Minister of Finance Camillo Gonsalves
May 14, 2021
House passes near $118m. bill to help battle fallout from Soufriere

Almost EC$118 million was approved by Members of Parliament this week to address “the most immediate humanitarian cleanup demands” caused by La Soufriere’s explosive eruption in April.

The 2021 Supplementary Estimates of St Vincent and the Grenadines totalling EC$117.9 million was passed without opposition just after midnight -on Wednesday morning, and its funding is expected to finance at least 30 distinct and immediate responses to the disaster.

“Even preliminary incomplete assessments of the damage and the loss that we have faced, are sobering estimates. Even without going to the full extent of the red zone, orange zone and up the mountains, we know that cleanup costs will exceed 38 million, we know that there is damage to over 5000 buildings exceeding 35 million. We know that at least 175 million of loss and damage has been inflicted on the agricultural sector and some estimates are as high as US150 million,” Finance Minister Camillo Gonsalves said in Parliament on Tuesday afternoon.

It is estimated that 100 per cent of vegetable crops in the red zone have been destroyed.

Also in the red zone, approximately 65 per cent of arrowroot crops, 90 per cent of tree crops and 80 per cent of root crops have also been destroyed.

Gonsalves also noted that hundreds of livestock, including sheep, goats, pigs and cattle have been lost. The fate is the same for thousands of chickens.

“We know that there is over 50 million in damage to our forests and the evaluators quite naturally, couldn’t get all the way up into the mountains to evaluate the full extent of damage to our forestry,” he said.

Damage has also been done to the public utility infrastructure, water, electricity, generation and distribution capacity.

“When the assessments are complete, it is entirely possible, indeed likely, that loss and damage could well approach 50% of the gross domestic product of St Vincent and the Grenadines…,” Gonsalves said.

The Finance Minister said his ministry has preliminarily estimated that the country will experience a second year of economic contraction ranging from 5 to 8 per cent in 2021 – on top of the 5 per cent COVID19 related contraction of 2020.

“Make no mistake, we are facing challenging times ahead with two years of economic contraction in excess of 5 per cent a year, and while we predict that there will be double-digit economic growth in the subsequent years- that is 2022 and 2023- this year will undoubtedly compound the hardship and the challenges that we were already experiencing as a result of the COVID pandemic,” he said.

Of the $117.9 million, $28 million has been allocated to ash cleanup, debris removal and river clearing.

Income support for farmers in the various hazard zones ($10.5 million for red/orange zone farmers and $3.8 million for green/yellow zone farmers) is one of 18 major initiatives that will receive funding under the Supplementary Estimates of 2021.

Other major initiatives to be allocated funding include shelter meals, building materials, agriculture production support, home reconstruction, bridge and road rehabilitation, and community brigade and road cleaning crews.

Gonsalves stressed in his presentation on Tuesday that the supplementary budget, which is almost 6 per cent of the country’s GDP, is just the first phase of the government’s response that is specifically targeted to humanitarian issues, cleanup costs and only the most urgent reconstruction demands.

“We will have secondary and tertiary budget allocations to deal with reconstruction, after we have fully ascertained the extent of the damage that we face but there is money coming even for that. Even as we programme this $117.9 million, we are already in active and advanced negotiations to bring additional resources on board to deal with the reconstruction of this great country,” the Finance Minister said.