July 29, 2020
A new report by the Inter-American Development Bank reviews the ongoing impact of the crisis for countries in the region, and provides recommendations for policymakers as they position for a post-COVID-19 recovery.
Recommendations include the importance of preparing for a broad resumption of travel and tourism, as well as the importance of bolstering capacity for debt management, broadening the social safety net, improving internet connectivity, as well as strengthening the capacities of emergency health services.
The report, Caribbean Quarterly Bulletin: The Pandemic Saga Continues, also includes detailed assessments for The Bahamas, Barbados, Guyana, Jamaica, Suriname, Trinidad and Tobago, and the countries of the Organisation of Eastern Caribbean States (OECS).
“While coronavirus curves had flattened and several airports reopened, the region still faces a treacherous transition to a post-crisis scenario,” said David Rosenblatt, the Regional Economic Advisor for the Caribbean Department of the IDB. “The path forward will not be an easy one as policymakers face social pressures, complicated fiscal situations, and a tough external environment.
They will need to spend scarce resources efficiently, improve their debt management profile and attend to longstanding institutional challenges in economic policy.”
Put together by the team of economists of the IDB’s Caribbean Department, the study notes the decisive actions by governments in the region to stop the spread of COVID-19. On the economic front, however, conditions have worsened in recent months as big declines in tourism revenues start to take a toll, with some countries facing historic double-digit declines in GDP. The economic impact for countries that rely more on commodity exports will be less severe.
Using the recently launched Tourism Dependency Index (TDI) the report analyzes Caribbean countries’ tourism dependency, and its implications for the post-COVID economic recovery. It notes that a dozen Caribbean countries (including The Bahamas, Barbados, Jamaica, and 6 from the OECS) rank in the top 20 globally on this index of tourism dependence.
Prospects for a return to pre-crisis levels of tourism demand remain highly uncertain, as the economic impact of the crisis continues to affect travelers’ ability to reach Caribbean markets, as well as lingering concerns regarding sanitary conditions.
The Quarterly Bulletin uses a recent IDB survey of 12,500 households in the Caribbean to analyze the social impacts of the crisis. It sheds light on significant job losses and business closures for business owners in both tourism- and commodity- dependent economies.
For households earning less than the minimum wage, more than one in three respondents said they had gone hungry in the previous week.
The report also recommends strengthening emergency health capacity and social safety nets. The pandemic has also brought to the forefront the need to improve internet connectivity and provide quality education.