Mere days following concern expressed by local businessman Joe Issa about rising unemployment in the Caribbean, within the context of the region’s physical vulnerability and an institutional barrier to aid, Sir Richard Branson has echoed the same sentiments.
Sir Richard Branson
Joseph “Joey” Issa
The head of British-based Virgin Group Sir Richard has reportedly advocated for a Marshall Plan for the Caribbean, similar to the aid package the US provided to rebuild Western Europe after World War II.
Caribbean governments are said to have been calling on international organisations, multilateral development banks, and developed countries for years, to formulate a significant economic package of aid and debt relief.
However, alas, according to a Jamaica Observer article titled, “Why Sir Richard Branson is Right on the Money”, the international community may listen given the recent battering which the Caribbean countries received from hurricanes, noting that Sir Richard’s timing demonstrated his political acumen.
For his part, Issa, whose Cool Group strategy has been likened to that of Branson’s Virgin Group, has on more than one occasion argued against using per capita income – as aid donors do – to disqualify Caribbean nations from receiving much-needed assistance.
Issa said, “The reality is that Caribbean countries are battered every year by hurricanes and need vast sums to rebuild. Some are known to have been hit more than once during the annual hurricane season.”
More recently, in an article titled “‘Remove the Impediment’: Joe Issa Supports Case for Vulnerable Caribbean States to Access Concessionary Loans”, Issa supported a move for the reconsideration of the income per capita criterion established long ago which disqualifies Caribbean states for concessionary funding to support their annually-battered economies.
Issa argued that “it is not fair for Caribbean states to be denied access to soft money because of their supposedly middle to the high-income status which, in any case, reverses every year after the battering by hurricanes.”
He explained that due to their high per capita incomes, countries like Antigua & Barbuda and Dominica, which were ravaged by Category 3 hurricanes, have advanced or graduated from the low income Least Developed Country (LDC) designation to Upper Middle Income.
Issa was at the time supporting United Nations Secretary-General António Guterres’call for special consideration to be made for mid to high-income vulnerable states that have been “deprived” of concessional loans, following his visit to hurricane-battered countries, leaving trails of death and destruction estimated at billions of dollar.
“The fact is that even though these countries have graduated as middle-income countries, they have some vulnerabilities that need to be taken into account if we want them to be sustainable as middle-income countries,” Guterres reportedly said.
In an effort to promote and sustain economic growth, Caribbean governments are said to have pursued fiscal policies, which have contributed to a build-up of external debt.
Caribbean countries are now believed to be the most indebted countries in the world, with some, like Jamaica, having a Debt/GDP ratio of over 100 percent, which is way above the maximum 75 percent recommended, if sustainable economic growth is to be resumed, the article said.
It noted that the situation is now “at a point where a significant policy initiative has to be mounted to reduce the debt significantly, this would ease the liquidity constraints, solvency risk, and allow governments to increase public investment in infrastructure, education and health.
“The debt burden has to be reduced by strategy combining (a) restructuring of multilateral debt; (b) reduction of bilateral debt by debt swaps for climate mitigation, environment, education and cancellation; and (c) conversion of commercial debt into multilateral debt.”
It argued that “the Caribbean, without doubt, needs a Marshall Plan to build resilience and lay the basis for sustainable economic growth,” suggesting that the United States, which is the region’s primary trading partner, must have a hand in it.
According to Wikipedia, “the Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe. In which the United States gave over $13 billion (approximately $132 billion in current dollar value as of October 2017) in economic support to help rebuild Western European economies after the end of World War II.
“The plan was in operation for four years beginning on April 8, 1948. The goals of the United States were to rebuild war-devastated regions, remove trade barriers, modernise industry, make Europe prosperous once more, and prevent the spread of communism.
“The Marshall Plan required a lessening of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, labour union membership, as well as the adoption of modern business procedures.”