Inter-American Development Bank
facebook
twitter
youtube
linkedin
instagram
Abierto al públicoBeyond BordersCaribbean Development TrendsCiudades SosteniblesEnergía para el FuturoEnfoque EducaciónFactor TrabajoGente SaludableGestión fiscalGobernarteIdeas MatterIdeas que CuentanIdeaçãoImpactoIndustrias CreativasLa Maleta AbiertaMoviliblogMás Allá de las FronterasNegocios SosteniblesPrimeros PasosPuntos sobre la iSeguridad CiudadanaSostenibilidadVolvamos a la fuente¿Y si hablamos de igualdad?Home
Citizen Security and Justice Creative Industries Development Effectiveness Early Childhood Development Education Energy Envirnment. Climate Change and Safeguards Fiscal policy and management Gender and Diversity Health Labor and pensions Open Knowledge Public management Science, Technology and Innovation  Trade and Regional Integration Urban Development and Housing Water and Sanitation
  • Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Caribbean Development Trends

  • HOME
  • CATEGORIES
    • Agribusiness
    • Antigua and Barbuda
    • Barbados
    • BehaviorChange
    • Belize
    • Bermuda
    • biodiversity
    • Blockchain
    • Caribbean
    • Caribbean Culture and Media
    • Climate Change
    • Creative Economy
    • Crime Prevention and Citizen Security
    • Data and Knowledge
    • De-risking
    • Dominica
    • Dutch
    • Early Childhood Development
    • Economic Growth
    • Education Policy
    • energy
    • entrepreneurship
    • Environmental and Climate Change
    • Events
    • Extractives
    • Finance
    • Fiscal Rules
    • gender
    • Governance and Regulatory Policy Reforms
    • Grenada
    • Guyana
    • Haiti
    • Health
    • Health Policy
    • Hurricane
    • Hurricane Irma
    • infrastructure
    • Innovation and change
    • Intellectual Property
    • IWD
    • Jamaica
    • JumpCaribbean
    • Labor
    • Labour Markets
    • MOOC
    • Music
    • Natural Disasters
    • Nurturing Institutions
    • OECS
    • Podcast
    • Poverty
    • Private Sector and Entrepreneurship
    • Saint Kitts and Nevis
    • Saint Lucia
    • Saint Vincent and Grenadines
    • skills
    • Sports for Development
    • Suriname
    • Technology
    • The Bahamas
    • The Blue Economy
    • Transportation
    • Tourism
    • Trinidad and Tobago
    • Uncategorized
    • VAWG
    • Webinar
    • women
    • Women for Change
    • youth
  • Country Offices
    • Bahamas
    • Barbados
    • Guyana
    • Jamaica
    • Suriname
    • Trinidad and Tobago
  • Press Releases
    • Bahamas
    • Barbados
    • Guyana
    • Jamaica
    • Suriname
    • Trinidad and Tobago
  • Authors

COVID-19, The Caribbean Crisis

May 14, 2020 by Diether W. Beuermann - Laura Giles Álvarez - Bridget Hoffmann - Diego Vera-Cossio Leave a Comment


COVID-19 is taking an unprecedented (albeit still unknown) toll on Caribbean region’s economic growth. According to the recently published Caribbean Quarterly Bulletin, the decline in the tourism industry will particularly affect The Bahamas, Barbados and Jamaica. Plummeting international commodity prices are having severe consequences in Guyana, Suriname and Trinidad and Tobago.

The crisis is impacting both lives and livelihoods. To understand how, the Inter-American Development Bank carried out an online socioeconomic survey across all 6 countries of the Caribbean. Almost 12,500 households responded over a 2-week period from April 16 to April 30, 2020. Individual data is confidential, in accordance with the standards set by the Internal Review Board of Cornell University, which approved the survey.[1]

Four important trends emerge from the data:

1. The number of vulnerable households has roughly doubled in the first six weeks of the pandemic. The percentage of Caribbean households with income levels below the minimum wage (the first two columns of Figure 1) increased from 23% in January 2020 to about 43% in April 2020. The figure shows consistent reductions across all income levels, in the fractions of households earning more than the minimum wage.

Figure 1. Household and Income Distribution in the Caribbean

2. Vulnerable households are finding challenges to cover basic needs. Figure 2 shows that 36.9% of households earning below the minimum wage reported experiencing hunger, while 48.7% of them reported deleterious changes in their diet with respect to the pre-pandemic period.[2] These adverse effects become less serious as household income increases.

Figure 2. Hunger and Changes in Diet in The Caribbean

3. Labor market impacts are highly unequal. Lower average incomes and uncovered basic needs reflect an unprecedented rate of job losses in the region. Figures 3 and 4 show that households which were relatively more disadvantaged before the crisis have been more affected in the labor market; a reality that will likely exacerbate pre-existing inequalities. Both commodity and tourism dependent countries show a larger prevalence of job losses in households that earned below the minimum wage in January 2020. A similar pattern, although less pronounced, is observed for the incidence of business closures. Tourism dependent countries approximately double the rate of job losses for both the highest and lowest brackets of the income distribution, when compared to commodity dependent counterparts: 77.3% vs 44.2% among lower income households and 36.1% vs 14.2% among higher income households.

Figure 3. Labor Market Impacts on Tourism Dependent Countries (The Bahamas, Barbados, Jamaica)

Figure 4. Labor Market Impacts on Commodity Dependent Countries (Guyana, Suriname, Trinidad and Tobago)

4. Social assistance programs are playing a major role in supporting livelihoods; but targeting could be improved. Most countries in the region offer universal access to health and education services, free at the point of delivery, as well as a wide range of social assistance programs. These programs have constituted important mechanisms to reach and support persons who are being affected by the crisis. Figure 5 shows social programs’ coverage rates before and during the pandemic. Social assistance programs have increased their coverage by 6.3 percentage points among low income households and by about 2 percentage points for households who earned above the minimum wage. This tells us that although social safety nets coverage has increased relatively more among disadvantaged households, they are also a source of inefficiencies in the public spending system. Indeed, leakage is significant. Pre-pandemic coverage rates were equivalent between households earning below 1 minimum wage and those earning more than 4 minimum wages (23.5% vs 24.2%).[3]

Figure 5. Coverage of Social Programs in The Caribbean

How are governments responding?

The region faces an unprecedented challenge and governments are responding through aggressive social distancing measures and by rolling out support packages for individuals and firms. The table below presents a summary of the main measures carried out to date in all the 6 Caribbean Department countries of the IDB. Most countries are containing the spread of the virus and are either reopening their economies or have announced a strategy to do so in the next few weeks.

Table 1. Policy Measures in Caribbean Countries

More and better targeted measures will be required from governments. The crisis will very likely continue throughout 2020 and beyond. In the face of increasing fiscal constraints to meet rising social demands, better targeting mechanisms will be necessary. As such, high quality and timely granular household level data will be highly needed. Despite significant recent advances in data collection across Caribbean countries, the COVID-19 crisis has evidenced the remaining gaps in this area. As recently stated by Jamaican Prime Minister Hon. Andrew Holness: “This is the real test of the society now. Are we in a time of crisis able to identify everyone? And the answer is no”. Fortunately, technological advances in terms of alternative methods of online and mobile based data collection could help in this endeavor.

[1] Notice that the data collected has been reweighted exploiting information from representative household level surveys across Caribbean countries. Therefore, the data collected online that we use to reproduce the results of this blog is already calibrated to meet representative socioeconomic parameters of Caribbean populations.

[2] All results in this blog are displayed by income level group, relative to the minimum wage (MW), during January 2020. That is households are classified according to their pre-pandemic vulnerability in terms of income.

[3] Leakage is defined as the proportion of non-eligible persons receiving benefits from social programs. In this case, both poor and non-poor households are receiving benefits from programs which should generally be targeted at the poor.


Filed Under: Coronavirus, Economy & Investment, Social Systems

Diether W. Beuermann

Diether W. Beuermann is a Lead Economist in the Caribbean Country Department of the Inter-American Development Bank. He has led research and data collection projects in various countries, including Barbados, Colombia, Guyana, Jamaica, Peru, Russia, Suriname, The Bahamas, Democratic Republic of Congo, Trinidad and Tobago, and the United States. His research has covered the effects of different information and communication technologies on agricultural profitability, child labor, academic performance, pre-natal care, and neo-natal health. He has also conducted research on the effectiveness of participatory budgeting, the short- and long-run effects of educational quality, the multidimensional nature of school causal effects, the determinants of school choice, the effectiveness of math-focused parenting programs, the role of remittances as a social insurance mechanism, the effects of early-life weather shocks on short- and long-term human capital accumulation, the effects of public health insurance on health outcomes and labor supply, the effects of behavioral-based entrepreneurship training on firm profitability, the effects of blue-collar crime on financial access and credit prices of affected firms, and whether and how conditional cash transfers may affect the effectiveness of other human capital development policies. He has published in several leading international peer-reviewed journals, including the Review of Economic Studies, American Economic Journal: Applied Economics, Journal of Human Resources, Journal of Health Economics, Journal of Development Economics, and World Development. He holds a B.A. in Business Management and a B.Sc. in Economics from the Universidad de Lima, a M.Sc. in Finance from the University of Durham, and a M.A. and Ph.D. in Economics from the University of Maryland-College Park.

Laura Giles Álvarez

Laura Giles Álvarez is the Country Economist at the Inter-American Development Bank (IDB) in Colombia, having previously worked as a Country Economist in Haiti, Barbados, and The Bahamas. Laura started her career at the IDB as a young professional in the Social Protection and Health Division and the Economics Team at the Caribbean Country Department. Before joining the IDB, Laura worked as a public financial management consultant, where she designed and executed projects on macro-fiscal policy, expenditure management, and the budget cycle in Kenya, Mozambique, Timor Leste, and Angola. Additionally, she served as an ODI Fellow in the fiscal team within the Macroeconomic Policy Department at the Ministry of Finance in Timor Leste. Laura holds a double master's degree in economic development from the University of Carlos III, Madrid, and Lund University.

Bridget Hoffmann

Bridget Hoffmann is an economist in the Research Department of the Inter-American Development Bank. Her research interests are applied microeconomics, development economics, and environmental economics. She received her Ph.D. in Economics from Northwestern University in 2015. She holds a bachelor’s degree in Financial Economics and Mathematics from the University of Rochester.

Diego Vera-Cossio

Diego Vera-Cossio is an economist in the Research Department of the Inter-American Development Bank. His area of interest is development economics. In particular, his research analyzes how different policies help or prevent family businesses from growing in contexts in which access to finance is limited. He is also interested in understanding how different methods of targeting and delivering resources from public programs affect policy effectiveness. Diego, a citizen of Bolivia, received his Ph.D. in Economics from the University of California, San Diego in 2018. He holds a Master’s Degree in Economics from Universidad de Chile and a Bachelor’s Degree in Economics from Universidad Católica Boliviana.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Follow Us

Subscribe

Search

Caribbean Dev Trends

We provide unique and timely insights on the Caribbean and its political, social, and economic development. At the IDB, we strive to improve lives in the Caribbean by creating vibrant and resilient economies where people are safe, productive and happy.

Similar posts

  • The Pandemic Saga Continues: Caribbean Quarterly Bulletin
  • Understanding Financial Vulnerability and Promoting Resilience in Barbados during COVID-19
  • What we know and what we don’t know about the social realities in the Caribbean
  • Are women worse off after 2020?
  • Regional Report: Labor and Social Programs in the Caribbean

Footer

Banco Interamericano de Desarrollo
facebook
twitter
youtube
youtube
youtube

    Blog posts written by Bank employees:

    Copyright © Inter-American Development Bank ("IDB"). This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives. (CC-IGO 3.0 BY-NC-ND) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC- IGO license. Note that link provided above includes additional terms and conditions of the license.


    For blogs written by external parties:

    For questions concerning copyright for authors that are not IADB employees please complete the contact form for this blog.

    The opinions expressed in this blog are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors, or the countries they represent.

    Attribution: in addition to giving attribution to the respective author and copyright owner, as appropriate, we would appreciate if you could include a link that remits back the IDB Blogs website.



    Privacy Policy

    Copyright © 2025 · Magazine Pro on Genesis Framework · WordPress · Log in

    Banco Interamericano de Desarrollo

    Aviso Legal

    Las opiniones expresadas en estos blogs son las de los autores y no necesariamente reflejan las opiniones del Banco Interamericano de Desarrollo, sus directivas, la Asamblea de Gobernadores o sus países miembros.

    facebook
    twitter
    youtube