Caribbean food security during COVID-19 can only be achieved through debt relief

The pandemic and global trade disruptions have highlighted the growing vulnerability of Caribbean states when it comes to importing food. Each year, Caribbean states import food products valued at nearly US $ 5 billion for food security.

Closing international borders to curb the spread of COVID-19 has resulted in restricted access to these imported food products which make up over 80% of the region’s food system.

A household survey commissioned by Caribbean governments in April 2020 to explore the impact of the pandemic on regional food security found that closing global borders was increasing barriers to food security by increasing food prices and by reducing income and employment levels. Survey data also revealed that more than half of all respondents experienced a loss of income or employment.

The impact of international border closures on food security

Tourism supports a large percentage of economic activity in the Caribbean. International border closures, which have resulted in the near total closure of air and cruise travel to curb the spread of COVID-19, have dealt a catastrophic blow to the Caribbean tourism industry.

The decline in tourism has resulted in reduced spending by tourists, closures of hotels and associated tourism services, and job losses for community members. Such results have translated into higher levels of debt, unemployment and psychological stress, disproportionately affecting vulnerable populations across the Caribbean.

All of these factors have made many locals worried about their ability to ensure food security in the coming months, as without money they cannot afford to buy food.

Pictured is the largest grocery store in San Jose De Ocoa, Dominican Republic.

The downward economic spiral

Downward growth spirals in vital economic sectors such as tourism have prompted Caribbean states to turn to international development institutions such as the World Bank and the International Monetary Fund (IMF) for emergency loans during the pandemic.

Alicia Bárcena, executive secretary of the Economic Commission for Latin America and the Caribbean, highlighted in April 2020 her concerns about emergency lending, saying “borrowing is not the answer to deal with this crisis. Caribbean countries need grants fast. Urgent intervention is needed to ensure liquidity. ”

According to Bárcena, Caribbean countries are spending between 1% and 4% of GDP to fight the COVID-19 crisis. The growing burden of external debt to replace income and ensure social outcomes, such as food security, worsened the Caribbean’s debt-to-GDP ratio, which was on average 68.5 percent in 2019.

The growing debt problem

The growing debt burden facing Caribbean states is in large part due to the fact that most hotels and restaurants in the region’s tourism sector are wholesale importing food at low prices. The priority given to cheap imported food for tourism consumption means that up to 80 cents of every dollar generated in the Caribbean tourism sector leaves the region each year.

As the pandemic has disrupted tourism growth, the extreme external debt levels facing Caribbean states are increasing. And governments are increasingly responsible for social outcomes like food security.

Over the past 12 months, the IMF has provided over US $ 1 billion to Caribbean countries.

Compared to the annual foreign exchange earnings in a thriving island economy, US $ 1 billion in emergency loans seems unimportant. However, by paying only the interest on the external debt accumulated on emergency loans offered by development institutions like the IMF, some Caribbean island states devote up to 54% of their annual budget to servicing external debt. .

Small islands, like the Bahamas, spend up to US $ 1 million each week on food aid programs – while increasing financial support for healthcare spending for COVID testing, treatment, vaccinations, surveillance and protective equipment.

By shifting the responsibility for social protection from citizens to the state, COVID-19 exacerbates the growing problem of external debt in small Caribbean states.

Shopping center with cars
Coki Point Plaza, a shopping mall in St. Thomas, US Virgin Islands.

Food security in the post-Covid-19 economy

In April 2020, the Prime Minister of Antigua and Barbuda, Gaston Browne, appealed to international development institutes, like the IMF, for alternative approaches to development, he said:

“The economic burden on our countries is unsustainable due to the high levels of indebtedness. We do not have the capacity to print money and our political instruments are very limited. What is required at this stage is some level of support from international financial institutions, such as the International Monetary Fund and the World Bank. “

Debt relief would improve the response of Caribbean states to global crises. Less debt means governments can increase spending on social services that would improve economic conditions for food security. It really is the only solution.

A post-pandemic recovery path to ensuring food security in the Caribbean involves the IMF and other development entities recognizing the unsustainable debt situation in the Caribbean island states and including the region in the broader considerations. developing countries for debt relief.

Source link

Michael M. Tomlin

Leave a Reply

Your email address will not be published.