Countries in the Organisation of Eastern Caribbean States (OECS) will benefit from a US$50-million loan from the Inter-American Development Bank (IDB) that will boost their response to the health, social and economic effects of the COVID-19 crisis.
This loan — which the IDB approved yesterday, November 26, and will disburse through the Caribbean Development Bank — will provide economic resources to the OECS member states.
The OECS comprises Antigua and Barbuda, Commonwealth of Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. Since 1977, the IDB has provided US$227 million to the CDB in a long-term collaborative relationship.
According to the IDB, “The programme will help reduce mortality and morbidity from COVID-19 and ensure minimum levels of quality of life and health for vulnerable people in the mentioned countries. In addition, it will provide support for micro, small and medium-sized enterprises (MSMEs).
Although OECS member states have reported a lower incidence of infections compared to other countries in Latin America and the Caribbean, the IDB still categorises them as highly vulnerable to health, social and economic risks caused by the COVID-19 crisis.
Before the pandemic, countries in the subregion would welcome over one million visitors annually — almost 200 per cent of their total population. With this level of traffic inflow, OECS countries are highly vulnerable to any external factors that affect tourism, presenting considerable economic and social impacts for the resident population.
“In response to the COVID-19 crisis, the loan will strengthen response leadership at the country level, improve services delivery capacity, support initiatives to break the chain of transmission of the illness, and improve case detection and management,” the IDB states.
In particular, the facility will support cash transfers as well as the expansion of safety net services that use existing cash transfer programmes and platforms in each OECS country. These include conditional cash transfers, transfers for people with disabilities, school-attendance grants for vulnerable populations, school meal support, non-contributory pensions, and actions to mitigate the effects of school closures, among others.
With regard to MSME financing, the programme will improve short-term financial capacity and will provide access to production-oriented finance for economic recovery.
“The programme beneficiaries include OECS residents and visitors and MSMEs affected by the COVID-19 crisis. Health interventions will benefit OECS countries population through preventive actions that will be publicly announced soon,” the IDB explains.
It will also benefit people with potential diagnosis of COVID-19 and those who have already been diagnosed and need specialised care. It may benefit up to 150,000 vulnerable and 360,000 working-age individuals that have lost formal or informal sources of income or have closed their businesses due to COVID-19 crisis, the bank further outlined.
Given their high vulnerability to the coronavirus crisis, MSMEs in the tourism, retail, service, logistics, agriculture, and fishery sectors will receive priority attention for the duration of this programme.
The IDB loan of US$50 million has a repayment term of 25 years, a grace period of five and a half years, and an interest rate based on LIBOR.