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New Lockdown May Be ‘Economic Suicide’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian retailers gave a mixed reaction to the reimposition of weekend lockdowns with some branding it as akin to "economic and national suicide" and others backing the Prime Minister's move.

Egan Kemp, president of Eunison Company, the Shoe Depot parent, told Tribune Business that Dr Hubert Minnis' response to the latest surge in COVID-19 cases - of which 16 more were disclosed yesterday - was "actually making the situation worse by choking off" the little economic activity that is taking place.

Arguing that COVID-19 will likely remain a threat for months, if not years, to come, Mr Kemp warned that The Bahamas must learn to live with the virus and learn to manage the associated risks by adhering to mask wearing/social distancing health protocols otherwise the country will have "no economy" left.

However, Andrew Wilson, Quality Business Centre’s (QBC) principal, told this newspaper that the Prime Minister had made the right call by reimposing restrictions designed to curb COVID-19's community spread, adding: "I'd rather lose a weekend than a lifetime."

While acknowledging that weekends, and especially Saturdays, were the top sales days for most retailers, Mr Wilson said the ban on travel to the US and other foreign shopping destinations meant that whatever was lost likely will be picked up during the week.

Yet Mr Kemp, questioning why the Government was treating weekends differently from week days when it came to the latest nation-wide lockdown (Grand Bahama is already under a seven-day shutdown), said: "I think everybody is starting to learn that these lockdowns cause more economic damage than everyone feared, and the Government will learn soon enough that without consumers it will have no revenue.

"We are taking the necessary precautions, so why are we not allowed to live and take the normal risks of every day life. Getting into a car, you could die. Getting into a plane, you could die. Life has risks. The enforced shutdown imposes inequity on businesses and employees by taking gainful employment away, yet they're still expecting tax revenue from the same sources. Where's the logic?

"I think later than sooner someone in government is going to wake up the fact the must let citizens and businesses conduct business as usual under the safety guidelines otherwise they will have no economy," Mr Kemp added. "The costly consequences of this thing are already starting to come to the surface.

"Without an economy, the Government doesn't exist because there are no people conducting every-day business transactions. I still go back to the Government must be diligent, and shutdowns should be limited and brief in scope."

Warning that many businesses had barely survived the first COVID-19 lockdown, while numerous others had not, Mr Kemp warned that himself and plenty of other entrepreneurs may not make it should the Government decide to impose more restrictive curfews and shutdowns than those imposed at present.

"If the Government goes back and shuts us down one or two more times, I don't know if we can do one more," he told Tribune Business. "If the Government shuts us down two more times, maybe even once, we're done.

"I don't think the average Bahamian understands how difficult it is to get a business up and running, add another job, add another job. I don't think they understand how hard it is to get the wheels churning.... We are likely committing economic and national suicide. These shutdowns are equivalent to economic and national suicide."

The Government has frequently acknowledged that managing the COVID-19 pandemic is akin to walking a tightrope, given that it has to balance protecting and saving lives with preserving to least some economic activity so that sufficient numbers of Bahamians can earn a living.

Dr Minnis again alluded to this in unveiling the weekend lockdown on Friday, saying: "The fight for the health and lives of our citizens comes first and foremost. At the same time we are fighting on the economic for the financial security of every family. The reality is we will rebuild our economy and will recover fully."

Yet no plan or strategy has yet been forthcoming, with the Government seemingly relying on its Economic Recovery Committee (ERC) for this. Yet its full report is only due in September 2020. Mr Kemp, meanwhile, said the lockdown had cost customers only be able to shop at weekends - due to the difficulty of getting into stores due to the COVID-19 protocols - the one time they were able to meet their needs.

He also warned that the weekend lockdown will "again drive more Bahamian customers to shop online and buy less locally" at a time when this nation needed to conserve every cent of foreign currency it possesses.

"I understand the Government is in a difficult situation, but they are actually making the situation worse by choking off their only income source, which is the local economy because they currently don't have much external income coming in," Mr Kemp said. "It's only a matter of time before the Government's inability to pay its own people comes to fruition."

He added that, if Shoe Depot was to open on Sunday in addition to its current Saturday presence, the weekend lockdowns would impact between 25-30 percent of its weekly sales. The retailer had run a sale or discount initiative every week since the economy's reopening in a bid to give hard-pressed consumers some relief and keep them spending.

Mr Wilson, though, took a more sanguine approach to the latest weekend lockdown. "I honestly think the Government is doing the right thing with the lockdown," he told Tribune Business. "I think the Government has made the right decision with the lockdown. Certainly, I'd rather lose a weekend than a lifetime.

"Saturday is definitely our biggest day as a retailer, but again our experience has been that when Saturday is no longer available, so people cannot travel. We'd pick up that sale the day before, or the day after, the lockdown end... It's going to cost some businesses, but it's not as if that sale will fully disappear."

Mr Wilson said QBC's sales were down 15-30 percent pre-COVID-19, but this had been at least partially offset by the 50 percent rental discount offered by landlord, the Mall at Marathon. "If your sales are down 30-40 percent, you won't make the same profit you previously made, but it allows you to sustain the enterprise," he added.

Comments

Proguing 3 months ago

"I don't think the average Bahamian understands how difficult it is to get a business up and running, add another job, add another job. I don't think they understand how hard it is to get the wheels churning.... We are likely committing economic and national suicide. These shutdowns are equivalent to economic and national suicide."

Surely not the usual suspects who don't want to see any tourist in the Bahamas.

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observer2 3 months ago

Actually the government is running with no cash flow issues. Don’t mind Turnquest crying poor mout.

Besides VAT and customs duty which they are still getting, cruise ship and hotel taxes are being offset by cash from Government Bonds issued to Bahamians and international loans at rock bottom interest rates from the IMF, OECD and the World Bank.

Bahamians and Banks are all to ready to lend the Government their money at 5%. Beats having to lend it out to non existent Bahamian businesses!

So the Bahamian government doesn’t need to lay off staff albeit many government departments like the international mail at the post office, Bahamas Air and Ministry of Education are either shut down or close to shut down.

Minnis already said he don’t believe in letting go staff.

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happyfly 3 months ago

So money does just grow on trees. Remarkable. Makes you wonder why they needed to add 12% VAT to everything three times if they can just run the government on loans endlessly ??

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observer2 3 months ago

yes, governments just borrows the money from the ppl.

the local banks are full of money because no one has anything to do with their money under lock down.

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newcitizen 3 months ago

Jesus. Your understanding of finance is terrible, you must work for the government.

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ThisIsOurs 3 months ago

the 7pm curfew is a nonstarter. some businesses are closing as early as 430 to allow staff time to perform end of day reconciliation and time to get home.

Here's my suggestion to them. Put out your draft plan and let the public rip it apart. Since noone in cabinet appears to be able to think of alternate scenarios, let the public do it. This way you've planned for as many knowable risks as possible. The we've never done this before is not acceptable.

The next thing I need them to do is release their aides. Do everything yourself. drive your own Car, drop and pick up your kids, go to the food store, dry cleaner, clothes shopping, pay bills, household items, clean house. Do all of it. Maybe then you'll get bCk in touch and understand the plight of your people and stop placing completely unnecessary and unwarranted restrictions on them.

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