On behalf of the small island and coastal states of the Caribbean, let me convey sincere appreciation to the Inter-American Development Bank (IDB), International Monetary Fund (IMF) and the World Bank for organizing this conference today. It has provided a most timely opportunity for valuable discussion on resilience to disasters and climate change.
I am truly honored to have been asked to deliver the keynote address and hope that my words will resonate with you and challenge each person here, to a new paradigm of how we think about building resilience to disasters in the Caribbean; as well as the associated development finance challenges that we face in order to do so.
Let me start with a short story.
A group of Caribbean friends were sitting under a mango tree. They began a heated discussion on “who is the greatest Caribbean athlete”. The Trinidadian states, “of course its Brian Lara, the greatest batsman of all time”. The Grenadian says, “It has to be Kirani James – prodigious from a young age in the 400 metres”. The Barbadian says, “without question, it has to be Sir Garfield Sobers, the greatest cricketer of all time”. The Bahamian says, “it has to be Shaunae Miller – just look at what she has achieved in the 200 and 400 metres. After a long pause, the Jamaican says “this is ano brainer – it is Shelley-Anne Frazer Pryce she is the first Caribbean Woman to win a Gold at the Olympics in the 100 metre race!”
This, ladies and gentlemen, is how we all perceive and “feel” climate change impacts. We all have different opinions, capacities and experiences and therefore differently perceive how we should respond. We even differ on how we should go about building resilience, what to prioritize and the financial instruments required to deal with each climate issue.
The biggest takeaway from the story justnow, is that with the multitude of climate related threats and impacts facing us as small islands, there will be no one correct solution to building resilience. It will require many different, innovative responses. Whether it is public/private partnerships, insurance instruments, debt for adaptation swaps, risk platforms, or other solutions.
So, while we may all differ on who the greatest Caribbean athlete is – (and of course many persons would have said it’s Usain Bolt); let me speak on what we can all agree on. We agree that as natural disasters become more frequent, so do the adaptation costs imposed on us as small island developing states (SIDS) – especially since we are on the frontline of climate change impacts. We have growing populations, and we are facing rapid urbanization in coastal zones with corresponding falling populations in rural areas and on our outer islands. Some more than others are also facing the pending loss of limited land mass due to sea level rise.
One common theme is that the cost of repeated natural disasters has been underestimated and this is making sustainable development and prosperity much harder to achieve – especially as we are confronted with many development challenges which affect our economic growth – such as high levels of poverty, debt and crime – among others.
What is clear to many of us though, is that meeting the Sustainable Development Goals and the goal of “leaving no one behind” will become increasingly costly, more challenging and likely not be met… unless measures are taken to reduce the vulnerabilities and build the resilience of SIDS to the climate change impacts which continue to set us back.
This will require increased partnership and support as well as using existing support more effectively and making new resources available for us to build the required resilience at the country, community and individual levels.
Moody’s Analytics in its Economics of Natural Disasters, published earlier this year states that among the 20 most vulnerable countries in the world, more than half represent small island states across the Caribbean and Pacific Regions.
To illustrate this point further, let us recall that the 2017 Atlantic Hurricane Season – a watershed year for the region – left 18 countries in the Caribbean severely battered with an estimated damage and loss of $130 billion US dollars.
In the case of Dominica – one of the countries which bore the brunt of the impact – a post-disaster needs assessment conducted following Hurricane Maria, estimated their total damages stood at US$931 million while their complete losses was another US$380 million. This amounts to almost 230% of the island’s GDP in the previous year. But the impact is actually much more than just the US$1.31 billion in damages and losses.
Consider the damage to the country’s housing stock — 15% destroyed, 75% damaged — at an estimated cost of US$382million;
Consider the damage to critical infrastructure — roads, bridges, water systems, electricity, telecommunications;
Consider the impact on the agriculture and tourism sectors which are critical for supporting food security, economic activity and providing a livelihood for tens of thousands;
And these are only the visible aspects of natural disasters which we can only attempt toascribe a “post-disaster cost” to.
But what about the incalculable impact on the entire population who were either directly or indirectly affected by this disaster?
Very often we fail to consider the total social and psychological impact and other realities faced by countries struck by these natural disasters.
We fail to consider the human impact.
So today, I wish to take this opportunity to pose a challenge to us all:
I want us to begin to think of resilience beyond these natural disaster events – or what we refer to as sudden events.
I wish to use this platform to catalyze the dialogue to include the impacts that are not easily visible. Those affecting our sensitive Blue Economy, and for which we have limited adaptation options. The ones I refer to as the “slow cancers of climate change”, the ones that have a completely different temporal and spatial scale than what we are accustomed to talking about. I want to challenge us today to start including in our resilience dialogue, what the United Nations Framework Convention on Climate Change (UNFCCC) describes as the “slow onset events” of climate change.
Specifically,as SIDS, we must begin more fruitful dialogue on building resilience to impacts such as increases in sea temperatures, which, according to the National Oceanic and Atmospheric Administration (NOAA) is causing our reefs to bleach at an unprecedented rate. To be fair, I have read where our neighbour Mexico, is making major attempts to develop an insurance instrument for their coral reefs – but I don’t want us in the Caribbean to simply read about these things, I want us to be proactive… and to lead the way in crafting and implementing the world’s leading, and most innovative resilience building instruments ever. I want us to expertly ride that wave (no pun intended). And in doing so, I want to seek support from our development partners to accelerate the success that we have been making with projects such as the “Reef restoration using resilient corals project” funded by the IDB – at the University of the West Indies, Centre for Marine Science. Our Caribbean scientists have been doing DNA testing on various corals to identify which ones are climate-change resilient and have already begun to propagate these specific corals for replanting in coastal systems – with the full engagement of fisherfolk.
But it doesn’t start nor end there.
Perhaps one of the most important issues facing us as Caribbeanislands, stems from the climate impact of Ocean Acidification for which the National Oceanographic And Atmospheric Administration (NOAA) has stated alarming numbers. They state that a 30% increase in the acidification of our oceans has occurred since the industrial period. With no signs of abatement, Caribbean Nations require the immediate attention and requisite funding to build resilience to this specific climate impact. This climate impact, that we don’t usually speak about, poses a clear and present danger to us in the Caribbean – especially given our heavy reliance on our reefs and shell fish industry. Let us think about it…. the cultural and economic value of sea egg industry of Barbados and the Eastern Caribbean islands or the conch industry of Bahamas and Jamaica – which by the way contributes approximately 1% to our GDP and employs hundreds.
I cannot even begin to conceive of the resulting macro and micro economic fallout this will cause. However, I note that the shellfish industry in the East and West Coast of the USA have begun to utilize insurance products designed to offset the impacts of Ocean Acidification…is this another possible avenue that we should be looking at?
My point is: The Caribbean needs to immediately engage in fruitful dialogue with its partners – with a view to comprehensively assessing all climate risks, assessing the available resources as well as developing and implementing tools that are essential for building resilience to all climate related impacts.
Ladies and gentlemen, colleagues and partners, let us begin expanding our discussions on resilience, to ensure that they include considerations that are beyond the typical “climate impacts” we have been repeatedly discussing.
It is clear, that both the sudden and slow onset climate events are drivers of increasing disaster risks. They all threaten to undermine many of the critical development gains being made by our countries. But how do we truly build resilience… and what are the requirements and the support systems needed to move our countries from vulnerability to sustainable prosperity?
To answer this, I would like to share a few of our priorities, which have a fundamental grounding in proper development planning. In Jamaica, we are making every effort to modernize our legal frameworks – as it relates to hazard risk reduction and vulnerability across all sectors so that climate change is mainstreamed into all portfolios.
As with many of my esteemed leaders, I am seeking to create and strengthen our national platforms for hazard risk reduction including measures to incorporate them into our land use practices and forward-thinking urban planning.
As it pertains to risk financing, governments in the Caribbean must continue to acknowledge the importance of including disaster risk management in fiscal policy frameworks to efficiently and financially safeguard future development.
Today, 19 Caribbean countries annually purchase parametric insurance coverage for tropical cyclones, earthquakes and excess rainfall from the Caribbean Catastrophe Risk Insurance Facility’s (or CCRIF’s) Segregated Portfolio Company (SPC).
The value of catastrophe risk financing was vividly highlighted during the 2016 and 2017 Atlantic Hurricane Seasons when CCRIF SPC made payouts totaling US$83.6 million after three major hurricanes — Matthew, Irma and Maria — to nine-member governments, whose tropical cyclone and/or excess rainfall policies were triggered. But is CCRIF SPC enough?
Whilst as a region CCRIF SPC has been of critical help, CARICOM has called for its scaling up to support its future growth, particularly in terms of increasing coverage levels amongst existing members, adding new members from the region and offering new products.
We are gradually increasing our ability to finance the cost of recovery and reconstruction, but important gaps remain, especially for high impact events. As such, we are working with the World Bank and the UK to explore the feasibility of a CAT-Bond to transfer part of that risk and others.
I am very proud to state that in Jamaica, our Ministry of Finance and the Public Service is leading the process to develop a Public Financial Management Policy for our Natural Disaster Risk platform and our international development partners are supporting this initiative.
Among other things, this Policy will improve our understanding of the fiscal risks of natural disasters and recommend various financing strategies, particularly ex-ante financing strategies to support our targets for fiscal and debt sustainability.
In fact, I am encouraged and very pleased to announce that later today, I will sign with the IDB, a new kind of loan product – A Contingent Credit Facility for $285 million. This facility will provide immediate financing during the emergency recovery phase after a sudden event.
The IMF has played a leading role in helping to prioritize financing mechanisms that best keep us on our path to increase growth and reduce debt. Those processes will also contribute to our goal of attaining developed country status by 2030.
But we cannot do it alone —- we need the support from our international development partners. Today, because of the use of GDP per capita as the sole criterion for graduation, many of our countries are classified as high middle-income developing countries, and as such we oftentimes are not considered as high priority for the allocation of donor support from the international community. It should be quite clear by now, that GDP in and of itself is not a true indicator of development – apart from indebtedness, as it does not take into consideration vulnerability to exogenous factors including increased intensity and frequency of natural disasters.
As such, we are looking to the international community and development partners to work together with us as small island states – as a special grouping — as an exposed and vulnerable group — to have meaningful dialogue in finding the best options that can be used as alternatives to using income levels to determine our access to finance. We can now all agree, that this “GDP rule” is a distortion of the reality that small states, such as Jamaica face when this sole criterion is used. It is clear, climate change has demanded that we revisit the way business is done with our multilateral partners (and with how we manage our own finances.)
The shocking scale and impact of climate change on SIDS descried in the recently published 1.5-degree report demands that what is facing us requires an urgent change in the climate finance landscape and how, we as SIDS access and utilize such.
Maybe it is we can consider as one option increased grant and concessional financing based on an a credible and agreed vulnerability index? Maybe it is we can revisit the call by the Alliance of Small Island States (AOSIS) to have a special window of access for loss and damage at the GCF?
My point, and hope is, that we need to quickly find alternatives that are fair, practical, relevant and helpful to us as SIDS. Alternatives that will ultimately enhance our disaster risk management capacity and ability to respond to the increasing impacts of climate change.
We are encouraged by the prospects of the Addis-Ababa Action Agenda on Financing for Development, and note the progress being made in translating this agenda into action.
We also recognize the new financing instruments and tools such as blended financing approaches, green bonds, blue bonds, social impact bonds, diaspora bonds, climate financing and debt-for-nature swaps, among others at our disposal, to assist in our path to become more resilient.
Our donor community also has a critical role to play in facilitating our countries’ ready access to grants and concessionary financing to address climate change adaptation. For example, the most critical needs are in the area of hard infrastructure — e.g. sea walls, climate proofing ports and jetties, breakwaters, modification of existing buildings and human settlements.
It is important to remember that room for projects like these is limited by our high levels of public debt. As we gradually reduce our debt, we slowly create more space to invest in resilience. But the threat from climate change is moving too fast for this gradual approach, we need to explore ways to accelerate climate investments. In fact, scaling up climate smart technologies is the goal of the Caribbean Climate Smart Accelerator which was launched in Jamaica in August this year. I was very proud to have my country play a significant role in bringing together governments, philanthropy, CSO, MFI, bilaterals, and the private sector for climate action. I am looking forward to seeing projects move from incubation to implementation.
So, whilst we are encouraged by the support ( such as from the World Bank which has provided concessionary financing for projects which includes the retrofitting and construction of key infrastructure to be climate resilient) and whilst knowledge building and training of key technocrats remains important, there is an urgent need for financial resources to support hard infrastructure and address infrastructure gaps to reduce vulnerability, while preserving our debt reduction commitments.
Support for research and development in new products and technologies for adaptation must also remain a strategic priority for the donor community. It is important to mention the steadfast support of the Canadian and British governments in supporting the complex technical work needed to design these initiatives.
With respect to social protection strategies, we are looking to our international development community to support us in areas that will contribute to sustainable livelihoods and economies.
I close by reiterating on behalf of my colleagues, that we are thankful for the teams at the IDB, IMF and World Bank for the continued support that your organizations are providing to our region with respect to climate resilience building. That support has been helpful in the pursuit of a development pathway that is consistent with Agenda 2030 Sustainable Development Goals where we will be able to eliminate poverty, achieve high rates of economic growth, and where social inclusion and advancing environmental sustainability become the norm – indeed moving us from vulnerability to inclusive and sustainable prosperity.
