The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian economy’s productive sectors have suffered a combined $621m damages from Hurricane Dorian, a newly-released report has revealed, with tourism sustaining a half a billion dollar blow.

The much anticipated report on the category five storm’s economic and financial impact, produced by the Inter-American Development Bank (IDB) and other multilateral agencies, reveals that it inflicted a $1.04bn hit to the private sector alone through combined damages, income/revenue losses and other assorted costs.

Besides the physical damage, the IDB together with the United Nations’ (UN) Economic Commission for Latin America and the Caribbean (ECLAC) and various global health bodies estimated that the tourism and agriculture/fisheries sectors, along with commerce in general, have lost over $400m in combined earnings.

And they added that the 50 percent reduction in projected GDP growth for The Bahamas in 2019 will cut salaries paid in the economy by $51.3m, with capital income falling $60.9m, knocking consumer spending and business investment back significantly.

Abaco has lost 7.3 percent of its economic output, accounting for 47 percent and 60 percent of the decrease in overall worker compensation and capital, while Grand Bahama lost 2 percent of its GDP.

“The productive sector suffered damage estimated to be $620.9m, most of it in tourism ($529.6m) followed by commerce ($77.6m), and fisheries and agriculture ($13.6m). All damage in the productive sector happened in the private sector,” the joint report said.

“Losses for the productive sector were estimated at approximately $400.3m. Abaco suffered 83.8 percent of those losses. Tourism accounted for most of the losses (81.2 percent) and suffered the greatest effects. This sector suffered a loss of $325.2m. The losses in commerce were $65m, and in fisheries and agriculture, $10.1m. All losses to the productive sector were private.”

Noting that the damage to resorts, marinas and other tourism-related assets, businesses and infrastructure was in some cases “catastrophic”, the report added the $325m “losses” related to “the disruption in the flow of tourists as result of the storm, and a changed public perception due to the damaged structures.

“Most of the losses will be accrued in the high season of 2019 and 2020, tapering off as the recovery is expected to gain momentum. There were also additional costs for $15m related to demolition, debris removal and salvaging of sunken ships,” it continued.

Turning to commercial activity in general, the joint report said these losses in Abaco would be spread over three years given how long it would take the island’s economy to rebuild. In contrast, the Grand Bahama losses only cover four months.

“The effect on the commerce sector was greater on Abaco than Grand Bahama due to the path of the hurricane, as the eye of the storm passed through the commercial centre of Marsh Harbour,” the IDB/ECLAC assessment added. 

“The structures that were made of concrete survived with less damage, while those made of lighter materials fared much worse. The total damage was estimated at $77.5m for the commerce sector: $71.4m on Abaco, and $6.2m on Grand Bahama. 

“The losses to the sector are projected to occur over the expected length of recovery. On Grand Bahama, the losses are expected to accrue over just four months, while on Abaco it is expected to take a full three years. Due to the destruction of property and vital infrastructure, as well as the evacuation of residents, commercial expenditure will fall to zero in the month of the  disaster and then gradually make its way back to pre-disaster levels as the recovery goes on,” it continued.

“The total losses estimated for the commerce sector are $65m: $64.5m on Abaco and $0.5m on Grand Bahama. Assessing over time, losses will be $22.1m or 34 percent of the total in 2019; $34.9m or 54 percent in 2020; $7.2m or 11 percent in 2021; and $0.8m or 1 percent in 2022.

“The additional costs for this sector comprise debris removal and demolition. At the time of the assessment team’s site visit to Abaco there was still an extensive amount of debris in Marsh Harbour. Debris removal and demolition of damaged properties will be expensive and will take additional time on Abaco. The total additional costs for the commerce sector are estimated at $4.8m: $3.8m on Abaco and $1m on Grand Bahama.”

Noting Dorian’s impact on fisheries catches, the assessment said: “The total damage in fisheries was $11m including damage to vessels, processing facilities and fishing gear. Considering the seasons for spiny lobster and stone crab, the losses in fisheries will be $7m and will represent a big fraction of the total losses.

“In agriculture the losses will be $2m, considering perennial and annual crops, and for poultry over $1.5m. The total losses for fisheries and agriculture are estimated at $10m.”

As for infrastructure such as roads, airports and ports, plus public utilities, the IDB/ECLAC assessment projected a total hit of more than $452m, with physical damages accounting for $239m and economic losses standing at $197m.

“Infrastructure experienced damage amounting to $239.1m,” the report said. “The power sector represents 54.1 percent of the total. The telecommunications sector suffered damage of $42.1m, transport accounted for $50.8m and water and sanitation $14.9m.

“Approximately 48.6 percent of the damage in the infrastructure sector was to private property and the remaining 51.4 percent was to public property. Some 66.8 percent of damage of the infrastructure sector took place on Abaco.

“The losses in the Infrastructure sector were estimated at $197.1m. Most of the losses were in the power sector (35 percent) followed by telecommunications (27.6 percent). The losses in water and sanitation and transportation were near $19m each. The public losses in the infrastructure sector were smaller (38.8 percent) than the private sector’s (61.2 percent). Abaco suffered 60 percent of the losses of the infrastructure sector.”

Breaking this down, the IDB/ECLAC report said: “Total damage in the power sector was estimated at $131.3m, of which the largest line items were $80.4m in damage to the transmission and distribution networks on Abaco and $21m in damage to the flooded power generation plant on Grand Bahama.

“Total losses were estimated at $68.9m reflecting the value of power that was not sold, both because of damage to the transmission and distribution network and because of the reduction in demand for electricity as a result of storm damage. Losses were estimated until December 2021 as recovery is expected to take at least this time or even longer to return to normal levels.

“An estimated loss of $22m was made for the remainder of the year 2019; $40m for the year 2020; and $6.8m for the year 2021.”

Damage to the telecommunications sector was estimated at $42.1m, and the report added: “The losses are estimated at $54.4m, and the most significant losses occurred on Abaco where services could not be provided to end users due to widespread destruction. Loss estimates were projected until December 2021, as recovery is expected to take at least this time or even longer to return to normal levels.

“An estimated loss of $13.7m was made for the remainder of the year 2019; $16.3m for the year 2020; and $24.4m for the year 2021. Losses were primarily as a result of the absence of commercial power, the extended time needed for network restoration and the loss of clientele.

“On Abaco, where the effects of the hurricane were the hardest, it is expected that there will be a long road to recovery of the services that require a wired telecommunications network infrastructure.”

Turning to the transportation sector, the IDB/ECLAC report found: “The estimated transportation infrastructure damage is approximately $51m for the whole country. Fifty-three percent of the damage took place on Grand Bahama, where 93 percent was sustained at the Grand Bahama International Airport.

“The losses are estimated considering the decrease in tourism and cargo in both Abaco and Grand Bahama, and its effects on the collection of port charges and services. The estimated economic losses associated with the interruption of transportation services is $37m. It is estimated that 44 percent of the losses will take place in 2019, 39.2 percent in 2020; and 16.8 percent in 2021.”