Tuesday, June 25, 2024
HomeOpinionCommentaryFrom vulnerability to resilience in the Caribbean Community

From vulnerability to resilience in the Caribbean Community

The following is an article written by Secretary-General Luis Almagro, originally published in the Uruguay newspaper, Cronicas, October 29, 2021. 

“The article is consistent – and reflective – of the undertakings give to us by Secretary-General Almagro at our several meetings, attended by many of us, including our recent lunch meeting with him,” said Sir Ronald Sanders, Ambassador of Antigua and Barbuda.

By Luis Almagro

The COVID-19 pandemic has made the multidimensional nature of the development challenges facing countries in the region a reality and has exposed structural problems and vulnerabilities. In this column I want to refer especially to those of 14 members of the Organization of American States (OAS). These States make up the Caribbean Community (CARICOM) group, most of which are among the smallest and most vulnerable countries in the hemisphere.

These island and coastal states have well-known, inherent, structural and systemic vulnerabilities, due to their remote locations, small size, openness of their economies, and technical and financial constraints. In addition, they are highly susceptible to climate change and its adverse effects, including sea-level rise, rising and intense hurricanes, droughts and floods; economic and fiscal crises in the economies of its major trading partners; and the accompanying humanitarian issues that arise from the impact of all these external events.

The pandemic has exacerbated many of these challenges and highlighted the existential threats posed by these exogenous factors. Economic security, health and human security, food security and environmental security are all intertwined and at stake in a very strong way.

The impact of the pandemic has been transmitted to the Caribbean through five channels: a collapse of the tourism industry; worsening financial conditions with insufficient response from the international financial institutions; a reduction in remittances from developed countries where migrant workers are mainly among those who have lost their jobs; a fall in commodity prices as a result of a global rise in unemployment and the consequent fall in demand for raw materials; and an abrupt reduction in foreign investment.

If covid-19 is controlled, it will be at least two years before the tourism industry returns to normal. Many CARICOM economies will contract dramatically by then, post negative growth and have serious problems providing the fiscal stimulus needed for recovery.

Some CARICOM countries, including many that are vulnerable to hurricanes, have ceased to have access to favourable financing conditions. Therefore, based on existing criteria, based primarily on per capita income, these countries will not qualify for the considerations that the World Bank (WB) and the International Monetary Fund (IMF) are giving middle-income countries, including financing needs and debt relief or even access to the Fund’s Quick Credit Facility.

As economies continue to weaken, with insufficient response from the international community for debt rescheduling and access to concessional financing, unemployment and poverty are increasing. In addition to the economic impact of the pandemic, there will surely be social upheavals and increased crime levels. All of this could lead to a vicious cycle of rising debt and further underdevelopment, which, in turn, could lead to eroding governance conditions. Democratic stability is a hallmark of most CARICOM countries.

It is necessary to propose a new partnership framework, within which the international community, specifically the richest and most developed nations and international financial institutions, can support CARICOM’s efforts to reduce vulnerability and build resilience, based on quantifiable measures, so that these countries can ensure their long-term viability and further develop their capacities to fully integrate into the global economy.

Energy insecurity persists even in those CARICOM member states that have been misclassified as high-income countries. Without a more inclusive approach to cooperation by extra-regional partners, International Financial Institutions (IFIs) and Multilateral Development Banks (MDBs), to achieve energy security, CARICOM countries will not acquire the necessary infrastructure and institutional capacity. With the exception of the three oil and gas producing countries – Guyana, Suriname and Trinidad and Tobago – they will continue to be energy insecure by paying high prices for energy which, in turn, will increase production costs in their agricultural, manufacturing and tourism industries.

However, these circumstances provide an opportunity for profitable foreign investment and IFIs support in the development of renewable energy sources to which CARICOM governments are fully open as public-private partnerships or as buy-sell, operate and transfer companies.

Food security is a relevant issue for most CARICOM countries. Climate change has already adversely affected food production and is expected to have a worse effect. Extreme heat, droughts, floods, saltwater encroachment due to rising sea levels and storms have damaged agricultural productivity and led to increases in food prices and income losses. Persistent hurricanes have wiped out crops, driving farmers into bankruptcy and forcing them to close the business, in many cases permanently. According to the Food and Agriculture Organization of the United Nations (FAO), it is possible that in 2050 there will be decreases in crop yields of 10 to 25 percent due to climate change.

The Caribbean and Central America is the first frontier against climate change, these are the most affected countries in the world. With regard to hurricanes that, year after year, destroy one or more CARICOM countries, keeping them in a cycle of high debt, it is proposed that IFIs and donor governments, especially G20 countries, establish a “Caribbean Recovery Fund” that would be a rapid response facility that addresses the urgent need to rebuild in a resilient manner after hurricanes, but also to build before hurricanes to minimize damage should they occur.

The IMF, WB and IDB and the G20 countries should consider special arrangements for CARICOM countries, including (a) the suspension of per capita income as a criterion for concessional financing; (b) debt relief, including suspension of debt payments, cancellations of ageing debt, in particular by the Paris Club; (c) budget support through a combination of grants and low-cost loans on a country-by-country.

G20 countries should increase PAHO resources, as well as direct programs through the Caribbean Development Bank to help CARICOM countries with the extraordinary public health expenditures that have arisen abruptly as a result of the effects of covid-19.

In tourism, the G20 authorities should consider the formulation of a cooperative relationship with CARICOM countries establishing protocols for travel between their countries, by air and sea, with the creation of safe travel procedures and mechanisms to restore tourism flows.

The pandemic has underscored the need for hemispheric and international communities to support the ongoing efforts of CARICOM countries to decrease their vulnerability and improve their resilience to exogenous shocks that are not of their own making. The imperative now is to establish effective and meaningful collaborative mechanisms to mitigate global risks and threats, increase preparedness levels, and promote uniformity of response.

As CARICOM governments design and implement strategies to emerge from the crises generated by the COVID-19 pandemic, the imperative to build more resilient economic, social and environmental systems has never been more urgent. In this regard, it is necessary to forge a new consensus, in which regional governments and their international partners seize the opportunity presented by the pandemic to strengthen capacities, in pursuit of a more sustainable and equitable future.



Please enter your comment!
Please enter your name here


Caribbean News

United States establishes economic diplomacy action group to bolster US competitiveness

By Caribbean News Global WASHINGTON, USA - Last week, President Biden signed a Presidential Memorandum establishing the Economic Diplomacy Action Group (EDAG), a new...

Global News

Africa offers attractive investment opportunities for Japanese firms, says ADB leaders

JAPAN / AFRICA - Africa presents a compelling investment destination for Japanese firms, with high growth potential and the African Development Bank's strong support...