Leno’s head of Wealth Solutions calls for accelerated digitalization to speed up recovery following economic shock of national shutdown to contain COVID-19 pandemic
The surest pathway to economic recovery following the national shutdown to contain the deadly COVID-19 virus is a jolt to accelerate digitalization, expanding and spurring online activity that is an increasingly vital part of economies around the world, says one of the nation’s top financial analysts.
Brian Jones, Managing Director of Wealth Solutions at LENO – a multi-dimensional financial services provider and brokerage with more than $800 million under administration – says while the COVID-19 shutdown is a voluntary and temporary halt to the Bahamian economy, it demonstrated how critical operating in an environment other than person-to-person can be.
Jones, who stopped short of calling the sudden recognition of the urgency of e-commerce and alternative payment solutions a silver lining in the cloud of temporary closures and rising unemployment, said there is reason for optimism moving forward.
“While there is tremendous cause for concern, this was a voluntary economic shutdown caused by a temporary health crisis,” said Jones. “But it is just that, temporary. These are unprecedented times, but folks will get back to business. While COVID-19 has seemingly brought most things to a halt, it will also jump start many new initiatives out of the disruption we are currently facing.”
Jones projects a series of changes, many of them altering the model of the Bahamian economy that is so heavily dependent upon tourism.
Among the most promising overall changes, he notes, is speeding up digitalization so that commerce doesn’t stop because a door is closed.
“The Bahamas, like many other countries around the world must accelerate our national digitization agenda, which can allow us to push the pedal and move with speed when global economic conditions return to normal. The resiliency of the economies in countries such as Estonia are proving that throughout this crisis, digitization is more crucial now than ever,” said Jones.
The shutdown has clearly demonstrated the value of money transfer apps and peer-to-peer payment, he believes.
“New Fintech and e-commerce businesses, along with the coming national launch of the Sand Dollar, provide platforms and tools for the economy to function more efficiently as all sorts of business functions and activities can be carried out in a completely virtual environment,” said Jones, who has been at the forefront of cryptocurrencies and alternative payments including the Central Bank’s Sand Dollar project, first tested in Exuma.
Jones also predicts increased focus on building infrastructure ranging from physical plants including hospitals and other medical facilities to creating secure platforms for trade and ease of doing business. He thinks COVID-19, like no other episode before it, has demonstrated the need for greater food security, local production of essential goods and for parallel streams of conducting commerce. Maintaining health insurance will assume a more prominent role and those who can afford it may resume the tradition of packing away dollars for “a rainy-day fund.”
Government, Jones said, will need to work more closely than ever with the private sector to ensure funds are available for jumpstarting the economy and acting as a shock absorber. He sees more attention on fixing the skills gap between available jobs and labour and believes this is an ideal time to look at an ongoing virtual education program.
“We see from looking at history, this is not the first time something like this has happened, and it’s also likely that it will not be the last,” Jones said. “Growth lies in ingenuity and we will also see many startups emerge to solve some of the new problems that have arisen due to the crisis. Several of the top unicorn companies in the world today were started during the last major economic downturn over one decade ago.”