Caribbean Business News Round-Up

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A new report from the World Travel & Tourism Council (WTTC) has found that COVID-19’s impact on the Caribbean’s travel industry results in losses of around $33.9 billion.
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By NAN Business Editor

News Americas, NEW YORK, NY, Fri. June 2, 2021: Here are the top Caribbean business news headlines making news this week.

REGIONAL

A new report from the World Travel & Tourism Council (WTTC) has found that COVID-19’s impact on the Caribbean’s travel industry results in losses of around $33.9 billion.

According to the WTTC’s annual Economic Impact Report (EIR), travel and tourism’s contribution to the Caribbean’s gross domestic product fell from $58.4 billion (14.1 percent) in 2019 to $24.5 billion (6.4 percent) in 2020.

Travel and tourism’s contribution to the region’s GDP dropped a staggering 58 percent, higher than the global average. In total, the loss of travel-related income resulted in the loss of an estimated 680,000 jobs across the Caribbean. The WTTC’s report found the number of people employed in the Caribbean travel and tourism sector fell from nearly 2.76 million in 2019 to 2.08 million in 2020, a decline of 24.7 percent.

Domestic visitor spending also declined by 49.6 percent and international visitor spending fell by 68 percent. The news isn’t all bad, though, as new data shows most departures scheduled from the United States in 2021 are to the Caribbean and Mexico, which should aid in the region’s recovery.

USVI

U.S. private equity firm Arclight Capital Partners LLC, which invests the retirement savings of Maine teachers, NFL football players and Mayo Clinic doctors, lost hundreds of millions of dollars betting on a troubled Caribbean oil refinery, according to sources and documents reviewed by Reuters.

Boston-based Arclight’s Energy Partners Fund VI, which held a majority stake in the Limetree Bay refinery on St. Croix in the U.S. Virgin Islands, shed more than a quarter of its value in the year ended March 31, according to financial disclosures by a limited partner in the fund.

The fund has since removed the refinery from its portfolio, while investors holding hundreds of millions of dollars of common and preferred equity in the facility have been forced to write it off as worthless, according to pension fund officials and financial disclosures.

ST. MAARTEN

Sint Maarten’s Minister of Finance Ardwell Irion says he remains optimistic that the territory will receive the promised NAF39M in liquidity support from the Dutch Government.

The minister further explained that St. Maarten has money to pay its civil servants for another month. However, persons receiving the unemployment support and the SSRP are the ones that will be fully affected until the issues between the Dutch Government and the Government of St. Maarten are ironed out.

GUYANA

Guyana’s Hope Energy Development Inc. (HED) has submitted an Environmental Impact Assessment (EIA) for the construction and operation of the first large-scale wind farm in Guyana along the East Coast of Demerara. The Hope Wind Farm Project base-case scenario proposes the construction of four wind turbines along the coast at the Hope Beach location, outboard of the Lowland/Hope to Ann’s Grove Villages. The Project has secured a land lease comprising a total area of 27.057 acres, registered with the Guyana Lands and Surveys Commission, for a term of 50 years which commenced on January 1, 2007. It is intended to be used for Industrial Purposes, specifically the establishment of a wind farm for the generation of electricity.

PUERTO RICO

A private company has taken over the transmission and distribution operations of Puerto Rico’s power authority, which has struggled with blackouts and bankruptcy, corruption and mismanagement.

The takeover by Luma Energy under a 15-year contract coincided with the beginning of the Atlantic hurricane season, with many across Puerto Rico worried about the transition and whether the new company can handle a severe storm. The United States territory is still struggling to recover from Hurricane Maria, which destroyed most of the power grid in September 2017.

The company will serve all of the island’s roughly 1.5 million clients, has enough resources to handle a Category 2 hurricane and can bring in more equipment and workers if a stronger storm hits.

BAHAMAS

The Bahamas’ Prime Minister this week acknowledged that The Bahamas’ financial services sector is shrinking due to global pressure.

“The offshore financial services sector, our number two industry, has been shrinking due to a vastly different and much more stringent global regulatory environment,” Dr. Hubert Minnis said. He made his comments while opening the 2021/2022 national budget debate in the House of Assembly, making those remarks in the context of the bleak economic situation in the country due to Hurricane Dorian and the COVID-19 pandemic. The financial services sector could take another hit soon, as global tax watchdogs and the global superpowers look to impose a minimum corporate tax on corporations across the world.

CAYMAN ISLANDS

A new report released by Cayman Enterprise City (CEC) has put the special economic zone’s economic impact during the first 10 years of its operation at US$502 million.

Caribbean-born economist Marla Dukharan, the author of the study, wrote that this demonstrated Cayman’s ability to innovate and diversify its economic base.

“72.3% of the SEZ companies at CEC have set up in the Tech City, which gives Caymanians the opportunity for the first time to work with and engage in emerging Tech sectors from right here in Cayman, such as Software Development, Advanced Analytics, Fintech, Medtech, Biotech, Cybersecurity, Green Technology, and Media Companies, adding new skills and jobs to the Caymanian workforce,” she wrote.

ST. VINCENT AND THE GRENADINES

The money that the government will give to farmers and other people affected by the eruption of La Soufriere will be taken back through the increase in the Customs Service Charge, which came into effect on Tuesday.

Leader of the Opposition Godwin Friday says it is not too late for the Ralph Gonsalves administration to cancel the increase, which Vincentians cannot afford in this year of multiple crises.

In the 2021 Budget, the government, in February, amidst strong objections by the opposition, increased the customs service charge from 5% to 6%.

Minister of Finance Camillo Gonsalves, downplayed the increase, which is expected to generate almost EC$10 million in additional revenue this year.

DOMINICAN REPUBLIC

Hotels and tourist transportation in the DR may only have 70% of their maximum capacity in new regulations there.

Between June 2 and June 9, restaurants located in tourist resorts of Punta Cana, Cap Cana, in La Altagracia, and Casa de Campo, in La Romana, must comply with the curfew corresponding to those areas and must only have 50% of their capacity in the reception of customers.