Friday, March 27, 2020
Friday, March 27, 2020
The coronavirus pandemic will radically shift the structure of economies in the Caribbean region in the long-term, creating more opportunities for diversification and helping islands build fiscal resilience, according to a leading economist.
“These are really abnormal times. At the end of this crisis, there will be structural changes in our economies and governments are going to have to adjust,” said Dr Justin Ram, director of economics with the Caribbean Development Bank (CDB). “There is going to have to be a concerted effort as to how we move forward.”
Speaking during a recent webinar hosted by US-based event management group New Energy Events, Dr Ram added: “Although we are in a short-term crisis, our focus has to be on the long-term. We have to consider long-term resilience building.”
As businesses across the Caribbean region close in accordance with government containment efforts, Dr Ram said there has been an increase in the use of technology and believes this has the potential to transform the working environment once the pandemic has passed.
“There is a real silver lining in this,” he said. “[We have seen] greater use of digital [services] and working remotely. We now have to recognise that those types of changes can improve productivity. People are going to become more productive, new opportunities will arise, we are going to see much greater potential for new types of jobs.”
While the region cannot escape the economic fallout of Covid-19, island economies will be able to get back on their feet through sensible government policy that invests in public services while maintaining adequate foreign exchange reserves, said Dr Ram.
“We are going to see some type of contraction [in the region’s economies]. The depth and length of that contraction will depend on government policies. We have to be mindful that we pay particular attention to foreign exchange reserves. We have a real balancing act here.”
Another factor in spurring the region’s recovery and building resilience is pursuing its renewable energy goals, according to the economist who said lowering energy costs would generate business confidence, encourage investment and help diversify island economies.
Dr Ram urged governments to continue their renewable energy commitments once the immediate downturn has passed, saying: “We need competitive economies and that means we have to move away from the vagaries of the international commodity markets.”
He also called for regional cooperation as the Caribbean navigates the short-term disruption saying: “These types of crises are going to keep hitting us but we want to ensure we build resilience so we can deal with them. Let’s work together so we can build that resilience.”