Statement number 3 by the Dominica Freedom Party on the New Corona Virus in Dominica May 11th 2020

The Dominica Freedom Party congratulate you the people of Dominica for your adherence to the social distancing recommendations and for your respect of the curfew and lockdown as our country seeks to minimize risk to life from the COVID-19 pandemic. We are thankful that no lives have been lost of the 16 persons officially reported to behave been infected with the new corona virus, most of whom have recovered. We urge our continue vigilance and pragmatism as the quasi-lock down and curfew is gradually eased.  

But an economic disaster is certainly looming in our land – the result of a double whammy – loss of CBI revenue and the impact of the COVID-19 pandemic! A significant worsening in social conditions will result and the already-low quality of life in the nation will drop. A key challenge will be how to prevent the situation from becoming chaotic and how do we ultimately restore the economic health of our country. 

But we as we have previously indicated, the economy of Dominica was already weak and declining prior to the impact of the COVID-19 pandemic. However, the COVID-19 pandemic is making the situation worse. To minimize the pain that is to come and to reposition the country’s economy, a number of strategies must be contemplated. In that regards it would be desirable for there to be prepared a meaningful rapid relief package and an economic stimulus package to respectively address the immediate social impact of the COVID-19 Pandemic on the people and awaken the economy. But given the lack of fiscal reserves and the poor state of government finances, the current administration will need to borrow to finance such a package. The Dominica Freedom Party has recommended that the government approaches the International Monetary Fund (IMF), the World Bank and the Caribbean Development Bank (CDB) for such support. Though there may still be fiscal financing shortfalls after inputs from these multilateral institutions, their inputs could be very helpful. 

What then does the government need to finance? First, they need to finance a huge fiscal deficit (expenditure exceeding revenue) that was already confronting the country prior to the impact of the COVID-19 pandemic but that will be made much worst by the pandemic. This threatens to rattle the country including through difficulty to pay civil servants and cuts in expenditure to include that on social programmes. 

Secondly, given the unfolding pandemic, the government would need to consider funding an immediate relief programme as if this is not done, there could be much social hardship and heightened social and citizen security challenges that would in turn make it more difficult to restore our country once the COVID-related risks have abated. Even if the quasi-lockdown is lifted in Dominica, lockdowns among our trading partner countries including the USA and the unfolding pandemic-induced global recession, will continue to depress economic activity in Dominica, and thus there may still be need for social relief. But we pause here to re-iterate that should financing become available, the government should not use a relief programme as a political tool.

An immediate relief package could include but not necessarily be limited to the following areas. 

• Income support for low-income workers who lost employment or suffered significant reductions in earnings as a result of the pandemic-induces crisis. However, such support can’t be given for a very long period given financing constraints, but should allow individuals and communities some breathing space to put in place longer-term efforts to cope with a crisis that could run over an extended period.
• Assistance to public transport operators during the period in which they have been advised to carry less passengers per row. This will support their earnings given that bus fares are controlled. The availability of bus services would facilitate persons accessing essential services, but it would also facilitate a quicker return to normal life once the risk from COVID-19 has passed. 
• Debt relief should be contemplated for homeowners with mortgages who experience significant declines in earnings. This could be facilitated by the banking system through loan restructuring, but consideration would have to be given to the financial soundness of commercial banks and credit unions to facilitate this. There should be a role played by the Eastern Caribbean Central Bank (ECCB) in that regard. 
• Debt relief for qualifying businesses who have suffered significant loss of income. Here again this could be facilitated through the banking system with the involvement of the ECCB. 
• Keeping essential utilities turned on for residential and commercial use during an initial period without disconnections but with a proposed bill settlement plan for those who suffer significant loss of income or who otherwise could not settle their bills. A relief package should then include an element that gives consideration to the ability of the utility companies to provide such support. 

Thirdly, government needs to consider funding a long-term stimulus package aimed at resetting the economy. This is not per se a suggested stimulus package towards resuscitation the economy in the aftermath of the adverse impact of the COVID-19 pandemic, as, the truth be told, there is not much to resuscitate. But certainly, the occasion of the COVID-19 pandemic provides a compelling action point to reset the economy as the little life that was remaining in the economy of Dominica is being snuffed out by the COVID Pandemic and there are potentially new trends, realities and opportunities that need to be incorporated into our economic planning. 

A foundation opportunity for resetting the economy is in the area of agriculture and agro-processing. Three inter-related pillars should be considered in that regard. The first pillar relates to improving food security. This could include consideration for improving the local availability protein and with much focus on chicken –  a major source of protein consumed by residents. But there is also need to reduce risk in the production chain of chicken eggs (in which Dominica is already self-sufficient) and chicken broilers. This means that strategies should be launched to encourage the production of chicks, hatching eggs and feeds on island. Moreover, as the scale of production of chicken broiler is increased and with appropriate supporting strategies, its price will decline and the nation will increasingly be able to reduce its huge chicken import bill in addition to obtaining the desired food security benefit. Some, protection of the local poultry industry is necessary for food security reasons, but this must be managed carefully to allow the industry to attain optimal productivity.  Strategies to encourage healthy eating should be launched with the expectation that in time consumers will gravitate more towards the healthier and fresher option notwithstanding a price differential. 
 
Our country produces adequate vegetable, ground provisions, tropical fruits and tree crops for local consumption.  Efforts to encourage these should be continued, but such efforts would be more sustainable if our country sought to export more  of these products and engage in value added production in order to extend availability of products on the local and export market beyond the seasonal availability. Some crops may be excellent to be grown for food security purposes and at the same time they may present excellent opportunities for export as fresh or processed products. One such crop may be sweet potatoes which is regarded as a supper food - foods with exceptional or very high nutritional value. 

The second pillar for resetting the agriculture industry relates to taking advantage of the heightened global health awareness in the wake of the COVID-19 Pandemic. Being in good health and having a strong immune system has been emphasized as important for individuals to overcome COVID-19 infections. There was already a global trend towards healthy eating and many foods have been identified as superfoods, many of which Dominica currently produces including sweet potatoes, avocados and ginger. Eating organic foods is also part of the healthy eating trend. The COVID-19 pandemic has served to heighten that global trend and efforts should be made by Dominica to take advantage of that trend. 

The third pillar for resetting agriculture is the repositioning of agriculture in the context of the big idea – promoting Dominica as the nature island of the world. This means differentiating Dominica’s products based on the island naturalness. But to do so sustainably would be well served by aligning the way we live with the image that we wish to promote. This must be increasingly supported by the proof, to include that related to longevity/life expectancy. With respect to the agriculture sector, aligning to the big idea requires migrating towards organic production and targeting appropriate markets. Given our small size, aligning production to the big idea allows us to compete globally by differentiating our products rather that to compete based on scale. 

A stimulus package for the agriculture industry must not be about providing hand-out to farmers, but rather about obtaining the resources to adequately pursue the three-pillar strategy. Such a strategy require resources for, product research; providing technical assistance to those with demonstrated promising efforts; organizing efforts and encouraging cooperation among farmers, exporter and processors; undertaking market research; accessing markets; putting in place adequate infrastructure including irrigation; encouraging the use of appropriate technology; providing agronomic support to farmers (including that related to organic farming practices and soil conservation); raising standards and certifying production; facilitation transportation to export markets; encouraging the participation of young people, providing financing opportunities to include loans, export credit and venture capital. 

In our next statement we will discuss strategies for resetting the tourism industry.