03182020 BUSINESS

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business@tribunemedia.net

WEDNESDAY, MARCH 18, 2020

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Public transport demand off 40% By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE number of passengers using public transportation was yesterday said to have decreased by 40 percent due to the coronavirus-imposed 30-day cruise industry shutdown and school closures. Harrison Moxey, the United Public Transportation Company’s (UPTC) president, told Tribune Business: “Things have been slowed down, and there have been some cut backs. Particularly from the western areas there has been less transportation, less movement for the tourists, and the closure of schools has reduced movement by 40 percent at least.” Mr Moxey added that the main bus routes affected are Number 10; Number 10a and the Number 12b. “Those western routes would feel a direct impact, but all routes are feeling the effects of it. School closure within itself impacts our movement. Those are some of the challenges right there,” he said. “So you have about a 30 or 40 percent less movement, and I imagine it would affect the taxi drivers as well - less cruise ship passengers moving up and down, and only just a handful for us to contend for.” Asked whether some bus drivers may temporarily stop operating, Mr Moxey replied: “Because most bus drivers operate independently of franchises with different responsibilities, it’s really the first two days since things have happened. “I imagine we are going to see what happens by the end of the week; what the impact would be running on the road versus the burning of fuel and that type of thing. So probably by the end of the week we would be able to better assess, but the fear may calm or it may increase, so it can go from bad to worse but, at least for the next two weeks, we can prepare for a decrease in movement.”

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Bahamas faces 26% GDP slash in virus ‘worst case’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

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HE Bahamas could suffer a catastrophic 26 percent gross domestic product (GDP) cut if the worst-case coronavirus scenario comes true, an Inter-American Development Bank report revealed yesterday. Two IDB economists, unveiling several potential outcomes depending on the length of the pandemic and the extent of its impact on tourism, warned that The Bahamas is potentially exposed to the most severe economic contraction out of all Caribbean nations. Should the worst-case scenario they mapped out become reality, The Bahamas would suffer the loss of a staggering $3.337bn in economic output (GDP) based on the $12.739bn current GDP estimates given in the revised mid-year budget forecasts.

• IDB economists: Country could lose $3bn • Projections branded ‘scary’ and a ‘killer’ • Minister: Capital works can fill the gap Using the last figure for GDP in constant prices, which was $10.763bn for 2018 and is a measure that strips out inflation, gives $2.819bn as the scale of the economic contraction that The Bahamas would face due to a virtual shutdown of the tourism industry that it relies on to drive growth, employment and foreign exchange earnings. The economists, Henry Mooney and Maria Zegarra, said The Bahamas is so exposed because it is the most tourism-dependent nation in the region. They added that it relies on the industry for 48.3 percent of its annual GDP (economic output) and 56.2 percent of total employment. The duo’s paper, which analysed the impact on six Caribbean nations under

various coronavirus-related scenarios, added that tourism receipts accounted for 77.2 percent of this nation’s export earnings. This, they added, placed it well ahead of Jamaica, Barbados, Trinidad & Tobago, Guyana and Suriname in terms of its tourism dependency. The two IDB economists examined the different impacts that a 25 percent reduction in tourism activity, 50 percent reduction and 75 percent reduction would have on each of the six Caribbean nations studied. This was applied to both tourism’s direct and total GDP contribution to these countries economies, and analysed in three different scenarios relating to how long the coronavirus pandemic will last. One took the “shock duration” end as June

30, 2020; another focused on September 30, 2020, and the final one assumed that the pandemic might last for the rest of the year. Under a scenario where The Bahamas lost 75 percent of its normal tourism activity during a coronavirus outbreak that lasted until the end of the year, the IDB duo estimated that this nation could suffer a 10.5 percent GDP loss just from the impact on its major industry alone. And the wider effects would more than twice as great, with GDP or economic output slashed by more than one-quarter or 26.2 percent as the ripple effects from the tourism impact are felt throughout the Bahamian economy.

A BAHAMIAN bottled water supplier yesterday said the coronavirus pandemic has sparked “pandemonium” among consumers with online delivery orders soaring four times’ higher than normal levels. Christian Knowles, Aquapure’s senior manager, told Tribune Business that the situation was one “for the record books” as current demand for the company’s products - at food stores, water depots and its premises, as well as online - had more than doubled beyond typical levels for this time of year. Arguing that “fear is king” when it comes to Bahamian consumer behaviour, Mr Knowles said Aquapure had been “fortunate” in deciding to maintain high inventory levels during the slower winter season as this had enabled it to meet the

“It’s been pandemonium, but we’ve been getting it done as quickly and as best we can,” he told Tribune Business. “The only thing I can compare it to is hurricane season; like there’s a storm upon us. It’s been quite quite hectic. “We’re used to this. There are cars parked on the side of the road, and there’s a line that’s quite long. We’re used to dealing with it though.” Aquapure and other Bahamian bottled water manufacturers have effectively been under siege for several days, with vehicle queues lining the roads outside their premises, as households stock up on essentials amid the continuing coronavirus uncertainty. Food stores and water depots have frequently

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

run out of stock, with Mr Knowles describing the panic buying spree as “unprecedented” compared to whenever The Bahamas has been confronted by a major hurricane. Asked by this newspaper to compare present demand to what Aquapure normally encounters at this time of year, Mr Knowles said sales had “a little bit more than doubled” when set against the norm. “We have an online marketplace where people can go and order for deliveries on the website, and we’ve seen that go up above four times’ what it usually is. Everybody wants it now, now, now,” he disclosed. “The most difficult thing

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• Aquapure sees online orders quadruple • Top manager: ‘This is for the record books’ • Says ‘fear is king’ among local consumers COVID-19 surge for bottled water products. He revealed that the manufacturer was now trying to stay ahead of the game by looking at alternative supply channels because the demand spike meant the raw materials it employs, such as the bottles themselves, had “taken quite a hit” in recent days. Mr Knowles said five gallon bottle returns, which he described as Aquapure’s “bread and butter” product, were being moved through the company’s cleansing process and put “back in line” ready to go out full on delivery trucks within 30-40 minutes to increase the frequency with which drivers are out on the road and ensure it kept up with consumer requirements.

Union leader: ‘All hands on deck’ for virus A TRADE union leader yesterday called for an “all hands on deck” approach to minimise the threat that the coronavirus crisis poses to the livelihoods of thousands of Bahamian workers. Bernard Evans, the National Congress of Trade Unions of The Bahamas (NCTUB) president, told Tribune Business that this nation needed to adopt a “tripartite partnership” requiring sacrifices from workers as well as the employers and the government. Calling on employees to take paid vacation if it was available, and access sick pay if it was available, Mr Evans said several recommendations for mitigating the fall-out had been made to the government through the recently-established National Advisory Committee for COVID-19. These, he disclosed, included the government paying companies incentives to ensure they did not send workers home without pay, and also the waiver of loan repayments - and interest on those loans - that were due to the banks and other lenders. Mr Evans, who said the government’s response was awaited, argued that such measures were “very, very much needed” to support “the most vulnerable in our society”, who he identified as those persons on minimum wage or living pay cheque to pay cheque. Calling for the government to prevent lower income workers being “pushed closer to the poverty line”, he added: “We still don’t know the full impact of this

‘Pandemonium’ doubles water producer’s sales By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

BERNARD EVANS

Wholesalers: Panic ‘No headroom’ over COVID-19 fiscal stimulus buying ‘through roof’

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net WHOLESALERS yesterday urged Bahamians to get a grip on coronavirusrelated panic buying that has gone “through the roof” and increased demand by up to 25 percent. Philip G Smith, the d’Albenas Agency’s sales and marketing manager, told Tribune Business: “We have had no supply chain disruptions, but the problem is the demand has gone through the roof. They will be out of stock in the stores because we don’t have a million trucks to get orders to the stores every other minute. We have not had any disruptions in our supplies as yet. “Have you seen the panic in the stores recently? That is the main reason we are having the problems that we have. Demand has gone through the roof, we have a

line outside of our cash-sales door almost to the gate, and every wholesaler is going through the same thing. The demand for products, especially sanitising products and cleaning products, and then food products as well, everybody is trying to stock up, stock up, stock up.” Asked to quantify the increase in demand, Mr Smith replied: “It’s hard to say because I haven’t had a chance to run any numbers, but it has increased tremendously. This pales in comparison to a hurricane threat, or the imminent hit by a hurricane, because that is a limited timeframe. You know the hurricane is going to be here on Friday, so you started shopping maybe at the end of last week, but this has been going on for probably over two weeks, maybe three weeks. “We have enough trucks to be able to handle the load. One of the main problems is getting the orders filled fast

enough to get them on the trucks and get them out. We have a large complement of order fillers and they do a very, very good job, but probably the orders have increased at least by 20 to 25 percent and then the size of the orders as well.” Mr Smith added: “Ever since the coronavirus became prominent in the news in the US, and there were cases in the US - and cases especially in Florida - Bahamians became hyper-aware of coronavirus. “Last week there was a huge glut in the food stores, and when the news hit on Sunday that the coronavirus is actually in The Bahamas, the food stores were crazy. I mean, Super Value number ten on Cable Beach and also the Quality Markets on Cable Beach, and then you have the Golden Gates Super Value. All of the food

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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE government “doesn’t have the headroom” to rescue the Bahamian economy from the coronavirus crisis through a package of tax cuts and waivers, a governance reformer argued yesterday. Robert Myers, pictured, the Organisation for Responsible Governance’s (ORG) principal, told Tribune Business that The Bahamas would simply have to rely on the existing tools provided by the National Insurance Board’s (NIB) unemployment benefit and sick pay to protect its citizens from the sharp recession it likely faces due to the pandemic. He said the government, through the Public Treasury, simply had nothing more to give in the form of tax breaks and other relief given the post-Dorian fiscal crisis that emerged several months before anyone heard of COVID-19.

Mr Myers added that The Bahamas needed “to get back from the fiscal cliff rather than lean further over it” given the projected near five-fold increase in the 2019-2020 fiscal deficit to $677.5m, and $1.5bn rise in the national debt over the next five years. Arguing that the coronavirus pandemic “will pass”, he said the government already had enough to grapple with given the increased medical costs it will incur to test, contain and treat the coronavirus. “I don’t think the government can provide any. They

just don’t have the funding for it,” Mr Myers replied, when asked by Tribune Business whether the government had little choice but to offer a fiscal stimulus package to prevent numerous Bahamian businesses from failing and the resultant loss of thousands of jobs, which would threaten to tank the whole economy. “They just don’t have the headroom,” he reiterated. “Any dollars you don’t pay the government now means you put it at greater risk. It’s just that simple. The government is broke. They don’t have any funds to give you. Anything they do in that capacity puts the government further into debt, and moves us closer to the fiscal cliff or pushes us over the fiscal cliff. “Who are we trying to kid here? We’re already in bad shape. We’re leaning over the fiscal cliff, and we have to try and get ourselves back

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