BY JACQUELINE CHARLES Miami Herald.
APRIL 14, 2020 07:09 PM
Caribbean leaders say a financial bailout offered to some of the world’s poorest countries this week by the International Monetary Fund to help cushion the economic blow of the coronavirus pandemic doesn’t go far enough — and stressed that they, too, are in desperate need of a rescue.
On Monday, the International Monetary Fund announced that it was canceling six months of debt payments, totaling $215 million, from 25 nations. Haiti, which gets to keep about $4.8 million, was the only Caribbean nation to make the cut along with Afghanistan, Yemen, Sao Tome, Solomon Islands, Nepal and mostly war-torn African countries.
“Up until now, there is no rescue plan for the Caribbean, and we need a rescue plan,” said Antigua and Barbuda Prime Minister Gaston Browne. “This is not a situation where we are trying to ask for assistance conveniently. It is an absolute necessity.”
With the Dominican Republic leading the region with 3,167 confirmed COVID-19 infections and 107 deaths as of Monday, the Caribbean region has registered more than 5,000 cases of the deadly rapidly spreading respiratory disease. The effects have not only been devastating in the loss of lives but also jobs, as governments closed airports and cruise ports and shuttered hotels to try to stop the spread.
The World Bank, in a report released on Sunday, said the pandemic could send economies across Latin America and the Caribbean plunging by 4.6% this year.
Browne believes the projection is too conservative and fundamentally flawed, and underestimates the impact of the coronavirus on the Caribbean’s tourism-dependent economies.
Using his own debt-ridden and still hurricane-recovering island-nation as an example, Browne said, Antigua has already lost 20,000 jobs, which is half of its national workforce. He estimates another 6,000 could also be laid off as the government struggles to make payroll for its 12,000 public servants.
Meanwhile, he said, “they are looking at our per capita income and saying we’re so wealthy, we’re not eligible for assistance when, one, we have no surplus and second, about 80 percent of our revenue could be wiped out. How the hell can we survive?”
Since the coronavirus outbreak first reached the Caribbean’s sun-bleached shores last month, Caribbean leaders say they have tried to get their creditors to help. They point out that many nations were already struggling to recover from a rash of devastating hurricanes over the last two years, and COVID-19 has only made life harder, forcing them to make extra investments in healthcare even as they have to keep making debt payments with no foreign revenue coming in.
“Right now the region needs a Marshall plan,” Browne said, calling for a write-off on debt payments and grants from the IMF and other Washington-based financial institutions. “I believe that after the next 60 to 90 days, [our] countries will become totally broke and would not be able to meet certain expenses, so there needs to be some level of international coordination and cooperation.”
Browne hopes to get the 15-member Caribbean Community regional bloc, known as CARICOM, to speak with one voice on the matter following an emergency virtual meeting Wednesday. High on the agenda are the virus’ economic impact and how leaders can best address the challenges resulting from it.
“We are doing whatever we can,” said St. Vincent and the Grenadines Prime Minister Ralph Gonsalves, who shut down his nation’s crystal blue waterways to yachting and recently offered citizens a stimulus plan valued at 4 percent of gross domestic product.
Even though Caribbean leaders are used to “adversity and making a little go a long way,” he said, it’s clear the current crisis is a threat and no Caribbean nation is immune from its potentially devastating impact.
“We’re looking to international partners, including institutions like the World Bank, IMF, the Caribbean Development Bank and some bilateral links,” Gonsalves said.
Caribbean economist Marla Dukharan said that in determining which countries are most deserving of debt cancellation, the IMF and the World Bank look at countries’ classifications as low income, middle-income, high-income. The classification, she said, is riddled with weaknesses and omissions that the Caribbean has raised with the multilateral agencies for years. More weight needs to be given to a country’s vulnerability to other factors, she said.
“For example, the Cayman Islands has one of the highest GDPs per capita in the world, but based on recent reports by Moody’s, it is the most vulnerable to sea level rise, and climate change more broadly, in the world. This factor, and others which drive vulnerability, cannot be ignored when you are trying to determine if a country needs help, what kind of help they need, and to what extent,” Dukharan said.
Whether Caribbean nations get the help they are seeking, they should brace themselves for higher unemployment, which could double based on projections of zero cruise tourism for the rest of the year, and a roughly 80 percent drop in tourism this year compared to 2019, she said.
“Regardless of the rate of contraction, which is really guesswork at this point, it is clear that we will need help, lots of it, and for a long time,” said Dukharan, who lives in Barbados. “Regional cooperation is arguably more important now than ever before.”
Jamaica Tourism Minister Edmund Bartlett said that of the 20 most tourism-dependent small countries in the world, 13 are in the Caribbean, with the British Virgin Islands leading the list. Others include the Bahamas, St. Lucia, Grenada, St. Kitts and Nevis, Jamaica and the Cayman Islands, Bartlett said, rattling off the names from memory.
More dependent on tourism than perhaps any other region in the world, Bartlett said, the Caribbean employs about 1 million people in tourism, which accounts for more than 30 percent of the foreign exchange coming into the region.
Closer to home, more than 50 percent of Jamaica’s foreign exchange is generated by tourism. “Last year, we brought in 3.7 billion U.S. dollars; 1 in 10 of all the workers in the country are directly employed in tourism,” said Bartlett.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.