Beautiful Virgin Islands

Thursday, Oct 30, 2025

Another knee on the Caribbean’s neck

Another knee on the Caribbean’s neck

The failure of the world’s richest nations to respond adequately to the abrupt and rapid decline in the economies of developing countries, including the Caribbean, is resulting in huge increases in unemployment and poverty, and could, ultimately, erode democracy and the rule of law.
As a new World Bank report issued on June 8 rightly states: “A major natural disaster on the heels of the COVID-19 pandemic would be economically devastating for some countries in the Caribbean region”. Yet, the G20 countries have engaged in public relations exercises that point to their “pledges” to inject up to US$8 trillion into the global economy. But there is no evidence of this money being delivered, or that it is accessible by every country that needs it.

The G20 has also failed to be responsive to the issue of suspending debt payments and rescheduling them on realistic terms that would allow countries to use scarce funds to help keep their economies afloat and prevent a large number of their people from collapsing into abject poverty.

Instead, several G20 countries in the creditors’ organisation, called “The Paris Club” are insisting on debt payments by countries whose revenues have dropped so precipitously that they can barely meet basic domestic obligations. What is worse is that the Paris Club is refusing to authorise the International Monetary Fund (IMF) to provide funding to these debtor countries under emergency facilities.

When the impact of the COVID-19 pandemic on economies around the world became patently obvious, the heads of the World Bank and the IMF called for official creditors to suspend debt repayments by the world’s very poor countries and those eligible for support from the International Development Association. But despite appeals to recognise that some Caribbean countries, regarded as ‘middle and high-income’, also needed urgent attention, the main policymakers of the two institutions did not budge on changing their criteria.

Since then, it has become clear that COVID-19 will deliver a debt blow to these countries from which there will be no short or medium-term recovery. They simply cannot pay the debts now.

Against this backdrop, the Washington-based journal, “Latin American Dialogue”, published on June 10, asked me to respond to the question of how prepared are Caribbean countries for this year’s hurricane season in the context of the COVID-19 pandemic?

I provided this answer: “The COVID-19 pandemic has decimated Caribbean economies many of which lost at least 20 per cent of their GDP in the first quarter of 2020 and are forecast to experience a further 10 per cent decline by the end of August.

Unemployment has reached unprecedented high levels and Government revenues have drastically declined while expenditures have increased extraordinarily to contain the coronavirus and treat its victims, including through the purchase of medical supplies and construction of facilities for infectious diseases.

Debt levels have also risen, and many Governments are unable to service repayments which, even before the pandemic, were absorbing as much as 48 cents of every dollar. Consequently, Government spending on hurricane preparations has been diverted to mount programmes to feed the poor and to support the unemployed.

Payments for insurance of properties against hurricanes have lapsed through unemployment and business closures, rendering communities unable to rebuild easily in the wake of destruction by storms.

Many Caribbean countries are denied access to concessional financing from the International Financial Institutions on the sole criterion that they are classified as middle and high-income countries, even though they share many of the structural limitations of less developed countries. The Paris Club is also opposing suspension or rescheduling of debt payments on the same basis.

“Therefore, there is little more that Caribbean countries can do to prepare for dangerous storms this year. Regrettably, the G20, which could help, have remained wedded to policies that fail to recognise the dire circumstances of Caribbean countries, abandoning them to a fearsome hurricane season that could damage them even more severely.”

The picture could not be any clearer. COVID-19 is devastating Caribbean countries, categorised as ‘high-income’ as much as it is hurting low- and middle-income ones, adding to their debt burdens and threatening a far-reaching sovereign debt crisis.

COVID-19 has worsened the problem; countries are facing high health-care costs, collapsing revenues, no capacity to service debts, and a struggle to keep their economies afloat.

There is an urgent need for a stop to sovereign debt payments to official and private creditors, to give Caribbean countries a chance to cope with yet another shock to which they did not contribute, but that now puts another knee at their necks.

If the G20 allocated a mere 0.5 per cent, or US$40 billion, of its pledged global injection of US$8 trillion to Caribbean countries to pay off Paris Club debt and for new soft loans, the region will have a fighting chance.

This problem will not go away by ignoring it. Caribbean Governments and Private Sectors must ensure it is not ignored by rich Governments and the international bodies they control. The Caribbean is not owed a living, but it is owed the right to live.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
UK and Vietnam Sign Landmark Migration Deal to Fast-Track Returns of Irregular Arrivals
UK Drug-Pricing Overhaul Essential for Life-Sciences Ambition, Says GSK Chief
Princesses Beatrice and Eugenie Temporarily Leave the UK Amid Their Parents’ Royal Fallout
UK Weighs Early End to Oil and Gas Windfall Tax as Reeves Seeks Investment Commitments
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
×