Source Modern Diplomacy
The current situation in Saint Vincent and the Grenadines is alarming, as the small island developing state (SIDS) is facing multiple assaults on a lot of fronts. From battling the COVID-19 pandemic, to struggling to uphold their tourism economy; from dealing with the recent volcanic eruption to salvaging their agricultural exports, St. Vincent and the Grenadines is currently in a very grave situation indeed.
With an economy centralized around tourism, the COVID-19 pandemic had already wreaked havoc on the country’s economy as travel all around the world had slowed down, in an attempt to contain the spread of the pandemic.
However, it was the recent volcanic eruption that dealt an even greater blow to the country’s economic situation, as it led to disastrous effects on the country’s agricultural sector. These factors combined have unleashed a massive disaster for the country, as it struggles to uphold its economy, whilst attempting to deal with the fallout from the pandemic and the volcanic eruption.
The eruption of the La Soufriere volcano on the 9th of April was particularly disastrous for this small Caribbean country, as it released immense amounts of ash, dust, and smoke, that led to the evacuation of thousands of people, most of whom will not be returning to their homes anytime soon.
This will hurt the population of this small country which is comprised of just over a hundred thousand people. St. Vincent’s airspace was also closed due to this volcanic eruption, alongside a disruption in the water supply of the nation. This disruption, not only led to people having to stand in long queues to gain access to limited water supplies, further increasing COVID exposure, but also leading to massive damage to agricultural crops. Furthermore, as many farmers had to abandon their fields, agricultural production took a major hit, which drastically impacted the country’s economy. Unless they immediately take up measures to halt the assault on their economy, the situation will deteriorate irreversibly. For all Vincentians to effectively withstand these multiple assaults, regional and international aid is necessary for the small Caribbean nation.
Strong reinforcement of this call for support from the international community led to the adoption of the resolution by the United Nations General Assembly last April as proposed by the Guyanese Ambassador on behalf of the Caribbean Community (CARICOM).
“Solidarity with and support for the Government and people of Saint Vincent and the Grenadines, as well as neighboring countries affected by the impact of the eruptions of La Soufriere volcano” was received with overwhelming support, with 174 of the 193 UN member States agreeing to it.
Aside from this, there are other measures that St. Vincent can take to stabilize its economy in the long run. Firstly, the nation must reduce its dependence on tourism and a few agricultural exports alone. Diversification of exports is key here, to help the nation, survive and thrive, in case one aspect of its economy is affected. Secondly, to deal with the unreliable climate and weather changes, the country must implement the usage of climate-smart technologies and shift to digital agriculture.
Lastly, the country must work on reducing its imports and increasing its exports. This can be done effectively by encouraging public-private partnerships in the food and tourism sector, and by focusing on increasing its services and finances industry.
Another potential income stream would be to implement a limited citizenship by investment (CBI) program like what its Eastern Caribbean neighbors have done. In neighboring St. Kitts and Nevis, the government has stated that up to 35% of its revenue was derived from the CBI program in the last 5 years.
The Prime Minister of the Commonwealth of Dominica has also mentioned that over $1.2 billion dollars was made since 2017 from their CBI program. With these potential figures in mind, St. Vincent and the Grenadines can attain the much-needed funds for its recovery.
Alongside these measures, international bodies such as the World Bank and UN, and other regional bodies also need to step forward and provide economic and medical aid to the disaster-hit nation. Recently, the World Bank has approved $50 million in Supplemental Financing to help support the nation during this crisis. Further measures like these are needed to help keep the nation’s economy afloat and strengthen its fiscal sustainability.
The Caribbean economy in general needs to alter its structure, to generate more resilient economies that can handle the stresses of the pandemic and future climate catastrophes. This can be done by improving regional integration. The CARICOM intergovernmental organization can be made stronger with the inclusion of all territories and countries in the region.
The sixteen (16) independent nations and eighteen (18) associated states can work closely together to reach common goals. Strongly implementing the CARICOM Single Market Economy (CSME), eliminating tariffs and quotas, and allowing for free trade in the wider Caribbean region can help collectively boost the economies of all the countries in the Caribbean and shield them from the disastrous effects of any future economic hit.
