The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

COVID-19 and Hurricane Dorian will inflict a combined $7.5bn loss on The Bahamas, a United Nations (UN) agency is forecasting, “inhibiting social and economic development for years to come”.

The United Nations Development Programme’s (UNDP) report on how the pandemic and Category Five storm have impacted micro, small and medium-sized businesses in Abaco and Grand Bahama, which was released yesterday, predicted that the twin disasters have cost this nation a sum equivalent to 60 percent of its economic output.

“To date, the combined macro-level economic impact of both crises is projected to inflict losses of $7.5bn or 60 percent of Bahamian GDP. As a result, social and economic development will likely be inhibited for years to come,” the report said.

No calculations or workings were provided to support how the UNDP arrived at these figures. Hurricane Dorian’s damages and losses, though, have previously been pegged at $3.4bn, while 2020’s contraction in Bahamian gross domestic product (GDP) as a result of COVID was thought to have been equivalent to around a $2bn shrinkage. That still leaves a further $2.1bn to be accounted for.

The UNDP report, meanwhile, referenced a previously-undisclosed Ministry of Finance report dating from 2020, which estimated that small businesses in Grand Bahama and Abaco would incur $43m in recovery costs to rebound from Dorian alone.

“The Ministry of Finance, in a 2020 post-Hurricane Dorian report, estimated that the recovery costs for small businesses from Hurricane Dorian in Abaco and Grand Bahama would reach $43m,” the UNDP added.

“The same report indicated that of the 3,500 registered MSMEs, and large number of unregistered informal businesses operating in the islands primarily affected by the storm, 75 percent of those operating in Abaco and 60 percent of those in Grand Bahama reported being impacted.”

With COVID-related lockdowns and other restrictions further disrupting Dorian reconstruction, the UNDP report said the pandemic had inflicted “significant damage” on economies worldwide with the effects likely to be long-lasting and still evolving.

“In addition to the costs and toll to the national health systems, food security issues have been widespread, and countless livelihoods affected. As the COVID-19 pandemic has continued to unfold, and supply and demand markets are continually challenged, the impact to The Bahamas’ social and economic systems continues to grow in scope and complexity,” the report added.

“The effects of the COVID-19 pandemic on micro, small and medium enterprises (MSMEs), which had to change many dimensions of their business activities, are comparable to the impacts caused by Hurricane Dorian.”

The Organisation for Responsible Governance (ORG), which conducted the field work on the UNDP’s behalf, interviewed some 486 micro, small and medium-sized businesses on Abaco and Grand Bahama between November 2020 and February 2021 to acquire the data upon which the report is based. It found that almost 28 percent of respondents had closed permanently.

While most businesses surveyed, some 76.7 percent or just over three-quarters, were able to continue operating at their pre-Dorian location, one out of every five companies either had to relocate on the same island (11.8 percent) or switch island entirely (9.5 percent).

“One hundred and one (101) MSMEs relocated in one form or another. Forty-nine of those businesses do not intend to return to their original location. Forty-eight MSMEs do intend to return to their original location, and four indicated that they have no current option for relocation,” the report added.

“Of the 9.5 percent of MSMEs that relocated within The Bahamas, almost 45 percent relocated to New Providence.” Not surprisingly, almost two-thirds of businesses surveyed reported being impacted by both Dorian and COVID, although the effects were not uniformly distributed across the two hurricane-ravaged islands.

“The impact was not experienced evenly for MSMEs across the islands. More businesses in Grand Bahama (75.2 percent) reported being affected by both the storm and pandemic, and in Abaco,. Hurricane Dorian alone impacted the larger share of MSMEs (50 percent),” the UNDP report said.

“MSME respondents identified business investment and purchasing capital as their highest priority funding need (46.7 percent), and owner and staff payroll-related expenses (20.6 percent) being the second highest priority. Business commitments and debt administration accounted for 13.4 percent of responses.

“Almost 42 percent of businesses indicated that they have been able to remain at least partially open because of the storm and pandemic. Thirty-point-five percent (30.5 percent) declared they were partially closed, and 27.8 percent were permanently closed.

“More than 55.2 percent of MSMEs in Abaco have closed permanently compared to 11.6 percent of businesses in Grand Bahama. A larger percentage of businesses are in operation in Grand Bahama (50.5 percent), compared to the 26.7 percent in Abaco.”

When it came to operational hours, the UNDP report found: “Comparing the first quarter of 2020 to that of the previous year, 63.7 percent of MSMEs indicated a decrease in the number of hours worked, 14.4 percent indicated no change in hours, and 10.2 percent indicated an increase.”