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August 13, 2020

The Caribbean Experience with PFM Responses to the COVID-19 Pandemic

Posted by Arnold Ainsley[1]

The IMF’s Fiscal Affairs Department (FAD) and the Caribbean Technical Assistance Center (CARTAC) recently organized a series of webinars for CARTAC member countries on public financial management (PFM) responses to the challenges posed by the COVID-19 pandemic. These seminars are a forum to promote peer-to-peer learning and for countries in the region to share their experiences. The first series of webinars discussed government cash management during the COVID-19 pandemic. The second series addressed preparing PFM systems for emergency response challenges during the COVID-19 Crisis.  Some lessons learned from country experiences to date are discussed below:

Lessons from the Cash Management webinar

There were some valuable lessons from participants, including the following:

  • The countries with cash reserves and other sovereign funds were better able to fund the additional expenditure associated with the COVID-19 pandemic (Turks and Caicos, BVI, Barbados, and Trinidad and Tobago).
  • Countries with PFM programs that included a mechanism to proactively reallocate cash resources and prioritize payments in a crisis, were able to quickly adjust their cash management, which resulted in all government staff being paid salaries and wages during the crisis.
  • Most countries continued to collect as much revenue as possible, with some allowance made for unavoidable deferrals.
  • Most countries were able to re-engineer business processes and make flexible use of the IT systems to allow Treasury staff to work remotely from home and conduct virtual meetings.
  • Due to accumulated savings, for example from canceled local and overseas travel, some governments were able to use these funds for their crisis intervention.
  • Some governments use the opportunity to increase their use of electronic receipts and payments
  • Some countries were able to secure donor and concessional funding to respond to COVID-19 (Barbados, Belize, Haiti, St. Lucia, Grenada, Dominica, St. Vincent and the Grenadines)
  • A few countries established Ministry of Finance or Treasury working groups to make daily strategic decisions (the Bahamas, Guyana, St. Lucia) in addition to national oversight committees.

Lessons from the webinar on PFM responses to the pandemic

The main takeaways from this event were the following:

  • Overall, revenue loss to government has been quite significant (between 25% and 40% so far compared to the previous year) this has been combined with increased budgetary spending related to the COVID-19 response.
  • Budgetary measures included external financing and/or reallocation of grants from international organizations (Barbados, Belize, Dominica, Grenada, Haiti, St Lucia, St Vincent & the Grenadines); significant use of contingency funds and cash reserves (BVI, Turks & Caicos Islands) and the transfer of non-priority expenditures to COVID-19 measures.
  • Fiscal and legislative measures (including a cut in civil servants and parliamentarians’ salaries, and staff pensions; the loosening of tax collection and/or more flexible payment arrangements of taxes); and supplementary budgets for the countries where the budget was already enacted.
  • National oversight committees have been created in most countries to coordinate responses to COVID-19.
  • The experience of dealing with natural disasters has been replicated and has helped the concerned countries to respond to COVID-19 (BVI, Anguilla, Dominica, Turks & Caicos Islands).
  • Some countries have adapted their chart of accounts to record all expenditures related to the pandemic (including Belize, BVI, Curacao, Sint Maarten, Anguilla, Dominica).
  • Most of the measures and related spending have been executed following existing budget execution procedures, however, emergency procurements procedures have been followed in a limited number of cases.
  • Internal controls and audits are being adjusted to ensure accountability for emergency spending.
  • Some innovative procedures have been put in place such as the Emergency Fund, Residential Building Fund, and the Production Fund in Suriname with an integrated database allowing them to register all beneficiaries and track related expenses.
  • Suspension of public sector pension contributions produced short term savings which could affect pensions in the long run (Bermuda).
  • Some countries also identified challenges including lack of cash forecasts and inadequate procedures and IT systems to record and report on COVID-19 related financing and expenditures.

The webinars highlighted that countries that had previously put in place PFM tools to deal with natural disasters were able to deploy them in response to COVID-19. The webinars also illustrated a strong interest in peer-to-peer exchange of experiences in the region.

This article is part of a series related to the COVID-19 Crisis. All of our articles covering the topic can be found on our PFM Blog COVID-19 Articles page.


[1] Arnold Ainsley is a PFM Advisor at CARTAC.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.


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