Compiled By NAN Business Editor
News Americas, NEW YORK, NY, Fri. Sept. 4, 2020: Here are some of the top business and finance news making headlines across the Caribbean this week.
Moody’s projects total remittances to the Caribbean and Latin America will decline by about 4% this year as immigrants in the US Diasproa cope with higher unemployment.
“In LAC, Central America and the Caribbean are the most economically vulnerable to the decline in remittance inflows,” says Moody’s associate analyst Gabriel Agostini. “Mexico is the region’s largest recipient with nearly $40 billion in remittances last year. While remittance inflows to Central America and the Caribbean are nominally smaller, they are substantially higher in relative terms representing nearly 10% of GDP for each region.”
The report also quantifies the impact on remittances under an alternative scenario that contemplates prolonged pandemic and a delay in the US government extending income support measures. Under this downside scenario, US remittances to LAC countries could fall by 10% relative to last year.
According to Moody’s, this higher level of unemployment in the US limits the prospects for improvement for remittance flows in the near future which depend on the economic growth of the United States and the income support measures that they played a major role in replacing lost income this year. Additionally, the legal authorization of immigrants from Latin America and the Caribbean in the United States and their level of education will also influence the speed with which remittances recover.
The Inter-American Development Bank (IDB) has launched the Pivot Movement to harness the most innovative ideas for Caribbean development and create a plan for the future of the region. The Movement includes a crowdsourcing contest and an event.
Pivot Search is the crowdsourcing platform to receive new development ideas. It runs from September 2 to September 18, with a $5,000 cash prize. Along with partners Caribbean Climate-Smart Accelerator (CCSA), Singularity University and Destination Experience, IDB will also host The Pivot Event, a virtual conference, between October 15 and 30, 2020. General Manager of the IDB’s Country Department Caribbean Group (CCB), Therese Turner-Jones said, “The Pivot Movement is a vehicle for Caribbean transformation driven by ideas. It gives anyone anywhere the opportunity to help shape the future of our region. We are creating an innovative space where pioneering minds will discuss moonshot ideas to drive a more resilient and secure future for all Caribbean people.” Individuals can request an invitation to the Pivot Event and get further details about how to submit ideas for The Pivot Search via the website www.caribbeanpivot.com .
Guyana this week received US$46M for its third 1M barrels of oil entitlement. The total amount US$46,046,937 was deposited into its Sovereign Wealth Fund being held in a United States Bank of America account, Minister of Natural Resources Vickram Bharrat told Stabroek News. The news comes as Guyana parliament approved a $11.2B budget for 16 constitutional agencies in its first sitting in over a year.
Trinidad and Tobago
Economist Marla Dukharan says if there is no meaningful macroeconomic intervention in the T&T economy, the country runs the risk of depleting its foreign exchange (FX) reserves.
In her report titled: “Trinidad & Tobago Balance of Payments Risk: Why T&T could be heading to default and a balance of payments crisis by end-2022 Dukharan said that a country’s Balance of Payments account captures all the foreign currency transactions a country makes with the rest of the world, which includes but is not limited to imports, exports, remittances and foreign direct investment.
She argued that “the net effect of all these foreign exchange transactions is reflected in the change to the level of FX reserves held at the Central Bank – if we earn foreign currency, FX reserves increase, if we lose foreign currency, FX reserves decline.”
Money transfers to Jamaica reportedly grew 14 per cent for the June quarter, reflecting a recovery from the initial onslaught of the pandemic, the Bank of Jamaica’s preliminary estimates show. For the month of June alone, remittances were up 42 per cent, the central bank governor said last week. Due to the crisis caused by the coronavirus, and the initial fall-off noted in remittances, money inflows were last projected to decline to US$1.9 billion this fiscal year, down from US$2.3 billion pre-COVID. The bulk of the remittances are transacted via six remittance companies, led by Western Union.
Cruise ship operator NCL Corporation Ltd has listed another $1.2 billion of debt on the Bermuda Stock Exchange.This is in addition to $1.94 billion of debt listings it made on August 13. The company, which operates Norwegian Cruise Line, is a subsidiary of Norwegian Cruise Line Holdings Ltd, and raised capital in July to bolster its finances during the prolonged suspension of cruise voyages resulting from the Covid-19 pandemic. Its voyages are currently suspended until the end of October.
Antigua & Barbuda
The Antigua and Barbuda government Monday confirmed that it had turned down a request from the British carrier, Virgin Atlantic, for a minimum revenue guarantee (MRG), describing it as “outrageous”. The government’s Chief of Staff Lionel ‘Max’ Hurst, speaking on Observer radio here, said that the Gaston Browne administration could not agree to the MRG, which in that case is an air services agreement entered into between an airline and a government. Last week the Antigua and Barbuda government agreed to write off EC$8.5 million (One EC dollar=US$0.37 cents) in debt owed to the country by LIAT, which is now undergoing a restructuring plan led by St John’s.
St. Kitts & Nevis
St. Kitts & Nevis Prime Minister Dr. Timothy Harris has indicated that the EC$1,000.00 stimulus packages started in April 2020 in an attempt to alleviate the financial burden placed on citizens because of the temporary shutdown and the continued halt of our tourism industry will be extended for persons still unemployed as a result of the pandemic. According to Prime Minister Harris, over $22 million had been paid for the three month period, April – June 2020. Harris said that the Social Security Board expects close to 3,000 unemployed contributors to benefit from the September extension of the EC$1,000.00 stimulus package.
Turks & Caicos
THE TCI has lost more than 9.2 percent of its Gross Domestic Product (GDP) due to a lack of tourism during the Covid-19 pandemic, making it the nation most affected in the world, according to a recent study conducted by visa service provider ESTA.
The findings reported by the TCI Weekly News, show that the TCI suffered the sharpest blow to its GDP compared to other tourism dependent nations in the world. This colossal depletion in revenue which amounted to some $94 million was due to the Covid-19 pandemic’s impact on the global tourism industry.
Local workers withdrew almost $310 million from their pensions in May, using government’s COVID-19 emergency withdrawal measure, according to statistics from the Department of Labour and Pensions, according to the Cayman Compass.
There are a total of more than 73,000 private pensions in the Cayman Islands, and according to officials, more than 34,000 applications were received in May to withdraw money from those pension funds. The emergency-withdrawal measure, which allowed workers to access their private-sector pensions up to a certain amount, was made possible through changes to the Pensions Law. It was one of the initiatives implemented by Premier Alden McLaughlin to assist employees impacted by the COVID-19 pandemic and the closure of local borders.