The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Some 13,500 "informal economy" workers may have missed out on COVID unemployment benefits, the IMF said yesterday, adding that "execution fell short" on some government assistance initiatives.

The International Monetary Fund (IMF), in its full Article IV report on The Bahamas, said several thousand self-employed and other persons may not have had access to government-funded benefits because they remain outside the formal economy and make no social security contributions.

"Only self-employed workers in tourism-related businesses are covered by the unemployment benefit extension. This means that self-employed informal workers for other industries (many indirectly linked to tourism) and informal employees are not included among the unemployment beneficiaries," the Washington D.C-based Fund said.

"There are approximately 13,500 informal workers in The Bahamas. However, limited information about inter-linkages of the economy would make effective targeting beyond the tourism sector difficult." The informal economy refers to commercial activities not regulated or protected by the state, with the majority of participants in this area likely self-employed or micro businesses.

Calling for improvements in the efficiency and targeting of social spending, the IMF said that of all the funds dedicated to business and individual COVID-19 assistance during the final quarter of the 2019-2020 fiscal year - a sum equivalent to 1.2 percent of economic output - just 0.8 percent of GDP was ultimately expended.

"Execution fell short given limited demand for some programmes and implementation delays," the IMF said, adding that the Government's spending on Hurricane Dorian relief, as well as tax breaks granted to facilitate construction, will impose a burden on the Public Treasury equal to about 6 percent of GDP - more than $600m - spread over four years.

The Fund also identified what it described as "a duplication of services" where 15 percent of National Health Insurance (NHI) scheme beneficiaries also have private health insurance.

Turning to the Government-sponsored national food distribution effort, the IMF said: "The distribution of food support through walk-in demand, and the lack of up-to-date data and registration of poor households will significantly limit the effectiveness of this policy.

"Moreover, food assistance leaves households with the need to request other types of benefits to cover day-to-day expenses. The Government will have to register the citizen again every time a benefit is granted. Since social assistance programmes are application-based, validating information is challenging because of limited digitalised information and limited information exchange across relevant stakeholders."

It added: "As the country moves from the containment to the recovery phase, more emphasis should be placed on improving the efficiency and targeting of social spending. Without current information, it is impossible to target help and subsidise appropriately.

"Thus there is a pressing need to improve social statistics and collect more information about households to understand the income/wealth distribution and sources of income. Digitising key information, particularly in the health sector, will be key.

"This will be critical to ensure an efficient and adequate healthcare system for the eventual new, post-COVID-19 normal. Staff recommended expanding telemedicine services and modernising the processes for data collection, flow, storage and analysis of health information," the IMF added.

"This should be accompanied by a significant investment in connectivity, digital and medical equipment, training of health providers and development of digital health solutions that should be shared with the public - apps or wearables to track health data."