced with three choices:
Option A: depend on government help, which will run out
Option B: learn a new skill set
Option C: starve
Logic will dictate that Option B is the most likely course for the majority.
So the question now becomes what skill set can they learn? Here are some professions that are always in need of workers:
• Medical staff
• Auto mechanics
• Construction-related occupations
It is now for them to seek to retool themselves in short order.
For those who run Airbnb facilities, that sector is not likely to see any volume of demand anytime soon. Many will look to convert their properties back into long-term rental units.
The knock-on effect of this will result in the lowering of rental rates, specifically for one and two-bedroom units.
The upside is that all rental units will eventually need some form of upgrade and maintenance. This then opens the door for those in the construction industry to have some form of steady work.
Businesses, both large and small, will have to adapt to survive.
Restaurants, owing to social-distancing rules, will have fewer and fewer “sit-in customers” and become more dependent on takeout and delivery services to bring in revenue.
Salons and barbershops, if allowed to reopen, will be required to use personal protective equipment during what used to be routine procedures such as waxing, shaves and hair treatments.
Grocery stores will have to build protective Plexiglas booths for their cashiers, among other measures, including offering more home delivery services.
Individuals will, out of necessity, become more frugal in their spending and more innovative in their long-term planning.
With many being unemployed or underemployed, there will be less disposable income for luxury items such as mobile phones, clothes and eating out on a daily basis.
Many will begin to consistently cook at home, while others will begin to do more home repairs on their own. Some will take up home gardening to lower their costs and to ensure fresh, healthy food options.
Repatriation of workers
In economies such as Bermuda, Cayman Islands and the Virgin Islands, which are heavily reliant on guest workers, there undoubtedly will be some financial pain, as many of those now unemployed guest workers will be returning to their home countries.
This will result in less economic activity in sectors such as real estate, grocery stores and vehicle usage. The knock-on effect will put negative downward pressure on landlords looking to pay their mortgages.
Too big to fail
Banks will be, or should be, forced to lower their mortgage rates to avoid mass foreclosures.
In the aftermath of the 2008 global financial crash, many countries bailed out the banks from a disaster entirely of their own making.
It is now time for these financial institutions to come to the aid of the masses by lowering their rates on loans and mortgages.
Other financial institutions should be offering grants, not loans, to small and medium-sized businesses.
Regional governments are working in solidarity to ensure that we mitigate the loss of life through a variety of actions, including food security, to rebuild our social and economic lives.
In this time, we are united and in unity; we will not fail.
• Christopher Famous is the government MP for Devonshire East (Constituency 11). You can reach him at WhatsApp on 599-0901 or e-mail at email@example.com