BUSINESS MONDAY: Being prepared, taking risks key

One year ago this month, February 2020, the Barbados economy was beginning to make some rebound from the economic slump of the previous ten years.

The new Government had entered an agreement with the International Monetary Fund (IMF), and also introduced the Barbados Economic Recovery and Transformation (BERT) programme, amongst other measures to stabilize the economy.

The masses were generally satisfied that the government was doing a fine job. We had also looked forward to the return of many of our citizens and friends to Barbados  from the diaspora with our Vision 2020, which was a year long celebration from month to month through all eleven parishes, culminating in November. Projections for tourism  and other indicators had looked very promising.

But in March 2020 we had an unwelcome visitor to our shores called Covid-19 that suddenly changed the outlook for lives and livelihood on the entire country.

This monster coronavirus, which is believed originated in China, enveloped our little island and quickly disrupted our lives, even causing death. Growth is critical for the stability of the island and any growth was stunted. All through the year we witnessed massive loss of jobs through closure of businesses, large, medium and small. The tourist industry was brought to a sudden halt as aeroplanes reduced their frequency of visits and cruise passengers were stuck on oceans in cruise vessels all across the globe. In other words, tourism, which is the backbone of the Barbadian economy, had been heavily impacted by the cessation of cruise ships to the island. Our tourist industry was decimated.

Government then had to concentrate on the reconstruction of health facilities to house persons who were affected by the coronavirus. Health care professionals including doctors, nurses, laboratory technicians, orderlies, food handlers and maintenance personnel were busy looking after sick folks in quarantine and isolation facilities.

Many persons lost their jobs or witnessed a reduction in income across the board, resulting in high unemployment.

With the number of layoffs skyrocketing, many folks turned to self employment by opening their own businesses from their homes selling items of food and other produce. As I traverse the island daily, I see lots of business activity on our highways. Vending had seen increased numbers and small entrepreneurs can be seen selling items like coconut water, watermelons, and fruits and vegetables at competitive rates.

Because of the contraction in the economy, the masses have less disposable income and spending is down.

The National Insurance Scheme (NIS) made millions of dollars in payout of severance and unemployment benefits to workers during the period. Job losses reached a record high of approximately 40 000 persons. These workers came from almost every sector in the job market, but hardest hit was the tourism sector like hotels and restaurants, construction, retail and the manufacturing sectors.

Covid-19 had dealt an uppercut like a boxer’s punch to the heart of the economy. It has caused sickness and death and continues till today to strike with venom.

I have travelled across the length and breath of this island since 1996 conducting personal finance seminars to schools, service clubs, community centres, and church organisations, alerting folks about the neccessity  to save and protect their hard-earned dollars. I have written two books on money management – “Money Talks..Listen and “Life is full of difficult decisions..Make them”. In these books I have emphasized what I refer to as a money plan. I have expanded on the Laws of wealth – this is the earning, saving, spending and investing law. These laws when enacted will work wonders for your financial life and bring you some success.

When financial hard times come, and they will come from time to time, it is the wise person who saved, spent and invested wisely from his earned monies through the years that will have erected a cushion to soften the impact of a financial blow. That person is more resilient when they experience a loss of income or a reduction in salary. Having financial reserves in the bank, credit union, insurance company or other financial institutions, money invested in stocks, mutual funds, property or other forms of investments will set you apart from the persons who was always delinquent in setting aside any portion of his salary in times past.

The Fortress Fund Market, through its Caribbean Growth Fund, its Caribbean High Interest Fund and its Caribbean Pension Fund is still witnessing slight growth in these turbulent times because of its outreach into the global market. The credit unions are still offering interest on yearly Term deposits and Premier Savings plans.

I advocate caution in these times but it’s the ones who are willing to take risks that will see the benefits.

This year 2021 may not be a good year for us to see growth in the economy because of the proliferation of the coronavirus and the virtual unknown of the variants. We await the advice from the health professionals concerning the vaccines; we await the advice from our leaders and economists and the private sector concerning further lockdowns and curfews. We also await the compliance of the public to the protocols implemented to keep all of us safe. While we do all these things we pray to Almighty God for healing and protection for our country.

(Article submitted by G Leroy Straker)