The Cayman Islands is not ruling out calling on the British government for financial support in some form as its grapples with the economic impact of the COVID-19 pandemic.
London has indicated that it will look sympathetically on such a request.
Hon. Premier Alden McLaughlin has confirmed that the UK fall-back option is on the table and His Excellency, Governor Martyn Roper, has assured that the UK response would be favourable.
Although Cayman is in a strong financial position with a budgetary surplus and reserves to cover at least three months, Premier McLaughlin has said that he was not ruling out the possibility of a prolonged slowdown.
He said the priority to is secure jobs and keep public services running.
Addressing the options available to the territory, the Premier said a range of possibilities are under consideration.
“What we cannot allow is for Government to become cash-strapped so that we can’t pay our outgoings and we can’t support our people in this time of need.
“We will do everything we have to do and call on the UK to assist us in that regard,” he said.
Mr McLaughlin said the type of support he is considering was not necessarily direct funding but “to relax ratios around public finances so that we can do what we need to do to get through this time.”
Governor Roper in lending his support said, “the UK is already very carefully looking into all that, and of course will be very sympathetic to the situation that all the Overseas territories face, so I don’t envisage that being a problem.”
With the cancellation of this month's Joint Ministerial Council meeting, the UK Overseas Territories Minister Lizz Sugg had given a commitment that Britain would support the territories through this crisis.
That support is predicated more towards the immediate healthcare challenges.
The unexpected onslaught of the COVID-19 pandemic is already threatening to send the UK and OTs economies into a tailspin.
In the UK, the Boris Johnson administration making unprecedented levels of interventions to prevent the economy from going into free-fall.
CAYMAN CORPORATE INITIATIVES
In Cayman, Premier McLaughlin has reported that amid the still-unfolding COVID-19 crisis, there were encouraging initiatives coming from the business sector.
In what he referred to as “some good news”, Mr McLaughlin reported that on measures being taken by the banks, Cayman Water Company and the fuel supplier Rubis.
“I am really happy to say that I am so pleased that corporate Cayman is so conscious of the need to help everyone get through these most difficult economic times that are yet to come.”
He announced that Cayman National Bank will offer a three-month payment holiday to current borrowers and Cayman Water Company will suspend disconnections for at least 60 days and offer payment plans.
The fuel-supplier Rubis has reduced the rack rate of fuel by 40 cents a gallon and is urging retailers to pass on the saving at the motorists.
Premier McLaughlin has applauded has these initiatives.
“Those provisions are going to offer major breaks to all of us as we struggle through what is bound to be a difficult economic period for the foreseeable future.”
On the question of tax waivers on fuel duty to reduce electricity bills, the Premier is of the view that reducing the current rate of 25 cents a gallon would have little or no effect.
He said a main concern for Government was the likelihood of job losses and how best the government could shore up businesses and secure employment.
Mr McLaughlin also disclosed that given the scale of the challenge now confronting the Cayman Islands due to COVID-19, he is taking the unusual step of inviting the Opposition to upcoming meetings he is convening with Cabinet and the Caucus to discuss the territory’s response and long term outlook.
“These are issues that deserve and warrant national discussion and so we certainly want to involve the Opposition in those talks,” he said.
According to the Premier, “Even if this epidemic were to come to a screeching halt in a month’s time, what’s happening more broadly to the global economy will take much longer to come back anywhere near where it is now.
“We all have to plan and make provisions for what are going to be very lean times through the end of the year at least,” he said.
The state of government finances is also to be discussed in a special meeting being planned to look at the broad economic implications of the slowdown caused by the COVID-19 crisis.
While he again reminded that while Government’s financial situation is still robust due to fiscal prudence practised over the past seven years, the Premier noted that significant challenges lie ahead.
“Tourism is in tatters, providing no income and financial services are likely to be affected over time.”
He said that Government needs to plan to make sure that Government is in a position to pay bills and salaries, and “to do what is necessary to help our people just survive in this difficult time”.
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