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Getting 'Back Into Business' Critical To Poverty Battle

Peter Turnquest

Peter Turnquest

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must get its economy "back into business as quickly as we can" to combat the rising poverty and inequality exposed by a recent household survey, the deputy prime minister said yesterday.

K Peter Turnquest told Tribune Business this was the only sustainable solution to the Inter-American Development Bank's (IDB) finding that the percentage of Bahamian households reporting income below the minimum wage near-tripled to 47.6 percent during the first six weeks of the COVID-19 lockdown.

"Obviously from an economic point of view, a financial point of view, we're not surprised by it," Mr Turnquest said of the multilateral lender's findings, "because we all know that when the economy was locked down it had a devastating effect on families and individuals.

"We do recognise this has a direct effect on the consumption economy, which makes up the bulk of the domestic economy, so to that extent it has a knock-on effect. A simple answer is that we need to get the domestic economy up and going, but we also need to work out how to get the external markets moving.

"The Government will continue to work on its [investment] approvals process, and hopefully it will get people back to work and the economy starting to generate again."

With the Minnis administration having only budgeted to continue its COVID-19 assistance to businesses and individuals until end-September 2020, Mr Turnquest added that it was "in everyone's interests to get the economy going".

The deputy prime minister conceded that The Bahamas' heavy dependency on tourism as its primary foreign currency earner and job creator meant it had little choice but to re-open and revive the industry in the near-term, especially since true economic diversification into other industries will be a medium to long-term project.

"It all depends upon the economy and what happens once we start opening the borders," Mr Turnquest told Tribune Business. "We've been saying all along that we have set a timeline of late October/early November as the latest when we will start to get back into the tourism business.

"That's the Ministry of Finance's forecasting, and the minister [of tourism] will speak to the timeline, the risk and how we will mitigate the risk on Monday, and move from there."

The IDB's findings were drawn from an online survey, which attracted replies from 910 Bahamian families, and took place in the final two weeks of April 2020. While the COVID-19 pandemic is a fast-evolving situation, and much has changed since then, the results give an insight into the depth and breadth of the economic and social fall-out sparked by the pandemic.

"The percentage of households reporting income below the minimum wage increased from 16.1 percent in January 2020 to 47.6 percent in April 2020," the IDB said. It added that this was driven by three factors, with 50.8 percent of households reporting business closures and 50.2 percent suffering at least one job loss.

While some 75.1 percent of those furloughed said their employer had promised to take them back, it is unclear how many of these commitments have been followed through. A further 18.4 percent of Bahamian households lost rental income due to the COVID-19 shutdown.

The brunt of the economic fall-out was felt by lower income Bahamian households, raising fears of growing poverty and social inequality that may last well beyond COVID-19. "Households that reported earnings below the minimum wage in January 2020 were more severely impacted, particularly from employment loss (80.6 percent), compared to middle and high-income households (50.2 percent and 35.1 percent, respectively)," the IDB survey found.

Mr Turnquest yesterday said such concerns were being felt globally, and not just confined to The Bahamas. He acknowledged that COVID-19 was having a "disproportionate" impact on lower income Bahamians, who were "finding it more difficult to hold on" compared to their wealthier counterparts, which was why the Government had targeted its assistance initiatives towards them.

"It's one of the effects of the pandemic we have no control over," Mr Turnquest said. "We have to do our best to support them over the interim period and get back to business as quickly as possible."

He also acknowledged the "systemic historical problem where we have low levels of savings" after the IDB survey found less than four in 10 Bahamian households had adequate reserves to cope with COVID-19.

Mr Turnquest added that savings were critical to enable Bahamians to "ride through" whenever they "have a wrinkle or bump in their life plan", but said the high cost of living and ordinary expenses made it difficult for persons to build up such a cushion.

"We have to look at the question of a livable wage and what that means in terms of addressing the cost of living in The Bahamas," he continued. "These are all issues being discussed but at this stage it's too early to talk about. It's an historical, systemic problem that at some point we have to deal with."

Comments

ohdrap4 2 months, 4 weeks ago

It's one of the effects of the pandemic we have no control over," Mr Turnquest said.

Yes you could have had control over it.

You could have improved the medical resources during the first lockdown.

You could have also told the alarmist doctors that there would not be continued lockdown in no uncertain terms.

You knew people had no savings.

You could have spoken up before appealing to the IDB authority. (It is the first time ever I agree with the IDB).

And it is not too late to tell that Carissa woman from PAHO to SHU.

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proudloudandfnm 2 months, 4 weeks ago

Better get real fast. Tourism will remain a dead spot in our economy until a credible vaccine is made available. There is no magical solution to our economy. Vaccine or economic death. Time to get real and plan for life without tourism for a while yet....

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Dawes 2 months, 3 weeks ago

I'm not sure on that. There is no vaccine and yet tourism has occurred in Europe, so i wouldn't be surprised if people are willing to risk a holiday, as long as they know no lockdowns and quarantine .

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tribanon 2 months, 4 weeks ago

And to think we had the curve flattened and the number of Covid-19 cases under control after the initial closing of our borders to all travellers from abroad. We had the opportunity back then to at least fully re-open our domestic economy while keeping our borders closed because of the pandemic's major resurgence in many US states, especially in Florida. But Minnis and D'Aguilar just could not resist jumping the gun and very foolishly re-opened our borders on July 1. They did this notwithstanding that the US was ablaze with newly identified Covid-19 cases in the weeks immediately before that most fateful and deadly decision. All of the Covid-19 related deaths and all of the misery and suffering so many in our nation have had to endure since July 1 rightfully sits squarely in the lap of Minnis and D'Aguilar.

We had the situation under control but these two dangerous imbeciles brought the Communist China Virus back to our shores with a vengeance. And many small and medium size domestic businesses have been permanently closed as a result of Minnis and D'Aguilar's most foolish and harmful decision, leaving thousands of our people unemployed and destitute. How these two buffoons can look at themselves in any mirror is beyond comprehension. They know no shame and have no honour, otherwise they would have both resigned long ago. So sad.

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birdiestrachan 2 months, 4 weeks ago

The truth has not been told. many businesses went out of business because of the lockdowns. The Government has failed. when it comes to COVID the Bahamas has done far worse than other countries.

The competent Authority was not competent at all. The blame game and the lies will not work.

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JohnQ 2 months, 3 weeks ago

The truth of the matter is, the virus that originated in China is not going away. It is here to stay. Every country on the globe has been impacted. There might be a vaccine in the future that will negate some of the infection rate. But it is doubtful that it will eradicate the virus strain. We must learn to live with the risk and take steps to protect the vulnerable. Positive tests will continue and are not necessarily an indication of how things are going. Appropriate medical treatment and care can prevent an infected person from succumbing to the virus.

Ask our leaders to identify the metric or metrics that will allow the Country to return to normal. I suspect they will simply scratch their heads. The virus is here stay....the lock-downs must end....we must learn to live with it.

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