Communiqué: Special meeting of the OECS Authority and the Monetary Council

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Communiqué: Special meeting of the OECS Authority and the Monetary Council

(PRESS RELEASE) – A Special Meeting of the OECS Authority and the Monetary Council of the Eastern Caribbean Currency Union (ECCU) was held virtually on March 15th 2020.

The Meeting was called by Chairman of the Monetary Council and Prime Minister of Grenada, Dr. the Rt. Hon. Keith Mitchell, to discuss the COVID-19 situation and its impact on the OECS.

Heads of Government and Representatives of Government in attendance included:

Honourable Gaston Browne, Prime Minister of Antigua and Barbuda;
Dr. the Honourable Roosevelt Skerrit, Prime Minister of the Commonwealth of Dominica;
Dr. the Right Honourable Keith Mitchell, Prime Minister of Grenada;
Dr. the Honourable Timothy Harris, Prime Minister of St. Kitts and Nevis;
Honourable Allen Chastanet, Prime Minister of Saint Lucia;
Honourable Camillo Gonsalves (representing Prime Minister of St. Vincent and the Grenadines, Dr. the Honourable Ralph Gonsalves); and Honourable Joseph Easton Farrell-Taylor, Premier of Montserrat.

Dr. Didacus Jules, Director General of the OECS; Mr. Timothy Antoine, Governor of the Eastern Caribbean Central Bank; Mr. Dwight Lay, OECS General Counsel; and the following Commissioners were also in attendance:

Ambassador Colin Murdoch, Commissioner to the OECS for Antigua and Barbuda; and Ms. Debra Lewis, Commissioner to the OECS for Montserrat.

Also in attendance were:

Ms. Esther Rigobert, Permanent Secretary, Ministry of Finance, Saint Lucia;
Mrs. Lucy Jean Charles, Executive Assistant, OECS Commission; and
Ms. Ruby Robinson, Senior Administrative Officer, OECS Commission.

In the main, the Meeting focused on matters relating to the spread of the COVID-19 pandemic in the Caribbean, inter alia:

(A) Economic Impact

(B) Containment

(C) Coordination

(D) Capacity Building

(E) Medical and other infrastructure

(F) Social Impact

(A) ECONOMIC IMPACT

Macro-Economic Impact

OECS Heads of Government received projection reports on major economic sectors, such as Tourism, Trade and Agriculture. The Authority also considered three (3) containment scenarios as presented by the Governor of the Eastern Caribbean Central Bank (ECCB), Mr. Timothy Antoine.

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. In respect to Tourism, a decline of 20 per cent is currently projected but this could be worse with an unprecedented shutdown.

Heads expressed concern that funds in circulation may be gravely affected by the projected economic situation and directed the ECCB to undertake the following actions:

invite the Commercial Banks to consider a moratorium on interest rates;
relax regulations by financial institutions; and
consider the reduction or elimination of certain fees and charges.
The Authority also noted the offer by the ECCB to make facilities available to the Member States, as required, at lower than normal interest rates.

Public Sector Initiatives

Heads noted the urgency of rolling out business continuity plans in the public sector of all Member States.

In light of the loss of employment especially in the hotel and tourism sector, the Meeting committed to exploring measures to provide income support to vulnerable citizens most likely to be affected by the adverse economic impact of the pandemic. Employers and national insurance schemes will also be encouraged to provide maximum support.

Heads of Government agreed to institute price controls for a limited period to prevent price gouging on essential goods. Members of the ECCU also committed to working with the ECCB to accelerate and encourage digital payments to minimise the transmission of infection through the use of the physical currency.

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 (RGSM) operations.

Tourism Impact

The Authority received reports that the tourism sector would be heavily affected by the pandemic and noted a possible shutdown within ten (10) days. The arrival of cruise lines, as well as the arrival of international flights from Europe, were highlighted as the originating sources of infection.

Heads mandated that the OECS Health Ministers and Chief Medical Officers (CMOs) establish a monitoring mechanism to share intelligence on the emergence of cases in the Member States.

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 larger tourism sector.

Trade Impact

Heads of Government concurred that the air and seaports of the OECS should not be closed to facilitate the continuity of trade, the entry of essential goods and the movement of nationals of the OECS.

Heads further directed that the Leeward Islands Air Transport (LIAT) be engaged in a discussion on its role in facilitating intra-regional travel under the circumstances of the pandemic. LIAT is to advise on what the airline would require to enable the smooth execution of this role.

Food Security and Agriculture

Heads were advised that the OECS Council of Ministers of Agriculture – well before this crisis – have been working towards a food security regime in the region. St. Vincent and the Grenadines has undertaken to lead this initiative, which is expected to build on the experience gained from the Agri-Shipping Initiative, and result in stronger trade in local food across the OECS.

Foreign Reserves

The foreign reserves of the Currency Union are strong with a current backing of 99.7 per cent. In light of recent market developments, income on the reserves will rise in the short term. However, income will be reduced in the upcoming months based on lower interest rates by the Federal Reserve. For 2020, the backing ratio is projected between 97.0 – 99.0 per cent this year.

Fiscal Impact

An increase in the ECCU fiscal deficit by about 4 per cent of GDP due to lower growth, lower revenues and higher expenditure for COVID-19. Proactive engagement with creditors on RGSM is required to minimise rollover risk.

(B) CONTAINMENT

The Authority agreed that the best action to minimise economic fallout from COVID-19 is containment supported by personal responsibility combined with proactive and, where needed, aggressive public policy.

The Meeting also discussed the approaches to containment undertaken to date in the Member States and agreed on a series of imperative measures to curtail the spread of the disease within the Caribbean.

(C) COORDINATION

In the context of a single space, the coordination of public policy is essential. If not, the actions or inactions of one country could adversely impact other member countries.

Recognising the need to bring together the many threads of action in this rapidly changing dynamic, the OECS Authority agreed to constitute itself as the oversight body – meeting weekly, or as necessary, to receive systematic updates on progress on all fronts and modulate policy to suit conditions as they change.

Heads also committed to a proactive approach and to consult each other on national decisions with implications for neighbouring states.

Saint Lucia and the Commonwealth of Dominica, in particular, will conclude an MOU with Martinique and Guadeloupe through the French State and the Territorial Councils on restricting the movement of persons between these islands – especially with respect to inter-island ferries and yachts. Given the volume of free movement, specific ports of entry with defined protocols of surveillance will be specified.

(D) CAPACITY BUILDING

The OECS Commission has formally requested two (2) Infectious Disease Control Experts from Cuba. These experts will be deployed to train frontline immigration and health officials.

In the short term, the Meeting recommended that eligible member countries seek assistance from Cuba with respect to doctors and nurses to supplement national capacity. St. Vincent and the Grenadines has already requested a team of (3) three doctors and (12) twelve nurses with expertise in infectious disease management from Cuba to supplement their national capacity.

In the medium term, the ECCU and the OECS must strengthen its capacity as it pertains to national health security, biosecurity and food security. Areas of focus ought to include human resources, medical and other infrastructure, to deal with the lingering effects of COVID-19 and future threats.

(E) MEDICAL AND OTHER INFRASTRUCTURE

The OECS Ministers of Health and their CMOs have been coordinating their preparation for an outbreak and working in concert with the Caribbean Public Health Agency (CARPHA) and the Pan American Health Organisation (PAHO).

The ECCB has approved the provision of $4 million to member countries ($500,000 each) to help procure testing equipment and medical equipment, supplies and drugs. Already, $2 million have been disbursed (March 13). The remaining $2 million are available for bulk procurement through OECS Pharmaceutical Procurement Service as per the instructions of member countries.

The OECS Commission, through its Health Unit, has compiled a comprehensive cost list of the equipment and supplies needed in each Member State to enable the region to effectively address the challenge and, additionally, to source pro bono support as well as undertake joint procurement for the cost-effective provision of the resources needed.

The Meeting noted with satisfaction the supplies sourced to date from donor sources and expressed appreciation to the contributing partners.

All Member States reported on their local efforts in identifying quarantine and isolation facilities and reiterated their commitment to follow internationally accepted protocols at these facilities.

(F) SOCIAL IMPACT

Education Impact

Heads of Government agreed on the necessity of closing schools in the OECS until after Easter in an effort to safeguard children from contamination.

It was noted that the OECS Ministers of Education, in collaboration with the Education Development Management Unit (EDMU) at the OECS Commission, were actively exploring the use of online learning as a means of ensuring continuity of learning during the interregnum. Heads further noted that Notesmaster and CXC should be engaged in this process.

The Authority also received a report from the recent OECS Council of Ministers of Education Meeting, where the OECS Director General was mandated to engage the Vice Chancellor of the University of the West Indies (UWI) on the possible repatriation of OECS students (at their own cost) to their home countries given the closure of classes at UWI; and to request that consideration be given to the sitting of their exams, under invigilated conditions, at Open Campus locations in their home territory.

Psychological Impact

The Meeting agreed on the absolute importance of having a documented OECS strategy for the dissemination of information. Heads mandated that the OECS Commission work with the Ministers of Health, their CMOs and CARPHA/PAHO on this matter.

The Authority noted with satisfaction the MOU between the Commission and Facebook and received a report on the proposed collaboration between the Commission, Ministries of Health, CARPHA and Facebook that will result in massive exposure of official releases; the removal of fake news and unscientific prescriptions; and help to replace fear with knowledge.

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