British Virgin Islands

Monday, Jun 01, 2020

No correlation! Gov't has not met criteria of an 'economic stimulus'

No correlation! Gov't has not met criteria of an 'economic stimulus'

Opposition Leader Marlon Penn has described the first phase of government’s COVID-19 Economic Stimulus Response Plan as nothing but a dysfunctional approach to economic recovery.

In a seven-point bulletin released on Tuesday, government had said its economic stimulus plan so far included initiatives such as a $12 million-purchase for medical supplies, $2 million funding for farmers and fisherfolk, the purchasing of food and medication for seniors and needy residents, and an $800,000 investment in house-to-house garbage collection.

Penn, however, said there is “no cohesiveness” between those initiatives and the reawakening of economy.

“You can’t just take $12 million here and drop it over there, take $2 million here and drop it over there and there is no correlation in terms of what you are doing to stimulate workers and families, and what you are doing to move the economy at the same point. They both have to work hand in hand,” the Opposition Leader said.


Criteria of a stimulus not met

Also responding to the bulletin, senior Opposition legislator Julian Fraser said that a number of the initiatives outlined within government’s economic response did not meet the criteria to be considered an ‘economic stimulus’.

He said: “This (bulletin) that I am looking at is concern to me. [It] has no relevance as far as stimulus is concerned. I talked about the garbage collection, substituting house-to-house collection for bin collection. That’s a trade-off, that’s not a new initiative.”

“This particular item is not new money, this is monies that was being spent to pick up garbage anyway. I am saying that government has not addressed the issue of stimulus for the country, its people and the economy. That has not been addressed, not by what I am looking at here,” the senior legislator further argued.


Government afraid to use Reserve Fund?

Fraser also questioned government’s reluctance to utilise the Reserve Fund which is reported to have roughly $75 million.

He said the fund was established for crises such as the COVID-19 pandemic which has cause major disruptions to livelihoods and the wider local economy.

“It is not as if when you use out of the $75 million, you’re depleting government’s monies. Government will still have its consolidated fund, will still have its pension fund, will have its disaster fund and all the other funds, and that’s what that money is for,” Fraser stated.

“That $12 million [for medical supplies] was not budgeted for. That has to be a reallocation. So if you are taking monies that were budgeted for something else, and reallocate it to do something else, that is not a stimulus, the appropriate place to have that money from was the reserve, then you are stimulating the economy because you are putting additional money into the economy,” he added.

Government had indicated that they will be revealing phase two of their Economic Stimulus Response Plan on Thursday, May 28.

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