Dominica moves to cushion economic fallout from Middle East conflict

The Government of Dominica on Wednesday announced a series of measures aimed at cushioning the economic impact of the ongoing Middle East conflict, warning that rising oil prices and global supply disruptions could affect fuel, food costs, jobs, and overall economic stability.

Prime Minister Roosevelt Skerrit said the island is not facing any direct military threat but remains vulnerable to the economic consequences of the conflict involving the United States, Israel, and Iran.

“Let me be clear, Dominica is not in danger of war, but we are exposed to the economic aftershocks of this conflict that has already caused the largest supply disruption in the history of global oil markets,” Skerrit told a news conference.

He warned that the most immediate concern for Dominica is a sharp increase in global oil prices, noting that the country imports all of its fuel.

“We import all of our fuel and high oil prices will affect electricity costs, transportation, and the price of goods and services across our economy. We face rising costs of imported food and essential supplies, as global shipping routes and supply chains experience disruption,” Skerrit said.

The Prime Minister also cautioned that a slowdown in global travel and investment could affect tourism and capital inflows into the local economy.

To mitigate these risks, Skerrit said the government will introduce targeted relief measures to help households and businesses manage rising costs. These measures will include temporary reductions on duties and taxes for essential goods, as well as expanded support for vulnerable households through social protection programmes.

The government also plans to work closely with Dominica Electricity Services to manage rising energy costs and moderate the impact of higher fuel prices on electricity tariffs.

Skerrit noted that Dominica’s geothermal energy project in Laudat is progressing at a crucial time and could help reduce reliance on imported fuel.

The Prime Minister said the geothermal plant, located in the Roseau Valley on the outskirts of the capital, is now in an advanced stage of testing.

“Both generating units have already been tested, producing power and confirming that the plant is functioning well. Over the coming days, we will make final adjustments as we continue full performance testing,” he said.

He added that work on the transmission network, which will deliver electricity from the plant to homes and businesses, is nearing completion, while equipment at the sub-station is being installed and tested to receive up to 10 megawatts of power.

Skerrit said the geothermal project is expected to significantly reduce Dominica’s dependence on imported fuel, lower electricity costs over time, and strengthen the country’s position as a leader in clean energy.

“This is one of the main reasons why this government has remained committed to pursuing geothermal energy. It has taken some time, and it has been costly, but in the long run, we believe this will benefit our country and everyone who lives in it,” he said.

The Prime Minister also indicated that the government will engage stakeholders in tourism, agriculture, and the private sector to help protect jobs and maintain economic activity.

Additionally, Dominica will strengthen fiscal management by prioritising critical government spending while deferring some discretionary expenditures.

Skerrit acknowledged that rising prices could place pressure on households but urged citizens to remain calm.

“Dominica has faced far greater challenges before, from hurricanes to global pandemics, and we have emerged stronger each time,” he said.