Surviving the Storm

Do you know that the smallest U.S. state has a similar land area to all of the OECS countries combined?

The six independent countries in the Organization of Eastern Caribbean States (OECS) are Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.

Now, try to imagine that these small islands being hit by a hurricane or rocked by an earthquake. Buildings, roads, ports and other local infrastructure in the OECS may not have the most up-to-date hurricane-resistant or earthquake-resistant construction standards in comparison to other regions. Natural disasters have had a devastating impact on economic activity and on public finances in the OECS region.

A recently published IDB monograph, Together for Prosperity in the OECS analyses the historical impact of various natural disasters on the OECS nations during the period 2004 to 2016.

Data from the Emergency Events Database (EM-DAT) shows that during this period the OECS region incurred an estimated US$1.58 billion in total damages.  The OECS countries are most vulnerable to dangerous hurricanes and tropical storms, sometimes resulting in the loss of life, and often, irreparable damages to property, crops, and livestock. Thankfully, earthquakes in the region have been far and few between; there were no recorded instances of earthquakes with loss of life or significant property damage during the 2004-2016 period.

Hurricanes have been particularly devastating to the OECS countries. In 2004, Hurricane Ivan hit Grenada with the loss of around 39 lives and the destruction of housing, crops, and other national infrastructure. Moreover, this Hurricane led to substantial losses that were equivalent to approximately 148 percent of Grenada’s GDP, with 90 percent of homes being damaged or destroyed, and 55 percent of hotel room capacity becoming non-operative (see Figure 1). Hurricane damage to Grenada’s productive sectors led to an overall decline in economic growth from a robust 9.5 percent in 2003 as contrasted with -0.6 percent in 2004.

 

Figure 1. Total damage (Percent of GDP)

Source: EM-DAT: The Emergency Events Database – Universite catholique de Louvain (UCL) – CRED, D. Guha-Sapir – www.emdat.be, Brussels, Belgium

 

In 2015, Tropical Storm Erika devastated Dominica, with torrential rains and mudslides wreaking significant casualties and damage to infrastructure. Thirty persons lost their lives and over 570 people were left homeless in Dominica. Damages from Erika were estimated at approximately US$483 million, or approximately 97 percent of Dominica’s GDP.

The 2017 hurricane season was particularly cruel to the OECS nations and the northeastern Caribbean. Hurricane Irma, one of the most intense tropical cyclones on record, devastated Antigua’s sister island Barbuda in September, where it is estimated that 90 percent of buildings were destroyed and 50 percent of the population were left homeless. Later in September, Hurricane Maria wreaked havoc on Dominica, the “Nature Isle of the Caribbean”, as at least 30 persons died in the hurricane and approximately 80 percent of buildings on the island were damaged or destroyed.

The above stories are not uncommon to the OECS region. Each passing storm or flood challenges institutional capacity and weakens public finances. On their own, these countries do not have the financial resources to fund or to staff disaster risk management initiatives. Neither do they have the resources to continually fund the huge reconstruction bills that follow natural disasters.  The OECS region needs the international development community to partner with them in providing greater access to resources, grant funding, technical assistance and concessional financing to help build resilience to these recurring natural disasters.

Launched at the One Planet Summit in Paris in December of 2017, the Caribbean Climate-Smart Coalition aims to help unleash the means to catalyze an ambitious US $8 billion investment plan to bring greater energy security and infrastructure resilience to 3.2 million Caribbean households. Caribbean leaders in coordination with the international private sector community and a coalition of multilateral development institutions like the Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) will help to establish investment partnerships that can support the Caribbean’s transition to cleaner energy options and a more resilient infrastructure.

 

About the author:

Kimberly Waithe, a citizen of Barbados, is an economics consultant at the Inter-American Development Bank, Barbados country office since July 2014. Her responsibilities include monitoring and reporting on economic performances and prospects in Barbados and the OECS.

Previously, she was a senior economist in the Ministry of Finance and Economics Affairs in the government of Barbados, from 2011 to 2014. She started her career there in 2008 as an economist. There she monitored and evaluated key planning and strategic documents for Barbados and reported on specific aspects of the economy. In addition, she assisted in the preparation of the annual Barbados economic and social reports along with the journal of public sector policy analysis. She has also published several research papers in international and local journals. Her research interest includes public finance and public policy, economic development, and energy economics.

Ms. Waithe holds a Master’s degree in Financial and Business Economics and a Bachelor degree in Economics and Management (First Class Honors) from the University of the West Indies, Cave Hill Campus.