There have been 14 global recessions since 1870: in 1870, 1876, 1885, 1893, 1908, 1914, 1917-21, 1930-32, 1938, 1945-46, 1975, 1982, 1991, 2009 and 2020. This present global recession will be severe. The share of economies in recession will be more than 90 percent compared to 85 percent in the Great Depression of 1930-32, according to a recent World Bank report. What is troubling is a decline in global per capita income by 6.2 percent, which is unprecedented. This means millions will be pushed into extreme poverty globally and thousands locally.
Tourism is an industry that depends on disposable income, but since all the countries that travel to the Caribbean will be in a recession indefinitely and traveling will diminish significantly with the additional restrictions related to COVID-19, traveling will become less pleasant. Oil prices will be moderate for at least a year. This means The Bahamas has to diversify. Agriculture, agro-processing, import substitutions and international consulting. This will mean investing in agriculture and negotiating with importers that are usually campaign contributors.
This will be politically difficult but it is necessary to invest in and develop our human capital, which can offer educational, legal and medical services virtually. This will become more popular due to more people working from home, using the internet. Companies will want to expand this trend because it’s cheaper and could increase their profit. The Caribbean and The Bahamas can benefit from this global trend.
The world will change due to the COVID-19 pandemic. The Bahamas needs to adapt to the new reality.
– Brian Ellis Plummer