As the COVID-19 pandemic continues to spread across the globe—bringing severe human and economic costs—the Caribbean is no exception. With over 44,020 confirmed cases (14,608 confirmed in Haiti and Trinidad and Tobago) many countries have taken strong containment measures, such as border closures and lockdowns, to flatten the curve.
While COVID-19 cases are low in the Caribbean, even in relative terms to its small population, the curve has not begun to flatten in the region. Although social distancing and quarantines are critical, the economic uncertainty that comes with those measures provides a powerful counterweight – particularly in a part of the world where reliance on face-to-face transactions is high.
Economic Impact – Haiti
The COVID-19 pandemic has exacerbated the already weak economy and political instability in Haiti. While the number of confirmed cases of COVID-19 in Haiti remains relatively low compared to other countries in the region, the number of cases has been rising, and the country is still very vulnerable. COVID-19 is expected to lead to significant economic losses and could set back poverty reduction efforts. Economic growth is expected to decline to GDP by 3.1 % in 2020 as the service sector contracts, supply chains are disrupted, and remittances fall as the global economy heads into recession. The fiscal deficit is expected to widen to over 6% of GDP (from a pre-COVID-19 forecast of 3%) and inflation is expected to reach over 20%.
The reality of socio-political tension and instability in Haiti is aggravated by the global situation linked to the COVID-19 pandemic and its negative effects. Fortunately, Haiti is doing very well so far from this pandemic where the prognosis was totally unfavorable. As of today, the country has 9,040 confirmed cases.
Job creation, the fight against corruption, free competition on the markets, the development of SMEs, access to and reform of education, the mastery of new technologies but also and above all the strengthening of social cohesion to define a social stability pact for national development are the main challenges that Haiti is facing.
As PW, we continue to stand and work through our values by walking alongside local leaders to serve their community. We launched a loan program for our partners with S&L to provide loans to the businesses that were affected by COVID-19 and long political instability issues. We continue to reinforce entrepreneurs with business training and seminars that can equip them to manage their business.
Economic Impact – Trinidad and Tobago
As an energy exporter, Trinidad and Tobago will be highly exposed to the COVID-19-related energy price shock. As elsewhere, the hit to domestic activity from containment measures will also be severe, and we expect a substantial recession in 2020 despite stimulus measures, some of which have already been put in place by Government Economic Recovery Programs.
Earlier this year, Trinidad and Tobago was looking relatively resistant to the worst effects of the COVID-19 pandemic. However, given that tourism and oil are two of the main contributors to their GDP – with a 7.6% and 45% share, respectively, in 2018 – T&T is beginning to feel the economic pinch, even with a low number of cases confirmed, as of today 5,568 cases.
Recent job market analyses for the Caribbean by the IDB for 2020 indicate that additional job losses in Trinidad and Tobago due the impact of COVID-19, can range from 3.9% (during fast recovery) to 7% (during a long-term recovery), to 10.5% (if economic conditions translate into a deep recession). However, the informal sector is still the most affected (20% of the population is living below the poverty line).
In response, policymakers have deployed a variety of fiscal and monetary policy tools, supported by the country's banks. Banks have implemented reductions in interest rates and extended loan repayment deferrals, as well as supporting small and medium-sized enterprises (SMEs).
The Ministry of Health has created a series of COVID-19 Guidelines and Regulations to allow an organized and safe economy reopening (including manuals for places of worship, restaurants, meetings, gyms, cinemas, etc.). Masks are mandatory in public.
Due to the economic crisis business income are decreasing, and business owner are prioritizing salaries, paying their debts, etc. Hence NCB subscription revenues are not what was expected for 2020. Even though membership just increased by two new businesses, their revenue has been greatly affected by the pandemic.
PW facilitated a two-hour business session on how to digitally pivot your business, hosted by NCB. We focused on presenting a series of 12 cases with six simple and low-cost strategies to pivot your businesses during the crisis. 21 participants from different industries were able to attend.
As part of the efforts to increase revenue for PW’s LCI in Trinidad and Tobago, NCB will carry out a training event with their BA Team (Eric Wingerter and David Cusimano) in early November. This is going to be an interactive, experiential workshop, with the expectation that participants can come up out of the workshop with an actionable plan that they can start putting into place immediately on their business.