Heads of government in the Organisation of Eastern Caribbean States (OECS) and officials from the Eastern Caribbean Currency Union (ECCU) convened a virtual meeting on Sunday to review the possible effects of the spread of coronavirus (COVID-19).
According to the Governor of the Eastern Caribbean Central Bank (ECCB) Timothy Antoine, growth in the region could slow to 1.4 per cent for the year.
“Under the best-case scenario (containment by the end of June 2020), real GDP growth for the ECCU for 2020 will slow to 2.1 per cent – down from an initial estimate of 3.3 per cent; under a moderate case scenario (containment by end of summer), ECCU real GDP growth is projected to decelerate to 1.5 per cent; and in the worst-case scenario (global recession), a contraction of 1.9 per cent is projected,” a statement from the OECS read.
The decline in economic growth is consistent with projections of a 20 per cent decline in tourism in the region — if a total shutdown of the economies is avoided. The OECS noted that it could consider a shutdown of the industry since international flights and cruise ships, based on reports, were the originial sources of infections.
“The meeting agreed that the containment of travel would include temporary bans on the cruise industry, allowing however for Antigua to put mitigative measures in place to cushion the impact on its proportionately large tourism sector,” the OECS statement noted.
Still, the heads of government agreed to keep airports and seaports open to enable trade, especially of essential goods, and the movement of OECS nationals. To this end, the heads also instructed the leadership of Leeward Islands Air Transport to discuss the role it will play in facilitating intra-regional travel and to advise afterward.
On the matter of movement of personnel, in particular, public sector employees, the OECS heads underscored the need to roll out business continuity plans for all member states.
“In an effort to ensure business continuity, the ECCB will implement telecommuting to continue offering as many services as possible, especially payments and Regional Governments Securities Market operations,” the OECS statement added.
While acknowledging the possible loss of employment in the tourism industry, government head and ECCU officials “committed to exploring measures to provide income support to vulnerable citizens most like to be affected by the adverse economic impact of the pandemic”.
“Employers and national insurance schemes will also be encouraged to provide maximum support.”
Further, the leaders agreed that for a limited period they would implement price controls to discourage price gouging on essential goods. As a measure to limit contact when paying for goods, members of the ECCU pledged to work with the ECCB to speed up and promote digital payments.
The meeting also heard that the OECS Council of Ministers of Agriculture have worked on a plan for food security, which St Vincent and the Grenadines will lead.
Overall, the ECCU will emerge from this crisis with a greater fiscal deficit of about four per cent of GDP. This is “due to [slower] growth, lower revenues and higher expenditure for COVID-19”.