Disclaimer: The views and opinions expressed by this author are their own and do not represent the official position of the Barbados Today Inc.
The global spread of the Coronavirus pandemic, Covid 19, has created an unstable global economic situation at the beginning of the first year of the third decade of the twenty-first century. The ultimate effects of this crisis cannot be anticipated and are still being analyzed extensively by national health and economic experts and international organizations.
The crisis, the origin of which is exogenous to Latin America and the Caribbean, has already monopolized discussions about the future of economic development in Latin America and the Caribbean and many suggested immediate measures have been recommended for implementation to mitigate its effects.
There is a general view that this health crisis has already evolved into an economic crisis and there is the possibility of a food crisis. The World Food Program and the Food and Agriculture Organization of the UN have already predicted the occurrence of famines of biblical proportions in the near future.
The Covid crisis will have a significant negative impact on the economic growth and social stability of the Caribbean region.
The World Bank, the IMF, the ECLAC, the BID, and the CDB have all indicated that there will be significant economic and social dislocation in the region.
Distinguished Caribbean economist, Marla Dukeran writes: “The socio-economic effects of COVID-19’s sudden-stop represent the most significant shock we have experienced in about 100 years, with global implications that we can’t yet imagine.
In the past weeks, global financial markets have gyrated unbelievably, international travel and shipping have all but collapsed, supply chains have buckled, and the global safe haven – the US Dollar – has strengthened to the highest level in three years. Note that all the currencies pegged to the USD would have strengthened against other major currencies in a similar fashion – meaning that their external competitiveness would have deteriorated.”
She argues that “The current crisis created multiple challenges simultaneously: a health crisis, sudden-stop of economic activity, volatile financial markets, weak investor confidence, capital flight, exchange rate volatility, tighter financial conditions, price shocks, lower remittance inflows, and reduced availability of traded goods.
The effect that this crisis will have on each country depends on prior conditions and economic structure and degree of diversification of the economy. Professor Bert Hoffman from the German Institute of Global and Area studies in Hamburg, Germany, notes in a recent article called “Curse of the Caribbean” that “In many small Caribbean states, tourism accounts for three quarters of foreign exchange earnings and the majority of jobs.
On larger islands like Jamaica, one-third of the population is directly or indirectly employed in the tourism sector. Over time, the drastic lockdown measures imposed by almost all Caribbean governments will be relaxed. But there is no indication that their economic mainstay will recover.”
Although tourism authorities and operators seek to spread optimism, Caribbean tourism will not truly recover before Covid-19 vaccines are widely available and utilised. That means that almost all bookings for both the summer and the winter high season will be canceled. The social policies currently being drawn up won’t begin to compensate for earnings lost over such a long period.
For many years, Caribbean countries grew by narrowly focusing on tourism. However, that resulted in great social inequality and massive dependency on imports for nearly all daily necessities, first and foremost food.
Seven-member states of the Caribbean Community CARICOM, including Jamaica and Trinidad & Tobago, import more than 80 per cent of their food. More than 90 per cent of the food for Antigua, St. Kitts, and the Bahamas is imported.
This Covid-19 health crisis, this silent tsunami, has exposed the vulnerabilities of Caribbean economies and our model of economic development. There are five factors that will have negative influences going forward viz: 1. Climate change; 2. High levels of chronic non-communicable diseases; 3. High levels of debt; 4. High dependence on the tourism sector; and 5. High levels of food insecurity.
The world’s Small Island Developing States (SIDS) face many similar development challenges, including limited landmass and arable land; small, and often scattered, populations; fragile natural environments; dependence on imported energy sources; high vulnerability to climate change, natural disasters, and external economic shocks; heavy reliance on food imports; a limited number of economic sectors; distance from global markets; malnutrition (undernutrition, micronutrient deficiencies, and overweight and obesity); and high rates of diet-related non-communicable disease.
The COVID-19 pandemic is challenging the food security, nutrition, and climate resilience of SIDS even further. (FAO).
These observations by the Food and Agriculture Organization of the United nations paint a vulnerable picture of small island developing states.
In 2008-2009 during the last financial crisis and food crisis, due mainly to food shortages, the cost of wheat increased by 130 percent, the cost of rice by 74 percent, the cost of soybeans by 87%, and the cost of corn by 53%. In less than 24 months, world food prices had escalated to unprecedented levels and there were food riots in at least 20 countries of the world, as a result of the scarcity and lack of access to food.
Today, while considerable progress has been made and global food supplies are said to be adequate, recent events in some countries suggest that another food crisis is possible.
The head of the U.N. food agency warned recently that, as the world is dealing with the coronavirus pandemic, it is also “on the brink of a hunger pandemic” that could lead to “multiple famines of biblical proportions” within a few months if immediate action isn’t taken.
World Food Program Executive Director David Beasley told the U.N. Security Council that even before COVID-19 became an issue, he was telling world leaders that “2020 would be facing the worst humanitarian crisis since World War II.”
That’s because of wars in Syria, Yemen, and elsewhere, locust swarms in Africa, frequent natural disasters, and economic crises, in Lebanon, Congo, Sudan, and Ethiopia.
Beasley said, “today 821 million people go to bed hungry every night all over the world, a further 135 million people are facing crisis levels of hunger or worse,” and a new World Food Program analysis shows that as a result of COVID-19 an additional 130 million people “could be pushed to the brink of starvation by the end of 2020”.
Should the predictions of the FAO become reality what implications can this have for Barbados and the Caribbean? Is the Caribbean ready to face the Post-Covid realities?
Dr. Chelston WD Brathwaite is former Director-General of the Interamerican Institute for Cooperation on Agriculture (IICA) and former Barbados Ambassador to the People’s Republic of China.