“This is completely a black swan event. No one saw it coming. It’s affecting every single person on the planet, and we have to muster up courage, first of all, to do the right thing, especially for people who are absolutely desperate and need our help,” says Therese Turner-Jones, general manager of the IDB’s Caribbean Country Department.
Caribbean countries have had to weather many storms in the past, but none that unleashed impacts quite like the coronavirus pandemic. Alongside the lives at stake are millions of livelihoods, and understanding the economic forces at work is essential to planning a way forward for the region.
“Our region is pretty much just climbing out of the recession in 2020. It has taken us a long time to really catch some air, really feel our economies again, and now we are hit with another whammy,” says Turner-Jones.
“We have a crisis that is presenting itself with innumerable ways to reflect and think about doing things differently and we really have to take this seriously. It’s not going to be business as usual.”
THE CHALLENGES
Economists at the IDB have been closely tracking the virus’s effects on the region and its economies to provide a basis for needed responses. A newly published report sheds light on potential economic implications for the Bank’s six Caribbean member countries: The Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago.
The first of two main challenges behind the economic shock to the region is common to countries across the globe right now: “flattening the curve,” or reducing the spread of the virus. While COVID-19 cases are low in the Caribbean, even in relative terms to its small population, the curve has not begun to flatten in the region. Although public health experts say social distancing and quarantines are critical, the economic uncertainty that comes with those measures provides a powerful counterweight – particularly in a part of the world where reliance on face-to-face transactions is high.
The second challenge derives from the nature of the region’s linkages with the rest of the world. In The Bahamas, Barbados and Jamaica, 34-48% of GDP comes from tourism. With the sector screeching to a standstill, the repercussions are already enormous.
In a worst-case scenario, in which tourist arrivals drop by 75% in the last three quarters of the year, the GDP of The Bahamas would fall by more than 10 percentage points relative to pre-crisis expectations. The coronavirus represents the second major economic shock in a year for country; Hurricane Dorian inflicted losses that amounted to $3.4 billion, or 27% of GDP. See full analysis at https://www.iadb.org/en/improvinglives/weathering-coronavirus-storm-caribbean
