2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

PROGRAMME OF ACTION FORRECOVERY, RESILIENCE AND TRANSFORMATION OF THE ECCU ECONOMIES At the 97 th meeting of the Monetary Council held on 23 October 2020, the Council conditionally approved the Programme of Action for Recovery, Resilience and Transformation (PARRT) of the ECCU economies. The PARRT focuses on key policy actions that are fundamental for the recovery, resilience, and transformation of ECCU economies post the COVID-19 pandemic, which has caused the deepest economic contraction on record. The PARRT is guided by the principles of regional integration and solidarity; sustainable and innovative financing; inclusive growth; and innovation and competitiveness. It encompasses four (4) broad pillars namely: Financial Stability; Resilient and Inclusive Growth; Fiscal and Debt Sustainability; Payments Modernisation and Digital Transformation. Under each of those pillars is the specific policy actions or projects that will be implemented at both the national and regional levels to support the growth, development, resilience, and transformation of member countries in collaboration with regional and international partners (see table 1).

Table 1: Selected Key Policy Actions of the PARRT

PILLARS

KEY POLICY ACTIONS

Financial Stability

 Mitigate risks that may emerge in the financial system.  Implementation of “An Optimal Regulatory Framework for the Financial System of the ECCU.”  Implementation of a Financial Stability Framework for the ECCU.  Policy actions related to GDP growth, tourism, food security, human capital development and social safety nets.  Enhancement of climate resilience.  Investment in renewable energy.  Improve fiscal and debt management practices to support the economic recovery.  Improve tax collections and create efficiency in expenditure.  Advocate for Fiscal Risk Management systems.  Launch of the EC Digital Cash Pilot with an early expansion to all eight member countries.  Enactment of Modern Payment Systems and Services Legislation.  Fast tracking Digital Transformation.

Resilient and Inclusive Growth

Fiscal and Debt Sustainability

Payments Modernization and Digital Transformation

Several initiatives included in the PARRT have already been implemented at both the individual country and regional levels, including actions towards bolstering food security, enhancing the tourism product, digital transformation, and the recent launch of the EC Digital cash pilot – DCash wallet. This speaks to the practicality and realism of the PARRT. In addition, the ongoing volcanic eruption in Saint Vincent and the Grenadines, which is expected to have an undesirable effect on the economy, wealth and livelihoods, reminds us of the vulnerability of the region. This development further strengthens the argument for implementing the PARRT, which addresses building climate resilience, in an effort to mitigate the impact of natural disasters. However, the PARRT can only yield the desired outcomes if it is executed within a framework that consists of effective planning and administration, commitment and political will, stakeholder participation and financing, where applicable.

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