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The Caribbean – Caught In A Perfect Economic Storm

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David Jessop – Author of The View from Europe

CARICOM Heads meeting in Belize could not have been clearer about the ‘perfect storm’ that is about to strike the Caribbean. 

Speaking at a post summit press conference, John Briceño and Mia Mottley, the Prime Ministers of Belize and Barbados, both stressed the importance of a unified response to the multiplicity of global economic challenges facing the region. The emphasis now, they suggested, must be on actions that result in self-reliance and resilience. 

In San Pedro, CARICOM Heads agreed that the region urgently needed to implement measures intended to create self-sufficiency in food production and energy, deliver an effective and viable CSME, and more aggressively seek out the funding required to drive regional economic recovery. 

To coordinate this, a resuscitated and enlarged CARICOM Economic Recovery Committee is to meet to recommend how these and other overlapping strategic issues, including post-pandemic recovery, long-term indebtedness, the shameful absence of international resources to support climate change adaptation, and measures to offset the alarming global economic disruption caused by Russia’s invasion of Ukraine, might best be addressed. 

Whether member states can rapidly achieve even a part of what is required is unclear, but as Prime Minister Mottley pointed out, without a unified response, the region’s development trajectory will be derailed. 

What is evident is that the long overdue starting point must be increasing food production and the adoption and implementation of regional proposals put forward to Heads by Guyana’s President, Ifraan Ali. If successfully introduced by 2025, these could see the Anglophone part of the region become self-sufficient in poultry, and over a longer period a significant decline in imported corn, soya, root crops and vegetables, reducing substantially CARICOM’s huge US$5bn food import bill. 

To this end Guyana will host an Agricultural Investment Conference from May 19-21 involving Governments, the private sector, insurance companies, banks, and others to discuss the financing of agriculture-led regional integration, how supply and demand might be coordinated across the Caribbean, and the role that Guyana, Suriname, Belize, and Jamaica might play in production for the region. 

Critically, President Ali made clear that some US$100mn is being made available by Republic Bank on soft terms through a special facility, and that other public-private financing initiatives and private sector led arrangements are being considered that would de-risk Caribbean agriculture. 

The outcome of the conference will be a first indication of how serious the region is about overcoming present food insecurity, addressing the intra-regional trade issues that have previously stymied progress, and achieving competitiveness and productivity in a sector that desperately needs mechanisation and social distance from the stigma of the past. It will also demonstrate whether there is now the political will to deliver joined up regional solutions. 

The Hispanic Caribbean fears a long-lasting economic downturn

 Elsewhere, CARICOM’s larger Hispanic neighbours are also struggling to address the economic issues that the conflict in Europe has compounded. 

In the Dominican Republic the country’s Presidency suggests that even if the war in Europe were to end soon, sanctions will likely remain, and the country’s construction, farming and food sectors will continue to suffer from upward price pressure on imported petrol, natural gas, cereals, farm products and iron and steel, previously purchased from Ukraine. The consequence it says will be inflation, price speculation, and a tightening of revenue flows and government spending if it is to preserve macroeconomic stability. More immediately the country has lost almost overnight its large Russian and Ukrainian tourism market, and with it much of the forecast US$400mn in income from the 0.5mn visitors it had expected from the two countries in 2022. 

Cuba too has expressed concern about the unfavourable economic impact that the conflict in Ukraine will have on top of the US embargo. Cuban Deputy Prime Minister, Alejandro Gil, the Head of Economy and Planning, recently warned of increases in the price of the food and essential products the country imports. Speaking following a working meeting at the Ministry of Finance and Prices, Mr Gil noted that the world market price of oil along with that of wheat and soy flour, ship charters and other essential commodities, services, and the products that Cuba needs, had all skyrocketed. Cuba, he said, now faced a “tendency to greater complications”. 

Truth, an early casualty

Reading or hearing exactly what Cuba is saying about the conflict in Europe remains challenging. 

Western and Russian reporting would have it that Havana unreservedly backs Moscow, but other than not voicing any direct criticism of Russia, a country with which it has close historic ties, Cuba’s response has been every bit as nuanced as that of the rest of the region. 

Largely unreported by the international media, President Díaz-Canel said on March 7 in his first public statement on events in Europe, that Cuba was “unambiguously opposed” to the use of force against any state. 

“As a small country, we understand it better than anyone. Besieged for more than 60 years, we have suffered from state terrorism, military aggression, a brutal blockade”, he was quoted in the daily print edition of Granma, the Communist Party’s newspaper, as telling artists and intellectuals. Cuba, he said, will continue to advocate a serious, constructive diplomatic solution that guarantees the security and sovereignty of all. 

Observing that Cuba’s position had begun to be distorted by the US, he went on to say: “I fully understand that our people have been aware of the current military conflict in Europe and the regrettable loss of human life, in addition to the material damage and the threat in general to regional and international peace and security”.  He also stressed Cuba’s view that “this conflict could have been avoided if the well-founded claims of the Russian Federation’s security guarantee had been met with seriousness and respect”.  

To note this is not to be uncritical, but to indicate how easy it is in the fog of war for the world to lose sight of reality, the impact of what is happening on every Caribbean nation, and how recent events emphasise the importance of the region as a whole now placing much greater emphasis on achieving self-reliance. 

David Jessop is a consultant to the Caribbean Council

Previous columns can be found at https://www.caribbean-council.org/research-analysis/


March 18th, 2022 

David Jessop is a consultant to the Caribbean Council. The views expressed are his own.



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