Compiled By NAN Business Editor
News Americas, NEW YORK, NY, Fri. June 26, 2020: Here are some of the top business and finance news making headlines across the Caribbean this week.
“As the pandemic subsides and the world economy recovers, we are projecting a partial recovery in the region of 3.7 percent in 2021.”
That’s the word from the IMF’s Managing Director, Kristalina Georgieva, at Conference of Latin American and Caribbean Leaders organized by the Government of Spain.
Georgieva noted that “within the region, the Caribbean economies are suffering even more due to their high dependence on one of the most dramatically impacted sectors—tourism—which, for some, accounts for 50 to 90 percent of GDP and employment” and she noted that “the approach of the hurricane season poses additional risks.”
Still Georgieva recognized that “the policy response in the region has been swift.”
“Central banks have intervened effectively, using all tools of monetary policy, through lower rates and expanded balance sheets,” she added. “Given the scale of the crisis and unprecedented uncertainty, governments have had to also deploy fiscal measures to strengthen the health system, protect the most vulnerable and support employment and otherwise viable businesses.”
Caribbean CFO’s On COVID
The latest PricewaterhouseCooper’s (PwC) survey of 989 chief financial officers (CFOs) in 23 countries and territories, including over 40 CFOs in Jamaica and across the Caribbean, has found that 64 percent of businesses fear a second wave of coronavirus infections from COVID-19.
The (PwC) COVID-19 CFO Pulse Survey found that the majority of CFOs surveyed expect COVID-19 to decrease revenue/profits by 10 per cent or more, with 11 per cent indicating that while they expect a decrease, the range is unknown.
The second biggest concern is the impact of a global economic downturn as a result of the COVID-19 pandemic with 61 percent expressing interest.
Most Caribbean CFOs, or 70 percent compared to 63 percent globally, stated that offering new or enhanced products or services was most important to rebuilding or enhancing their revenue streams. None are considering making cuts to digital transformation or cybersecurity.
Fifty-percent of respondents said they are also considering deferring or cancelling planned investments as a result of COVID-19; 32 percent say in the next month they expect a productivity loss due to lack of remote work capabilities while 34 percent say in the next month they expect a change in staffing due to low/slow demand, temporary furloughs), the study found.
The World Bank Board of executive directors approved the regional Caribbean Digital Transformation Project for a total of US$94 million for four Eastern Caribbean countries: Dominica (US$28 million), Grenada (US$8 million), Saint Lucia (US$20 million), Saint Vincent and the Grenadines (US$30 million), and the Organisation of Eastern Caribbean States (OECS) Commission (US$8 million) to build an inclusive digital economy.
This is the first World Bank-financed project to support the development of the digital economy in the Caribbean. It aims to increase access to digital services, technologies, and skills by governments, businesses, and individuals.
Digicel, owned by Irish businessman Denis O’Brien (pictured) and based in Kingston, Jamaica, won 97% support from holders of US$937 million worth of notes and 99% support from holders of notes worth $993 million.
The move will reduce Digicel’s debt from $7 billion to $5.4 billion, said the company. This will reduce its annual interest payments by around $125 million. The company filed for bankruptcy protection in late May, saying its debt was unsustainable. According to filings in New York at the time, it had $7.4 billion in outstanding debt, with revenues for the year ending March 2020 just $2.3 billion and operating profit only $479 million.
Marriott International on Thursday announced that long-time company executive Brian King has been appointed President of the company’s Caribbean and Latin America region.
King will take on his new role in January 2021 and will report to Craig Smith, who will assume the role of Group President, International at that time. Mr. King succeeds Tim Sheldon, who recently announced his retirement.
Caribbean Airlines (CAL), has recorded a loss of more than US$14 million in just over a one month period, as a result of the impact of the coronavirus (COVID-19), the Minister in the Ministry of Finance, Allyson West, has said.
She told the senate that the airline, during the period March 23 to April 30, had estimated its losses at US$14.2 million. “The impact was further exacerbated following the closure of our borders at midnight on March 22. As a wholly owned state enterprise Caribbean Airlines Limited has complied with government policy during the COVID-19 pandemic and maintained all of its staff on payroll,” she added.
Fernanda Delgado, a senior researcher for Brazilian thinktank FGV Energia; Eduardo Pereira, a senior researcher at the Brazilian University of Sao Paulo; and Michael Jaganan, a senior researcher at the University of the West Indies in Guyana say Guyana must embrace transparency in order to realize oil wealth.
Writing in the Petroleum Economist, the researcher said “…while there is huge potential, Guyana’s lack of experience could have detrimental consequences.”
“The former British colony needs to learn important lessons from its Latin American peers to capitalize on its resource potential and the abundant financial opportunities ahead,” the article states.
The researchers also warned that a “failure to diversify the economy will make Guyana increasingly vulnerable to volatile oil prices, as exhibited by Venezuela’s historic GDP collapse since 2014 and more recently in the fallout from the Covid-19 pandemic.”
Trinidad & Tobago
Six petrochemical plants have now been shut down at the Point Lisas Industrial Estate in the last six months.
The country’s largest ammonia producer Nutrien has closed its Number One plant and will decide in two weeks whether it is going to remain shut or if it will be reopened. he company’s managing director Ian Walcott said told the Trinidad Guardian this week that the challenge remains low demand, soft international prices and the cost of natural gas in T&T.
He said the closure of the latest plant was linked to the “continued deterioration of the economics.”
Walcott said initially, the plant was shut down due to a mechanical problem, but the company took the opportunity to stop its operations as the market remained soft. The closure of the plants takes 1.2 million tonnes per annum out of production. The plants are essentially carbon copies of each other with an annual capacity of 600,000 tonnes each per year. Nutrien said the major challenge to the business in Trinidad remains the high price of natural gas.
Antigua & Barbuda
Antigua and Barbuda has entered a new era for digital asset businesses, after its pioneering Digital Assets Business Bill 2020 came into law earlier this month.
The law was formally added to the statute books on June 18, introducing a new and comprehensive regulatory framework for digital asset businesses, clients and customers.
The Act has been welcomed by businesses in the sector, with Antigua fast emerging as a global hub for Bitcoin BSV and other digital assets tokenized on top of the massively scaling original Bitcoin protocol.
Among those supporting the law is the Bayesian Group, which worked with government to advise on the legislation. A spokesperson for the group said the laws would bring more trust and credibility to the sector.