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Human and Economic Impact Assessment UNDP, UNICEF and UN Women COVID-19 | Policy Documents Series UNDP,UNICEF and UN Women EASTERN CARIBBEAN ANGUILLA COVID-19 MACROECONOMIC AND HUMAN IMPACT ASSESSMENT DATA Based on research conducted by Dr. Simon Naitram www.bb.undp.org https://caribbean.unwomen.org www.unicef.org/easterncaribbean COVID-19 | POLICY DOCUMENT SERIES COVID-19 | IMPACT ASSESSMENT DATA FOR THE EASTERN CARIBBEAN POLICY DOCUMENTS SERIES ANGUILLA Macroeconomic and Human Impact Assessment Data ANTIGUA AND BARBUDA Macroeconomic and Human Impact Assessment Data BARBADOS Macroeconomic and Human Impact Assessment Data BRITISH VIRGIN ISLANDS Macroeconomic and Human Impact Assessment Data COMMONWEALTH OF DOMINICA Macroeconomic and Human Impact Assessment Data GRENADA Macroeconomic and Human Impact Assessment Data SAINT LUCIA Macroeconomic and Human Impact Assessment Data SAINT VINCENT AND THE GRENADINES Macroeconomic and Human Impact Assessment Data Disclaimer: COVID-19 Policy Documents Series April 2020 The views, designations, and recommendations that are presented in this report do not necessarily reflect the official position of UNDP, UNICEF or UN Women. 2020 | UNDP, UNICEF & UN Women 2 COVID-19 | POLICY DOCUMENTS SERIES COVID-19 MACROECONOMIC AND HUMAN IMPACT ASSESSMENT FOR ANGUILLA INDICATORS VALUE Demographic Age Dependency Ratio (AP&H Census, 2011) 45% % of Labour Force Female 51% Population 13,572 Children Population (0-17 years) 3,778 Male 1,908 Female 1,870 Macroeconomic GDP percapita (UNSD, 2018) USD$19,891 GDP growth rate (Caribbean Development Bank) 10.9% Infation (Caribbean Development Bank) 0.8% Fiscal Debt to GDP ratio (Government of Anguilla) 49.9% Primary Balanceto to GDP (Government of Anguilla) 5.1% Interest to Revenue Ratio (Government of Anguilla) 8.02% Social Unemployment (AP&H Census, 2011) 13% Unemployment (female) (AP&H Census, 2011) 6% Unemployment (male) (AP&H Census, 2011) 19% Poverty rate (Country Poverty Assessment, 2007) 5.8% Povertyrate (female) 3.6% Poverty rate (male) 8.2% Poverty rate (children) 7.2% Number of school - going children (2017) 3,244 Note:All data is for 2019, unless otherwise stated. 2020 | UNDP, UNICEF & UN Women 3 COVID-19 | POLICY DOCUMENTS SERIES EXECUTIVE SUMMARY Anguilla is still in the recovery phase following the Tourism workers’ vulnerability even before the onset devastation of Hurricane Irma in 2017. Real GDP of COVID-19 will likely increase the poverty rate by remains 9.7% below the pre-global fnancial crisis around 5 percentage points. While women are level of economic activity, with the Tourism sector underrepresented in poverty in Anguilla, they are estimated to contribute 37% of Anguilla’s total overrepresented in the tourism sector, suggesting economic activity. In 2019, Anguilla ran a budget that around 3 percentage points of that increase will surplus of 1.6% of GDP.While the latest data shows an be due to women falling into poverty. The COVID-19 unemployment rate of approximately 13%, strikingly crisis will augment the share of workers not 23.5% of Anguilla’s population is afected by poverty participating in formal employment. or vulnerability. Further, Anguilla’s Public Assistance Programme provides a monthly grant to less than 1% The longer the tourism industry remains closed, the of the population which represents 0.22% of the greater the fnancial setback workers will face. An Government of Anguilla’s total recurrent expenditure increasing proportion of the population will likely fall budget for 2020. The Government of Anguilla below the poverty line. Workers, families, women and subsidises 25% to 100% of healthcare and treatment children in households will face multi-faceted costs for vulnerable individuals. deprivations such as access to continued and quality education, income loss, and nutrition and health The early closure of Anguilla’s international borders impacts. on 18 March 2020 limited the spread of the COVID-19 virus. Nonetheless, global supply chain challenges The report outlines a number of recommendations have constrained recovery, particularly in the including: expanding the time frame for COVID-19 construction industry. Moreover, beyond the related unemployment benefts and covering the shutdown, the domestic economy has also been newly unemployed; providing liquidity for small frms negatively impacted, for example by the cancellation with a Government guarantee scheme to backstop of the Anguilla Summer Festival 2020. MSMEs through the crisis; expanding the School Feeding Programme to cover poor students in all schools and extend the beneft of EC $200 per month While the limited spread of COVID-19 means that for each child; funding the short-run increase in consideration may soon be given to the reopening of expenditure using a temporary increase in the Interim the domestic economy, it is likely that the tourism Stabilisation Levy; establishing a shelter for women sector will remain closed in the medium term. Our victims of gender-based violence, exploring best estimate is that tourism will either partially partnerships with the tourism sector; implementing a manage to restart for the Christmas period, or will permanent unemployment beneft fund, fnanced reopen fully, within the internationally prevailing through a limited contribution increase by workers circumstances, in 2021. This represents an economic and employers to the Anguilla Social Security Board downturn forecast of -25% to -30% and marks the (ASSB); and amend the Anguilla Framework for Fiscal diference between a recovery or a recession Sustainability and Development to account for the extending over next year. COVID-19 (and similar national crises), allowing for fscal space and credit expansion. With a projected one third of the workforce unemployed, revenue could fall between EC$55 million (22.4%) and EC$66 million (27%) due to dampened demand, job losses, business closures and the absence of the tourism sector. 2020 | UNDP, UNICEF & UN Women 4 COVID-19 | POLICY DOCUMENTS SERIES CONTEXT MACROECONOMIC Anguilla’s real gross domestic product (GDP) is Anguilla’s construction activity contributed 11% to estimated to have increased by 10.9% in 2018 and GDP in 2019. Much of the rebuilding activities funded 2019. This represents a recovery following the by the Anguilla Programme began in late 2019 and signifcant decline in GDP of 6.6% caused by Hurricane were intended to continue into 2021. Prior to this, there Irma in 2017. Prior to the onset of the COVID-19 was signifcant construction activity in the private pandemic, the Eastern Caribbean Central Bank had sector. In 2001, construction was identifed as predicted a 2.2% growth in the economy. However, contributing approximately 15% of total employment. real GDP has not yet recovered to its 2007 peak. Real Agriculture, livestock, and fshing contribute only 1.7% GDP remains 9.7% below the pre-global fnancial crisis of total GDP. In 2001, only 3% of total employment was level of economic activity. supported by these primary economic activities. Anguilla is very much still recovering from the Tourism is Anguilla’s main foreign exchange destruction inficted by Hurricane Irma in 2017. Total generating industry. However, Anguilla benefts by damages were estimated to be US $880 million, which being part of the foreign reserve-pooling mechanism amounted to 97% of GDP in 2016. The rebuilding of the Eastern Caribbean Currency Union (ECCU). eforts remain ongoing. The Anguilla Programme is a Anguilla represents around 5% of the ECCU’s total fve-year £60 million capital grant from the economic activity. Government of the United Kingdom to rebuild Anguilla’s critical public infrastructure with enhanced Beyond the economic and social dislocation, resilience. The pandemic has understandably caused Anguilla’s domestic fnancial system sufered delays with the rebuilding of Anguilla’s infrastructure. signifcant damage in the aftermath of the global fnancial crisis of 2007/2008. Two indigenous banks According to national accounts data, hotels and became insolvent in 2013, forcing the Government of restaurants are estimated to have contributed 27% of Anguilla to take on an additional EC$330.28 million of total GDP in 2019. This is considered the best measure new debt. Two international commercial banks were of the direct contribution of the tourism sector. The signifcantly afected in Anguilla—one has closed its World Travel and Tourism Council separately estimates operations and one has been acquired by another that tourism directly and indirectly contributes 37% of commercial bank. While the Eastern Caribbean Anguilla’s GDP. The Government of Anguilla further Currency Union (ECCU)—of which Anguilla is a part— claims that the direct, indirect, and induced efects of has signifcant liquidity backed by the Eastern tourism account for 80% of the country’s GDP.1 Caribbean Central Bank, the domestic commercial banking sector in Anguilla is fragile. The need for frms The most recent labour force survey in 2011 found 29% to access working capital fnancing during the of Anguilla’s labour force to be employed in hotels and pandemic might be hampered due to this fragility, restaurants. This data estimates that 58% of jobs in meaning that a substantial number of liquidity- hotels and restaurants were held by women in 2011. In constrained frms might become insolvent. The non-tourism activity, 41% of jobs are held by women. possibility of signifcant business and consumer debt The World Travel and Tourism Council estimates that default puts the fragile banking system at risk. Some 51% of jobs are directly and indirectly supported by the damage has already been done to the domestic tourism sector. While this is likely an overstatement, it is economy. The COVID-19 pandemic has had further likely that there signifcant numbers of informal jobs knock-on efects on the domestic economy beyond being indirectly supported by the tourism sector. the current shutdown. Of signifcant note is the cancellation of the Anguilla Summer Festival 2020. 1 http://westindiacommittee.org/wp-content/uploads/2017/11/White-Paper-Anguilla-Hurricane-Irma-.pdf 5 COVID-19 | POLICY DOCUMENTS SERIES FISCAL • The Government of Anguilla is constrained by the In 2018, Anguilla ran a budget surplus of 1.6% of GDP.
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