By Damian Edghill and Marla Dukharan
Bajans ‘too love’ their pot fish. And every pot fisherman knows that when he hauls, there’s no telling what he may have trapped. After all, that is the allure and excitement of it — the anticipation of seeing the ‘silver’ rising to the surface, sets the heart ah-poundin’. Often the anticipation is 90% of the result!
A policy decision was made to set pots for tourists, hoping for a lucrative catch. Unfortunately, and inevitably, in addition to the coveted brims, snappers and chubs, a few congas, lionfish and Bajan sculpins were in the mix. Prolific species they are, too!
The lionfish swam to our waters all the way from Florida, and so too has COVID, from far away yonduh! The difference being that Barbados took a ‘calculated risk’ to knowingly allow some COVID in by setting relatively relaxed protocols, in the hope that our pot ‘mesh’ was fine enough to control its spread. The reason? Presumably because the average tourist mightn’t want to quarantine for two weeks.
Hindsight is 20/20, and we don’t want to look back to 2020, but we learn as we go along. Before taking a ‘calculated risk,’ one must first ask whether it is even necessary to take it in the first place, and then decide whether it is worth taking, and to what degree. Do we already have the means to get by until the pandemic is brought under control? Are we safe enough at present? And most of all, what are the potential consequences if a ‘(mis)calculated risk’ were to backfire?
The old-time people were conservative in that way. They weren’t ‘customed’ to having much. Are we gambling what we can afford to lose, or is life at stake? And in taking this risk ‘for a few dollars more,’ are we endangering the economy even further?
Naturally, it comes down to a question of balance and degree. But once life in a pandemic is involved, taking such a risk tends more to gambling in its most dangerous manifestation — Russian Roulette, as so vividly portrayed by Robert De Niro in the classic movie “The Deer Hunter.”
According to the Central Bank of Barbados, the tourism sector expanded by 3% in 2019 — the fifth consecutive year of positive growth, with ‘long-stay’ arrivals up by 3.5% that year (although the final stopover arrival number for 2019 was not stated). If we use the Central Bank’s 2019 growth rate of 3.5% on the 2018 stopover arrival number of 678,538, according to the Caribbean Tourism Organization, we get a 2019 estimate of 702,286 stopover arrivals for Barbados.
According to the World Travel and Tourism Council, in 2019 Barbados’ tourism sector contributed 31% of GDP, created 44.9K jobs, and tourists spent USD1.253 billion. The UNWTO estimates tourist spend at USD1.3 billion in 2019, at 65% of exports. Even if we use the 2018 level of stopover arrivals, the average spend per traveler is less than USD2,000, which we know is skewed to the downside somewhat by arrivals who are not in fact tourists, and those destined for cruise ships. This estimate, however, is also consistent with the IMF’s Week at the Beach Index, which reflects Barbados at about USD2,000 per traveler, per week.
Is USD2,000 per tourist, on average, worth the risk?
Is USD2,000 per tourist, on average, worth the risk? The Government has already had to pay about 33,000 unemployment beneficiaries over BBD70 million, even before this most recent spike. And we don’t know the cost to the state of all the associated testing, retesting, quarantining and healthcare for those currently affected. This, not to mention the further cost to the private sector and the overall economy due to possible closures of businesses and schools, employee absenteeism as a result of having to test and isolate, potential closure of the Barbados Port Inc., etc.
Gross International (FX) reserves crossed BBD2 billion in September 2020 — probably the highest level ever. Barbados has access to concessionary loans from multilateral institutions, and the IMF is unlikely to abandon us at this juncture, so we are on reasonably solid ground in regard to FX.
The short-term tradeoff, if we temporarily shift away from traditional stopover tourism, is higher unemployment, but our entrenched tourism approach is presently, at once the holy grail and the poisoned chalice. The evidently dire consequences suggest that the recent relaxed protocol experiment has failed, so the question arises, are we now in more danger than ever before, for a few dollars more? If we are to improve, we must ask ourselves the question as to whether this experiment has resulted in a net benefit.
Why not channel our energies with laser focus towards ‘Welcome Stampers,’ at least until the pandemic is over?
The Welcome Stamp initiative is estimated to have earned the Government about BBD1 million in fees in its first two months with just over 400 applicants processed at that time, and is expected to generate about USD21.5 million in annual property rentals alone. The median annual accommodation spend per applicant is roughly USD53K. The Welcome Stampers are screened for financial fitness and they must have health insurance. They are much more likely to adhere to two weeks of quarantine as the stakes are higher, and they are unlikely to become a burden on the state even if they fall ill.
This target market is, in the present circumstances, more lucrative for both the state and for the private sector at large, in addition to being materially less risky. Finally, the current COVID spike is a huge deterrent to would-be Welcome Stampers — but let’s hope that we can recover some of this lost ground. Reputation is, after all, everything.
High end luxury and sports tourism-related property sales are reportedly very healthy in neighbouring St. Lucia, mirroring a trend being seen in North America and Europe whereby people are clamoring to escape the cities, and are willing to pay to do so. If we manage to regain control of COVID, it is not a quantum leap to foresee Barbados taking similar advantage and presenting itself as a safe hub for athletes to live and train until that mainstream industry resumes.
In the early stages, The Cayman Islands adopted our Welcome Stamp concept, but set a policy of admitting only their ‘Global Citizens’ on a very controlled basis. That policy is more akin to selective spear fishing, than setting pots or sein nets.
Within days of the UK’s most recent spike, including new and more contagious variants of the virus, over 50 countries closed their borders to the UK. Notwithstanding that they are British Overseas Territories, The Cayman Islands and The British Virgin Islands do not appear to consider themselves joined to the UK by some sacrosanct umbilical cord, and the latter have banned incoming UK travelers. Why shouldn’t we at least screen UK travelers more stringently, for now?
Beyond the Welcome Stamp, perhaps it is time to go back to basics.
As discussed at length prior to the winter tourist season, we need to develop other sectors of our local economy to get us through this period, with emphasis on self-sufficiency via agriculture (haven’t heard much about that lately), solar/renewable energy, offshore financial services, and the digital economy. An incoming wire transfer or foreign direct investment deal cannot break out of quarantine and need not be sanitized. Why is the Government’s budget to support the offshore financial services sector less than 10% of that for tourism which, although providing employment, is possibly a net FX drain on the economy?
Keep in mind that Barbados quickly achieved food security during WWII, so it’s time to pivot and to retool. The above suggestions may not be as sexy or lucrative as tourism in the short term, but that alternative is simply not an option anymore. Get the youth involved in national service programs — take them from behind their screens and off the block.
We Bajans, our responsible policymakers and selfless frontline workers, toiled day and night, pulling the heaviest of rollers, to prepare as good a COVID batting wicket as possible. By the grace of the Almighty, we had some success and enjoyed it for a time, when the rest of the world was suffering terribly.
We lost sight of that. Are we now doing to run ourselves out on 99?
Sir Everton just passed on. Bless his soul. He knew how it felt to be run out, in his case unfairly. In our case, we have no ‘empire’ to blame. In any event, apportionment of blame is not constructive at this juncture, but learning lessons certainly is.
It strikes one, that underpinning The Cayman Islands’ policy is the self-assured notion that in an unprecedented crisis, there is first and foremost the need to safeguard what one has. It may just be enough. It can slowly and safely be rebuilt into more as safe haven status gains in value. But reach for surplus too quickly, and one may end up with much less. It is the law of diminishing returns, in this case, tending to retrograde peril. As is often the case, it is those who can most afford to hold strain, that are putting pressure on the powers that be to overreach. Yet, in the final culmination, we all pay the price.
There is no shame in admitting where one has gone wrong and changing one’s position based on hard experience.
But let’s be slow to repeat this mistake. It has been proven that the natural advantage of being an island nation with controlled borders is the best possible defense in this pandemic scenario, and the relative cost of that versus the alternative is acceptable. Protocols should be modified in order to protect the health and economy of the nation as the top priority, then let the market decide. We may yet be pleasantly surprised as to how long visitors may be willing to quarantine in order to enjoy Barbados, provided we are able to re-establish our reputation as having COVID under control.
“Sweetheart, gimmuh’ some a dem cherries, but lef’ back d bird pick ones, ah beg yah!”