The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas failed to plan for the possibility of a total tourism shutdown because it was lulled "to sleep" by years of record arrivals and earnings, a former finance minister said yesterday.

James Smith, also a former Central Bank governor, told Tribune Business that no planning was ever done to prepare for the reality The Bahamas faces now because no one foresaw that it could happen.

Speaking after the prime minister warned Bahamians to prepare "for generational changes to the economic structure of our Commonwealth", which seemed to imply a diversification strategy to reduce this nation's reliance on tourism, Mr Smith said the past several weeks had brought home just how "fragile" the country is in terms of its exposure to external shocks such as COVID-19.

He warned, though, that it would be "a tall order" to accomplish what Dr Hubert Minnis seemingly wants to achieve overnight, although he backed the Prime Minister's desire to convene a group of economists and others to develop "a masterplan to rebuild our economy" for the long-term.

"It's critical," Mr Smith added of the Prime Minister's call for ideas. "We're now seeing how fragile the economy is, and we will see more of it over the next few weeks and months."

Acknowledging that The Bahamas had experienced a tourism shutdown before in the aftermath of the September 11 terror attacks, albeit only for one to two weeks, he added that no one ever believed there could be a repeat for potentially much longer.

"Once it was over it was back to normal," Mr Smith recalled of the September 11 aftermath. "I don't think anybody contemplated it happening again. We didn't do any planning for what if it happens again.

"Looking back in retrospect, we should have been looking at strategies focused on what happens if we were shutdown for three to six months. It might have called for the stockpiling of food to feed ourselves, which would have needed resources in the Budget.

"It's easy to fall asleep. Year after year we've been getting record amounts of visitors. Even after the recession we were getting record amounts of visitors. It puts you to sleep, and now we're going to pay for that. That's where we are now. Now it's here, and here in full force."

Mr Smith said the Prime Minister's comments indicate the Government is also looking beyond the immediate COVID-19 crisis to the Bahamian economy's jump-start once the pandemic is over, and what can be done to make it more resilient against future external shocks.

"The question is what happens at the end of the period: Do you go back to business as usual, and simply reboot the economy from where we left off, meaning which means shuttered production units are to be restarted? Whatever we want to do, we have to do that first in The Bahamas," he added.

Mr Smith said The Bahamas first needed to look at generating more local production/manufacturing, and developing alternative access to goods and services. He expressed particular concern that Florida, a major source market for tourists and imports, appeared to be late in responding to COVID-19.

He also argued that The Bahamas had yet to maximise the benefits from tourism, pointing to Dr Minnis's recent House of Assembly speech in which the Prime Minister suggested unemployment pre-COVID could be substantially reduced if vacant rooms in existing hotels were filled.

And Mr Smith said linkages between the tourism/hotel industry and sectors such as agriculture stood to be better developed.