Government’s strong financial position means the Cayman Islands does not need to apply for additional funding at this stage to deal with the economic fallout from COVID-19, the Finance Ministry said this week.
The UK recently approved a £4.5 million (CI$4.7 million) contribution to the Caribbean Development Bank’s Special Development Fund to be used to support countries in the region with COVID-19 recovery, CARICOM Today, the Caribbean Community newsletter, reported.
“Cayman continues to be in a financial position where it can mitigate the social and economic impacts of the COVID-19 crisis and meet its operational and debt obligations from existing cash reserves,” the Finance Ministry told the Cayman Compass in a statement, following queries about accessing the funding.
“As not all Caribbean countries are in the same fortunate financial position as Cayman, it is only fair that other countries who are more in need are able to access the UK contribution,” the ministry added.
As an associate member of the Caribbean Development Bank, the ministry said, Cayman is only eligible to borrow at competitive interest rates directly from the bank itself. In the past, Cayman borrowed approximately US$5.7 million from the bank for the development of Pedro St. James.
The Cayman Islands government is in the process of finalising a CI$500 million line of credit which it intends to use only in the event that additional funding is required, officials have said.
Government is expected to make an announcement on the line of credit this week. Premier Alden McLaughlin, speaking at the Tuesday, 8 Sept. COVID-19 media briefing, said an agreement had been reached with a consortium of banks. The government will hold its next press conference at 2pm on Friday, 18 Sept.
The UK funding announcement also follows recent statements that Britain is contributing £3 million to the Pan-American Health Organisation for the provision of essential medical supplies in the region and a further £2 million to the World Food Programme and others to increase assistance for the most vulnerable households and to counter domestic violence against women and children.
“The Special Development Fund is CDB’s largest pool of concessionary funds, which are used to address poverty and human development challenges throughout the Caribbean region,” CARICOM Today stated in its report.
According to the Cayman Islands Finance Ministry, it has always been Cayman’s understanding that, based on the country’s per-capita income, it was not “poor enough” and is therefore not eligible to borrow funds directly from the Special Development Fund.
“As an Associate Member of the CDB, Cayman, in the past, made annual contributions to the SDF”, but in 2009 Cayman ceased making the yearly payment, the ministry statement noted.
“It is under this premise that we are assuming that Cayman is not eligible to access or borrow any of the £4.5 million that the UK Government has contributed to the SDF. Therefore, based on the above stated reasons, Cayman does not intend to access any of the UK’s £4.5 million contribution to the SDF,” the Finance Ministry added.