Compiled By NAN Business Editor
News Americas, NEW YORK, NY, Fri. April 3, 2020: Here are some of the top business and finance news making headlines across the Caribbean this week.
Fitch Ratings is making some dire predictions when it comes to the economy of the Caribbean region post-COVID-19.
Fitch this week said the impact on the regional tourism industry “may be long-lasting.” The median Fitch-rated country in the region receives from tourism the equivalent of 8% of GDP and Fitch analysts say they expect that the effect on the balance of payments will be hard particularly in places where “all-inclusive” is a significant or even majority part of the sector – Aruba, Jamaica and Dominican Republic.
The DR has seen over 1,284 cases to date and over 57 deaths, the most for the Caribbean while Aruba has 55 cases and Jamaica has reported 38 cases and 2 deaths.
Meanwhile, Fitch says remittances to the region will see a downturn as social distancing measures affect the U.S. service sector.
There was a glimmer of hope as Fitch analysts also said lower oil prices could temper but not offset the loss in foreign currency revenues. For example, they pointed out, net oil imports in Jamaica totaled USD1.2 billion in 2018, but this is less than one-half of tourism earnings (USD3.1 billion).
And zoning in on Jamaica especially, they said the country is exposed to alumina and bauxite prices which could come under persistent pressure if China’s manufacturing slowdown is prolonged.
Justin Ram, director of economics at the Caribbean Development Bank, told BN Americas that the virus “is going to be a big blow for any economy” and that includes in the Caribbean. He also forecasts that tourism receipts could decline by either 50, 80, or even 100 in the next six months.
“When you annualize that, you can well imagine what that means for the overall GDP growth rates of our countries,” he was quoted as saying. “For some of them you are looking at a 10% [annual GDP] decline, probably getting up to as much as a 30% decline in some economies.”
Billionaire Sailing In The Grenadines Slammed
Billionaire David Geffen, a noted Hollywood producer and the founder of DreamWorks studios, who has self-isolated on his 454-foot Superyacht “Rising Sun” in the Grenadines, is being slammed on social media.
After Geffen posted photos of sunset from his yacht on Instagram under the caption: “Isolated in the Grenadines avoiding the virus. I’m hoping everybody is staying safe,” social media users exploded.
“David Geffen is worth 8 billion dollars! For God’s sake help this country get ventilators, our health workers masks and the medical supplies they need! Or no, just stay on your fucking yacht instagramming. This is just shameful and grotesque,” tweeted Meghan McCain, the daughter of the late Senator John McCain.
According to Bloomberg, the Rising Sun, Geffen’s superyacht, has sailed back and forth from Grenada, St. Vincent and the Grenadines since February and was originally built for Larry Ellison, the founder of Oracle Corporation.
Royal Caribbean Cruises
Royal Caribbean Cruises got a downgrade this week from the 16 analysts covering the sector. They now forecast revenues of US$7.5b this year, a sizeable 32% reduction in sales over the past 12 months. Prior to this update, the analysts had been forecasting revenues of US$11b and earnings per share (EPS) of US$8.57 in 2020. The company now anticipates a loss of US$1.69 in 2020, a sharp decline from a profit over the last year.
In a bid to try to keep Haiti’s textile industry afloat amid the coronavirus economic shutdown, the Haitian government has authorized the reopening of seven factories that will be making protective medical gear.
Three of the factories already make washable hospital scrubs for the U.S. market, and Haiti is seeking a percentage of the garments for the country’s own use. The other four factories will switch from sewing cotton T-shirts for the U.S. export market to making face masks for Haitians, the Miami Herald and McClatchy reported.
Plummeting demand for oil as a result of the Coronavirus (COVID-19) pandemic and an oil price war are expected to see Guyana earning less than the US$300 million it had expected to rake in annually from the Liza Phase 1 project and force ExxonMobil to push back developing other oil reservoirs, Rystad Energy predicts.
Senior Analyst at the Norway-headquartered Rystad Energy, Aditya Ravi told Demerara Waves Online News/News-Talk Radio Guyana 103.1 FM that Guyana was now expected to earn US$160 million to US$190 million annually from Liza 1 but “that will take a hit in the current price environment.”
Layouts have begun in the Caribbean and the news sector is not immune. The Cayman Islands’ only daily newspaper has laid off more than a dozen employees, officials from the Cayman Compass said Monday. The layoffs include Caymanians as well as work permit holders. The paper says it has suffered even more during the COVID019 lockdown as it has lost the cash stream from recruitment advertisements, which is mandated in law and has been a reliable revenue source for the paper for years.
The Dutch government expects to spend about thirteen million euros in the first three months on the emergency package for employers, employees and self-employed persons in Bonaire, St. Eustatius and Saba.
State Secretary of Social Affairs and Labor Tamara van Ark wrote this in a letter that she sent to the Second Chamber of the Dutch Parliament on Tuesday in which she provided details on the temporary subsidy arrangement wage cost and loss of income for the Caribbean Netherlands. Bonaire, St. Eustatius and Saba, which are part of the Netherlands, are included in the comprehensive Dutch emergency package of about 10 billion euros to support employees, companies and self-employed persons during the COVID-19 crisis.
Turks & Caicos
THE TCI Government will provide $45 million in direct financial support and waiver of taxes, fees and charges to help residents affected by the COVID-19 pandemic.
This will go to individuals, small, medium and large businesses, Premier Sharlene Cartwright Robinson said in an address to the nation on March 26th. The cash will come from a hefty stimulus package of $80.2 which includes boosts to the health ministry and contingency fund.
Following a request from the Government of the Dominican Republic, the World Bank released US$150 million to support the country’s efforts to implement emergency measures to contain the spread of COVID-19 (coronavirus) and manage the impact of the pandemic.
The funds are disbursed from a contingent credit line from the World Bank, better known as the Catastrophe Deferred Drawdown Option (Cat-DDO), effective since 2018. The Cat-DDO was the first of its kind in the Caribbean and supported a series of Government reforms to improve its institutional and regulatory framework for disaster resilience. Those included measures to strengthen the resilience of the health sector, in compliance with international regulations mandated by the Pan American Health Organization and World Health Organization.