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Dire Warning for Caribbean Economies
by Marie-Claire Williams
As Caribbean governments begin to rebuild from the disruptions caused by the COVID-19 pandemic, they are being warned that time is running out to construct resilient economies.
T he dire warning “Gene” Leon , in an address to the inaugural Business and Management Research Think Tank organised by the Sagicor Cave Hill School of Business and Management (SCHSBM) on 23 September. came from President of the Caribbean Development Bank (CDB) , Dr. Hyginus
The former Associate Professor at State University of New York at Old Westbury also pointed to the impact of COVID-19 on individuals across the region: “Behind these numbers were lives severely disrupted by reduced remittance flows, loss of income or income reductions, socio-economic obstacles to the delivery of education, and uneven access to health services. Poverty
Dr. Hyginus “Gene” Leon President, Caribbean Development Bank (CDB)
“In the wake of the massive disruption wrought across the region and the world over the last three years by the COVID-19 pandemic, we must revisit our fundamental roles and responsibilities in economic development,” Leon cautioned. Drawing on 20 th century history, the economist pointed to the United States where, in the face of the Great Depression in the 1930s, the then President Franklin D. Roosevelt proposed what he called “The New Deal” - a series of programmes aimed at stimulating economic recovery, reforming the financial system, tackling poverty, and reducing unemployment. Nearly a century later, the Caribbean is setting similar goals in the wake of the pandemic and other global events. “When COVID hit in 2020, real
alleviation, health, education, and social safety protection systems were adversely impacted, and more than 6,000 lives were lost. In the face of the catastrophe, the effectiveness of governments’ responses was constrained.” The region’s economic woes were further compounded by the outbreak of the Russia-Ukraine war, just as countries were beginning to emerge from COVID restrictions. The ongoing conflict has impacted commodity and financial markets, increased inflation, disrupted supply chains, and heightened food insecurity. These are the reasons, he argued, that the region needs a new deal. “If we can learn anything from recent events, it is that we cannot prevent the
economic activity contracted by 7.6 percent. The region’s small size and openness to trade make it inherently vulnerable to macroeconomic shocks. However, the high level of export concentration significantly reduces our ability to recover from these shocks. “The impact of the pandemic on all of the region’s economies has been unprecedented; but the effect on service- oriented economies was particularly devastating, resulting in declines as high as 18.8 percent. Commodity-based economies did not fare much better, registering contractions of as much as 13.5 percent,” Leon said.
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