The perfect storm
Caribbean countries in for a ‘bloodbath’ if a major hurricane hits during COVID-19 crisis, say leaders
WITH ECONOMIES grinding to a halt in coronavirus-hit Caribbean countries, hardly any breathing room is likely as the sixmonth “above-normal” 2020 Atlantic hurricane season looms, bringing to regional shores what officials are calling the “perfect storm”.
“Already, governments are signalling that they’re not likely to have enough money to pay salaries to public servants,” Dr Ralph Gonsalves, prime minister of St Vincent and the Grenadines, revealed, painting a grim picture of the emptiness of states’ coffers at a time when they need it the most.
“Some governments have to borrow money to pay salaries in April, not to mention when they get down to May.”
Scientists from the Colorado State University are anticipating an “above-average” probability for major hurricanes – systems Category 3 and over – making landfall along the US coastline, and in the Caribbean for this season, which begins on June 1.
They have predicted 16 named storms, with half to turn into hurricanes and four into major hurricanes. There’s a 58 per cent chance for the Caribbean to be hit by at least one major hurricane. For the past 100 years, such a probability was 42 per cent. But climate change, among other factors, has been redefining forecasts.
In their April 2 paper, researchers Philip Klotzbach, Michael Bell and Jhordanne Jones said it only takes one hurricane making landfall to make it an active season, and people, especially those who live on the coast, should “prepare the same for every season, regardless of how much activity is predicted”.
SERIOUS QUESTIONS
But preparation for this year’s season will not be similar to the past because governments and resources are tied up fighting the coronavirus pandemic that has infected almost three million people worldwide, killing more than 180,000. Up to April 24, the CARICOM region confirmed over 974 cases, with 57 deaths. Jamaica has 305 cases.
Additionally, the open and largely tourism and commodity-dependent economies have been reeling from the fallout. Caribbean economies are expected to face a 1.5 per cent contraction, according to the early projections from the Economic Commission for Latin America and the Caribbean. The consequences are already being felt, with rising unemployment and need for governments to find money to provide temporary social safety nets, pay workers and stave off social unrest. And no one knows when it will end. Ronald Jackson, the outgoing head of the Caribbean Disaster Emergency Management Agency (CDEMA), said for much of the region, the hurricane season which starts in just over a month has entered public discourse, but there are serious questions about the level of the preparedness “given the heavy focus on COVID-19”.
That can’t be ignored for much longer, as Jackson argued that in a short while, the region will face the “perfect storm”.
“You are managing your current debt-toGDP ratios, you’re managing your fiscal environments, you’re dealing with social challenges, and even if you were making some headway, here comes the COVID crisis,” he reasoned.
“What resources are now available for traditional preparedness expenses? Your warehousing supplies, your shelter facilities – are some of them being used as isolation facilities? Things like your rainy-day funds that you may have used up for COVID, will it be available in a hurricane to provide relief, resources post-hurricane and recovery-related costs?”
The extent of support from foreign partners struggling to deal with the coronavirus is also another headache for regional governments.
“With many of the traditional sources that we’ve depended on themselves being hit very hard by the COVID crisis, what resources will be available from those traditional support systems to help countries with the post-impact response and recovery?” Jackson queried.
Jamaica’s plan to go to the international market this month with a catastrophe bond has had to be shelved. In his Budget presentation in March, Jamaica’s finance minister, Dr Nigel Clarke, said local technocrats were working with the World Bank on the bond that was aimed at strengthening the country’s financial ability to respond to natural disasters.
But given the current upheavals in the global economy, “the guidance to Jamaica is that it is no longer the appropriate time to go to the catastrophe bond markets as there may be no takers,” Clarke said in a statement to The Sunday Gleaner.
“The World Bank team is working with us to explore alternatives that may be suited for Jamaica to support financial preparedness for natural disasters.”
CRITICAL PHASE
All is not lost for Jamaica, however, as the country has a J$40billion contingent facility with the Inter-American Development Bank, which it can draw on in the event of a natural disaster.
Jamaica and other CARICOM states can also get support through the Caribbean Catastrophe Risk Insurance Facility, which provides insurance against natural disasters. Jamaican lawmakers, however, have been critical of the fund to which Jamaica pays millions each year in premiums but has found it hard making claims due to how risks are calculated. Battling the coronavirus also comes with particular requirements, including physical distancing, which the World Health Organization insists is critical to reducing exposure and spread of the flu-like illness.
Jackson said these measures, given that COVID is here to stay, will have to be integrated into storm responses, and that means additional challenges.
The next five to six weeks leading up to the “heightened part of the season” will be critical, he said, adding that “It is going to require our population to support the COVID measures that are being applied by the Government. The approach taken last season won’t work.”
A number of CARICOM states, including Jamaica, have requested support from the International Monetary Fund (IMF) under the Rapid Financing Instrument, and several other options have been proposed at the regional level following an April 15 emergency meeting of CARICOM heads of government.
The bloc, Gonsalves said, is also gearing up for “a common demarche” to the World Bank, the IMF, the European Union, and other institutions for flexible and increased support.
‘BLOODBATH AWAITS’
CARICOM’s Council for Foreign and Community Relations is due to meet May 7-8 and is expected to agree to engagement with the Donald Trump administration for ways to support member states facing COVID-induced economic hardships.
Gaston Browne, the prime minister of Antigua and Barbuda, told The Sunday Gleaner that “God forbid, and if any of our member states suffers any devastation from hurricanes, it would be a metaphorical hellfire”.
Writing to the IMF and World Bank pleading for support, he pointed out that up to March, the region had lost over 20 per cent of its GDP.
Several CARICOM countries have had to rework budgets and reallocate resources to come up with stimulus packages ranging from one per cent to four per cent of their yearly earnings to soften COVID-19’s blow on citizens and industries.
Natural disasters cost the region an estimated US$8.6 billion between 1996 and 2015, the World Bank has reported. In the last three years alone, natural disasters cost in excess of US$118 billion, noted CDEMA.
According to Gonsalves, a “bloodbath” awaits the region and “we don’t have a lot of time” to get a handle on the situation.