Small Island Developing States (SIDS) are characterised by their exposure to a variety of risks and limited capacity to deal with them when they occur. This is particularly true in the Eastern Caribbean, being especially prone to natural disasters that are up to 6 times more damaging when compared to developed countries.
Now we are bracing up for yet another hurricane season, while dealing with the dramatic impacts of COVID-19.
Countries in the region have responded well on the health front, despite the global tension to access medical and protective equipment and supplies. However, the implications of the COVID-19 crisis are manifold given this region’s economic, social and environmental vulnerabilities. The regularity of natural disasters – as evidenced by Dominica during the deadly 2017 hurricane season – gives countries a very narrow window of opportunity to recover and rebuild their resilience.
Economic vulnerabilities facing the Eastern Caribbean
Limited resources and economic diversification in Eastern Caribbean countries, compounded by their small size and remoteness, constrain development. Regional integration when fully realised will contribute to widening markets, but until then doing business will call for some ingenuity.
The Caribbean has successfully used its natural patrimony to develop service-based economies, which account for as much as 75% of GDP. Tourism can account for up to one-half of GDP and provide jobs for a similar proportion of the labour force. It is without doubt the region’s most prized asset. However, with 80% of tourists from the US, Canada and the UK, it has become a key vulnerability with COVID-19.
Border closures and travel restrictions within the COVID-19 context, have taken a toll, impacting citizens of all walks of life from hair braiders and crafts persons on Grand Anse Beach in Grenada to large tour operators and hoteliers on Barbados’ prized West Coast. No one is exempt!
Lingering reconstruction costs of past disasters squeeze fiscal space to tackle COVID-19. Financing past disaster recoveries through debt has, for many, crowded-out development expenditures. High public debt – domestic plus external – levels of well over 60% of GDP were commonplace before COVID and limit fiscal space for years to come. As governments resort to fiscal stimulus measures to keep their economies afloat, COVID-19 will only add to this region’s debt burden. The time for debt forgiveness is now.
Social and environmental vulnerabilities facing the Eastern Caribbean
High unemployment and aging populations, with a concomitant prevalence of non-communicable diseases (NCDs), add to this region’s troubles. Regional unemployment ranges from 10% – 25%. COVID-related job losses within the service industry, will exacerbate this situation.
Aside from wasted economic potential, joblessness induced by this pandemic harbours a darker side and could further fuel a host of other socially adverse consequences.
With old age-dependency above the global average, pressures on public finances to meet the health, pension and social security commitments are high. Health systems have become further stretched by a high prevalence of NCDs. While spending on health varies across the region (between 3% and 7% of GDP), Eastern Caribbean health systems perform substantially below the global average, forcing this region on the back foot as it tackles this health crisis.
The poor and vulnerable are particularly at risk, including employees who would have lost their jobs in the tourism sector and fisherfolk belonging to vulnerable households suffering from the lockdown. Many also operate in the informal sector (accounting for as much as 40% of GDP), are uninsured and have difficulty accessing social protection schemes. A lot has been done in the region to protect the most vulnerable. However Caribbean Governments will require adequate fiscal space to develop effective and progressive social safety nets, as they seek to restore livelihoods and income security following this crisis.
After COVID-19, the Caribbean’s needs will be far from over. Climate change – an existential threat – will continue to put significant financial strain on Caribbean countries. The need for increased investment for resilience is ever-present. The COVID-19 pandemic has made it necessary for Caribbean countries to reassess their preparedness against a wider range of increasing risks – including health pandemics. Accustomed to the impacts from natural disasters, the Caribbean will not only need resilience against global warming but also to a new wave of health risks that threaten the lives and livelihoods of its citizens.
It cannot be business as usual
Effective response demands decisive leadership and commitment from all partners around the globe to ensure that ‘no one is left behind’ and ‘no country is left behind.
This is why the United Nations COVID-19 Multi-sectoral Response Plan and Funding Appeal for Barbados and the Eastern Caribbean states was launched on 6th May to support the region to tackle this crisis with resources it urgently needs. This appeal will prioritize health and wellness, food security, economic recovery, social protection, education, and protecting the most vulnerable.
It complements the ongoing advocacy by the SIDS nations for a differential treatment, based on their vulnerability. But the sustainability of this response will depend on solidarity and international support. A regional compact to deliver debt relief and increase resilience financing is also needed between Caribbean countries, bilateral, multilateral agencies and private sector. This will augur well in disrupting the vicious circle of uncertainty, debt-dependency and unrealised sustainable development potential.