SPOTLIGHT ON SAINT LUCIA
Reform in action—using the Covid-19 crisis to accelerate the disaster responsiveness of public financial management systems. Caribbean countries are highly vulnerable, both physically and fiscally, to natural hazards. This vulnerability makes it imperative for the region to focus on resilience. Past development progress can be jeopardized as natural hazard events intensify due to climate change. Saint Lucia has been working to improve its fiscal resilience by making its public financial management system more responsive to disaster risks. Coincidentally, this has also helped to boost its preparedness to confront health crises such as the novel coronavirus pandemic.
Saint Lucia is frequently affected natural disasters—hurricanes, earthquakes, droughts, floods, and landslides—which usually cause significant physical and financial damage. The country is particularly vulnerable to the impacts of hurricanes and earthquakes, which cause average annual losses of USD 9.5 million (0.66 percent of GDP) and USD 2.56 million (0.18 percent of GDP), respectively. The rapidly evolving COVID-19 pandemic is posing many similar challenges for the Saint Lucian economy, calling for extraordinary measures to safeguard lives, health, and livelihoods. The Government of Saint Lucia (GOSL) faces the dilemma of mobilizing unprecedented resources to meet increased spending on health and fiscal stimulus packages as revenue collection is decreasing or delayed as the economy is deliberately put to sleep to slow the spread of the virus.
Conventional public financial management (PFM) systems are often ill-equipped to facilitate rapid response while maintaining accountability and transparency in times of emergency. The administration of disaster risk financing needs to be responsive and flexible, while ensuring value for money and minimizing fraud and corruption. Saint Lucia is making several quick fixes to its PFM system that are simultaneously enhancing its capacity to better support COVID-19 responses