360° Resilience : A Guide to Prepare the Caribbean for a New Generation of Shocks
Source: World Bank
Caribbean countries, a set of mostly Small Island Developing States (SIDS), have a history of dealing with large shocks. The region is threatened by both economic and natural hazards. Nations have specialized in tourism and commodity exports, disproportionately exposing them to global economic cycles through changes in tourism demand and commodity prices. They are also located in a region that is highly exposed to a range of natural hazards, from volcanic eruptions to earthquakes and hurricanes, which damage their infrastructure stock, reduce tourism demand, and destroy agricultural production. Hazards have often caused severe damage to economies and livelihoods in the region. This report reviews existing assessments of past losses from natural and economic shocks in the Caribbean, looking at impacts on physical capital, private sector activity (especially tourism and agriculture), economic growth, poverty, and well-being. It concludes that, despite the damage to physical capital experienced by countries due to natural hazards (especially in housing and transport infrastructure), the impacts on growth are short-lived, possibly because many mechanisms are in place to help economies bounce back rapidly. However, natural hazards have a high impact on poverty and human capital and threaten the sustainability of economic growth.