Countries in the Eastern Caribbean Currency Union (ECCU), who opted for lockdowns in response to the COVID-19 pandemic, have seen a dent in their economies but not the number of cases of the viral illness.
Minister of Finance Camillo Gonsalves made the observation at a press conference in Kingstown on Wednesday.
“I’m grateful to the leadership of the Honourable Prime Minister and, indeed, other members of the Cabinet for resisting the urge to have a knee jerk lockdown and complete halting of activity in the country,” Gonsalves said.
“Because now that the numbers are coming out, from various countries, two things are being observed: One observation is that the complete lockdown has not appeared to have changed the infection numbers significantly from one country to the next in the region.
“But the other number that’s coming out is that it has definitely affected the economies of those countries far more drastically than we have been affected, although obviously we have been affected,” Gonsalves said.
He said the Eastern Caribbean Central Bank now suggest that economies in the currency union may shrink by as much as 16%.
“That would be the largest contraction in the regional economy, probably in recorded history. I’m not sure if there’s another example of the entire region contracting by that much,” the finance minister said.
“The prediction for St. Vincent and the Grenadines is not as severe — maybe in the order of 11%, as opposed to 16% because our economies are not as dependent on tourism as some of the other economies in the Eastern Caribbean,” Gonsalves said.
He, however, said that all indications point to increasing severity in the impact of the COVID-19 pandemic on the economies of the region, and others to which the regional economies are connected.
“And it makes it all the more important that the relief, the services and the bailout packages that were conceived in the government’s recovery and stimulus package are delivered as efficiently as possible to the people of St. Vincent and the Grenadines to help alleviate some of the difficulty that so many Vincentians are facing because of the economic slowdown,” Gonsalves said.
He noted that the United States economy contracted by 4.8% in the last quarter.
That ends the longest period of economic growth in the United States in history. And it contracted by 4.8% in the last quarter, but if you think about how COVID spread in the United States, January and February are fairly normal months in America and really things only started to tighten in April.
“So if the April month alone managed to sink the American economy by 4.8%, it sends an unsettling signal about where the global economy is going in this COVID crisis. The prediction [is that] unemployment will triple in the United States of America,” Gonsalves said.
He said that the prediction is that in the next quarter, U.S. economy will contract by double digits.
“And these things have a knock on effect on the economies of our region. The Economic Commission for Latin America and the Caribbean is predicting that the CARICOM economies will contract by about 6%,” Gonsalves said.
It is most obvious to everyone with at least half a brain that this pandemic will create a major financial problem worldwide.
Its such a shame that over the last 20 years we have been subjected to a spend more than income should permit policy.
We are . $1.5 billion in obvious debt, but there is perhaps another billion debt owed to bond holders, which will become payable at different times over the next ten years, So what would appear to be $1.5 billion may be $3 billion when you include bonds and treasury bills and other semi hidden loans to entities.
Barbados has a rainy day account where they currently hold US$50 million. They will only use that money of there is a destructive storm or hurricane.
Most islands have emergency accounts where they are holding substantial sums should their economies get into serious problems they can fall back on.
SVG has under the ULP always had a scrounge from other nations policy, where we think the world should pay for all our problems, even those created by this very government. Well things may be different this time around because the whole world is going to be in financial crisis and will have little time for those tied closely to the policies of Venezuela and Cuba in their financial behaviour.
The ability to scrounge and beg may be over, it may be time to call on the debts owed to us by Venezuela,
$70 million for Cuban wages at Argyle airport. Also the amounts pledged to us by the group of countries who formed the declared ‘coalition of the willing’ who reneged on their promises of funds and goods for the Argyle airport project. I just hope the dynasty leader was truthful when he told us about these pledges. If not he should pay them himself, because the people believed him and relied on him.
Now that more information is coming out, we see how most of the world has handled this wrongfully. SVG is one of the few countries that have done things correctly. I enjoy it when our government does things right, especially when I may have made the same mistake other countries have made. So far the government has done a very good job concerning this virus.