By Myron V Walwyn, Tortola BVI
No one has any idea where we will land when the COVID 19 pandemic
outbreak comes to an end. No matter what model you may use, it could be
months before any sense of normalcy returns to the world and indeed the
Caribbean.
Currently, the United States of America has a record 188,592 confirmed cases,
with over 4,056 deaths. Over the weekend, top doctors advising President
Trump on the coronavirus pandemic warned that as many as 200,000
Americans could die during the outbreak, even with much of the country
already under stay-at-home orders and practicing physical distancing.
When the U.S. sneezes, the old adage goes, the Caribbean catches
pneumonia. But what happens when the U.S. coughs? Well, we are about to
find out. The consequences of an ineffective response to this public health
emergency in America will reverberate through the Caribbean and perhaps
has the capacity to deepen the divide between the wealthy and the general
population. The ripple effect to the Caribbean where inequality has been on
the rise over the last number of years, the disposable income of households
have been on a steady decline and any growth and wealth has been going to
a smaller and smaller percentage of the upper population is a stark reality.
This is no easy time for governments in the region but its also not the time
for inaction. Across the region, economic stimulus packages have been
ushered out to its citizenry and in theory have the potential to secure that
those affected by the public health emergency are provided with some level
of an economic cushion to make it through the next coming months.
For example, Saint Kitts & Nevis has rolled out a comprehensive stimulus
package, with the activation of an EC $120 million fund being made available
for those affected by the slowing down of the economy. This amount includes
to EC $1,000 per month available to taxi operators, hotel & restaurants staff
, local vendors, fishermen/women and farmers. Barbados has earmarked BDS
$20 million along with the establishment of a Household Survival Programme
to help more than 1,500 vulnerable families. Through its Welfare Department,
the fund will provide up to BDS$600 per month to each family and also provide
a 40 per cent increase in all rates and fees paid by the Welfare Department to
individuals. Grenada’s economic stimulus package provides for EC $20 million
of payroll to the hoteliers, restaurants, bars, small travel agents, and income
support to public buses, taxi drivers, tourists vendors and other such identified
hospitality -based businesses. Lauded as one of the countries in the Caribbean
to have implemented early measures, the Cayman Islands had already
implemented COVID-19 regulations about a week and a half prior to the World
Health Organization’s(WHO) announcement that COVID 19 had reached the
level of a pandemic, despite not having yet identified a single case of the virus
within its territory. Cayman Islands has also made a one time stipend
available to taxi drivers, tour operators and water sport employees in the
amount of US $600 per person and for an initial one month closure of the
economy.
Even in the United Kingdom, on March 11th a budget was announced with
nearly £37 billion in fiscal stimulus, including a tax cut for retailers, cash
grants to small businesses and expanded access to government benefits for
the self-employed and unemployed. They have recently unveiled another,
larger stimulus package and included, among other things: £379 billion in
business loan guarantees and £23 billion in business tax cuts and grant
funding to businesses hit worst by the virus.
It should be noted that no matter how robust any economic stimulus package
is, it will not be able to address the low demand and supply shocks being felt
across the globe and by extension the Caribbean. It is however, incumbent on
the administrations to focus on a “relief package” for its citizens and the most
vulnerable. This is particularly staggering in the Caribbean, where
unemployment is compounded from high rates of conditions like asthma, heart
disease, diabetes and kidney disease – problems that experts say could make
COVID-19 more damaging, if contracted.
Here in the BVI, we have an economy that is fortified by two pillars, financial
services and tourism. Financial services puts more direct revenue in the
government coffers however, the dollar distribution through the territory is
more significant in the tourism sector. Some positive steps have already been
taken to secure our financial services industry and the use of technology and
the internet allows for remote working by persons employed in that sector.
Tourism is an industry that requires face to face contact and this very contact
is being discouraged in order to prevent the transmission of the coronavirus.
Therefore, business owners and their employees in tourism and tourism
related-sectors will require immediate financial support to keep them afloat.
So it behoves us to take similar approaches to what has already been done in
different parts of the developed world and in neighboring Caribbean countries.
I commend the Government for indicating that they will be bring forth an
economic stimulus package geared towards supporting the most vulnerable,
including small and mediums to large businesses.
Here are some examples of actions that can be taken to provide economic
support to our communities. I take no credit for these, as I am sure you the
reader has had those very thoughts:
- A loan payment moratorium (personal and business) should be put in
place for a minimum period of 3 months and I commend some banks
in the BVI who have already committed to deferring loans - A waiver or cost reduction of payments for water and electrical
consumption for households of an initial period of 3 months - Landlords should not be allowed to evict tenants of non-payment of rent,
but those tenants who can afford should pay their rent. This particular
matter is not a straight forward situation as some of us may think - A moratorium on customs duties for essential businesses for an initial
period of 3 months, with the proviso that the cost savings be passed to
the consumer - Interest free or very low interest loans for existing micro and small
businesses should be established, this could be done through the
National Bank of the Virgin Islands with the requisite stipulations - Create other incentives to encourage businesses not to lay off their
workers - Through social secuirty, an unemployment stipend should be
considered for an initial period of at least 3 months - Give food security the prominence that it needs in our national
development. We cannot only throw money at agriculture when we are
in difficult times, there must be an organized and properly funded
program to move us as close as possible to self sufficiency
These are just some of the things that can be done and there may be others
and we encourage the government to consider all the options available to
them but it must act before any more damage is done to the local economy.
Of course the health and safety of our citizens is paramount, but the viability
of the economy to withstand this shock should also be at the top of our minds.
The proportional balancing of these two are delicate to say the least, but we
cannot afford to have our citizens survive the near death of COVID 19 and
then face economic ruin long after this outbreak is gone.