The Special Meeting followed a recommendation from the 63rd Meeting of the ECCB Monetary Council on 24 October 2008, for a joint meeting of the OECS Authority and the ECCB Monetary Council to engage in an in-depth assessment of the impact of the global financial and economic crisis on member countries, to discuss plans and strategies and take critical decisions to respond to the crisis.

Member States acknowledged that the situation was grave, given the scale and scope of the international crisis and the more than likely possibility that it will be prolonged. They agreed that it was therefore important to undertake appropriate policy measures to deal with the effects of the crisis and to position the countries to take advantage of the recovery when it comes.

The meeting received presentations from Member States on the critical economic and financial issues being faced and specific actions taken to date to mitigate the hardships faced by individuals and businesses. The meeting recognised that there were a number of underlying challenges to individual Member States some of which could be better addressed in a collective manner. It was further recognised that there are structural problems within the individual economies that constrain development such as size, scale, productive capacity and opportunities for growth, still, there are strengths and possibilities inherent in the OECS Economies through which the challenges can be met successfully.

In framing a response to the emerging challenges, the meeting identified several areas as being critical to the stability and growth of the OECS region.

FINANCIAL SYSTEM
The meeting was informed that the ECCB is taking all necessary steps to maintain and preserve the stability of the currency and the financial system and is keeping in very close touch with developments in the regional and international financial community. Contingency plans have been drawn up to address any possible issue that may arise and the ECCB is in constant contact with the banking sector within the Currency Union.

TOURISM
The meeting recognised that tourism is the most important economic activity in Member States, and that the sector’s performance in 2008 reflected a significant downturn, resulting in job losses and cutbacks in hotel development projects. Projections for 2009 are that the downward trends will continue and may worsen, particularly in light of the continued recession in the major tourism source markets.

Accordingly, the Meeting agreed on the following measures:

For the short term:
1. Member States would provide a short term tax relief package to the hotel industry tailored to the individual circumstances of individual Member States, on condition that the industry takes proactive innovative measures to preserve employment levels, increase operating efficiency and reduce operating costs;

2. Member governments will strengthen markedly, their partnership with the industry in supporting marketing, product enhancement and other facilitating measures that position the industry to respond readily when the tourism source markets recover;

For the medium to long term:
3. Member States agreed in principle to the establishment of an Executive Committee of Ministers of Tourism to oversee and give direction to the long term OECS tourism development agenda.

4. Member States agreed in principle, subject to the determination of the specific functions and cost of operations, to the possibility of setting up an OECS Tourism Authority with the capacity for planning, coordinating, regulating, marketing and research and development, which will initially function as a secretariat to the Executive Committee of Ministers. The proposed Tourism Authority will initially play a coordinating role, working in tandem with OECS Ministries of Tourism, and drawing on the resources of the ECCB and the OECS Secretariat.

5. Member States agreed to collaborate more closely in the marketing of the region. Accordingly, they agreed in principle, subject to agreement by the wider Caribbean, to the implementation of a US$3 levy on airline tickets for persons travelling to the OECS and the wider Caribbean originating in overseas markets; the proceeds of which will be used to establish a sustainable funding mechanism to ensure adequate public funding of regional market campaigns.

6. In furthering the linkages between tourism and the rest of the economy, Member States agreed to urgently schedule a video-conference between the Ministries of Finance, Ministries of Agriculture, Ministries of Tourism, the OECS and the ECCB.

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