The 3rd annual Cayman Islands Chamber of Commerce Economic Forum coming up this weekend is expected to not just address but chart a course forward on how best to resuscitate the jurisdiction’s economy in light of the battering it has taken from the COVID-19 pandemic.
Like countries the world over, Cayman has had to rapidly adjust in ways hitherto unexpected and experienced, to the almost overwhelming challenge posed by the pandemic.
By any stretch of the imagination, we are living in era-defining times that will set the template of how our societies and economies will function for the foreseeable future.
Importantly, the ‘cost of COVID’ will be with the world for years to come as countries adjust their economic policies and make the financial adjustments, and prepare to pay the bill for the astronomical amounts they’ve had to dole out to keep their economies and societies afloat through this pandemic.
Right here in Cayman, the hit to the economy, and the government’s budget, has been significant.
The Cayman Islands government had unleashed a series of measures to cushion the effects of the pandemic on the business sector and citizens with a range of funding support including early access to pension funds for private-sector workers.
The government’s COVID-19 Economic Assessment and Stimulus Plan had projected that revenues could contract to between CI$632 million and CI$ 649 million this year alone.
With the increased spending to manage COVID-19, the government was facing a deficit this year of up to CI$ 250 million.
Reserves of CI$ 621m which were regarded to be in a healthy position pre-COVID-19, are now seen as under severe strain.
In addition to government' social and economic support measures, banks, utility and other companies have been providing relaxed terms to their clients.
The conundrum facing Cayman is not unlike that confronting other countries in the region, as well as the major global economies such as the ‘mother country’ the United Kingdom; Cayman’s main trading source for tourism, products and services, the United States; and other countries.
In the UK, the impact of the pandemic has forced the government into an extensive package of support measures for businesses and employees.
These range from a furlough scheme with the government paying most of the salaries of private-sector workers forced to stay off the job because of the crisis, alongside a package of other welfare support linked to a person’s employment status.
The furlough scheme alone was costing the government almost £14 billion a month.
The government is seeking to gradually withdraw support as the scheme costs an estimated £14 billion a month and was expected to cost in the region of up in direction of £100 billion by October which officials said was “a staggering amount.”
New unemployment figures put the unemployment rate at a high of almost 4% with over 780,000 forced out of work since the start of the coronavirus lockdown.
There were fears that UK unemployment could rise to almost 15% of the working population if the country experiences a second wave of the coronavirus pandemic.
The US, a beleaguered President Trump - under pressure for his handling of the crisis and facing a tough re-election in November - has already allocated a record stimulus package costing US$ 2 trillion, the largest economic stimulus in US history covering corporations and the public.
The final tab was expected to almost triple over time.
President Trump has just signed off another series of controversial executive orders expanding the coronavirus economic relief to Americans struggling during the pandemic.
By last month, the US national unemployment rate had topped 10 percent.
Canada had put in place a Temporary 10% Wage Subsidy as a three-month measure that allows eligible employers to reduce payroll deductions.
The Canadian government has also doubled the duration of its Work-Sharing program from 38 weeks to 76 weeks for employers affected by COVID-19.
The country also has in place a Canada Emergency Response Benefit (CERB) for workers which has also been extended.
The CERB gives financial support to employed and self-employed Canadians who are directly affected by COVID-19.
Countries in the Caribbean, which mainly rely on tourism, are not faring any better and in the main, are in a much more precarious position even when compared to Cayman.
Governments have announced several measures to deal with COVID-19 and some are exploring stimulus packages to assist businesses and workers.
In Trinidad which just had an election returning the incumbent People's National Movement (PNM) to power, the COVID crisis was an inescapable feature of the election campaign.
The government was already paying up to 75% of the salary of employees sent into technical unemployment by companies affected by the coronavirus crisis.
The banking sector has also been offering relaxed payments for their clients and there has been a range of social and economic assistance measures across various sectors of the economy.
Barbados was already under a strict pre-coronavirus International Monetary Fund(IMF) economic bail-out including numerous lay-offs in the public sector.
Now, among the additional measures the government is now considering due to COVID-19, the government is considering offering “fully tradeable financial instruments” instead of demanding they accept a percentage of their monthly salaries in bonds.
The concept is aimed at forcing people to save while cutting down on government payments in the interim.
The Jamaica government is pursuing a COVID-19 Allocation of Resources for Employees (CARE) Programme as one of its innovations to assist workers to cope during the crisis.
That programme is intended to provide temporary relief in the form of cash transfers to cushion some of the impacts faced by individuals and businesses.
Meanwhile, in the private sector, utility companies were also offering payment waivers to their clients.
It is clear from this snapshot the extent to which COVID-19 has put the economy of Cayman, the region and the world into a tailspin.
How we recover and parachute down to a relatively soft landing from this is going to call for skillful collaboration between government and businesses to cushion the effects of COVID-19.
This weekend’s third economic summit will undoubtedly be the most important to date and could very well be for some time to come.
That’s why it must be more than just a talkshop but a real 'work' shop.
The sole focus should be getting Cayman back to work while camping with the pandemic.
Lives and livelihoods depend on it.