Today, I’m writing about everyone’s favorite subject – Covid – and how it’s affecting the BVI. It’s not something I’ve commented much on and this is a long post, but bear with me. What else do you have to do on a Saturday night during curfew?
The BVI’s economy rests on two pillars: Financial Services and Tourism. That’s not new news. Financial Services makes up about 60% of our economy and tourism almost all the rest. Agriculture contributes less than 2% to GDP.
Even before Covid, Financial Services was in a slow and gradual decline for a couple of years, which makes tourism even more important to the BVI, moving forward. Before we shut down in March, our tourism sector had bounced back remarkably after Irma and we were on track to have about one million visitors. Of that number, about half are cruise ship passengers who contribute little to our general economy, but quite a lot to our government’s coffers. The big driver for the BVI economy is charter boat tourism, as these people can spend thousands per capita, and we get more than 350,000 of them in a normal year. Right now, we’re at zero tourists.
I’m citing these statistics to put the magnitude of our problem into context. The BVI is a TINY place, with a population of about 30,000+ people. We live and prosper based on the money flowing in to the Territory from one MILLION tourists. Let that number sink in for a moment. The money they spend gets multiplied over and over, creating jobs for restaurant staff, taxi drivers, people who service the boating industry, and others who, in turn, spend money on all kinds of things that ripple through our economy, like construction and retail, creating even more jobs. We simply can’t survive without a vibrant tourist sector. It’s that simple.
Staycations can be helpful during our offseason, and they were starting to be a focus pre-Covid, but as a solution now, it’s like putting a band-aid on a bazooka wound. There’s not enough money circulating around in the BVI for Staycations to make a material difference going forward. Staycations won’t fix our problem.
There has long been talk of making agriculture a third pillar of the economy. While Covid made it abundantly clear that we should rely less on the importation of fresh produce, the BVI’s mountainous terrain and small size are not conducive to large scale agriculture. Even if we were to double or TRIPLE the size of this sector, which we likely can’t, it also wouldn’t make a material impact. Enhancing our agriculture sector is needed, but it’s not a solution to our current problem, either.
There has been recent legislation to introduce the medical marijuana and gambling industries to the Territory. Many countries already have in place similar initiatives. We’ll be starting from ground zero and we don’t have any built-in competitive advantages. While one or both of these may eventually contribute to our economy, their success is by no means assured and, in any case, it won’t happen fast enough. So neither will contribute at the scale we need.
While tourism is on pause, our government can prop-up the economy in the short term, but the BVI isn’t like the U.S. or U.K. It can’t print money to solve this problem. At some point – and that point is soon – the money will run out. When it does, layoffs will accelerate and people who currently feel safe in their jobs will be affected. If government lays-off administrative staff, the Financial Services sector may be looked upon to soak up the newly unemployed. But specialized skills are often required in that industry and what Irma and Covid have taught us is that these kinds of firms can move to other Territories. If we inflict damage on our Financial Services “cash cow,” it would be devastating to the BVI in the short, medium, and long-term.
For the above reasons, our ONLY realistic option for economic recovery is to get tourist dollars flowing in as soon as we can safely do so. We missed most of the 2020 season and there is pent-up demand waiting to come. So how do we do this safely if we can’t even remain Covid-free without tourists?
Covid-19 isn’t a joke. It’s not the flu, it’s not a “hoax” and it’s not to be taken lightly. Although 40% of people are asymptomatic, it’s highly infectious and it can be very serious, sometimes inflicting long-term damage on those who get it – even the young and otherwise healthy. Sadly, though death rates have fallen, some people are still dying of it.
We have health protocols in place in the BVI that are proven to work at protecting us from Covid – protocols like mandated mask-wearing, social distancing, washing hands, and sanitizing. But many pay no attention to the protocols and there’s been no real enforcement of these measures so far. And, as most of us are aware, a few very greedy and inconsiderate people recently flouted our safeguards, smuggling people into the Territory. Our first priority needs to be enforcement of our existing protocols and stopping illegal human trafficking.
But recent reactions have gone to the extreme. When one (false) positive case was reported on Jost Van Dyke, we locked down JVD and tested everyone on that island. Now, we’re in another lockdown, which started with very strict measures and has since been relaxed somewhat. But, make no mistake – lockdowns put thousands out of work when many can’t afford to pay their rent.
Of course, we must keep our people safe, but the economic and social costs of these sorts of measures, both short and long-term, are enormous. With extreme measures, we’re bringing an already fragile economy to its knees. We urgently need to re-evaluate our actions to strike a more realistic and sustainable balance.
We had better be able to manage a small number of cases with existing protocols because there’s more bad news… The harsh reality is that we’re going to have to live with Covid for a long, long time. Many will refuse to get vaccinated and the disease is not going to magically disappear in 2021. No one will simply “flip a switch” so it’s safe to return to where we were before the pandemic struck. Even in the most optimistic scenario, cases will pop-up sporadically for years to come.
But lest ye think I’m all doom and gloom, I’m not! I closely follow health industry bulletins and I can tell you there is very good news coming soon. Great progress is being made on the fronts of treatments, testing, and vaccines.
First, regarding treatments, doctors and scientists know significantly more about the disease than they did in March. It’s still scary, but it’s much more treatable now. Fewer people who get infected are ending up on ventilators and dying of Covid – and the trend line is going in the right direction. Many promising new treatments are in the pipeline to be approved during the remainder of 2020.
On the subject of testing, there have been recent “game-changing” breakthroughs. A couple of weeks ago, an inexpensive saliva test was developed by Yale University scientists and approved for emergency use by the FDA in the United States. It has the same level of accuracy as the gold standard PCR nasal swab test. It’s non-invasive, it’s cheap, and it requires no special lab equipment so it can be quickly scaled worldwide. As soon as this is available to the BVI, and that should be within weeks to a few short months, we can require pre-arrival tests and test visitors again on entry. In fact, the entire territory could be quickly and cheaply tested. This development, alone, really changes everything.
Finally, there are more than 130 vaccines racing towards approval around the world. Production is scaling up in parallel even before approvals are granted. One or more of the leading candidates will almost certainly be approved before the end of this year, perhaps as soon as November. Military and front-line workers will be the first to receive vaccines, but the end is in sight.
Even before any of these breakthroughs become available to us, though, countries like St. Lucia and St. Barth’s can serve as models for safely opening to tourism NOW. Both of these countries have implemented a phased approach for safely letting tourists back in, starting with villa guests. So far, it’s working very well. We should not wait. We should follow their lead and plan to quickly open back up to tourism as better testing, better treatments and vaccines start to come online. Government needs to forward plan and make public the phased opening dates so the industry – and our guests – can plan for the upcoming tourist season. Industry lead-times are measured in months, so even if dates need to be adjusted, we MUST make public a plan now so we don’t lose this coming tourist season. That would be catastrophic.
Covid will not go away, but very positive developments are now just weeks away. We can manage the risks, keep people safe, and have a successful upcoming season.
Breakthroughs are coming on all fronts. But we must plan for it now. It’s time for action.