To confront economic and climatic vulnerabilities of Caribbean countries that have only amplified since the COVID-19 outbreak, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) Alicia Bárcena has called for urgent concessional funds to be provided to address these countries’ vulnerabilities.

According to her, Latin American and Caribbean countries are suffering the effects of the COVID-19 crisis through a drop in trade with their main trading partners, lower prices for commodities, the disruption of global value chains, lower demand for tourism services, and a decline in remittances.

In addition, the fall in tourism-related visits calculated at between 57 and 75 per cent in 2020, will entail a loss of between US$22 billion and US$28 billion in income, high exposure to climate change, and a high level of public indebtedness.

To this end, at a special session of the United Nations High-level Political Forum on Small Island Developing States held last Wednesday (July 8), she proposed five recommendations imperative as a response to the crises.

These include a debt relief initiative through a debt for climate change adaptation swap, which includes the creation of a resilience fund, a debt service standstill and a change in international financial institutions’ eligibility criteria for granting concessional funding, stage contingency bonds, green and blue bonds, and liquidity support via the issuance of the International Monetary Fund’s special drawing rights.

Blue bond refers to a debt instrument issued by governments, development banks or others to raise capital from impact investors to finance marine and ocean-based projects, while green bonds refers to fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.

“Concessional financial support to the Caribbean is an imperative, regardless of whether they are considered to be middle-income countries. High debt service in Caribbean countries limits their fiscal space for responding to the COVID-19 crisis,” the senior United Nations official emphasised. “They are currently spending US$1.2 billion to address the pandemic, but debt service is very high, between 30 per cent and 70 per cent of their revenue, which puts great pressure on their fiscal space.”

She further indicated that Caribbean countries do not have concessional financial support, and receive very little Official Development Assistance.

“There are warning signs with 10 years left to fulfill the 2030 Agenda and the Samoa Pathway. We are not going to achieve the goal of reducing poverty, or the full goals related to women’s empowerment, food security, unemployment and the strengthening of health and sanitation. That is why concessional funding is a must,” Bárcena stated.

The SIDS Accelerated Modalities of Action (Samoa) Pathway is an international framework that is aligned with the 2030 Agenda for Sustainable Development developed by the United Nations. The agenda includes 17 sustainable development goals and 169 associated targets.

“At ECLAC, we are carrying out our ‘Caribbean First’ strategy as a priority. We are fully prepared to support Caribbean countries on the promotion of a debt relief initiative. We will advocate for a reduction and elimination of debt, regardless of the income status that countries have,” she continued.

Bárcena also insisted on the need to open political spaces at an international level so that the voices of Small Island Developing States may be heard.