Economic Winds of Post COVID-19 Impact Being Felt in Grenada
By Michael Durn
An occasional correspondent for G-FE
Strategic economic decisions taken by successive governments have made the economy of Grenada, Carriacou and Petite Martinique heavily dependent on tourism. The most recent figures state that agriculture contributes 11% of GDP, with industry and services responsible for 20% and 69% respectively. The services element of the economy is made up, in large part, of tourism and associated services. Fifteen years ago the government illustrated its commitment to tourism as the foundation of Grenada’s economy by building a dedicated cruise terminal and integrated shopping centre in the capital St Georges.
This now lies silent as COVID-19 attacks the world’s economy and drives Grenada into a lockdown of its 124,000 citizens. The corona virus has affected many lives for the past 3 months in various communities across the tri-island state. Firstly, the poor in different parts of Grenada are struggling to provide the basic needs for their families. The surge of the COVID-19 has caused businesses to close their facilities and send their employees home; some with pay most without. Persons are now at home relying on their employers or the government to provide benefits, funds or food to maintain their household.
It is believed that a substantial minority are having to deal with the mental stress caused by the lockdown. A short while ago two men from the Morne Fendue area of St Patrick committed suicide, allegedly due to the pressure brought about by their economic situation. This is very sad and tragic since people are worried of the outcome of the corona virus pandemic and how they are going to continue to maintain their families during this crucial time.
Secondly, according to the Now Grenada newspaper, the unemployment rate has risen to 24% which means Grenada has the highest unemployment rate in the Caribbean due to the outbreak. Across the country many are not receiving any income. Individuals who are deemed essential workers are earning wages. These employees are principally civil servants, such as aviation/airport officials, police officers, medical officers, nurses, physician, farmers, supermarket staff, accounting personnel, bank and credit union employees. They form a small minority of the workforce and in many cases they are on part time duties.
Consequently, there is a reduction in the flow of income and expenditure across the country. Currently people are focusing only on how they can get the basics rather han the normal combinations of goods and services.
Thirdly, the flow of revenue in Grenada has slowed leading the GDP to drop over 30%. The credit union and banks are now obligated to facilitate customers by extended their loans by giving them sufficient time to make payments. Moreover, the most valid accessibility the people need, is the transportation services. The operators of transportation services are now struggling to maintain a living since they are not allowed to work during the pandemic, which puts a strain on them and their family.
Another major sector affected by the pandemic is tourism. As outlined above, this is where Grenada obtains most of its foreign revenue. The tourism sector is now struggling, with business owners shutting down their operations and sending employees home. It is uncertain when or if these employees will return to work or be rehired. For instance, those hotels which are in the True Blue area of St George are fighting to survive since they earned their income from foreign students attending the prestigious of St. George’s University.
In short, everyone in Grenada is going to suffer, in the short to medium term at least, from the horrific economic after-effects of COVID-19. However, the poor people of Grenada, who comprise 35% of the population and survive by undertaking casualised labour, are going to be devastated by the effect of the virus as they will suffer more.
The Government and all political parties in Grenada and across the region now need to consider the economic and social model they will follow when COVID-19 becomes history. The “new normal” has to be substantially different from the existing framework, which relied heavily on tourism at the expense of a sustainable local alternative. Many commentators have urged a back to the land model of agricultural development and inter-country industrial development.
We wait and see.