24 June, 2009 - Published 10:08 GMT

By Ken Richards
Part two of a series on the impact of the recession

Riding the recession

Most Caribbean states are grappling with the high cost of living and the impact of the global recession.

Barbados and St Vincent and the Grenadines are two Caribbean nations suggesting that they are not faring too badly.

Although they, like their other Caribbean neighbours, have seen their economies contract and jobs are being lost, mainly in the private sector.

Tourism and sugar are two important foreign exchange earners for Barbados.

For St Vincent and the Grenadines, the pillars of the economy are agriculture, the offshore financial sector and tourism.

Vincentian Prime Minister Ralph Gonsalves has embarked on the very major project of constructing an international airport with help from several donor countries including Venezuela and Taiwan.

He's hoping that the airport will become a reality and contribute in a meaningful way to the economic development of the country.

Bajan moves

The David Thompson administration in Barbados, aware that the country's tourism sector is feeling the impact of the global financial crisis, has moved to minimise losses there.

Tourism received some significant attention in a recently presented budget.

The business community too is being helped with a view to prevent job losses.

The international ratings agency, Standard and Poors, lowered its credit rating on Barbados this month - another sign of the pressures Caribbean economies are facing.

The island's long-term foreign currency rating is down from triple B plus to triple B but the New York-based agency said the economic outlook remains stable.

Standard and Poors said it expected prudent policy-making and strong cohesive social policies to help steer Barbados through this difficult period.

The agency forecast that the country's economy would decline by 2.5% this year before gradually recovering by 2011.

Things are slow

When I visited the Bridgetown market, vendors were admitting that 'things are slow'.

But they were not necessarily blaming this on the recession.

One vendor selling agricultural produce denied that people were complaining about her prices.

Another told BBC Caribbean that 'people are not buying' but added that she didn't have a clue why they weren't.

Breadwinners who have lost their jobs say they are bouncing back with help from other employed family members.

It is not clear how the average family is coping, but a couple I spoke to indicated that the recession hadn't quite reached them - at least that was the wife's view.

''We're coping pretty well. We're still shopping as usual, travelling as usual, so we haven't really felt it yet'' she told BBC Caribbean.

But her husband countered that they had made some adjustments: ''buying one kind of milk instead of two, cutting back on buying 18 and 20 dollar chickens when you can buy 12''.

The President of the island's Small Business Association, Celeste Foster, says there has been some fallout with regard to sales.

''Some of the business we would have had from some of our external international players we are obviously not getting here'' she told BBC Caribbean.

Small businesses

In St Vincent and the Grenadines, the former Chamber of Commerce President Jerry George, who doubles up as a local analyst, described three tiers for the Vincentian economy: the offshore financial sector, agriculture and tourism.

He told me all three are hurting.

He concludes, the local economy is in trouble.

As in Barbados, the small business sector in St Vincent and the Grenadines is under pressure.

Business woman Evelyne Cambridge runs a car parts and accessories firm and she is also into shipping.

She has had to send staff home and relocate as part of cost-cutting measures intended to keep her business afloat.

She told BBC Caribbean that customers are not shopping at her business as often as before.

"They need the stuff but it's just that they don't have the money," she said.

More losses to come

Prime minister Ralph Gonsalves told me that stimulating the economy was both a challenge and a priority.

"You have a general depression in economic activity which you have to try and stimulate in different ways," he explained.

The prime minister acknowledges that tourism is facing a tough uphill climb.

Dr Gonsalves describes the next five months as difficult ones for tourism in his country.

"Tourism earnings are going to take a further dive," he said, adding that that would provide some additional challenges to the government.

Across the island consumers are complaining about high prices, especially as it relates to foodstuff.

People I spoke to blame a 15% value added tax (VAT) imposed by the government for making a bad situation even worse.

But Prime Minister Gonsalves says the VAT has merely replaced a previous tax and is in some cases lower than before.

Feeling the pain

The prime minister's explanation appears to be of little comfort to residents of the financially challenged Sion Hill squatter community on the outskirts of the Vincentian capital Kingstown.

I visited the area to get a sense of how the people there were coping.

Things are 'very very expensive', one man informed me, adding: "Sometimes when you done pay your bill, you could hardly eat properly".

A woman who lives further down the road and works as a janitor agreed that 'things were really rough'.

"Because the little salary they giving, when de lightbill done take it, you can't even self buy food," she told me.

A younger woman pointed out that rice and sugar had 'gone up' and that buying chicken had become a luxury.

They may be hurting, but survival is a clear priority.

The people I met in St Vincent and the Grenadines, like their Barbadian counterparts, seem determined to successfully ride the recession.

They are using their very limited resources as creatively as possible 'stretching that dollar' in an effort to make ends meet in difficult times.