Caribbean & Central America - April 2024

A new United Nations (UN) report focuses on The Bahamas as an example of the growing financial cost of climate change and health pandemics. Natural disasters are becoming more frequent, are leading to increased foreign debt, and are restricting both the value and impact of social programmes.

In per capita terms The Bahamas is one of the wealthiest nations in the Caribbean, but it has not been able to escape a series of economic body-blows. Since 2012 the country, with a 400,000 population, has been hit by no less than five major hurricanes. They include Hurricane Joaquin (2015), Matthew (2016), Irma (2017), and Dorian (2019). Of those, Dorian was by far and away the most destructive with over 70 people killed, and damages estimated at US$3.4bn, equivalent to roughly one-fourth of GDP. As if that were not enough, the highly tourism-dependent Bahamas was also hit by the coronavirus (Covid-19) pandemic in 2020 which triggered a 24% fall in GDP that year.

Attiya Waris, the report’s author, who is also a UN independent expert on foreign debt, says the growing cost of climate change is forcing Caribbean governments to spend less on support programmes such as food assistance, business loans, and unemployment benefits. In the case of The Bahamas after Dorian, the government was forced to raise US$500m in additional debt, almost doubling its debt servicing costs. Waris calls for a series of measures from the international community, including more concessional lending, write-downs for climate disaster-related debts, and contributions to the proposed Loss and Damages Fund (agreed last November at the UN climate change conference [COP28] in the United Arab Emirates). She also recommends strengthening taxes and reducing finance-related corruption such as money-laundering. The report notes that while Caribbean countries such as The Bahamas are suffering the sharp end of climate change losses, they have contributed least to global warming. In fact, The Bahamas contributes less than 0.01% to global greenhouse gas emissions.