The World Health Organization (WHO) classified the COVID-19 outbreak as a global pandemic in March 2020. To date, there have been over 8 million persons infected and over 400, 000 deaths worldwide as a result of the virus. Despite it being a health crisis, COVID-19 has not only taken a toll on the persons it has infected but on businesses and economies on a whole.
In St. Vincent and the Grenadines, the effects of the virus have been no different. Most of our businesses can be categorized as micro, small and medium enterprises. And it is these businesses that are said to have been hit the hardest by the fallout from the pandemic.
Even though they can be agile in response to the changing world, MSMEs are also susceptible to shocks such as COVID-19. This is because these businesses are vulnerable by nature. Access to finance is a primary obstacle.
According to the World Trade Organization (WTO), many of these enterprises depend on international trade. This is because they either export their products through direct or indirect channels or because they import the inputs needed to manufacturer their products to sell on the local markets.
These types of businesses also account for a large portion of the employment in a country and are a major employer of women and youth.
With the disruptions in the supply chain caused by unprecedented lockdown measures enacted to contain the spread of COVID-19, MSMEs are finding it increasingly difficult to find new suppliers, deal with price increases that have occurred and also the massive drop in demand for products in most sectors.
To help business owners, governments have created stimulus packages with the focus on assisting with the effects of COVID 19. One such initiative by the Government of St. Vincent and the Grenadines is the expansion of the existing Promoting Youth Micro-enterprises (PRYME) programme. In addition support for business include loan forbearance, utility bill moratorium, VAT and Tax waivers and extension on filing income tax returns and for payment of motor vehicle licenses and liquor licenses.
To show the value placed on Micro, Small and Medium Enterprises, the United Nations in April of 2017 adopted resolution 71/279 which designated June 27 as Micro, Small and Medium- sized Enterprises Day. This was done to raise public awareness of their contribution to sustainable development and global economy.
Deah James, B.Sc., M.Sc., is an international trade and development professional with keen interest and experience in the areas of trade facilitation, sustainable development, regional integration, aid for trade and financing for development.
Today I am pleased to be moderating Webinar III in the G.O. Lynch Consultancy Inc and Associates series entitled “Post-COVID 19 Recovery & Rebuilding in the Face of Natural and Manmade Disasters“.
Join me and the all-star panel today, June 17th at 11:00 am (EST) for our panel entitled “Recovering and Transforming our Economies – New Legal, Regulatory and Trading Imperatives” where we explore the legal, regulatory and trading imperatives as we seek to rebuild Caribbean and other small island economies post-COVID and in the face of natural and manmade disasters.
There can be no denying that the coronavirus disease 2019 (COVID-19) has had a deleterious effect on livelihoods and economies around the world, with a precipitous decline in global travel, upending many traditional brick and mortar businesses and reorganising of many hospitality services. The Caribbean Region has not been exempted from the scourge of COVID-19 and the consequent economic fallout.
Whilst international supply chains and connectivity (air and sea) remained relatively stable for agri-food products, local and regional producers were faced with the double burden of market interruptions, on the occasion of the imposition of ‘stay-at-home’ orders and excess supply for agri-food products primarily targeted for the hotel, restaurants and fast-food markets. This tested the resiliency of their enterprises and by extension the agri-food sector.
Overshadowed by the COVID-19 pandemic, primary agri-food producers in many parts of the Region struggled with long term drought. The 12-month review (April 2019 to March 2020) according to the Caribbean Regional Climate Centre, indicated that conditions were severely to exceptionally dry[i]. In the absence of well-developed and implemented integrated water management plans and corresponding irrigation system, primary agri-food producers many of whom are small family farmers, reliant on rain fed agriculture were front and center, experiencing the excruciating pain of limited availability of water for their crops and livestock.
The acute water stress finds genesis in the fact that Caribbean agriculture is highly seasonal being dependent on weather. Natural climate variability but more so climate change has altered the status quo making traditional agricultural methods less efficient.
June 1st ushered in the 6-months long annual Atlantic hurricane season which according to the National Oceanic and Atmospheric Administration – Climate Prediction Center is expected to be an extremely busy season, “forecasting a likely range of 13 to 19 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher)”[ii].
The unnerving prediction can potentially exacerbate the lingering effects of both the drought and the COVID-19 pandemic on the agri-food sector, exposing its fragile structure and huge vulnerability. Interestedly, the majority of the countries in the region have been ranked as medium – high on the classification of vulnerability to external shocks – inclusive of exposure to natural hazards and climate change[iii].
Exposure to this exogenous threat is evident in the recurrent incidences of tropical cyclones of varying magnitude to befall the region over the last two decades, averaging once in less than every two years (Table 1).
Table 1 – Weather Systems Impacting the Region from 2000 – 2019
Year
Name
Year
Name
Year
Name
2000
Keith
2005
Emily
2015
Joaquin
2001
Iris
2005
Wilma
2016
Matthew
2002
Lili
2005
Katrina
2017
Irma
2003
Isabel
2007
Dean
2017
Maria
2004
Ivan
2014
Gonzalo
2019
Dorian
Additionally, over the last two decades, the Region has suffered approximately US $32 billion in damage and loss for which infrastructure, housing and agriculture were most pronounced[iv].
Notably, examples of impact of tropical weather systems in the Region are: Hurricane Ivan in 2004, was estimated to have stripped over 91 percent of the forest land and watershed vegetation in Grenada and wiped out an entire years’ crop, destroying approximately 85 percent of nutmeg trees, Grenada’s main export crop[v]. In the case of Dominica, damage and loss to the agriculture was estimated at US$170 million from hurricane Maria[vi]. Thirdly, the Bahamas reportedly lost approximately 60,000 livestock with damage and loss to agriculture assessed to be upwards of us$ 80 million as a result of hurricane Dorian[vii].
The question therefore, is whether the Region has learnt the lessons from previous catastrophic climatic events and has truthfully embarked on the journey to strengthen its agriculture resilience with a level of urgency.
Achieving Resilience
Resilience personifies the concept of having an adequate policy-induced ability for an economy to withstand or recover from the effect of exogenous shocks[viii]. More broadly put, the level of resilience will be determined by how well the actions and interplay of the various systems (political, economic & societal) can safeguard the performance of the economy[ix]. Resilience is therefore, underpinned by robust institutional frameworks to dampen or render shocks negligible or the speed to which an economy can return and surpass normal productivity following shock events.
Interestingly, vulnerability does not equate to inability to achieve resilience as seen in the “Singapore Paradox” which confirmed the paradigm that small countries with high economic vulnerability ratings can still be economically resilient and attain consistently high Gross Domestic Product (GDP) growth rates with a consummate elevated level of Gross National Income (GNI) per capita and high standard of living as measured by the Human Development Index (HDI).
As governments seek to reopen borders aimed at boosting economic activities, they cannot afford to be blindsided by COVID-19, losing sight of the imperative of building the resilience of the agri-food sector to the potential wreckage that can arise on the occasion of climatic weather events.
Hope that the next few months will bring respite from any other exogenous shock might be misplaced as this year’s Atlantic hurricane season has already recorded two named storms. Evidence of COVID-19 and the impact of tropical weather systems on the region elucidates the rationale behind the need for governments to have a long term commitment to agri-food resilience building.
Proactive steps are therefore needed to confront this looming challenge of the predictive above-average Atlantic hurricane season.
Recommendations
Having regard to the foregoing, the prevailing conditions around regional food and nutrition security and cognisant of the inexhaustible compendium of policy recommendations already available and intensely debated, I wish to highlight a few areas of consideration that I consider germane and an absolute imperative for building resilient agriculture.
Hurricane Resistant Agriculture Technology – it will be foolhardy if the region continues to promote the use of greenhouse and other protective agriculture technology (livestock, crops & aquaculture) that are not technically designed to withstand hurricanes. The urgency to sustain livelihoods or even to build back after the impact of a climatic event should not be traded for inappropriate technology ill-suited for the regions challenges. According to the United States based National Institute or Building Sciences, every $1 spent on mitigation saves at least $6[x]. Transposing this conclusion without accounting for variables would imply that investment of $175 million in disaster mitigation and appropriate climate smart technology can yield over $1 billion in savings.
Policymakers should institute a well-coordinated and systematic integration of climate adaptation principles into agriculture and food and nutrition security development policies, plans, programmes, projects, budgets and processes. For example, the Caribbean Climate Risk and Adaptation Tool (CCORAL) should be a standard feature in the evaluation of the agriculture projects. The use of CCORAL should also be augmented with sub-sector and geographic considerations to ensure local relevance.
Updating of national integrated water resources management strategies, enhancement of agriculture catchment storage capacities and aggression transition from a predominantly rain-fed agriculture approach to irrigated agriculture. Technical skills in the region should be enhanced for drip irrigation technologies with a mass proliferation of same among farming systems.
Farmers should receive training in water conservation measures, especially in drought -impacted areas. Additionally, where countries have not yet introduce funding mechanisms for water resources management, they should commence budgetary allocations for implementation, monitoring and enforcement (especially within the upper watershed, i.e. sustainable use of forest resources and disposal of agricultural waste).
Mainstreaming of climate smart and regenerative agricultural techniques – this should no longer be a buzz phrase but ought to be diligently implemented noting its potential to achieve resilient agriculture impact, especially within vulnerable communities. Simple practices such as organic mulching, agro-forestry, housing animals in raised pens or high ground to combat flooding, proper storage practices for agriculture inputs, provision of shade and ample water for livestock to safeguard animal health and protect from heat-stroke should be common practice.
Sandiford Ruel Edwards, MA, MBA, ACCA is a Development Finance Specialist with experience in many countries in the Region.
The views and opinions expressed herein are solely those of the guest author and are not necessarily representative of those of the Caribbean Trade Law & Development Blog.
[i] CariSAM Bulletin Vol 3 Issue 12 May, 2020, Caribbean Regional Climate Centre
The novel Coronavirus disease (COVID-19): a common threat that has united the world in unprecedented ways. As the pandemic rages on, however, some are getting anxious and want answers. United States (US) officials have accused China of mismanaging the coronavirus response and allege that it originated in a Chinese lab. China responded with allegations that the US military planted the virus in Wuhan.
The possibility for escalation is nigh as US President Donald Trump reportedly suggested that China may be punished for its alleged impropriety through new tariffs, sanctions and the lifting of sovereign immunity. As the US seeks to punish China, one wonders what the effects may be on the wider world.
The Global Economy
The tariffs being floated by the Trump administration as possible punishments will stifle the global economy since, being the world’s two largest economies, the US and China are very much intertwined in the global economy. Consideration must also be given to how China will retaliate to the tariffs.
Tariffs, essentially being a tax on imported goods, will make goods more expensive at a time when many businesses and consumers cannot absorb such a cost. What little spending power exists will diminish, further pushing the economy downward. The global economy’s recovery rate will be restricted as supply chains will slowly regain traction amidst low numbers of buyers and sellers. Shocks will hit small open economies especially hard as they greatly depend on foreign production that travels through the US. It is still left to be seen if the US will follow through with such plans however.
Sanctions have more versatility in the sense that they can be applied to certain businesses or individuals within the US banking system. This is effective because the US has a long reach in the world’s financial system. However, depending on where those sanctions are applied, there could be some disruption in the global supply chain because, as mentioned earlier, China is intertwined in the global system. Again, small open economies that regularly do business with China will be in trouble.
The lifting of state sovereign immunity allows American citizens and the American Government to sue China for COVID-related issues. Removal of sovereign immunity may have at least two effects. First, it allows the US wants to fight China with its own rules by allowing lawsuits. Secondly, if state-owned or state-related Chinese businesses in US jurisdictions are entangled in lawsuits, China will have to decide if staying in the US is worth the retaliatory lawsuits or risk relocation which may cause disruptions in supply chains.
Political
Considering the implications of this clash to the wider world, both parties have been working to push their narrative to their partners for support. This puts a number of countries with mutual relationships in an awkward position as they must now play chess with their words and actions which, as seen through Australia and the European Union (EU), is quite difficult.
Australia has, just like the US, called for an investigation into the virus’s origins but has stopped short of saying the virus came from a lab. To China, not overtly opposing those claims is implicit support of the US’ claims and in response, Chinese Ambassador to Australia Cheng Jingye suggested a possible shift in trade relations between the two countries. Acting on those words, China has suspended beef imports from Australia. This underscores China’s willingness to use its economic might against countries politically opposed to it. Such tactics may hurt Australia as China accounts for 36 percent of Australia’s total annual exports. Though both countries claim that the issue is separate from the pandemic, it is hard to defend that point considering the veiled threat laid by the Chinese ambassador. One must ask whether it is possible to separate the two incidents or if it would have happened but for the call for an investigation.
The EU has been under the spotlight for editing a report related to disinformation campaigns by China to appease China and for allowing China to censor an opinion piece written by the EU’s ambassador to China. The EU’s move is seen as bending more toward China by editing its report and allowing China to censor its piece. Added to this is reporting that the European External Action Service (EEAS), responsible for the bloc’s foreign policy, has been rife with problems related to each EU member state wanting to follow its own agenda. This suggests no real coordinated effort toward handling the issue and a weakening of the EU’s position as this may, theoretically, give China an opening to further cement this divide.
Despite what may appear to be the case, EU member states have stood up to China. It is reported that China attempted to encourage German Government officials to make positive spins on how it has been handling the virus but it was quickly shot down. France hastily summoned its Chinese ambassador when a Chinese diplomat wrote a piece criticising Western countries on their treatment of the elderly. President of France Emmanuel Macron and German chancellor Angela Merkel have both called for investigations into the origins of the virus but, similar to Australia, have not claimed that the virus came from a lab. Joined with that is the EU’s support of the US’ push for an investigation into the coronavirus’s origins at the WHO general assembly. These examples show that the EU is not necessarily bowing to China. Considering the historically friendly relationship between the two, the EU would not have the same motivation as the US to immediately dismiss China.
Even the World Health Organisation (WHO)?
The WHO itself has been dragged into the fray by the US as the Washington has suspended its WHO funding due to accusations that that UN agency facilitated China’s hiding of coronavirus statistics. Such an accusation suggests that the WHO abdicated its duty in order to appease China. The US’ actions also serve to weaken the WHO’s ability to help the world at large; more so those who cannot help themselves. Allowing a spat to spill over into the UN agency for health during a pandemic is seen by many critics as a way for the Trump administration to deflect any blame it is receiving for its handling of the virus domestically; especially since a Presidential election is due this November.
Conclusion
COVID-19 has led to a pandemic that took the world by surprise. Most people did not think that a virus in China would spread to the world. Nevertheless it has and people’s magnanimity has shown through like never before. However, it has devolved into a blame game between the world’s most powerful countries about how the pandemic started, capturing many other countries in the fray. But for the pandemic, would the US and China be in this situation? Probably not, but here we are. The only real way for this situation to stop is if the US recants or if China admits fault. At this point, neither seems likely. One can only hope that the war of words between the two countries does not escalate to a point of no return that drags the rest of the world down as a result.
Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.
Caribbean Trade Law and Development 
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