COMMENTARY: A corona fund
By Dickson Igwe, Contributor
Tiny economies cannot print massive reserves of cash, by raising vast amounts of financial capital from global investors as multi-trillion dollar economies can.
Multi trillion dollar GDPs, such as the US, Germany, and UK, have the ability to borrow near unlimited amounts of money from investors through the issuance of various debt instruments at the lowest rates of interest.
Global investors view these economies as safe havens. However, small economies with GDPs between $1-$50 billion — like most Caribbean Islands — must fund their own pandemic riven economies.
Small economies are left to sail on unpredictable and stormy seas by themselves in the present economic crisis. Small and struggling economies can borrow from global investors in the present environment: that is an option.
Increasing nat’l debt in a crisis
However, unlike their trillion-dollar counterparts in the north, who can dictate their proposals to willing investors, small economies do not have that power.
Increasing national debt in a crisis through international borrowing can place a developing country at the mercy of institutions such as the IMF and World Bank for years, through indirect political control, economic control, and high debt obligations, lasting years.
Indebtedness to global financial institutions banks further limits a government’s ability for public investment and limits the government’s control over the financial management of its own economy.
This places public policy at the ‘beck and call’ of global investors. To avoid the preceding, social funding – where individuals within a country fund economic activity through direct contributions — is the answer.
Scarce fiscal resources
In the case of corona, it is funding to keep the poor and needy afloat, thereby leaving government to manage scarce fiscal resources, without the additional burden of managing charity.
Now, as the economic famine settles in, with a worldwide economic depression that some experts predict will wipe $87 trillion off the value of the global economy, governments that manage small economies that depend on a single or dual source of income, such as these Virgin Islands, will have to adapt to an austere environment.
Why: because no one knows when or how this Corona Virus Pandemic ends. Numerous experts: scientists, epidemiologists, virologists, and so on and so forth, believe this pandemic will go on indefinitely.
A vaccine and cure are unexpected before the end of 2021. Then, reopening economies in the midst of a pandemic is no guarantee of economic recovery. Consumers drive economic recovery in the pure capitalism model.
Fearful consumers
Today, consumers are fearful. Fearful consumers zip their wallets. The reason consumers are fearful of is the severe contraction caused by lockdown and social isolation in the world economy. When consumers observe failing businesses and increasing joblessness, they adopt savings and thrift as a form of self- preservation from social and economic dislocation. Savers do not drive the type of consumer spending that further drives economic recovery.
Economics is first and foremost human behaviour. Consumer and business confidence depends on the health of the economic environment. The pandemic has instilled a climate of fear. And until consumers are confident to go out and shop, and exist as they did before this pandemic, economic growth will either be anaemic, or nonexistent. So how does an economy and society such as these British Virgin Islands survive in a collapsing economy? The answer is social funding.
Not new
The idea is not new. A social fund is an account into which the whole community contributes: organization and individuals.
A social bond is linked to a social account that offers global investors an opportunity to contribute. A social bond operates over a fixed period of time, and in the present environment will be used to support the needy through injecting capital into the account from investors.
Cash from investors will be paid into the social fund account for disbursement. Yes, the social account will pay the investors when the fixed term is up, but that will be covered by contributions into the account by the general public.
A social fund is a charitable effort. Will a social account linked to a social bond work? It should, when one considers the alternative, which is a government dipping into its scarce reserves, and borrowing in a contracting economy, which in turn is years of interest payments, negatively impacting government’s ability to spend and build a prosperous and sustainable economy.
Best keep social security, and social health funding intact, and fund the unexpected disaster of a sudden crisis such as a hurricane, earthquake, and pandemic, ripping away livelihoods through community effort.
Social funding managed by independent and nonpolitical assessors, using strict means-testing to decide who is eligible for help is the way to go.
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It’s Saturday. So the world knows not what it’s doing but the fart bag has the solution. He suggests that all the ones who have been stealing in the BVI give money to a “social fund” for the needy. In the BVI there is only a one way street for money. It’s into the pockets and never to come out unless it’s for the purchase of something they want. Charity doesn’t exist. Thus, it is the responsibility of the government to provide for the needy. That is what taxes and social security payments are for. Now the best thing would be to open the borders and let the economy flourish as best it can. Besides, the gas bag needs new subject material.
Not the normal anti capitalist racist drivel but it seems that the ‘social commentator’ has run out of things to pontificate about. A social fund – he is living in cloud cuckoo land.
Start using the LIFE money.
Agree with Igwe that establishing a social fund is viable option for the VI. There are tens of social funds across the globe, ie, Angola, Madagascar, Pakistan, Philippine Islands, Romania, Ukraine, Jamaica, Belize, Panama, Egypt, Yemen among others. What is a social fund? Simply, it is a safety net that help poor countries and communities cope with structural adjustment policies. Social fund commissioned, it can be funded from local and international sources.
The VI, along with the rest of the CARICOM region, are small, resource-poor, heavily travel and trade dependent, disaster-prone, heavily indebted (2020 regional debt is approx $9B) and susceptible to economic and environmental shocks. Covid-19 has exposed the region’s vulnerabilities and the develop world cannot cast a blind eye on the region as invisible and indispensable. They do so at their own risk and peril, for issues in the developing and emerging countries can spread quickly to developed countries, ie, medical, security……..etc. VI economy tanked by Covid-19, it needs help urgently.
As the US taxpayers through the Marshal Plan bail out the UK to the tune of approx $5B after WWII, the UK should develop a Marshal Plan-styled package for its OTs.The rich nations of the 54 nation Commonwealth of Nations should contribute to the VI Social Fund. Additionally, also the rest of the developed countries, along with agencies, ie, IMF, World Bank….etc, should contribute to the VI Social Fund.
Moreover, small countries borrowing to meet Covid-19 driven needs, will sink. Most of these countries were just barely threading water and now with an added debt burden will
submerge. A high debt to GDP ratio stifles growth and development. What is a high debt? Some experts suggest a debt to GDP ratio of 40% for developing and emerging countries and 60% for developed countries as prudent. The World Bank suggest 77% with any extended increase above this number as troubling.
@E. Leonard, here you go again with UK developing a Marshal Plan-style plan for OT. Well, not a farthing of UK taxpayers money for the BVI. The UK has its own Coronavirus expenses so the BVI need to take a hike and spend its own money. Now, in addition to the UK, you adding the Commonwealth and rest of world too. Bunch of parasites in the region but tropical paradises. LMAO. So who is going to manage this VI Social Fund?
You must be American talking about US taxpayer bail out England after the War. The UK lost blood and treasure in the fight and deserve that help. What did the BVI do to deserve UK taxpayer money? This month is the 75th anniversary of V-E Day so I respect those who serve and those who perished to liberate us from Hitler that coward that could not face the enemy and fight like a man (he committed suicide) so don’t make me curse.
Your humanity brims with hatred and contempt with every word you type and post. Why are you so bitterly angry and vile?
The BVI current population are the offspring of humans who were forced to work and produce goods, services and wealth for the UK, your ancestors, for 350 plus years. And not one day’s pay was ever paid to them in all those centuries.
No, they did not fight and bleed in tribal wars in Europe for centuries culminating in the greatest tribal conflict of all, world war 2. They fought for survival, bled and died on plantations across the diaspora under a vicious regime that made Hitler’s atrocities look like childrens play, while making the UK and Europe rich.
They toiled under the most wretched and brutal conditions to provide UK and Europe the financial and natural resources from which to use to fight tribal wars and build empires.Our ancestors back, blood, sweat, teas, sufferings, misery and death built Europe, not yours.
They, our forefathers, were paid brutally with UK inhumanity throughout the centuries by your ancestors. They/we are yet to be paid a pound, shilling or pence. Yet, here you are spouting the most hatefilled, vile, venomous rhethoric at BVIslanders, our family members and friends everyday of every week, not just Saturday on Igwe’s coloum. You need to zip your hatefilled heart.
Yet, none of that hatred and denial dogma will hide the fact that the current UK generation, your generation, has a moral responsibility to right that human catastropic wrong done by your forefathers, of which all after have and continue to benefit from. Thus, the creation of the white privildge of today.
Meanwhile, the BVI deserves that/such help today. It has earned it centuries ago. To deny such demonstrates the same inhumanity that was delivered to us centuries ago.
“The Crown have never compensated this nation for Genocidal enslavement and the contribution that our people have made to financially enrich the British nation throughout the centuries.
Lots of diplomacy with little to no financial assistance of any kind throughout the years of poverty, hurricanes, and other natural disasters. A Shameful bunch of human beings!!!””
“The UK lost blood and treasure in the fight and deserve that help.” Ok. Well, the descendants of Slaves are well-deserving of reparation. Descendants crying, the Atlantic is littered with hundred of thousands, if not millions, of Slaves flung overboard either because they were too sick, too strong willed or too many on board to feed.
Slavery was the most egregious humanitarian disaster in history. Slaves were exploited, brutalized, dehumanized, raped, treated as chattel (property), miseducated (not permitted to learn how to read or write), not permitted to marry, separated from family (mother and child, partner and partner,…etc), stripped of their religion, property less, poorly fed, lynched …….etc.
Slavery and Slave labour built the British economy and shaped modern Britain. The contributions of Slave labour is part and particle of the British landscape and is part of the British fabric, though Britons may want to close their eyes and minds to this reality. Moreover, Slave labour thrusted Britain into having the largest and strongest economy in world in the 19th Century.
Physical Slavery was abolished in 1833 and part of the Act was to compensate Slave owners. Slavery abolished, the British government borrowed £15M and contributed another £5M for a total of £20M to compensate approx 3,000 Slave-owning families. Many prominent Britons families received compensation; wonder if any Britons residing in the VI family received compensation.
This £20M was 40% of the government budget at the time. Everyone benefited and continue to benefit to this day from Slavery saved for Slaves and their descendants. Neither Slave nor descendant received a ”hapeney” or an apology for their labour and abusive treatment.
Interestingly, many generations of Britons including Boomers, Gen X, Millennials, and iGen have been paying taxes to pay off the £15M borrowed to compensate Slave owners for lost of their supposed property. Supposedly, the loan was finally paid off in 2015. Though current generations of Britons may say that they were not alive during Slavery and had nothing to do with Slavery and should not bear the burden of providing reparation to Slave descendants, they have benefited from Slavery and continue to benefit. The UK government should provide reparation to Slave descendants. No one is asking for a check for each descendants.
I mus ah was bussing ah sleep in class during the history lesson when they were teaching this. Look like they deliberately left out much important stuff that we needed to know. How come they never tell us about the £15M that the UK government borrowed to pay slave owners but not compensate either slaves or their descendants?
Perhaps, they thought that we were too dumb to understand because they decreed that we should not be taught how to either read, rite or do rithmetic ; they still think that we are dumb and we give them reason to believe so, for our self-hatred. For example, we had a constitutional review for internal self governing yet the Governor has all the power and every chance he gets he lets the Premier know it.
Ok. The straw whose labour stirred the UK’s economy drink got nothing. Labour is the biggest expense in any business. The folks in the Slave business got free slave labour and the free slave labour was the fuel that drove the economic engine, the oxygen in economic lifeblood that carried the UK’s economy. Well, it is way past time for reparation for the descendants of West Indian/Caribbean Slaves. It is time for the UK to get the moral courage and conscience and step up to the plate and do the right thing.
[Let’s lead like eagles, not careen off the cliff like buffaloes]
The USA gave the UK nothing. Everything the USA lent the UK through the lend lease arrangement was repaid, often by the appropriation of British owned assets in the USA.
The country that received the most US free aid was Ironically Germany, followed by Japan.
As usual friend Igwe spouts arrant non sense.
@ Rubber Duck, so you too have alternative facts? Look like you got the same talking points. Listed below is an excerpt from Wikipedia on the US Lend Lease Policy :
President Roosevelt signs the Lend-Lease bill to give aid to Britain and China (March 1941).
House of Representatives bill # 1776, p.1
“The Lend-Lease policy, formally titled An Act to Promote the Defense of the United States (Pub.L. 77–11, H.R. 1776, 55 Stat. 31, enacted March 11, 1941),[1] was a program under which the United States supplied the United Kingdom (and British Commonwealth), Free France, the Republic of China, and later the Soviet Union and other Allied nations with food, oil, and materiel between 1941 and August 1945. This included warships and warplanes, along with other weaponry. It was signed into law on March 11, 1941, and ended in September 1945.
In general the aid was free, although some hardware (such as ships) were returned after the war. In return, the U.S. was given leases on army and naval bases in Allied territory during the war. Canada operated a similar smaller program called Mutual Aid.” What did the UK repay?
By the way, under this policy, the US had a number of leased forward deployed bases on BWI islands( Caribbean Coastal Frontier) that were controlled by the UK, ie, British Guiana (now Guyana), Trinidad and Tobago, Barbados, Antigua, St. Lucia, Jamaica, TCI, Bermuda, and New Found Land.
@Rubber Duck, if it looks like f***, quacks like a duck and waddles like s duck, it is a duck; and if you are Rubber Duck, your alternative facts a…s is busted, GTFOH!
okay just so you know , you , me, everyone can add to wikipedia does not make it true.
You probably believe all those Hollywood war films too about how only US soldiers fought the Nazis
https://www.stripes.com/news/u-k-makes-final-payment-to-u-s-for-post-wwii-reconstruction-1.59389
Nobody gives a rats a** about the racist and corrupt people of the BVI. You constantly degrade the white man for bringing your ancestors to this paradise yet you want him to bail your a**es out because you refuse to work. There are many countries much younger than the BVI that are light years more advanced then the cave dwellers of the BVI. Need help? Call your brethren in Senegal, Nigeria or and of the other “advanced” nations of the black world.
We will not allow our life’s light to be determined or dimmed by the darkness you project.
Reallyy!!
Like Igwe pealing thunder, flashing lighting yet no rain. No meat to the story other than wanting UK money. Y’all must be related because you always backing him with crap.
“Covid-19 has exposed the region’s vulnerabilities and the develop world cannot cast a blind eye on the region as invisible and indispensable. They do so at their own risk and peril, for issues in the developing and emerging countries can spread quickly to developed countries, ie, medical, security……..etc.”
Indeed, developing countries are only a plane ride away from transferring and spreading issues to developed countries. For example, the Coronavirus was only a plane ride away from China, spreading quickly to the west, ie, Europe, US……etc. It is mutually beneficial and in their national interest/security for developed countries to invest in developing countries. Helping developing countries will not only improve their standard of living, quality of life and per capita income but also help control the outbreak of diseases, ie, epidemics, pandemics……..etc, slow migration…….etc.
As heat flows from warm to cold surfaces, as the north and south poles of magnets attracts and as gravity pulls on the body, so too will migration occur from poor to rich countries. People are communal and prefer to stay home and be around their family and friends but only sacrifice normally to leave their homelands to provide a better life for their families; ie, people coming to the BVI from from the farthest most places around the globe.
BVI is not poor, Social Security has cash reserves not stocks of over $800 million, Government has reserve fund over $400 ,illion but with $1.2 billion they claim they are broke…….someone is not
The UK exploited and depleted the regions limited resources using free Slave labour to build its booming economy. Well, it was booming at the time. They used slaves to cultivate and harvest sugar cane, cotton, tobacco…..etc for use in UK factories. Resources depleted, they disposed of the islands like used paper towel. However, before disposing of them, they used them as bargaining chips for other nations, ie, Canada, US…. etc. The few remaining OTs, ie, Anguilla, Montserrat, CI, CI and VI they view as the excess baggage and is willing to cast in the dung heap if it could.
As other bloggers have noted, a problem in the region is a problem every where so it is in developed countries national interest to help. That help is more important and urgent now with Covid-19. The UK should be the first in line to make a contribution to the social fund.
I don’t even read the articles, I just come to read all the butt bothered comments on both sides. That’s where the entertainment lies in these articles.
@Nazi Gold, the decent and civil people around the world are celebrating the 75th anniversary of V-E Day, allies having forced the surrender of Germany led by Adolf Hitler, a cowardly, piece of shit, murderous thug. His Third Reich dream of Germany becoming the successor to the Roman and German empires shattered, he committed suicide on the verge of Germany surrendering. Your hero’s dream shattered, join the world in its 75th anniversary celebration. If you served or is serving honorably happy Memorial Day! If not, you and other people of similar murderous thoughts go find a rock to hide under.
Every time there is a storm
$$$$$$$
Now a virus from china
Want $$$$$$
Isn’t Igwe always preaching independence ? But now wants bailouts $$$$ from UK taxpayers who pay tax for Belongers in BVI who pay zero tax ?????
Lol
Answer ………NO
@E. Leonard, @ UK Taxpayer, Diaspora, NPolitico and others, you got the haters, racists, sympathizers……etc on the run, sprinting like Usain Bolt in the 100 metre dash for cover and concealment. You have “chooked” hopefully the consciousness of the descendants of Slave financiers, traders, pirates, buccaneers, Slave owners, plantation owners, factory owners, boat owners………etc.
The history they thought us in school was self-serving; they wanted themselves to look human and Slaves savages. When in fact, they were confessing and projecting. Bunch of fake a..s hypocrites. All the crap about Lord Nelson, Francis Drake, Henry Morgan, Columbus and his 3 ships, Oliver Cromwell, Henry VIIi, Thomas Wosley, Tudors, Humpty Dumpty, Brer Nancy……etc was pure crap.
Every other abused and disadvantage group, ie, Japanese, American Indians, Israelis….etc have gotten made whole somewhat but the Slave descendants not a even a wooden nickel; never heard of “hapeney.” Lol. Descendants of US Slaves still waiting on their 40 acres and a mule.
I did not have the inclination to focus on British history curriculum during school. Probably failed most tests on the subject. Fortunately I did not need that drivel to advance or graduate.
So I am glad I was not burdened with such useless knowledge and can now leisurely research truthful history.
Undoubtedly, Slavery was one of the most despicable, dehumanizing, exploitative act against mankind; it was probably more despicable than Nazism and we know that Nazism also was a horrible and despicable act perpetrated by an Animal Adolf Hitler. The foregoing discussion on the vices of slavery makes your blood boil and fill you with rage but that debate must continue; the ball must be moved beyond debate though, for it has been several hundred years since this wicked and dastardly act was inflicted upon persons of African descent.
Nonetheless, we can have several balls in the air at once. Dickson Igwe laid a social club proposal, a good proposal, on the table. It is but one of many options to get us through to the other side of the river beyond this pandemic. Think that government, NGOs, businesses, individuals, agencies, organizations……etc must hitch themselves to this wagon to make it happen.