Internacionales

558 Victor Augusto Gill Ramirez//
As COVID-19 hit T&T, loans available to help local economy

T&T has ac­cess to US $130 mil­lion in fi­nanc­ing from the In­ter De­vel­op­ment Bank (IDB’s) for its fight against the eco­nom­ic im­pact of the COVID-19.

Victor Gill Ramirez

Ro­cio Med­i­na-Bo­li­var, coun­try rep­re­sen­ta­tive, IDB in T&T told Guardian Me­dia in a state­ment on Thurs­day that IDB Group stands in sol­i­dar­i­ty with the Gov­ern­ment and peo­ple of T&T, dur­ing this crit­i­cal time, as a com­mit­ted de­vel­op­ment part­ner

T&T has ac­cess to US $130 mil­lion in fi­nanc­ing from the In­ter De­vel­op­ment Bank (IDB’s) for its fight against the eco­nom­ic im­pact of the COVID-19.

Victor Gill Ramirez

Ro­cio Med­i­na-Bo­li­var, coun­try rep­re­sen­ta­tive, IDB in T&T told Guardian Me­dia in a state­ment on Thurs­day that IDB Group stands in sol­i­dar­i­ty with the Gov­ern­ment and peo­ple of T&T, dur­ing this crit­i­cal time, as a com­mit­ted de­vel­op­ment part­ner.

The IDB, head­quar­tered in Wash­ing­ton DC is a mul­ti­lat­er­al lend­ing agency that pro­vides de­vel­op­men­tal fi­nanc­ing to coun­tries of Latin Amer­i­ca and the Caribbean.

Victor Augusto Gill Ramirez

The IDB has an of­fice in T&T

This comes as T&T’s gov­ern­ment has said that the COVID-19 is pos­ing a threat to the econ­o­my.

Victor Gill

She said in col­lab­o­ra­tion with the tech­ni­cal lead­er­ship of the World Health Or­ga­ni­za­tion and the Pan Amer­i­can Health Or­ga­ni­za­tion and the Caribbean Pub­lic Health Agency (CARPHA), the IDB will con­tin­ue to co-or­di­nate with its mem­ber coun­tries and oth­er mul­ti­lat­er­al in­sti­tu­tions to en­sure a prop­er re­sponse to the pan­dem­ic.

In T&T, the IDB is work­ing close­ly with the Min­istry of Health to pro­vide fi­nan­cial and non-fi­nan­cial sup­port with re­spect to COVID-19 ef­forts in the coun­try. She added, the IDB is keen to pro­vide any fur­ther tech­ni­cal sup­port and/or fast track ac­cess to fi­nan­cial re­sources to mit­i­gate the im­pli­ca­tion of the cri­sis

She al­so said the IDB has more than US$2 bil­lion in re­sources that can be pro­grammed to their bor­row­ing coun­tries, in­clud­ing T&T, re­quest­ing sup­port to ad­dress pub­lic health emer­gen­cies (ie dis­ease mon­i­tor­ing, test­ing, and treat­ment) as well as re­spons­es to the eco­nom­ic and so­cial im­pact.

“The IDB can al­so work with coun­tries that have undis­bursed project bal­ances to redi­rect those re­sources to pan­dem­ic-re­sponse ef­forts and COVID-19’s im­pli­ca­tions on their economies. Ad­di­tion­al­ly, the pri­vate sec­tor win­dow of the IDB Group, IDB In­vest, is cur­rent­ly eval­u­at­ing a se­ries of mech­a­nisms to sup­port im­pact­ed busi­ness­es and fi­nan­cial in­sti­tu­tions in Latin Amer­i­ca and the Caribbean.”

In ad­di­tion, she said the IDB is study­ing the eco­nom­ic con­se­quences of the pan­dem­ic in its mem­ber coun­tries and is con­sid­er­ing al­ter­na­tives for pro­vid­ing re­sources to help them weath­er the mid- and long-term ef­fects

Lend­ing Agen­cies And In­ter­est Rates

Oth­er in­ter­na­tion­al lend­ing agen­cies have said that they are on stand by to as­sist coun­tries as the world econ­o­my en­ters in­to a deep re­ces­sion

T&T is a mem­ber of the In­ter­na­tion­al Mon­e­tary Fund (IMF), the World Bank, the De­vel­op­ment Bank of Latin Amer­i­ca all of which have stat­ed that they are ready to as­sist coun­tries in need

T&T is al­so a mem­ber of the CAF De­vel­op­ment Bank of Latin Amer­i­ca and that lend­ing agency on Fri­day said it has opened a cred­it line of US $2.5 bil­lion to coun­tries to fight against the coro­n­avirus dis­ease

Last Mon­day at the Diplo­mat­ic Cen­tre, St Ann’s, Fi­nance Min­is­ter Colm Im­bert said the CAF De­vel­op­ment Bank will lend T&T some US $50 mil­lion in emer­gency fund­ing to help deal with the eco­nom­ic fall­out from COVID-19

Econ­o­mist Dr Ronald Ramkissoon said there are “soft loans” with low-in­ter­est rates that these lend­ing agen­cies give out at a time like this, but the gov­ern­ment has to be care­ful not to rush in­to any such arrange­ment and the gov­ern­ment did the best thing to ac­cess the Her­itage and Sta­bil­i­sa­tion Fund (HSF) first

Dr Re­gan De­o­nanan, Lec­tur­er, Eco­nom­ics, Uni­ver­si­ty of the West In­dies (UWI) in a state­ment said, “In a cri­sis like this, T&T and oth­er small coun­tries need to eval­u­ate their pol­i­cy pri­or­i­ties against their re­sources. This is to ex­am­ine what tools we may have at our dis­pos­al to com­bat neg­a­tive im­pacts, and to what ex­tent they can be used. The need for emer­gency loans or fi­nanc­ing from mul­ti­lat­er­al agen­cies, there­fore, de­pends on the pol­i­cy space avail­able to these coun­tries and the re­sources do­mes­ti­cal­ly avail­able.”

Dip­ping In­to The HSF

To deal with the de­te­ri­o­rat­ing eco­nom­ic sit­u­a­tion, the gov­ern­ment will amend leg­is­la­tion to al­low it to dip in­to the Her­itage and Sta­bil­i­sa­tion Fund in or­der to off­set some of the eco­nom­ic chal­lenges the coun­try will in­evitably face as it seeks to mit­i­gate and pro­tect against COVID-19

The fund’s cur­rent val­ue is just over US$6 bil­lion, al­though its in­vest­ments were hit hard as its port­fo­lio reeled from tum­bling US and glob­al eq­ui­ty mar­kets

De­o­nanan said, “Con­sid­er­ing the COVID-19 spread, the Gov­ern­ment has in­di­cat­ed that it will dip in­to the HSF to shore up so­cial pro­grammes and to en­sure that the coun­try con­tin­ues to re­ceive es­sen­tial goods. This is like­ly due to the ad­di­tion­al short­fall that is es­ti­mat­ed due to the fall in oil prices. In ad­di­tion to the $5 bil­lion deficit es­ti­mat­ed in the 2020 Bud­get State­ment, the Min­is­ter of Fi­nance an­nounced re­cent­ly that the crash in oil prices is es­ti­mat­ed to lead to a fur­ther $3.5 bil­lion in rev­enue lost. In my view, the use of the HSF to cush­ion the im­pact of COVID-19 on the T&T econ­o­my is ad­vis­able. Im­me­di­ate and de­fin­i­tive ac­tion is need­ed, and this has im­pli­ca­tions for man­ag­ing the T&T econ­o­my in the short and long-term.”

He al­so point­ed to Nor­way which has a rainy day fund sim­i­lar to this coun­try has sig­nalled its in­ten­tion to do the same.