The Inter-American Development Bank (IDB) Caribbean Country Group General Manager, Therese Turner Jones, says the agency is exploring measures through which regional territories with which it has funding agreements can be assisted to improve debt management.
Speaking at the official opening of the Inaugural Caribbean Debt Summit at Secret Resorts in Montego Bay, on Tuesday (October 1), Turner Jones said one consideration is the inclusion of a disaster clause in agreements for countries impacted by natural disasters such as hurricanes.
She explained that this option would facilitate debt relief during affected countries’ recovery process.
“That would allow for recapitalisation of the interest, over time, on the loan to make it easier for a [recently affected] country, like The Bahamas, for example, over the next few years, as it tries to allow some relief on the debt that they would owe,” she stated.
Turner Jones said based on the Caribbean’s geographical location, countries face unparalleled risks from climate change, which has contributed to macroeconomic and financial instability, and has exacerbated debt challenges.
“We generally don’t think about shocks. The shocks analysed tend to be financial, political changes in regimes, or [related to] exchange rates. We generally have not been taking into our macroeconomic forecast the impact a natural disaster can have on the macroeconomic stability of a country,” Turner Jones argued, while emphasising the importance of doing so.
Meanwhile, Principal Director for the Debt Management Branch in the Ministry of Finance and the Public Service, Dian Black, contended that the Government is seeking to institute contingencies to mitigate the possible impact of climate change on the economy.
“We really need to develop strategies to deal with climate change, particularly building resilience, developing financial strategies and also, of course, being proactive. We will build resilience in agriculture and other sectors to really fight climate change and the whole hazard surrounding natural disasters,” she said.
Some 50 delegates from the Caribbean and Latin America are participating in the Summit, which runs from October 1 to 4.
The topics being discussed include macroeconomic, debt and fiscal management issues most relevant to Caribbean countries as well as the financial implications of natural disasters and climate change.
The Summit is being co-hosted by the Government of Jamaica and the IDB.