SUM TO FINANCE BOTH CAPITAL INVESTMENTS AND CURRENT EXPENDITURE IN THE 2021/2022 BUDGET.
Saint Lucia is positioned to have increased access to funding for managing and mitigating the socio-economic impacts of COVID-19.
Parliament has approved authorization for the Prime Minister and Minister of Finance, the Hon. Allen Chastanet to borrow an amount of USD$30,000,000 from the International Development Association to finance the COVID-19 Response, Recovery and Resilience Development Policy Programme.
The Prime Minister, during a Sitting of the House of Assembly on Feb. 23, explained that the funds would go toward addressing the many challenges posed by COVID-19. Mr. Chastanet told the House of Assembly that the negative impact on Saint Lucia’s productive capacity, both in the public and private sectors is directly correlated with the performance of the fiscal accounts.
“Our fiscal space has been constrained by the low performance of Central Government revenue and increased public health care expenditure. This limits the extent to which policy measures can be adopted to provide adequate stimulus to cushion shocks from the current economic downturn.
“This policy-based loan is therefore underpinned by prioritized structural reform measures agreed to, with the World Bank under IDA 19 Sustainable Development Financing Policy. This Programme supports the government’s actions to recover the economy from the short-term impact of COVID-19, especially, in relation to the health sector, relief to vulnerable households and businesses. The programme also seeks to build cross sectoral resilience through the strengthening of public sector governments and provide the impetus for private sector participation in the overall economic recovery.”
The COVID-19 Development Policy Programme is expected to leverage government efforts in three primary areas.
Protecting Lives and Livelihoods: This will be achieved by continuing to focus on structural measures and interventions that will strengthen the social protection system for the most vulnerable.
Ensuring Business Continuity and Strengthening Resilience: This component will focus on our current efforts in saving jobs as well as strengthening the support to the Fisheries sector through the implementation of the Insurance Mechanism Caribbean Oceans and Aqua Culture Sustainability Facility. In relation to business continuity additional liquidity support will be made available to medium small and micro enterprises (MSMEs) as we work toward economic recovery.
Legislative Reforms: This area focuses on reforms in Public Financial Management, Public Procurement as well as the improvements of Public Debt transparency and Public Debt management for the post crisis recovery.
With the view of saving lives and preserving livelihoods the Government of Saint Lucia since the onset of the COVID-19 pandemic, has channeled significant resources in undertaking the Social Stabilization Programme, the Economic Recovery and Resilience Plan as well as the initial health response.
Prime Minister, Hon Allen Chastanet said: “Some of these initiatives are expected to continue into the new fiscal year and will require significant financial outlays. The sharp increase in positive COVID-19 cases since January 2021 has increased the pressure on an already fragile health sector. Despite the Sector benefiting from significant donor – financial and technical assistance a huge deficit still remains.”
The sums expended in retrofitting and outfitting the respiratory hospital and clinics, rental of premises to serve as isolation and quarantine facilities and the increased capacity for testing significantly impacted the Government’s financial resources. The funding of the COVID-19 Response, Recovery and Resilience Development Policy Programme from the IDA will therefore finance both capital investments as well as current expenditure in the 2021/2022 budget. It will not only support the containment of the spread of COVID 19 among the citizens but will undergird the economic recovery of the local economy.
