A frightening projection of an annual US$12.5 billion loss to Caribbean economies due to natural disasters has been made by Inter-American Development Bank (IDB) Caribbean executive director Robert Le Hunte. That loss figure amounts to 13 per cent of the 2022 Gross Domestic Product of the region, which amounted to US$95 billion according to data from the World Bank Group.
Such a loss cannot be borne by the already small and narrow economies of the countries of the region without serious disruption and negative consequences to people. What’s even more critical is that the big impacts will occur in the mainly tourism-dependent economies of the region.
The relevance of the combination of those two factors, losses due to climate change impacts, and the dependence of a large number of economies on tourism, means that the industry will be hit hard by the disasters and by extension so to the economies and well-being of the people in those states. Now while the T&T economy is not tourist-oriented, local manufacturers sell a large quantity of their products on the regional tourism market in the Organisation of Eastern Caribbean States. If, therefore, those economies are affected, so too will be that of T&T.
The other aspect of the impacts of climate change is the expected damage which will be done to the core products of regional tourism, those being the natural environment, the beaches and the Caribbean Sea, the hotel and guest-house infrastructure, the coastlines of these islands, and the needed re-investment in the tourism product from North America and Europe.
Of great concern also is the IDB’s call for the participation by private investors to support the obvious responsibility of governments to replace damaged infrastructure and to restart economic growth after the storms, hurricanes and the beaches and shorelines impacted by more than rough seas.
That many, if not all of the large hotels and hotel chains in the Caribbean tourism industry are foreign-owned, the constant need for new investment because of loss and damage of property will surely force foreign investors in particular to think two and three times before writing cheques.
Therefore, the continuing dependence on foreign investment by large hotel chains in plant and other tourism infrastructure here, will be based on decisions by investors from outside the region who will have no more than a financial interest in the Caribbean. Moreover, the annual physical destruction predicted will negatively impact a number of the natural resources and attractions of the region.
The predictions of the IDB spell serious difficulties in the immediate and not-too-distant future. What they certainly call for are efforts to make the region less vulnerable to potential climate change disasters, and to engage regional private sector investors to appreciate the fact that they are the ones who will have to join with the governments to invest in the replacement of hotel plants, a range of tourism facilities and attractions and, most importantly, to protect human life from the predicted tragedies of climate change.
The challenges are ahead of the people, governments and the business community of the Caribbean and we cannot continue to depend solely on foreign investment and patronage to construct and defend the tourism product.