A grave sense of responsibility

Statement by Joseph E.Farrell, Premier and incoming Chairman of the ECCB Monetary Council, Friday, July 23, 2021, during the virtual handing over ceremony. 

Introduction

On behalf of my government and people of Montserrat, I am particularly delighted to extend greetings to all from the beautiful Emerald Isle of the Caribbean.

Once again, the ongoing COVID-19 pandemic prevents us from convening in person. Nonetheless, we are grateful for the digital technology that permits us to convene and advance the important work of the Eastern Caribbean Central Bank.

Today, it is with a grave sense of responsibility, I accept the mantle of chairmanship from Dr Timothy Harris, prime minister and minister of finance for Saint Christopher (St Kitts) and Nevis.

I wish to express my gratitude to, and respect for, prime minister Harris who steered the monetary council through what was, undoubtedly, one of the most difficult years of our 38-year existence.

As Martin Luther King Jr once said: “The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy.”

At this moment, Saint Vincent and the Grenadines is dealing with the devastation and fallout of the La Soufrière volcano. Montserrat fully understands, given our own experience of living in the shadow of an active volcano, the Soufrière Hills. In fact, it was just two days ago that a public holiday was given as a Day of Prayers and to mark the 26th Anniversary of the volcanic eruption of our Soufriere Hills Volcano. From the Emerald Isle to the Gems of the Antilles, we express our strong support and solidarity. As was the case in Montserrat, Saint Vincent and the Grenadines will rise from the ashes.

Brothers and sisters, the COVID-19 plague has already claimed 145 lives in the ECCU and has completely disrupted our lives and livelihoods. Please help us to arrest this grievous trend.

Through scientific innovation, supported by an unprecedented level of international support and coordination, we now have safe, effective vaccines and optimum uptake of these vaccines are our best defence against the virus, and therefore key to fast-tracking our return to normality, we must protect ourselves, our loved ones and our economies. I, therefore, encourage everyone to get vaccinated.

Our Central Bank’s response to the pandemic has been proactive and responsive. I recognise the swift action of the Central Bank in developing the Programme of Action for Recovery, Resilience and Transformation of the ECCU Economies (“PARRT”). It is a bold and ambitious plan that charts our recovery and repositions our economies for transformation. In this regard, I hail the determined efforts of Governor Antoine and his team.

Focus of my chairmanship

I now wish to articulate the policy priorities during my tenure as chairman. The policy agenda will encompass:

• Monetary Stability;
• Financial Stability;
• Food and Nutrition Security;
• Renewable Energy;
• Innovation and Digital Transformation;
• Advocacy on Issues Impacting Small States.

Monetary Stability

Since 1976, the exchange rate peg of US$1.00 to EC$2.70 has provided a level of confidence and stability even in the most disruptive and uncertain times. The Monetary Council will continue to support the strength and stability of our EC dollar.

Of necessity, that includes support for the enactment of fiscal resilience frameworks in member countries.

Financial Stability

As part of the programme of action, the bank will press forward with plans to establish an optimal regulatory framework for the entire financial sector. That work includes addressing gaps in the legislative framework to support robust supervision, improving consumer protection and establishing a regional standards setting body to ensure a level playing field across the currency union.

On the broader matter of legislation, I commit to encouraging my fellow Council members to accelerate the passage of legislation in their respective countries.

Food and nutrition security

According to the Food and Agriculture Organization (FAO), May 2021 saw the biggest surge in monthly food prices since September 2011. Moreover, food prices are forecast to increase over the coming years, further threatening food security in our region.

To enhance our resilience as a region, we must accelerate, as a matter of urgency, our efforts to improve food and nutrition security and contain food prices. To that end, we must work assiduously to attain our goal of reducing our 2019 food import bill of EC$1.6 billion by 25 per cent by 2023. The cost savings of $400 million will redound to the benefit of the people in respect of their health and will also support our objective of maintaining a strong EC dollar.

Renewable energy

COVID-19 may have overshadowed the existential threat of climate change but make no mistake, that threat is real. It is true that our small countries contribute very little to global carbon emissions. Still, we take seriously our moral obligation to be a part of the solution.

Given this context, the monetary council endorses the Central Bank’s Climate Resilience initiatives. Indeed, the Council fully supports the bank’s collaboration with the World Bank to establish a Regional Renewable Energy Infrastructure Facility to support investment in renewable energy in our Currency Union.

This initiative has the potential to assist countries in their efforts to meet their “Nationally Determined Contributions” and will be critical if we are to triple the share of renewables in our energy mix during this Decade of Action.

Innovation and digital transformation

The COVID-19 pandemic has confirmed that governments, too, can be agile and innovative. For example, in May of this year, Montserrat launched a Whatsapp Life Certificate Validation Service to allow our pensioners living abroad to be able to present themselves via Whatsapp video calls for their life certificates, resulting in significant cost savings and more efficient service.

As chairman of the monetary council, I wish to underscore the importance of the Caribbean digital transformation programme. In Montserrat, we have recently enhanced the resilience of our internet infrastructure with the Subsea Fibre Optic.

At this juncture, I wish to laud the Governor and his team on the historic achievement of launching the digital currency, DCash.  Following a successful launch of the Pilot in four of the eight OECS member states earlier this year, I am pleased to note that DCash will be rolled out in the remaining four territories, including Montserrat, by September of this year. This innovation facilitates cross-border payments within the ECCU and opens up more opportunities for e-commerce.

Advocacy on issues impacting small states   

Ladies and gentlemen, as small island states, we often feel invisible and almost powerless. But we are neither.

Under my chairmanship, we will continue the tradition of boldly advocating for small states’ issues on the international stage.

The 26th United Nations Climate Change Conference of the Parties (COP26) is scheduled to take place in the Glasgow, Scotland later this year. This will be a prime opportunity to press the international community to make natural disaster clauses (and perhaps even pandemic clauses) standard in new debt contracts for Small States, who are least responsible for, yet most impacted by climate change.

We will also continue our advocacy for vulnerability to be an explicit criterion in determining access to concessional financing, rather than per capita income.

Conclusion

Colleagues, brothers and sisters, we are at an inflection point in the history of our currency union. The foundations we lay today will determine our trajectory for years to come. Charting our way forward in this perfect storm is a weighty task. However, throughout this pandemic, our region has demonstrated a strong sense of solidarity. Long may this continue.

With the help of Almighty God, the support of the entire monetary council, the Central Bank and the people of our region, I am confident that we will succeed. May God bless all of us.