Experts Discuss 5-Point Plan for Hawaii’s Economic Recovery – State of Reform

Hawaiian economy experts discussed their ideas for a five-point plan to help the Hawaiian economy recover and how vaccine rollout is critical to reopening the economy. Ray Vara, President and CEO of Hawaii Pacific Health, Peter Ho, Chairman and CEO of the Bank of Hawaii, and Dr. Mark Mugiishi, president and CEO of the Hawaii Medical Service Association (HMSA), discussed these issues at a business forum at the Hawaii State of Reform Virtual Health Policy conference on Thursday.

Although Hawaii has done a pretty good job of managing the spread of the COVID-19 virus, the economy has still suffered, Vara said. Hawaii’s economy is largely dependent on tourism, particularly the service industry, which is one of the hardest-hit industries nationwide.

“Some of the federal relief from CARES funding helps stem the tide a bit,” Mugiishi said. “But there’s no question that smaller companies have probably struggled the most. Big companies might have had a little more sustainability reserves to last a little longer.”

Experts worked together to create a five-point plan that lays out what they need to do to help the economy recover and improve from before the pandemic.

The first point of the plan was that public health and economic health are intertwined. Ray Vara said it was “virtually impossible” to reopen the economy without a strong public health system. Ensure the vaccine introduction is efficient and people can vaccinate in time. He pointed out that Maui started vaccinating people 75 and older earlier than other islands, partly because Maui has a smaller population, so the operational lift wasn’t as difficult.

“It [the vaccine rollout] will be a logistical challenge,” said Mugiishi. “It’s really, really important for people to remember that when it launches, it’s not going to be perfect. There will be people who don’t belong and end up getting the shot. There will be problems with registration, problems with parking, there will be times when you wait too long, all of these things will happen. But the primary endpoint of this whole thing is getting shots in the arms.”

The second point was that the state and interest groups must take finance capital into account. They must ensure that short-term steps do not impede economic growth in the long-term.

“The problem we’re facing is a k-shaped economic environment and recovery,” Ho said. “And by that I mean unemployment is obviously unacceptably high, but if we look at the personal income numbers on the ground, they don’t look nearly as bad.”

Hawaii’s high cost of living makes business owners and residents dependent on state and federal assistance funds and programs.

The third point raised by the experts was the need to take human capital into account in the reconstruction effort. Hawaii needs to be able to invest in the people in its community, Vara said. Through the use of education, through workforce training or higher education, people are more likely to stay in Hawaii.

Physical capital was the fourth issue raised by the panelists.

“We have infrastructure, and we have land, and we have a whole bunch of things in this state that we can really look at and say, ‘How do we make sure we’re doing the best? and the best use of those things, and they’re effective,'” Vara said. “We know how important affordable housing is, we know some of the limitations we have in terms of sewage and all the different things that our infrastructure needs. There was no greater time to invest strategically in these areas and to make our decisions wisely.”

The fifth and final point raised by the panellists is the regulatory framework. Hawaii needs to be a welcoming place for people to come and bring their businesses and entice people to stay in the state.

“We can lag behind very well [behind] the rest of the country is emerging economically from the pandemic,” Ho said. “People are being given a choice to grapple with whether to stay on the islands or leave. That choice will depend in large part on what people see as available in terms of resources.”

The five points raised by the experts are not a complete plan, but rather a framework that the state government should consider when working on the country’s economic policy.

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