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THE NEW NORMAL - a tightrope for Cayman

Front Pages 15 Jul, 2020 Follow News

THE NEW NORMAL - a tightrope for Cayman

Cayman is gradually reopening and at the same time rapidly realising that things will not be the same for some time yet, and possibly for the foreseeable future.

Normal as we have come to know it has been put on hold while we adjust to the new reality.

Normal now means working remotely; commuting digitally from your desk at home (even ‘out-of-country’) to your office in Cayman, or shopping virtually; staying at home in Bodden Town while online shopping in Boca Raton.

Normal now means an explosion in online shopping where what was once a convenience has overnight become a necessity that we have embraced.

Normal now demands a massive and urgent rethink of how Cayman (like everywhere else), does business, runs its government, and just lives.

The economic repercussions for the existing ‘normal’ on which Cayman has built a thriving society are already being felt.

 

VIRTUAL IS REAL

Online marketing firms are literally ‘capitalising’ on the boom in virtual shopping by consumers for real products, resulting in a flow of capital out of the country with local wholesalers and retailers seeing a consequential reduction in footfall and the knock-on impact on their turnover.

It’s quite paradoxical also that what was intended as emergency access to pension funds seems to be triggering a wave of ‘retail therapy’, except that the windfall - as it’s seen and is being treated by many - isn’t circulating within the local economy...as was hoped.

Working from home ‘out-of-country’ is the new phenomenon especially for the financial sector where huge advances in fintech enables firms to dramatically cut back on their overheads for office space.

But that gain for the company is a loss for the property developer here.

Likewise, residential real estate also suffers locally as the technology-driven remote working concept means more empty properties in the local real estate portfolio.

In the UK, the government is urging people to ‘go out and spend’ the very generous crisis support packages it has offered to both companies and workers.

But shoppers, after an initial foray - mainly perhaps to test the outdoors after being in lockdown for nearly three months - are instead now choosing to stay indoors in their numbers...and when they go out it's less retail therapy and more prudent spending than profligacy.

The original message from the government to stay indoors on health grounds, drummed in even under the threat of criminal charges, now seems to have fallen into the category of the laws of unintended consequences to the extent that the knock-on economic effect is cause for concern.

Et tu Cayman?

 

IT'S THE ECONOMY (and that’s not stupid)

Tourism as we knew it will take a long time to recover. Even if the borders were to open sometime between September and October it will be months before visitor numbers return to anything looking like normal.

Inward tourism or 'staycations' might very well become part of the new normal and a crucial part of the industry. That is unless the urge to venture abroad with its attendant risks proves irresistible to those in search of a respite.

Conversely, it's the same marketing strategy that Cayman would deploy for wooing visitors here as the tourism industry adapts to the new realities being flexible within strict public health boundaries.

Virtual tourism anyone? It’s possible but the experience isn’t quite the same.

Health tourism offers great possibilities, plus remote healthcare works although ideally in the case of Cayman medical tourism requires having the patients here.

Virtual education has been proven even pre-COVID to work and its possibilities have been tested in Cayman’s schools with some degree of success with the lockdown.

But the longer it takes to adjust to what in some instances will be ‘the new normal’ will only prolong the economic agony sending worrying ripples throughout the society.

As daunting as the challenges might seem though, there’s hardly any alternative but to tackle them head-on.

The strategy of gradually reopening the economy in phases with a keen eye on keeping the spread of the virus under control is sensible.

Now is no time to throw caution to the wind out of sheer desperation to hastily return to a pre-COVID lifestyle. This ‘new normal’ will dictate how Cayman interacts with itself across all sectors of society; business, consumer and visitor.

On the other side of the coin, being excessively cautious could itself be counter-productive.

By its very nature, reopening of the Cayman Islands economy has to factor in other issues that other territories and countries might not have to face on the same scale and complexity.

The virus is still among us and until a vaccine is found - or it somehow dissipates - Cayman has no alternative but to manage it and live with it.

Subjecting the economy to further disruption is hardly an option.

 

STEADY AS SHE GOES

The risk of another forced lockdown rises exponentially alongside the chances of another spike. The current economic slowdown pales into insignificance when one contemplates that scenario.

A rush to reopen carries great risks both to public health and economic wealth. All that has been done could easily be undone by irrational decisions.

The message from the authorities must be clear and uncompromising. Some restrictions will no doubt be in place for the foreseeable future.

The imminent Level-1 All Clear goal might itself even be somewhat overzealous under the circumstances and in need of clarity as 'all-clear' suggests all risks have passed.

Living at the current Level 2 might itself become the norm for some time as the degree to which Cayman returns to even a ‘new normal’ relies on many external factors, many of which are outside our control.

The surge in coronavirus cases in Florida is an example.

Elsewhere, reports of outbreaks and second waves are forcing some countries to institute targeted regional lockdowns, a facility not available to Cayman.

In the meantime, COVID-19 seems like it will be around for some to come, a new reality to which we’ll just have get accustomed, adjusting as we go along.

A sobering thought, but sober thinking is what this situation requires.


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