Introduction
There are concerns by many residents of the Turks and Caicos Islands that the reopening of the borders should not take place on July 22nd, 2020. I believe the primary concern is due to the thousands of COVID 19 cases in the United States and the USA of course is where most of our tourists come from.
I support the Government’s decision in opening the borders on July 22nd, 2020. Personally, I think the Government should have opened the borders from June. If we do not open the borders soon enough, how will we survive? Tourism is our only industry and even if we venture into other industries, it will take a while before these other industries are able to be impactful in our economy.
Quite frankly, we do not even know how impactful the opening will be on our economy this summer as people are afraid to travel and furthermore summer bookings are not normally as high as winter bookings. Some may argue it is not high like the winter bookings, why should we open. In this environment right now, every dollar count.
All of us (residents and tourists) just need to be vigilant as we open our economy to the world. This includes practicing social distance, washing your hands frequently and wearing your masks.
The Reality and the Vicious Circle
The TCI proposed recurrent revenue in their budgets is $261 million with expenditure being $302m. Where will the Government get money from if they do not open the borders? Do we expect them to borrow the money? If they do borrow the money, they will need income to repay the loan on a monthly basis? Furthermore, it does not appear the Government has any intention of borrowing.
While it is true that the Government has stated it has $100m in reserves. However, if no revenue is coming in, that $100m can be exhausted within 4 months or so. How did I get the 4 months? If the expenditure is $302m, you divide that by 12 which is roughly 25m a month.
According to the budget, there are 2,268 individuals working for Government with an annual budget of $75million. The Government has publicly stated it has no intention of cutting salaries so how will they continue to pay civil servants if the economy is not open?
It was also revealed that there are between 10,000 and 13,000 employees working in the hospitality industry. While there is a provision of $1200 to be paid to these individuals, that $1200 will not last long. If the borders do not open, how will these individuals survive? Some may argue most of these individuals are work permit holders and send them home. Obviously, if they are not working, they should go home. However, let us look at the vicious circle. Some of these individuals are living in your apartment so that they you can pay your mortgage or enjoy your income. Some of these individuals are going to the beauty salons, the barbers, the grocery stores so these businesses can do well. Contributions from these individuals are being made to NIB and NHIB. When these contributions are reduced, how will NIB be able to funds in place for us when we retire? How will NIB pay their staff? How will NHIB pay their staff? Where will NHIB get money from to take care of people medically if contributions are reduced. Despite our feelings, we cannot maintain a sustainable economy with just the 10,000 or so locals. All of the gas stations will not be able to remain open. The car rentals will not be able to stay open. Some restaurants will not be able to remain profitable. One of our largest statutory the Airport Authority is funded primarily by tourism. This body is responsible for a huge segment of employment at the airport. How will they continue to pay their staff? This is the reality.
On Airbnb alone, there are over 300 Turks and Caicos properties registered. What will they do now if the borders do not open? Rent long term? There may not even be a market for long term if it is just us locals remaining in the country. Some of these homes are being managed by property managers who get paid a percentage of the revenue. How will these property managers survive? How will the employees of these property managers survive if they are not working?
Other Countries
I know that we do not need to compare our situation to other countries but in this case as a point of reference, it is necessary.
Jamaica, Antigua and St. Lucia have opened their borders because of their reliance on tourism. Recently the EU has decided to ban Americans from coming there. While the EU will be impacted by tourism, they have other industries to rely on.
Cayman, Bermuda and BVI do not have to open their borders now. These countries have a significant income coming from Offshore Finance and COVID 19 does not really impact offshore finance.
Some countries also have unemployment benefits in which individuals contributed and so they can get unemployment benefits.
Conclusion
The residents are demanding their stimulus package. I believe they are for two reasons, 1) perhaps because they know they are entitled to it and 2) they need the money. When the $1200 is exhausted, how will these individuals get any additional funds if the borders remain closed. How will you and I survive?
The concern about health is valid, however, unless they find a cure or vaccination to control the virus, the virus will be among us. If we open the borders in November or even January, we face the same risks of contracting the virus. Therefore, let us be vigilant as we reopen of the borders on July 22.