As health and border officials in The Bahamas continue their surveillance and screening in response to the outbreak of the deadly coronavirus, it is also important for both government and the private sector to monitor and determine contingencies for impacts on trade, shipping and the global economy.
Yesterday, the World Health Organization (WHO) put the death toll of the coronavirus at 565, with 28,256 confirmed coronavirus cases reported in 25 countries.
Economic and financial analysts worldwide are continuing to asses the impact that efforts to curtail the spread of the virus have had on manufacturing, supply chains and commerce in China, the epicenter of the outbreak and the world’s second largest economy behind the United States.
International Monetary Fund (IMF) managing director Kristalina Georgieva is quoted in the Nikkei Asian Review this week as saying the impact of the virus is likely to bring “some slowdown” in the global economy in the short term.
“In the long term, we don’t know,” she noted. “We have to assess how quickly action is being taken to contain the spread of coronavirus and how effective this action is.”
Prior to the outbreak, the IMF last year had projected sluggish economic growth for 2020.
A slowdown in the global economy would naturally impact prospects for The Bahamas’ economy this year, which the Central Bank now says may experience a flat outturn.
This country’s economic growth prospects are heavily tied to the economic performance of the United States.
GDP growth for the US, according to the US Federal Open Market Committee’s December 2019 report, was projected to slow to 2 percent in 2020 down from 2.2 percent in 2019; to 1.9 percent in 2021 and to 1.8 percent in 2022, with the slowdown being attributed to the US/China trade war.
Given current travel restrictions enacted by the US in the wake of the coronavirus outbreak and the virus’ impact on China’s economic activity, analysts are speculating on whether China will be able to make good on its agreement to purchase $200 billion worth of goods and services from the US as part of the new Phase 1 trade deal between both countries, and how the same might impact US economic projections.
Shipping companies are among businesses that have scaled back operations in China in the aftermath of the outbreak including Maersk and MSC Mediterranean Shipping, which according to CNN Business have reduced the number of vessels on routes connecting China and Hong Kong with India, Canada, the United States and West Africa.
Maersk is a principal client of the Freeport Container Port in Grand Bahama and MSC is a partner of the port which is a key fixture in the island’s industrial center.
Analysts warn that the longer the global health emergency of the coronavirus outbreak continues, the deeper the fallout will be for shipping and trade, and though there has so far been no indication of whether reported scale-backs have impacted volumes of business at the Freeport facility, it is a noteworthy development.
Slowdowns in containerized shipping and supply chains from and within China can also impact industrial companies on Grand Bahama which acquire raw materials from China, as well as businesses in the country that source inventory from China’s mainland.
Given the evolving dynamics of this novel viral strain, it also remains to be seen whether The Bahamas might determine a need to follow the pattern of countries such as Singapore and Australia, which are placing ships that have called on Chinese ports in floating quarantines until their crew is determined to be virus free.
The impact of the coronavirus on China’s trade and tourism meantime, should serve as an eye-opener to The Bahamas which relies so heavily on imports and tourism for its survival.
Experts are now examining the pandemic potential of pathogens, even as scientists study ways to prevent future disease outbreaks.
As they do so, we should ask ourselves how prepared we would be if an outbreak or global health emergency originates within the borders of our closest trading partner, severely impacting exports and travel.
How would we feed ourselves? What industries are we working to develop with diverse export avenues? What tangible steps are we taking to reduce our critical dependency on essential imports?
These are but some of the many important considerations as The Bahamas and the world responds to the coronavirus outbreak.