The Caribbean is one of the regions of the world most vulnerable to climate change. During the hurricane season, storms repeatedly wreak havoc. Yet, the affected countries themselves contribute little to global climate change.
At the same time, the Corona pandemic hit the region particularly hard: One of the main sources of income, tourism, came to an almost complete standstill in the spring of 2020 and has barely recovered to date. Imports of goods became increasingly expensive. Economic growth in many countries plummeted.
Both crises coincide with a precarious debt situation in the region: Seven of the eight Caribbean island states are critically to very critically indebted, according to the Global Soverein Debt Monitor 2022. Six of the eight states show a clearly negative debt trend over the past four years.
However, the region’s states have barely been able to benefit from the G20’s debt relief measures, the debt moratorium DSSI and the debt relief framework Common Framework.
Already in 2018, our Caribbean partner organization, the Jubilee Caribbean debt relief network, had formulated concrete demands as to which measures would help particularly vulnerable states in the event of a climate disaster. In the wake of the Corona pandemic, more and more voices from the region are now speaking out, calling for short-, medium- and long-term debt relief measures. These include the Caribbean Community CARICOM and the Alliance of Small Island States AOSIS.
The problem is that none of the states or confederations of states from the region do have a seat at the table when decisions on debt relief are made in international bodies. They have no voice in the G7, the G20 or the Paris Club, and their influence in the International Monetary Fund (IMF) and the World Bank is minimal.
Together with our partners from the Global South, we are therefore working to ensure that their voices are finally heard: The triple vulnerability of Caribbean states must be recognized and translated into appropriate debt relief measures. Only in this way can the states succeed in absorbing the consequences of the Corona pandemic and in overcoming the challenges of the climate crisis.
On this topic page, we therefore want to bundle information on the debt situation of the states in the region and make solution proposals of the regional actors visible.
Voices from the region
Jubilee Caribbean, a Caribbean debt relief network, is calling for states that have been victims of tropical cyclones to be able to suspend their debt service. Such a moratorium and the start of efficient debt rescheduling negotiations would quickly free up much-needed funds for emergency relief and reconstruction after a disaster.
“(…) Our nations are not only exposed to adverse weather phenomena. Moreover, we are small island states with small and less diversified economies that have little capacity to withstand external shocks, with which poor but larger nations may be able to cope. This has been one of the reasons that we have never been able to sustainably escape from our debt traps. However, our external debt can be turned into an instrument of efficient support in the event of future catastrophes, if there is a proper mechanism to allow for moratoria and serious debt restructuring. (…)”
Jubilee Caribbean, 2018
The Alliance of Small Island States (AOSIS) demands, among other things, that G20 debt relief be extended to middle-income countries and that private creditors be included on a mandatory basis. Instead of gross domestic product, the vulnerability of states should be used as a yardstick for qualifying for debt relief.
- Speech by AOSIS Chair Gaston Browne on 29.03.2021 at the Forum Financing for the Development in the Era of COVID-19 and Beyond Initiative
- AOSIS press statement on 14.09.2020
- AOSIS Statement to the UN General Assembly on 10 July 2020
“(…) We support the calls made by the UN Secretary General and UN Conference on Trade and Development for debt relief. We support the actions adopted by the international community for debt service suspension for poor developing countries. Unfortunately, these are insufficient to address the challenges facing SIDS during this pandemic.
Our Alliance calls on all relevant major stakeholders, inter alia, the World Bank Group, the International Monetary Fund, multilateral and regional development banks, bilateral creditors and other private creditors, to take immediate and substantial actions that will allow SIDS to manage the unfolding crisis caused by the COVID-19 pandemic and address our grave socio-economic impacts, while preserving our sustainable development achievements and commitments, and reinforce our resilience to climate change. (…)”
The Caribbean Community (CARICOM) also calls for the extension of debt relief measures to vulnerable middle- and higher-income states. These measures should apply in particular to debts incurred in dealing with the Corona pandemic and the climate crisis.
- Statement by CARICOM Secretary-General Carla Barnett 05.10.2021 at the UNCTAD World Leaders Summit Dialogue on Inequality XV
“(…) We applied funds that were budgeted for other purposes to meet the needs of the health sector for PPEs, medical equipment, testing supplies and vaccines. We shifted funds to meet basic social safety nets. We repurposed loans and borrowed additional funds. Already high debt burdens grew even higher. (…)”
Carla Barnett, CARICOM, 2021
Publications and further information
- Focus Paper 7 (2022): “Vulnerability as a basis for debt relief – The Multidimensional Vulnerability Index”
- Focus Paper 6 (2021): “Debt sustainability in times of climate disaster and corona – How to achieve a realistic assessment of crisis impacts?”
- Focus Paper No. 3 (2020): “A debt moratorium – but for whom? How, in 2020, debt relief is not helping those who need it most”
- Información especializada Nº 1 (2020): “Moratoria de pago: ¿para quién? El alivio de la deuda en 2020 queda lejos de las necesidades”
- Article (2021): “Small Island Developing States and their Vulnerability to the Climate, Debt and Covid-19 Crisis”
- Video (2021): “Heron Belfon, Coordinator Jubilee Caribbean, on the debt crisis in Grenada in times of COVID-19”
- Study (2021): “Climate change, Debt and COVID-19”
- Campaign (2020): “Climate Justice Needs Debt Relief”includingCampaign Picture
- News (30.12.2020): “New educational material on sovereign debt and climate change”
- Guest Post for “German Climate Finance” (24 June 2020): “Debt Relief in Response to Loss and Damage Caused by Climate Change”