By NEIL HARTNELL
Tribune Business Editor
A Bahamian economist yesterday warned the Economic Recovery Committee's proposed work visa is not a sufficient "needle mover" to replace $1.7bn to $2bn in tourism earnings lost to COVID-19.
Rupert Pinder, who lectures at the University of The Bahamas, told a webinar organised by TCL Group that the Committee's estimates to-date suggested the planned visa will come nowhere near to compensating for the "huge economic hit" delivered by the pandemic.
The Committee, in unveiling its annual work/study visa, suggested that attracting 1,000 successful applicants to The Bahamas would result in a $30m annual boost for the economy assuming each spent an average of $30,000.
However, Mr Pinder said such an injection - however welcome - paled when set against the hundreds of millions of dollars lost to the Bahamian economy and its workers as a result of the COVID-19 lockdowns and other restrictions.
"When I look at it in the context of the Economic Recovery Committee, where I have a challenge with that is we're going to lose roughly between $1.7bn and $2bn in tourism receipts because of the COVID-19 pandemic. That's a huge hit with respect to the economy," he argued.
"This work visa, with respect to the preliminary numbers put up, with 1,000 people spending $30,000m each for $30m, that is not a needle mover in terms of what we're dealing with in disruption to the economy. It's not a needle mover.
"For me, the short to medium-term is how we re-open the economy in a safe and responsible manner. Diversification is medium to long-term. The problem I have with the work visa is this is not a needle mover with respect to then share of the economy we've lost to lockdowns and the pandemic. It's not a needle mover in terms of where we're at, and what sort of revenue we need to make up for."
It is quite possible the Economic Recovery Committee never intended the proposed work/study visa, which has been approved in principle by Cabinet, to be an economic difference maker that will compensate for the tourism industry's near total shutdown.
The proposed visa effectively represents an extension of The Bahamas’ existing annual residency permit, with the aim being to make the application and approval process much simpler, quicker and efficient.
The idea, which lags Barbados, represents low-hanging fruit, with foreign workers and students who qualify not allowed to participate in the domestic economy as a condition of its granting. Students must be registered with, and studying online, at a foreign university, while workers must be employed - and paid by - an overseas company.
Still, Gregory Pepin, Deltec Bank & Trust's chief executive, told the same webinar that the work/study visa initiative was "not innovation; that's just remarketing" of The Bahamas' existing residency products.
He acknowledged that the initiative would provide a short-term boost from consumption spending in the economy, but said long-term economic growth will only benefit if successful applicants elect to put down roots in The Bahamas by starting new businesses or investing in existing ones.
The webinar's third panellist, Bahamian entrepreneur Robbyn Thompson, said anything that made accessing The Bahamas easier and quicker was a positive. However, she urged the Economic Recovery Committee not to simply follow the lead of Caribbean rivals.
"I do encourage the Economic Recovery Committee to do more research and find more unique ways to recover the economy, and staying relevant as a country and destination, not just doing what the rest of the Caribbean is doing, particularly Barbados," she added. "We need to invest more time, energy and effort figuring out what works for The Bahamas rather than the Caribbean collectively."
Marlon Johnson, the Economic Recovery Committee's co-chair, previously told this newspaper on the work/study visa: "The key thing is we think it opens opportunities for boutique firms to move their entire operation to The Bahamas, and that will be an element of marketing to see if firms, or units of firms, want to live in The Bahamas and do work remotely.
“We have the Internet infrastructure people expect, and all the infrastructure amenities people would expect to have. We have the Family Islands for people wanting to get off the beaten path. We believe we have a very interesting proposition to present to the global marketplace so it will be interesting to see how it plays out.
“The approach is how do we maximise and leverage what we have in The Bahamas to get persons here, and add value for them and add value for The Bahamas.”
The Committee made clear the visa’s specifics, and details of the application process, are still being determined. It said responses to applications will be provided “in a matter of days”, which is likely to raise scepticism among some observers, with persons able to apply online.
Mr Johnson said the Government-appointed committee will also seek to “refine” the projected economic impact from the visa, which is designed to inject spending by successful applicants into the domestic economy via landlords (rent); car rentals; retailers; restaurants and a host of other sectors.