Photo: Via france24.com

10th December 2022

Protests are into their third week in the French overseas territories of Guadeloupe and Martinique. 

Demonstrators had initially taken to the streets to protest impending mandatory vaccination rules for health workers and other COVID-19 restrictions, but the unrest has evolved into action against a broader set of socioeconomic issues. 

Over the last two weeks, residents have erected barricades and blocked roads as frustration mounted over the application of an order already active in mainland France requiring health workers to be vaccinated against COVID-19. 

According to French Interior Minister Gerald Darmanin, there have been at least 10 arrests made across the two territories after several journalists and members of the security forces were targeted. 

Reports emerged that shots were fired at police in Martinique, where a coalition of 17 trade union organisations launched a general strike in protest of the COVID-19 curbs. AFP reported that men on a motorbike shot at four journalists from the news agency, but no one was injured. 

In Guadeloupe, the protest saw an escalation of violence as protesters set fire to at least six buildings in the largest city Pointe-à-Pitre with four being completely destroyed, according to the fire service. 

France has reportedly already dispatched 200 police officers to the island, and Minister for France’s overseas territories, Sébastien Lecornu said 70 additional officers, as well as 10 more members of a special SWAT-like unit, would be deployed to better respond to the situation. 

With no end to the unrest in sight, France has moved to postpone the mandatory vaccination requirement until 31 December to allow for negotiations. 

“If the law of the Republic is to apply to all French departments, and therefore to Guadeloupe and Martinique, the details of its application must be adapted to the health and social situation of these two territories,” the health ministry said in a statement announcing the postponement. 

Despite this the unrest has continued. Some analysts have blamed the historic mistrust of the French Government’s handling of health crises which has remained since many people in Guadeloupe and Martinique were exposed to a toxic pesticide, known as chlordecone, used in banana plantations in the 1970s. Others say the protests shifted to local anger over broader issues with the French Government. 

Last week, Sebastien Lecornu met with four union representatives in Guadeloupe, who handed him a list of their demands. In addition to ending the vaccination mandate, demonstrators have been calling for salary increases and lower gas prices. 

The meeting hit a flashpoint when French officials took exception to union leaders’ refusal to denounce recent violence, including attacks on police and other security officers. “The condition for dialogue is for all political and trade unions to condemn the violence, and more specifically, attempts to murder” said a statement from the Ministry. 

Another important, but highly contentious issue is greater autonomy for the two territories. In a YouTube video released after the protests began, Minister Lecornu said that certain elected officials in Guadeloupe had raised the question of autonomy and changing its status as an overseas region. 

“The Government is ready to talk about this. There are no bad debates, as long as those debates serve to resolve the real everyday problems of people in Guadeloupe,” Lecornu said of the pursuit of great autonomy. 

He added that this was one of a series of initiatives the Government in Paris would be taking in Guadeloupe, including improving healthcare, infrastructure projects, and a scheme to create jobs for young people. 

However, Lecornu has since walked back his statements on autonomy. In a 2 December interview, he attempted to clarify his earlier position, saying that “autonomy” of Guadeloupe mentioned in the midst of a social crisis, would consist of “a decentralisation pushed to the extreme”. 

As unrest continues – albeit on a reduced scale – many have branded the Overseas Territories Minister’s visit as a failure. Negotiations have thus far not yielded concrete solutions as many elected officials and labour unions declined the invitation to meet. 

“This is not a failure, we are on the way to a return to order,” Lecornu said as he ended his 24-hour visit to Guadeloupe. Speaking on the absence of elected officials, the Minister said that while some had “let him down, the state is there to move forward”. 

As the stand-off continues between local elected officials, trade unions and the French Government, nightly curfews remain in some parts of the territories and roadblocks continue to pop up sporadically on key highways disrupting regular economic activity and livelihoods. 

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo by Alonso Reyes

26th November 2021

As the global economic recovery accelerates, Caribbean nations are positioning themselves to benefit from the return of cruise tourism to their shores.

In recent weeks, several countries have welcomed the return of cruise ships to their ports after the industry all but collapsed under the weight of the COVID-19 pandemic. Though some countries reopened for cruise tourism before others, the initial trickle of ships is growing into a stream.

On 11 November 2021, Port Kingstown in St Vincent and the Grenadines received its first cruise call since the MV Seaborne Odyssey docked in Grenadine waters during August. The MV Britannia is the first to visit the mainland since the pandemic halted cruise flows and is one of more than 224 calls scheduled in the coming months. Of these, some 14 ships are expected to make inaugural calls.

Similarly, the Port Authority of Jamaica (PAJ) has disclosed that the country is to welcome 50 cruise ships at the five ports in the island in the months of November and December 2021.

PAJ CEO, Gordon Shirley, said the ships would visit ports in Ocho Rios in St Ann, Montego Bay in St James, Port Antonio in Portland, Falmouth in Trelawny, and Port Royal, Kingston, in the coming weeks. 

He also noted that the expanded berthing at the port in Montego Bay will facilitate larger cruise ships, with Jamaica targeting to receive four of the biggest cruise ships (Oasis of the Seas, Allure of the Seas, Harmony of the Seas, and Symphony of the Seas) ever to be built in 2022. 

“Cruise shipping is critical to the recovery of the tourism sector, and we are seeing a welcomed return of vessels with the recognition that Jamaica’s Resilient Corridors offer a safe environment for our visitors, tourism workers, and the general population,” said Tourism Minister Edmund Bartlett, as he hailed the growing demand for destination Jamaica and the success of efforts to reopen the tourism sector. 

In the past, the island has pulled in revenue of US$10mn over the winter season from cruise lines and their visitors. The Ministry of Tourism is currently projecting 200,000 cruise passengers, representing 110 calls between October 2021 and April 2022.

Meanwhile, St Kitts and Nevis has witnessed the simultaneous berthing of three cruise vessels at the expanded Port Zante for the first time since the onset of the pandemic. The 16 November calls of the Celebrity Equinox, Explorer of the Seas, and the AIDAperla to the port has been described by the Tourism Authority as “a major milestone for cruise recovery in St Kitts.”

In what was its inaugural call to the country, the AIDperla brought with it 1,666 visitors, while the three vessels brought approximately 4,500 persons to the shores of St Kitts. Tourism Minister Lindsay Grant called on stakeholders to understand the important work being done as the destination continues to work with its cruise line partners to offer a safe experience.

Just 263km away, Dominica has welcomed three cruise ships making inaugural calls to at the Woodbridge Bay Portsince the resumption of calls to the island in July 2021. 

The MV Enchanted Princess of Princess Cruises arrived on 14 November on what was the ship’s first of 10 scheduled calls to the island for the 2021/2022 cruise season. On 16 November, the MV Rotterdam of Holland American Line also made its inaugural call; bringing 1868 passengers to the island’s shore.

Dominica has received a total of 19 cruise calls as of 15 November 2021, bringing an estimated 10,818 cruise passengers to the island’s shores. Statistics up to 14 November show that some 4570 passengers have engaged in tours to the island’s tourism sites. 

Officials have announced that they are scheduled to welcome approximately 251 cruise calls during the 2021/2022 Cruise Season carrying a total of 355,973 cruise passengers. Of these, 12 ships will be making their inaugural calls to the island.

In Puerto Rico, the Royal Caribbean cruise line has announced that it will resume its regular schedule of stops at the Pan American Pier in Old San Juan. The Puerto Rico Tourism Company (PRTC) also revealed that the capital city’s main piers will also welcome Crystal Endeavor and Celebrity Apex cruises for their inaugural visits to the island.

“The visits, which these three vessels will be making between the months of November 2021 to April 2022, will have an economic impact initially estimated at around US$16mn,” said PRTC Executive Director Carlos Mercado Santiago in a statement.

Although doubts about the sustainability of cruise tourism persists amidst assertions of low passenger spend vis-à-vis stayover visitors and environmental degradation, the industry remains a mainstay of Caribbean countries desperate to get their economies going again.

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo by Markus Spiske / https://www.ecolife.zone/

Caribbean Heads of Government and regional technocrats have made forceful representations at the UN Climate Change Conference (COP26) being held in Scotland. 

Barbados Prime Minister Mia Mottley, who was among a limited cadre of world leaders to address the opening plenary in Glasgow, delivered a stinging rebuke of inaction by large nations. 

“Do some leaders in this world believe that they can survive and thrive on their own? Have they not learned from the pandemic? Can there be peace and prosperity in one-third of the world that literally prospers, and the other two-thirds of the world live under siege and face calamitous threats to their well-being?” Mottley asked while referring to continued inaction as a “death sentence” for small states. 

Seemingly referring to China and Russia, Prime Minister Mottley called out those countries which are some of the biggest emitters of carbon globally, that opted not to attend COP26. She urged those present to “encircle” countries unwilling to act on emissions. 

Noting that the central banks of the wealthiest countries had spent US$25tn on quantitative easing over the last 13 years, Mottley called on large countries to step up in the financing of climate change mitigation. “Had we used that US$25tn to purchase bonds to finance the energy transition, or the transition of how we eat, or how we move in transport, we would now today be reaching that 1.5 degree limit that is so vital to us,” she argued. 

Trinbagonian Prime Minister Keith Rowley said that loss and damage are already clear in the aggressive erosion of coastlines and the bleaching of coral reefs. He stressed that “tackling loss and damage must remain a critical and core issue of any global climate action framework”. 

“We are increasingly concerned about our ability to address this issue given the well-known difficulty in accessing financing for such projects. We need funds like the Green Climate Fund to establish specific streams for loss and damage finance to ensure that this is prioritized in the same way as mitigation and adaptation,” Rowley admonished. 

Prime Minister of Antigua and Barbuda and Chair of Alliance of Small Island States (AOSIS), Gaston Browne has labelled COP26 as a public relations exercise, even as he acknowledged some benefits to the summit. 

“We also wanted to see increased scale of funding so that more monies would be made available to small island states and other developing countries to adapt and mitigate against the effects of climate change and even to have some form of mechanism for compensation for loss and damage. Those are among the objectives we had established going into the COP26, but unfortunately if you look beyond the incremental gains COP26 was merely a PR exercise, a great PR platform,” Browne said. 

While in Scotland, Prime Minister Browne also signed an agreement with the Prime Minister of Tuvalu which paves the way for ground-breaking climate change litigation before international courts. According to agreement, its signing offers “a novel legal path to address the severe damage to Small Island States caused by climate change”. It establishes a Commission of Small Island States on Climate Change and International Law which is authorised to seek advisory opinions from the International Tribunal for the Law of the Sea on the legal responsibility of States for carbon emissions, marine pollution, and rising sea levels. 

“Small Island States’ emission of greenhouse gases is negligible, but they bear the overwhelming burden of its catastrophic effects, including persistent destruction, repeated costs of rebuilding and huge debts to finance resilience. This injustice must end. We insist that those States most responsible for this dire situation respect their legal obligations to stop global warming and to provide compensation to its victims,” Browne said. 

Bahamas Prime Minister Philip Davis urged world leaders to show courage in the fight against climate change, warning that the world is running out of time to prevent disaster. “We in The Bahamas will do what we can, but the limits of what our nation’s effort can accomplish are stark: we cannot out-run your carbon emissions, we cannot out-run the hurricanes which are growing more powerful, and we cannot out-run rising sea levels, as our islands disappear beneath the seas,” Davis said. 

Meanwhile, the Caribbean Development Bank (CDB) took the opportunity to propose a resilience-adjusted Gross National Income (GNI) measure for Small Island Developing States (SIDS) to access concessional finance. 

Speaking at COP26, CDB President Gene Leon said that the Recovery Duration Adjuster (RDA) is based on two key principles. Firstly, the incorporation of underlying structural weaknesses, high debt levels, and insufficient investment in resilient infrastructure as important inputs in determining the extent of a country’s vulnerability to exogenous shocks. And secondly, the duration of recovery from a shock which would provide a stronger justification for accessing concessional finance. 

Leon argued that conventional measures that utilise GNI per capita, do not capture this resilience drag (the longer duration of recovery experienced by SIDS) and can provide misleading signals about the health and stability of an economy which has implications for the overall cost of recovery and achievement of development goals and targets. 

“The RDA is therefore the means through which we can create a resilience-adjusted per capita income measure that will be a more comprehensive and equitable tool for classifying SIDS and mobilising much-needed financial resources” the CDB President stated. 

Away from the plenary sessions at COP26, Organisation of Eastern Caribbean States (OECS) Director General Didacus Jules, signed the Glasgow Declaration on Climate Action in Tourism. The Declaration calls for the acceleration of climate action in tourism by securing commitments to reduce emissions in the sector by at least 50% over the next ten years, and net zero emissions before 2050. 

“The OECS is one of the most dependent tourism regions in the world and the tourism sector is highly vulnerable to climate change. I am excited about this partnership and how it can help our tourism sector get aligned to the climate change agenda,” Jules said at the signing. 

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo by Markus Spiske

Authorities are racing against time to secure the release of 17 missionaries who have been kidnapped by a gang in Haiti.

According to reports, members of the Ohio-based Christian Aid Ministries were on a trip to visit an orphanage in Ganthier, a commune east of the capital Port-au-Prince, when they were taken.

Christian Aid said that the group consisted of 16 US citizens and one Canadian, and includes a total of five children, seven women, and five men.

This year has seen a significant increase in the incidence of kidnappings in Haiti. It marks another in what has been more than 600 kidnappings recorded between January and October this year, compared to 231 for the same period of 2020, according to a local civil society group.

Officials have identified the group responsible as the 400

Mawozo gang, which was also blamed for kidnapping five priests and two nuns earlier this year. The gang controls the area where the missionaries were abducted in the suburbs of Port-au-Prince. The BBC reports that they have been involved in armed combat with rival

gangs, and kidnapping businessmen and police officers over the last several months.

In the days after the kidnapping, the emergence of a ransom demand has created a heightened sense of urgency. The purported leader of the 400 Mawozo gang, Wilson Joseph, has issued a ransom demand of US$1mn per person, and has threatened to execute the hostages if the US$17mn ransom is not paid.

“I swear by thunder that if I don’t get what I’m asking for, I will put a bullet in the heads of these Americans,” he declared in a video message being circulated on the internet.

Justice Minister Liszt Quitel said that the demand might signal the start of a long negotiation. “Often these gangs know these demands cannot be met,” he said, “and they will consider a counter-offer from the families. And the negotiations can take a couple of days sometimes, or a couple of weeks”. Quitel said that the gang had yet to issue a deadline for payment.

The Washington Post reported that one of those abducted posted a WhatsApp message calling for help. “Please pray for us!! We are being held hostage, they kidnapped our driver. Pray pray pray. We don’t know where they are taking us,” the message said.

The White House has confirmed that FBI agents and US Department of State officials are helping Haitian authorities with the investigation. Secretary of State Antony Blinken said that the kidnappings were “also indicative of a larger problem, and that is a security situation that is, quite simply, unsustainable.”

In an interview with CNN, Illinois Republican Congressman, Adam Kinzinger, said that he believes the US should negotiate with the kidnappers, but not pay ransom. “We need to track down where they are and see if negotiations – without paying ransom – are possible…Or do whatever we need to do, on a military front or police front”, he said.

In Michigan, hundreds turned up for a vigil praying for the safe release of a local family who are among those kidnapped. According to their pastor, Ron Marks, the four family members arrived in Haiti earlier this month to render humanitarian assistance.

A spokesperson for Christian Aid Ministries said the families of those kidnapped are from Amish, Mennonite, and other conservative Anabaptist communities in Ohio, Michigan, Wisconsin, Tennessee, Pennsylvania, Oregon, and Ontario, Canada.

Meanwhile, unrest has broken out in Haiti as workers with local unions staged protests against rising levels of crime. The strikes closed businesses in Port-au-Prince and other cities, as public transportation employees did not show up for work.

“We are calling on authorities to take action,” said Jean-Louis Abaki, a taxi driver involved in the strike. Abaki said that if Prime Minister Ariel Henry and the police chief want to stay in power, “they have to give the population a chance at security”.

Prime Minister Ariel Henry last week confirmed the appointment of the Inspector General, Frantz Elbé, as the Director General of the National Police of Haiti (PNH), following the resignation of embattled former chief Léon Charles. Henry urged Elbé to restore peace in the country.

“We would like public peace to be restored, that we return to normal life, and that we find the way to democracy. Finally, we would like to organise elections,” the Prime Minister said.

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo by Pedro da Silva

The Bank of Jamaica (BOJ) is facing widespread criticism over its decision to increase the key policy rate in a bid to curb inflation.  

After inflation broke through the upper limit of the 4% to 6% target in August to reach 6.1%, the BOJ had signalled its intention to increase interest rates, but there was uncertainty about the size of the increase.

In one of its most significant moves since the passage of new legislation which increased central bank independence, the BOJ announced that it was adding a percentage point (100 BPS) to the overnight interbank rate it pays on cash it holds for banking or deposit-taking institutions.

The increase, which is the first such change in 13 years, aims to “moderate” the economy’s growth potential given fears of continued inflation. 

However, the rate increase has the potential to also increase bank lending rates that could further limit credit to productive sectors, and hike household credit through higher interest rates on consumer loans for cars, credit cards and mortgages.

“While the decision to increase the policy rate will impact growth in the short run, the Bank and the Monetary Policy Committee (MPC) are concerned that if we do nothing now, and high inflation becomes entrenched, growth over the longer term will be adversely affected,” said BOJ Governor Richard Byles. 

Though the BOJ recently revised its growth outlook to a range of 7% to 10% for the current fiscal year ending March 2022 (up from 5% earlier in the year), many are concerned that the rate increase will limit the economy’s prospects for countering the large economic contraction in the previous year. 

In a media release, the Private Sector Organisation of Jamaica (PSOJ) criticised the interest rate hike, calling it “a risk to Jamaica’s medium-term economic growth prospects”. “Any movement in interest rate upwards is going to have a dampening effect on the economy. It’s going to slow down investment decisions and slow down consumer spending and also affect motor car purchases and mortgages because the cost of borrowing is going to go up,” said PSOJ President, Keith Duncan.

The BOJ said that while it understands the BOJ’s concern about a trend of inflation building, it “is of the view that there is basis for concern that the now tighter monetary policy stance — in the context of adverse macroeconomic conditions arising from the COVID-19 pandemic, the Government’s programme to maintain a fiscal surplus, and uncertainty among economic actors about short term price changes due to supply chain issues — presents a risk to Jamaica’s medium-term economic growth prospects”.

Through its Economic Policy Committee, the PSOJ urged the central bank to exercise “caution in respect of transitory inflation” which is expected to be short-lived. It called on the BOJ to expressly clarify the specific economic circumstances that would give rise to further changes in the policy rate. 

The IMF’s Q3 World Economic Outlook sought to allay inflation fears by emphasising that “recent price pressures for the most part reflect unusual pandemic-related developments and transitory supply-demand mismatches”. The IMF also signalled that “inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices”. 

Noting that elevated inflation related in part to high food prices, is also expected in some emerging market and developing economies, the IMF cautioned that “central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics”. 

The BOJ has also come in for strong criticism from the Jamaica Manufacturers and Exporters Association (JMEA) which labelled the move as “misguided,” warning that it would “further impoverish the most vulnerable in society”.

Several regional economists have also voiced concern about the rate hike. Dr Adrian Stokes, Senior Vice-President and Head of Insurance and Wealth Management at the Scotia Group Jamaica argued that he does not “see the justification for tightening monetary conditions in a depressed economy” given that he expected the rise in inflation to be temporary. 

“If you compare what’s happening in the US where they have a much stronger economy, inflation is running much further ahead of their target and the Federal Reserve there is just beginning to think about tapering, not even to tighten monetary conditions,” said Stokes referring to the mid-year US inflation rate of 5.4% compared to their target of 2%.

Meanwhile, former Opposition Senator and University of the West Indies academic, Dr Andre Haughton contended that given the structure of Jamaica’s economy and the scale of the pandemic, the BOJ should think about other objectives other that just satisfying an inflation target”.

Responding to the concerns about the impact of the policy decision, BOJ Governor Richard Byles maintained that “the suite of policy actions beginning with the modest increase in policy rate has been calibrated to minimise the adverse impact on growth”. “BOJ’s assessment, therefore, is that even with these actions, and potential future actions, GDP growth will still fall within the range of 7% to 10% for fiscal year 2021/2022,” he added.

With the hike, the BOJ has joined a growing list of economies including Brazil, Chile and Norway that have increased interest rates to curb inflation, even before more developed economies like Britain and the US. The BOJ’s mandate, as set out in the Bank of Jamaica (Amendment) Act 2020 is the maintenance of price stability and financial system stability, with price stability being the primary objective.

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Cuba’s Prime Minister, Manuel Marrero, has said that reactivating tourism will be the key to Cuba’s economic recovery, due to its ability to stimulate growth in many other sectors of the economy. 

Speaking at a meeting with Cuban tourism professionals in Varadero on 2 October, he said that there could be no going back after tourism reopens on 15 November (Background Cuba Briefing 13 September 2021). The challenge he said would be great as it would involve the participation of managers in many sectors to solve problems associated with the proper functioning of all tourism services. 

Granma reported Marrero, formerly Cuba’s Tourism Minister, as saying that regardless of the country’s financial difficulties “tourism is a priority”. 

At the meeting which was called to examine preparations for fully reopening tourism in Varadero and related facilities, Marrero stressed the need to achieve stability at the start of operations and to quickly address the growing number of requests from tour operators in Cuba’s principal markets. 

“We cannot be passive in the face of so much [global] competition, we must innovate and look for new forms of commercialisation, including through the Internet”, he told participants after emphasising that the greatest challenge now facing Cuba’s tourism sector was to provide quality services extending beyond the hotel network. 

The main battle, he said, was achieving “efficiency and in the culture of detail” as the country already had the benefit of “the beauty of our beaches, culture and a friendly and cultured people”. Marrero additionally stressed the importance of the full involvement of suppliers, national industry, and others in helping solve problems associated with the proper functioning of all tourism facilities. 

Granma noted that at the meeting, José Ángel Portal, the Minister of Health, highlighted the important role medical personnel would play in ensuring the delivery of the full scope of sanitary protocols in hotels and at airports. Portal announced that as an additional measure, all workers in the tourism sector will receive a dose of booster vaccine. 

The meeting heard that Russia, Canada, Mexico, and Germany will initially constitute the main source markets for visitors when Varadero fully reopens. 

In an indication of the importance of tourism’s successful recovery to the Cuban economy, the meeting was attended by Vice Prime Minister, Inés María Chapman, the First Secretary of the Communist Party in the province, Matanzas’ Governor, and the ministers of Agriculture, Food, Industry, Health, and Transportation. 

During his visit, Marrero met with representatives of foreign chains operating in Cuba as well as with the Presidents of Cuba’s hotel groups. 

Other Cuban reporting indicated that while access to all facilities in Matanzas hotels will be open to Cubans and visitors, initially until the situation with COVID-19 is normalised a separate group of hotels in the resort will be allocated to the domestic market. 

As previously reported by Cuba Briefing, Cuba’s Ministry of Tourism has said that as of 15 November the country will gradually reopen its borders to international tourism. It is doing so on the basis that, by then, more than 90% of Cubans and a high percentage of travellers from its principal source markets will be fully vaccinated. As of that date, Cuba will relax its stringent hygiene-health protocols on all arrivals and focus instead on symptomatic patients, monitoring temperatures, and on random testing. 

The approach will then be to gradually restart tourism facilities in specific locations. Using the experience of Varadero it is expected that government will proceed to open services fully in the province and adopt the same procedure in other territories taking into account the epidemiological situation there. 

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

Photo by Georgy Trofimov

A looming debt crisis and another sovereign credit rating downgrade are just two of the many challenges facing the newly elected Philip Davis Administration.

Prime Minister Davis led the Progressive Liberal Party (PLP) to a resounding victory in the 16 September election, securing 32 seats to the Free National Movement’s (FNM) seven.  

“It is time to face our challenges and face them head on, you voted for a new day, a new beginning.” Davis said during his victory speech.

In the days after the election, nine cabinet ministers were sworn in, as well as Davis’ selections for parliamentary secretaries. Among them, Ryan Pinder as Attorney General and Minister of Legal Affairs, Fred Mitchell as Minister of Foreign Affairs and Public Services, Dr Michael Darville as Health Minister, and Michael Halkitis as Minister of Economic Affairs.

The Prime Minister and his Cabinet face myriad challenges including a turbulent period of mounting debt, double-digit unemployment numbers, stagnant economic growth, low vaccination rates, and a recent credit rating downgrade. 

One day after Davis was elected, international credit ratings agency Moody’s announced that it was downgrading the country’s long-term issuer and senior unsecured ratings to ‘Ba3’ from ‘Ba2’. This latest downgrade takes The Bahamas even deeper into non-investment grade or “junk” status.

In its release, Moody’s highlighted that the country’s US$10.356bn national debt is now more than six times bigger than the government’s annual income or revenue base. Moreover, the ratings agency made clear its negative outlook on The Bahamas, which signals there could be another downgrade in the offing. 

Justifying the negative outlook, Moody’s said that the pace of the economic recovery, and particularly tourism activity, would directly affect the pace of fiscal consolidation and how quickly debt begins to decline. “The reliance on indirect taxation – VAT and excise taxes – makes government tax collection more sensitive to the speed of the economic recovery,” the release added.

“A slower recovery would place downward pressure on revenue and limit the speed of fiscal consolidation and prospects for debt stabilisation. Larger-than-expected fiscal deficits in turn would increase reliance on external market borrowing and could create external liquidity pressure,” Moody’s said.

Responding to news of the downgrade, Prime Minister Davis said that it was not surprising. “If anyone has been following the fiscal affairs of this country, they’d know that for quite a while we’ve been heading over a fiscal cliff,” he added.

This revelation from Moody’s puts the new government’s pledge to cut the VAT rate from 12% to 10% on potentially shaky ground. When asked how soon Bahamians could see his party’s election promise to reduce the VAT rate, Prime Minister Davis declared that announcement would be made in the coming weeks. 

However, Executive Director of the Organisation for Responsible Governance, Matt Aubry, has cautioned that such a cut would “not hold the line with Moody’s and other rating agencies” that are watching very carefully to see how the new government tackles The Bahamas’ fiscal, economic, and COVID-19 crises.

Aubry said that the PLP’s election promise would be complicated by the downgrade since the country’s dire fiscal circumstances reduces the Government’s space for a VAT cut, as any revenue foregone would need to be “offset” by gains in other areas that have yet to be identified.

Before the election, now-Prime Minister Davis argued that the VAT decrease will help hard-hit families and businesses while stimulating the economy by incentivising more consumer spending and a higher transaction count. The previous government estimated that the one-year rate cut would cost the country US$100mn in tax revenue. 

While all Bahamian businesses and consumers await even a temporary rate reduction, the ballooning national debt and projected US$951.3mn fiscal deficit mean that the Davis Administration faces increasing pressure from rating agencies, multilateral institutions, lenders, and creditors to produce a detailed debt management plan to improve the sustainability of public finances.

To this end, Gowon Bowe, CEO of Fidelity Bank (Bahamas), has argued that the Government should instead focus on eliminating the VAT exemptions introduced by the former Minnis administration, so as to return The Bahamas to the “broad-based” taxation model it was initially praised for.

Meanwhile, noted Caribbean economist, Marla Dukharan, has warned that The Bahamas is one of two Caribbean countries expected to be the next to default on their sovereign debt. Speaking at a recent University of the West Indies roundtable on Caribbean economies, Dukharan said that the estimated US$3.4bn economic devastation caused by Hurricane Dorian in September 2019 has cast a long shadow over the country. 

Dukharan argued that the economic fall-out of the COVID-19 pandemic has dealt the nation a double-blow that would likely necessitate significant restructuring through an IMF agreement in the near term.

With the government expected to attempt to raise funds through debt financing later this year, there is an added worry that the latest credit downgrade and negative economic projections could increase the government’s borrowing costs as creditors increase their risk premiums. An estimated US$512mn is budgeted for debt servicing costs this fiscal year, accounting for 18% of budgeted recurrent expenditure.

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo by Shyam

Many Jamaican businesses are reeling as the financial impact of the Government’s COVID-19 mitigation measures take their toll. 

According to businesses, the so-called “no-movement” days recently announced by Prime Minister Andrew Holness, where curfews span the entire day have significantly limited economic activity.

No business can survive on three and a half days of commercial activities says Montego Bay businessman, Sunil Vangani. 

“We are suffering a lot because we are not making enough over three and a half days to cover our expenses, said Vangani, who has been operating several businesses along the north coast for the past 25 years.

In the latest measures, Prime Minister Holness announced six no-movement days spanning Sundays to Tuesdays for a two-week period and ending on 14 September, unless extended.

With hospitals at crisis levels, low rates of vaccination, and COVID-19 cases still spiralling, many not only welcomed the measures, but also are urging the authorities to extend them.

However, according to Vangani, this is not the sentiment of the business community. “The way the lockdowns are being done is creating more harm than good, because markets, banks, and supermarkets are jam-packed on the movement days, creating a greater super-spreader environment,” he argued. 

Moreover, businesses are lamenting the unpredictability of future business. Some contend that the erratic nature of COVID-19 directives is making it difficult to schedule investment, purchases, and other activity to meet what is increasingly unstable demand. 

Asserting that the lockdowns should not extend beyond 14 September, Chairman of the Tourism Enhancement Fund, Godfrey Dyer, said that the authorities “should take a break and just have the lockdown at night and watch it over the next few weeks to see what happens”. 

While the tourism sector has not been as impacted by the curfew restrictions, due to the operation of the government’s Resilient Corridors, which allows many aspects of the tourism sector to operate insulated, there is new concern about international travel warnings.

In a potential blow to the tourism recovery, the US Centre for Disease Control and Prevention (CDC) has raised the travel advisory for Jamaica to “Level 4: Very High,” warning Americans to avoid travel to the country. It also cautioned that, if travel cannot be avoided, US residents should make sure they are fully vaccinated before travel. 

This comes just days after the UK’s Foreign Office (FCDO) updated its guidance to advise against all non-essential travel to Jamaica. However, since FCDO advisories are distinct from the Department for Transport’s traffic light lists, Jamaica remained in the amber category in the government’s last travel review on 26 August, despite fears that it would be downgraded to red.

“Jamaica’s product remains strong and our attractiveness as a destination is still intact. We have not seen yet any deviation from our projected patterns for the fall and winter,” said Tourism Minister Edmund Bartlett, who recently welcomed the one millionth tourist to Jamaica since its reopening.

Jamaica is not the only Caribbean country where businesses are coming out against COVID-19 measures. In Barbados, the recent announcement that all schools will be conducted virtually left some businesses seeking financial assistance from the government in order to meet commitments for the millions in school uniforms and supplies they have stocked for the reopening of schools. In St Lucia and Grenada, recent weeks have seen the use of limited and no-movement days, as well as tighter curfew restrictions, which many businesses have said are eroding any remaining profitability in the economy. Both countries are currently recording unprecedented spikes in COVID-19 cases, deaths, and hospitalisations, but with public finances severely constrained, unemployment at unsustainable levels, and vaccination levels lagging, options for regional leaders appear limited. 

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo by Sunyu Kim

Aid remains limited two weeks after Haiti was hit by a magnitude 7.2 earthquake which severely damaged several cities, killing 2,200 and injuring thousands more. 

The United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) estimates that about 800,000 people have been affected and an estimated 650,000 people – 40% of the 1.6mn people living in the affected regions – are in need of emergency humanitarian assistance. 

Despite this, many commentators have said that international aid flow into the country in the aftermath of the quake has been relatively slow and limited. Many donors appear to be waiting for the completion of the Post-Disaster Needs Assessment (PDNA) which Prime Minister Henry says will be completed in the coming weeks. 

 Once the PDNA is completed the Technical Steering Committee will organise a meeting of donors in order to have funds to finance the reconstruction plan. 

However, some analysts believe that the aid delay is due in part to lingering suspicions by the Government and donors alike, after past failings of aid administration and abuses in the country. 

The United States Geological Survey said that this quake was more powerful than the 2010 quake that hit near the capital and killed 220,000 people. It was followed by dozens of aftershocks ranging from M2.5 to M5.8 which further collapsed buildings. 

The damage is concentrated in southwest Haiti on the Tiburon Peninsula where in the cities of Les Cayes and Jeremie, hundreds are still unaccounted for. According to the UNOCHA, almost 53,000 homes have been destroyed and more than 77,000 have sustained damage. 

To make matter worse, just days after the earthquakes, Haiti was hit by Tropical Storm Grace which hampered rescue efforts and worsened conditions on the ground as heavy rains, flooding and strong winds took hold.

Speaking at a CARICOM Heads of Government Meeting on the political and humanitarian situation in Haiti, Prime Minister Ariel Henry said that his government was dealing with three priorities simultaneously – relief and reconstruction following the earthquake, the need for credible and transparent elections, as well as delivering justice through the complex investigation into the assassination of President Jovenel Moïse. 

The compounded effects of an ongoing political crisis, socio-economic challenges, food insecurity and gang violence continue to greatly worsen an already precarious humanitarian situation. Some 4.4mn people, or nearly 46% of the population, face acute food insecurity, including 1.2mn who are in emergency levels and 3.2 million people at crisis levels. An estimated 217,000 children suffer from moderate-to-severe acute malnutrition. 

Haiti would need an estimated US$1.2bn to deal with the initial damage caused by the 14 August earthquake, according to an initial impact assessment report discussed during a Technical Steering Committee meeting chaired by the Prime Minister. 

“It is essential that each actor has in mind the objectives that we have set for ourselves, along with the six-week deadline to complete the entire process and begin to provide, with serenity and speed, lasting responses to this disaster,” Henry said. 

The UN Deputy Resident Coordinator in Haiti, Maureen Bermingham said she saw this exercise as an opportunity not only for the physical reconstruction of the country, but also for social reconstruction. World Bank Resident Representative in Haiti, Msellati Laurent, confirmed the readiness of his institution “to align with the proposals that will be made by the partners of the UN, European Union and the IDB”. 

Meanwhile, in the region, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) announced that it will make a pay-out of approximately US$40mn to the Government of Haiti. This pay-out represents the full coverage limit under the country’s parametric insurance policy for earthquakes for the 2021/22 policy year. 

“To begin to support the people of Haiti as quickly as possible, CCRIF will provide a first tranche of US$15mn to the Government within one week of the event and the remaining amount of approximately US$25 million within the 14-day window, to allow for the independent verification of the model results,” CCRIF said in a press release. 

Haiti’s Minister of the Economy and Finance, Michel Patrick Boisvert said that the pay-out “will help finance rapid and tangible government activities geared towards supporting the poor and vulnerable affected by the earthquake in the Grand Sud region”. 

Assistance has also come from other CARICOM countries including St Vincent and the Grenadines – itself recovering from a volcanic eruption – which made an initial donation of US$0.1mn. Prime Minister Ralph Gonsalves called on other CARICOM countries and the “Caribbean family” to assist Haiti with immediate humanitarian assistance. 

On 30 August, a UN General Assembly (UNGA) resolution called on the international community provide aid. The resolution expressed solidarity with and support for the government and people of Haiti in the aftermath of the recent devastating earthquake. It calls on the international community to scale up humanitarian assistance and rehabilitation of Haiti, in order to repair and strengthen the country’s prospects for achieving sustainable development. 

The resolution urges “international financial institutions and organisations to continue to contribute generously in their response to deliver immediate relief and to maintain their support for the long-term rehabilitation of Haiti, through prioritising action to reduce the vulnerability of the country by systematically promoting its long-term socio-economic development”. It also requests the “UN Secretary-General, to the extent of his authority, to support the reconstruction efforts that are being made by the Haitian government”. 

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.