By NEIL HARTNELL
Tribune Business Editor
Any further blanket COVID-19 lockdown could push the Bahamian economy past “the point of no return” and cause “irreparable damage” lasting for years, an accountant warned yesterday.
Kendrick Christie, a former Bahamas Institute of Chartered Accountants (BICA) president, told Tribune Business that the economic and social fall-out produced by the pandemic now represented a graver threat to this nation’s prosperity and well-being than the virus itself.
The Crowe (Bahamas) accountant and partner, emphasising that he was not downplaying COVID-19’s threat to health and life, said that while a sufficiently critical mass of businesses will “hopefully ride through” this current national lockdown any repeat would be “problematic” for both them and the economy’s longer-term well-being.
Calling on the government to be more “innovative” and take “a risk-based approach” to combating so-called COVID-19 “hot spots” and case surges, Mr Christie said last weekend’s relaxation of the lockdown restrictions for the virus-free southern islands (a case was subsequently detected on Inagua) indicated it had taken this message on-board.
However, he urged the government to develop and lay-out an “exit strategy” detailing how The Bahamas will move out of the present lockdown and deal with all potential COVID-19 scenarios moving forward. This, Mr Christie said, would help eliminate some of the uncertainty plaguing the private sector and consumers, and provide a modest - but nevertheless badly needed - boost of hope.
Agreeing that the first COVID-198 lockdown was needed, the Crowe (Bahamas) partner told this newspaper: “When you go through a second one, and realise how difficult it is for the economy, the economic threat is as big as the virus threat. To me, the virus is the short-term threat, but the economy and social is the long-term threat. We have a $1.3bn fiscal deficit....
“If we go into a third or fourth lockdown, it will cause clients to consider whether to remain in business. I am concerned about a next lockdown. This one hopefully they will ride through, but any other lockdown or restrictions on will be problematic.
“We need what is called an exit strategy put forward; what the Government’s plans are. The bigger threat is how do we open our economy and come up with very innovative measures to avoid another lockdown. We’re at the point of no return.”
Mr Christie said The Bahamas, like virtually every other nation, is due to COVID-19 just “a step away” from officially entering arguably its steepest ever recession, which is defined as two consecutive quarters of economic shrinkage or contraction (the virus struck with just two weeks of the 2020 first quarter left).
Yet he argued that the Bahamian economy has been struggling ever since the turn of the century, with the unemployment rate in double digits - above 10 percent - for 18 of the past 19 years, and annual GDP or economic growth remaining stubbornly below 1.5 percent every year for two decades.
This, Mr Christie argued, showed The Bahamas was “getting less returns from tourism” even before COVID-19’s arrival, highlighting the need for it to follow its competitors by diversifying into other industries and enacting reforms such as the digital economy, improved public service and lower energy costs.
“I think the business community realises they don’t know who is advising the Competent Authority, but they have to take into account this is just as much an economic threat as it is a health problem,” the Crowe Bahamas partner added.
“To me, right now I respect the virus, and we understand there’s a real virus threat, but we have to realise The Bahamas is not in a good position to survive economic lockdowns and the closing down of businesses. There’s got to be a balance to it.
“We’ve got to look at this as more of an economic threat now, and how we manage the health threat in relation to that. We don’t need to resort to these lockdown methods any more because that’s going to result in irreparable damage to the economy, social and mental health. Too often in The Bahamas we say cancel, halt and certainly don’t appreciate the impact this has on the economy.”
Mr Christie argued that the Government could afford to ease restrictions, and allow more businesses to operate with the necessary COVID-19 health protocols in place, because in his estimation at least 90 percent had shown themselves to be in full compliance.
“I think we are discounting that,” he said. “I travelled to Andros and they were very compliant, all wearing masks and only a certain amount of people allowed to come into the business. They’re very vigilant of the health threat.”
Meanwhile, Philip Galanis, the HLB Galanis managing partner, told Tribune Business that the ongoing COVID-19 fall-out will “create havoc” for businesses and thousands of Bahamians given that no sign of economic recovery was likely to emerge until year-end 2020 at earliest.
“What we are seeing here is the huge mistake of allowing people to leave for 72 hours and come back without testing and an enforced quarantine,” Mr Galanis said. “As a result of that, you are going to see businesses continue to suffer cash flow problems and start to - if not completely terminate employees - then furlough them.
“There is going to be a reduction in the level and volume of business, and the impact is undeniable at this time. We’re not looking at any real rebound until the end of the year, and that is going to create havoc for businesses and households.
“Many people don’t know where their next meal is going to come from. Many live pay cheque to pay cheque, putting a tremendous strain on national resources and the public finances. We will see a tremendous downturn as a result of this.”
Mr Galanis added that the current lockdown as “beginning to impact on people’s emotions”, with the term “COVID fatigue being bandied about”. He said: “People are getting very tired of it. The problem we’re facing is that no one seems to have a specific plan to get us out of this, and that is causing a tremendous amount of angst and anxiety.”
Predicting that the present lockdown will last at least until month’s end, given that there has been no let-up in the number of positive cases, Mr Galanis contrasted The Bahamas’ predicament with that of the British Virgin Islands (BVI), which currently is COVID-19 free.
He added that his HLB counterpart in BVI, via a Zoom conference, had informed him that island’s borders were shut until at least September 1, with travel by residents and visitors barred both ways.