A new session of the Barbados Parliament began on Tuesday overshadowed by the impact the coronavirus (COVID-19) pandemic has had on the socio-economic development of the Caribbean island.
Governor General, Dame Sandra Mason, delivering the traditional Throne Speech, outlining the priorities areas for the Mia Amor Mottley administration over the next 12 months, said that the pandemic, which has infected 183 persons here and killed seven others, came at a time when the island was slowly turning around its ailing economy.
“COVID put Barbados in lockdown as it did many other countries. It will be some time before the country is again able to host the numbers of tourists which we usually do,” she said, noting that the government is therefore proposing to stimulate the local economy by putting in place a number of provisions and initiatives to support Barbadians and ensure they weather this period successfully.
“It must be noted, however, that given the drop in its revenues, my government cannot meet the demands of every national or give everything for which people may ask. Despite the constraints, my government is still giving generous stimulus packages of benefits and support to help every Barbadian keep their head above the turbulent social and economic seas in which we find ourselves,” the Governor General said, adding “my government will not let you drown”.
She said that the new initiatives are also designed with a further purpose in mind and that is intended to give Barbados a general face lift, and the improvement of health conditions, aesthetics and environment.
“Barbadians must start to feel that we are really living in paradise. And when the country fully reopens, we must be able to welcome visitors to a truly beautiful Barbados, for an experience that is memorable in every way. This work will make Barbados, fitter, stronger, cleaner, better, more competitive and just,” she said.
The Head of State said that the support proposed by the government will be across multiple sectors and is intended to create jobs; provide a social safety net for youth, seniors, and the vulnerable; stimulate social and economic activity; generate the movement of money within the local economy, keep citizens engaged in lawful activity, and provide much needed incomes for citizens until the country starts earning foreign exchange again.
Dame Sandra said as a result, the Mottley administration will implement a 12-Month COVID Relief Programme and is intended to go further than the initial Adopt-A-Family and other similar programmes.
“We must now go further. People’s need to work goes beyond receiving a pay cheque. A job helps to give our lives purpose, a sense of security and promotes mental wellness. In plain language, our men and women must have options. They both have an intrinsic desire to provide for their families and to have lives of dignity. In recognition of this, my Government has settled on a BDS$40 million (One Barbados dollar=US$0.50 cents) COVID Relief programme which will run for the next year.
Dame Sandra said that the COVID Relief Programme will be designed to ensure that people in the country have work to which they can go.
“While the private sector fights to restore a level of economic activity and provide jobs, government will play its part to ensure that the largest number of people possible is able to support their families. These jobs will be provided by contracting persons for 12 months, to carry out a range of activities across Barbados that are required to improve the quality of our life, our environment and our infrastructure. “
She said the government is also committed to easing the pain of those hardest hit by this pandemic, noting that these individuals will be contracted as self-employed persons and will be required to also pay their National Insurance.
“Since the pandemic, thousands more Bajans now recognise how absolutely vital it is for them to contribute to the NIS, if they are to benefit from social security when they most need it. As my government eases the pain of these persons, we will ensure that we fix both a number of outstanding challenges, as well as the new ones caused by COVID.”
The Governor General said that within the context of the Barbados Economic Recovery and Transformation (BERT) programme it is imperative that the lay the platform for growth of the local economy.
“While the macro economic framework was stabilized by the end of 2019, the COVID-19 pandemic has triggered a virtual implosion of the private economy. Both businesses and workers have been thrown down, especially in the tourism sector.
“The need to counter the consequences of this apocalyptic reality of our tourism sector has caused my government to work with the labour movement and the private sector in the industry, to come up with innovative solutions that allow us to protect tourism workers and the enterprises operating at the centre of our main productive sector.”
She said that the Mottley government has agreed to implement a stimulus package for the productive sectors to be known as the Barbados Employment and Sustainable Transformation Plan (BEST).
Dame Sandra said that tourism accounts for 45 per cent of Barbados’ gross domestic product (GDP), employing a significant amount of the workforce.
The BEST Programme will be a maximum of US$300 million scheme for hotels and tourism facilities as a response to COVID-19. The largest fiscal stimulus package being offered to the country. It is intended to protect jobs, support the balance sheets of our companies in the tourism sector and those of direct tourism services, and ultimately, ensure that our physical infrastructure remains fit for when some level of normalcy returns. Barbados must be fully prepared for that moment. “
She said that the BEST Plan has three main features. The first is that the government will make an investment in tourism firms which will enable these companies to re-engage all of their workers on 80 per cent of their normal salary for up to two years should the need arise. Workers entering the scheme will not lose their existing rights to severance pay if they are laid off again at any point within the next 12 months.
The Governor General said that the resources will only be available if tourism numbers and revenues remain below the levels required for the survival of the sector.
“This job support programme is a strategic intervention that is a win-win for all. It is conditional on a number of measures designed to strengthen the competitiveness of the tourism sector specifically, the economy generally, the quality of workers and the opportunities given to them. And what are these conditions? “
She said that there must also be a substantial up skilling of workers in the sector and that the National Training Initiative will offer training programmes for tourism staff.
The training offered will be in the areas needed for their specific job, but also for the softer skills that will be provided through citizenship education.
“Bajans should note that this citizenship training will be offered to all Barbadian employees and employers, all students above class 3 and any other citizen wanting to benefit from state benefits. It is our intention that as many of our citizens will become “Star Bajans,” instilling a stronger sense of national pride and purpose and of course, respect and tolerance for fellow Bajans.”
The second aspect of the BEST Plan will allow for a transformation of the tourism sector by committing to greening through water conservation and water harvesting measures, where applicable and the installation of renewable energy capacity, to reduce reliance on fossil fuels.
“Third, there is a requirement to review all processes, payments and systems to ensure their suitability in today’s world and where necessary, to undertake a digitisation of the same. My government will support these last two elements by the establishment of a dedicated Green and Digital Investment Fund for which firms that have re-engaged their workers will be eligible.”
She said that the funds will primarily be distributed through investment in the companies by way of a class of shares that mirrors preference shares. There will be some limited opportunity for grants. This method of support will help to strengthen the weakened balance sheets of these firms.
Dame Sandra said that the Green and Digital Innovation Fund and training will also be available to small businesses and to manufacturing and agricultural enterprises, provided that they too have retained a significant portion of their jobs. The sums available for investment and grant will be capped to ensure that as many entities benefit as possible.
The Barbados government has said that it would be requiring those entities benefiting from the programme to invest in localizing the value chain and making deeper connections with farmers, manufacturers, artists of all types, contractors and providers of professional services.
It said investments in collaboration across the sector such as joint websites, tours, marine sculptures parks, water ferries, and similar initiatives will also be strongly encouraged.
“My government recognizes that hotels or businesses which have plans to access the money needed for the purposes of refurbishing and expanding the business’ plant in a sustainable way, should be encouraged to undertake this work now as their revenue is already down and there is an inevitable downside to undertaking construction.
“We are refining the Tourism Loan Guarantee Fund, given the reluctance of local banks to participate, in spite of the need for many of our tourism establishments to be able to access cheaper forms of capital.
“Let us be clear, my government will invest to save enterprises. This is preferable to simply paying pensions and social security for workers to remain at home. It also helps our enterprises and their staffs to remain fit for purpose while supporting employees in maintaining mental wellness.
“It allows Government to protect, and in some instances, to expand the nation’s hotel stock and to help save our enterprises from bankruptcy and insolvency. While my government will help these businesses stay afloat, they will not be permitted to draw dividends or unreasonably increase the compensation of management and owners before repaying the investment in their enterprises. “
The Head of State said that by providing this assistance, it is envisioned that the beneficiaries will be better positioned to retain at least 75 per cent of the workforce, create sustainable jobs, honour their statutory obligations and manage their debt.