COVID-19 & fearful times for VI businesses
There is light at the end of the tunnel on the COVID-19 Pandemic with an approved vaccine expected shortly, and new super-swift testing and tracing capabilities. However, businesses remain desperate and fearful, and that is to be expected.
Ok. This Virgin Islands swimming instructor met his key sponsor on another breezy day in paradise, at a marina and resort on Tortola.
The marina and resort manager – a charismatic man with a relaxed bonhomie- was unusually melancholic. He was clearly burdened with the horrific impact that the pandemic was having on his business.
“We need a national plan for reopening Mr Igwe,” he asserted. My revenues are down over 50%, and that is having dire repercussions for my customers and employees. ‘’There is only so much we can bear before we may have to close down, even if that means for one season he added.’’
Now this writer has supported the government’s posture that it will be directed by the science – and only by the science- in its plans for reopening the country and economy. However, he fully appreciates the concerns of business that relies on an open and free market and stress-free trading environment, to survive.
Closed borders, lockdowns, and curfews are excellent for containing and controlling the spread of the Corona Virus. However, the preceding are also a “death knell” for any economy.
And it has been a miserable year so far. The Coronavirus has killed hundreds of thousands around the world. And it has also confined the rest of us to our homes for much longer than usual, and on a daily basis, as the virus has ravaged the BVI economy, especially travel and tourism.
And in the colder countries to the north, especially North America and Europe, as autumn days get colder and shorter, and Covid-19 cases surge, a dismal time looms ahead. COVID 19 appears to be a nightmare that will ever end?
The cries of the tourism and maritime industry in a country like the BVI are understandable. In the USA, Canada, and Europe, businesses have been supported by trillions of dollars of government stimulus. A country like the Virgin Islands simply cannot afford that type of overt and generous support to keep the population in jobs and out of poverty.
Consequently, the end to this horrible time is the hope that a vaccine will be forthcoming soon. Scientists around the globe are racing to develop a vaccine.
Regulators everywhere are fast-tracking approval processes.
While it is not yet clear whether any particular vaccine will prove to be safe and effective, pharmaceutical companies are preparing to crank up production of many promising candidates.
Governments are even creating a market for vaccines by placing big orders in advance.
If at least one of these bets pays off, 2021 will be a much happier year.
A vaccine offers investors renewed confidence. That is the main economic benefit in a vaccine short term. When investors - who run the global economy-feel confident, there is frequently rising confidence in consumers and businesses. That is usually the path out of recession. Economics is first and foremost about confidence.
The hope is that once a vaccine is approved and widely distributed, that humanity will finally be free to hug elderly relatives, socialize with both friends and strangers, move around as we please, and get back to work more or less normally.
In the meanwhile, governments like the Virgin Islands, that do not have the power to create trillions of dollars of stimulus, out of the creation of debt instruments that investors are willing and happy to ‘’lap up,’’ must use every effort to ensure their economies survive, by listening to the cries of their business people.
One option for the Virgin Islands is creating a regime of pandemic worker who will test, trace, and isolate residents and aliens, as a means of driving normality in the economy. That regime should be supported by a COVID19 tax and levy on travellers who should rightly cover the costs of such a program.
New technologies, like trackers on bands around the wrist, and cell phone applications, should enable COVID tracers to keep an eye on travellers who enter the territory and who prior to entry, test negative for COVID-19.
A look around the world will reveal the BVI is not unique in having locked borders and severe travel restrictions. And until a vaccine is approved and widely distributed this is going to be the norm everywhere.
In Europe, a second surge has appeared and is forcing another round of restrictions and local lockdowns. The USA, the world’s worst-affected country, is already seeing a second surge that is worrying scientists.
Yes, the government must listen to business. And the government must provide businesses with its plan to reopen the country and economy: a plan that is transparent and widely available.
But businesses too must understand the limits of government to ‘’pull a hare out the hat’’ and return to pre-pandemic normality in the time of COVID.