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The 2022 Budget kick-starts Phase 2 of the government’s response to the social, physical and economic impacts of the 2021 eruption of La Soufriere volcano.

The EC$1.3 billion budget contains EC$50 million in volcano-specific capital expenditure to take place in the coming year, Minister of Finance Camillo Gonsalves said, adding that this is in addition to the ECEC$118 million allocated in 2021.

Gonsalves said that much of the expenditure will fall under in the the Volcano Eruption Emergency Project (VEEP)

He said VEEP, a fresh initiative, is “a multifaceted, multiyear EC$113 million package that was painstakingly negotiated among the Government, the World Bank and the European Union”. 

VEEP contains over EC$20 million in early recovery initiatives and further income support and close to EC$85 million to fund restoration of critical services and infrastructure, while improving the nation’s capacity to respond to future emergencies. 

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He said that beginning this year, VEEP will fund multiple interventions within the Ministries of Works, Agriculture, Social Development, the National Emergency Management Organisation, and the CENtral Water and Sewerage Authority.

The significant components of VEEP include:

  • EC$11.5 million to provide temporary cash transfers and income support to volcano-impacted persons in the Red and Orange Zones 
  • EC$11 million to assist in the recovery of the agriculture sector 
  • EC$15 million to strengthen the National Emergency Management Organisation 
  • EC$14 million to restore, upgrade and strengthen water infrastructure in the north of Saint
  • EC$40 million to repair and restore bridges and roads, including the purchase of additional
    heavy equipment 
  • EC$8 million to support the Labour Intensive Temporary Employment programme (LITE) — a programme that will hire local labour on a short-term basis “to perform critical community works in preparation for or in response to the lingering threats of flooding, lahars, damaged roads and compromised infrastructure”. 

Over 20,000 people were displaced when La Soufriere erupted explosively on April 9, 2021, four months after it began erupting effusively. 

Gonsalves said that the 2022 budget continues work the government began in the immediate aftermath of the eruptions to assess and address the destruction of homes in the Red and Orange Zones. 

He said that the volcano destroyed 104 homes, with another 771 requiring moderate to extensive repairs. 

A further 58 homes were rendered  unsafe for habitation in a post-eruption environment because of their proximity to river channels, flood plains and other geological features . 

“As such, Budget 2022 contains EC$5.8 million to continue the relocation of 68 families whose houses are in areas assessed as vulnerable to lahars and flooding in the post-eruption environment.”

The finance minister said the EC$5.8 million allocation will construct at least 41 houses to complement the 27 homes already under construction. 

Additionally, EC$6 million has been allocated to purchase building materials, the bulk of which will be used to repair the 771 damaged homes in the Red and Orange Zones. 

He said that The Mustique Company has agreed in principle to a further EC$6 million to the construction of homes and the relocation of vulnerable residents. 

“Accordingly, in 2022, more than 150 volcano-affected families will move into freshly-built homes. More than half of those families will be relocated to areas that have been scientifically assessed as safer for habitation than their current locations.”

The Budget 2022 also allocated EC$17.1 million for the continued removal of volcanic ash and debris,EC$2.3 million to provide further meals, food and hygiene packages to volcano-affected families, and EC$1 million for the purchase of household appliances for residents who lost everything to the volcano.

He said millions will be spent in production support to the farmers and fishers who have been battered by the impacts of La Soufriere, Hurricane Elsa and COVID. 

“Millions more will assist the volcano-affected families, farmers, fishers and small business persons as part of the largest expansion in social safeguards in the history of St. Vincent and the Grenadines.”

Gonsalves said that  “specific resources” will be dedicated to helping to restore forests, coral reefs and ecosystems damaged by the volcano. 

He siad that within seven months of the first explosive eruption, his government has negotiated, allocated, accessed and begun spending over EC$300 million in resources to address the impacts of La Soufriere. 

“We have coordinated tens of millions more in support through allies and international agencies. For a Small Island Developing State like ours, with all of our inherent constraints, to secure over EC$300 million in targeted grants and soft loans is an extraordinary accomplishment. To do so in the midst of a Pandemic that has caused global economic slowdown is even more remarkable,” he said.