Caribbean & Central America - July 2024

*** EXPANDING AFRICA-CARIBBEAN RELATIONS. The Bahamas hosted the African Export-Import Bank (Afreximbank)’s annual general meeting and the AfriCaribbean Trade and Investment Forum from 12-14 June. Guyana’s President Irfaan Ali, the outgoing Caribbean Community (Caricom) chairman, commented: “Three years ago, sophisticated investors from Africa were not seen in the Caribbean region. Fast forward to today, we have seen in this region, since Afreximbank came on board, more than 50 African delegations looking at business opportunities in this region. It’s this little spark that could ignite massive transformation and realisation of the opportunity and potential that exists within our region.”

*** WMO 2023 REPORT CONFIRMS DANGEROUS TRENDS FOR CARIBBEAN. The United Nations World Meteorological Office (WMO) has published its 2023 State of the Climate in Latin America and the Caribbean report in which it finds that last year was the warmest on record for the region. It also found that sea levels “continued to rise at a higher rate than the global mean around much of the Atlantic part of the region, threatening coastal areas of several countries and small island developing states”.

In 2023, global mean sea level (GMSL) rose by an estimated 3.43mm. In the sub-tropical North Atlantic and the Gulf of Mexico, the rise was 4.23mm, and in the tropical North Atlantic, around Central America and the southern Caribbean, the rate was 3.56mm.

Another worrying trend is the rising number of extreme events. The 2023 Atlantic hurricane season had an above-average number of storms, ending with 20 named storms, compared with an average of 14 named storms per year for the 1991-2020 period.

*** TRINIDAD’S UNC RETAINS LEADER IN ELECTION RUN-UP. The last general election in Trinidad & Tobago was held on 10 August 2020, so Prime Minister Keith Rowley and the ruling People’s National Movement (PNM) are moving into the final year of their mandate. Internal elections held by the opposition United National Congress (UNC) in June have ensured that the UNC will go into the next election with its long-time leader Kamla Persad-Bissessar still at the helm and looking for a second term as prime minister having served from 2010-2015.

There are no great ideological differences between the PNM and the UNC, but they appeal to two distinct segments of the population. The UNC mainly appeals to those of Indian descent, who make up 35.4% of the population, while the PNM mainly appeals to those of African descent who make up 34.2% of the population.

After two terms in power, the PNM will have to counter any anti-incumbency bias in the electorate, but the economic cycle is being kind to it. The latest Article IV Consultation by the International Monetary Fund (IMF), concluded in May, noted that “for the first time in a decade” Trinidad is undergoing “a gradual and sustained economic recovery”. GDP growth in 2023 was 2.1%, and further momentum is expected in 2024 with growth of 2.4% projected, “supported by the non-energy sector and new energy projects coming on stream”. Annual inflation, which peaked in 2022 at an average of 5.8%, fell to 4.6% in 2023 and is expected to fall further during 2024 to an average of 1.5%.

Furthermore, the IMF sees the balance of risk as tilting towards the upside in the medium term, with new natural gas projects and the implementation of structural reforms boosting growth.