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Domino effect
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By *David Gumbs, **James Fletcher & ***Justin Locke

The global economy is on lockdown and the predictions are staggering. And, there is one regional economy where the long-term realities of the coronavirus are already clear: The Caribbean.

Over the past three decades, nearly every economy in the region transformed to depend on tourism, and today the Caribbean economy is primarily reliant on this single sector. The region is also subject to repeated crises, with 10 Category 5 hurricanes hitting the region in the last 15 years, and five of those occurring in the last three years.

The coronavirus has caused a complete collapse in the tourism industry and significant contractions in both the agricultural and the distributive trades sectors across the Caribbean. As a result, the region’s economy is collapsing and will likely not recover for some time.

Because of the Caribbean’s focus on a single, volatile sector, it is likely to be the first domino to fall in the post-COVID-19 world. When this is all over, the region cannot go back to business as usual. The Caribbean will have to fast-track its journey toward the twin goals that many of its countries embarked on as a result of the impacts of climate change as well as frequent natural disasters: sustainability and resilience.

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As such, any multilateral stimulus should be designed to help the Caribbean transition to a new resilient economy that is anchored in sustainable development. The foundation of the future is clean energy, and on top of this, new diverse industries such as modern agriculture, information technology, financial services, and manufacturing can be built. And there is a clear pathway.

Rocky Mountain Institute commissioned a study to understand the costs and benefits to transition all 31 countries in the Caribbean to 90% clean energy by 2030. If a major capital investment is made, the Caribbean region would save an estimated $9 billion in fuel costs and replace more than 24 billion litres of imported diesel fuel with renewable energy each year. This would translate into valuable savings in foreign exchange for all countries in the region.

It is no secret that Caribbean governments face significant fiscal constraints, and with the impact of COVID-19 that these constraints will become increasingly insurmountable. It only makes sense that the international community and philanthropic sector use this opportunity to inject global public investment initiatives to accelerate project development in the clean energy sector at a pace and scale never seen before. Economic stimulus investments into the clean energy sector therefore present Caribbean countries with an opportunity to:

  • Create urgently required new jobs,
  • Reduce electricity costs to attract new industries,
  • Improve the competitiveness of agro-processing and other manufacturing sectors,
  • Shrink the region’s carbon footprint,
  • Decrease leakage of foreign exchange, and
  • Diminish dependence on imported fuels.

In order to achieve this, the international community and philanthropy must support Caribbean governments to:

  • Focus on re-tooling workers to give them skills needed in the clean energy sector, modern agriculture, manufacturing, and information technology;
  • Boost incentives for electric vehicles (EVs) and design policy measures to unlock EV supply chains as well as investment in EV charging infrastructure;
  • Forgive overdue electricity bill payments for the poor and local businesses affected by the shutdown;
  • Backstop electric utility credit and access to low-interest credit while providing liquidity to government-owned utilities to shore up their finances;
  • Create clean energy lines of credit designed to backstop power purchase agreements and capital leases to crowd-in investment in renewable generation; and
  • Put people to work immediately in the construction sector by undergrounding overhead transmission lines so that they will not be knocked down by the next storm.

Collectively, these actions will help create thousands of jobs, reduce regional emissions, and reduce long-term dependence on imported diesel, helping the Caribbean to create a new foundation for a diverse, resilient, and sustainable economy. This may be a once in a lifetime opportunity to demonstrate a new vision for the region’s climate future and become an example for the world—transforming its citizens into controllers of their destiny and leaders of the clean energy era.

The Caribbean may be the first economic domino to fall from the coronavirus pandemic. It can also emerge once the crisis is over with a more resilient future through smart utilization of stimulus funding to unlock rapid, intensified investments to help these important islands on the frontlines of climate change make a full transition to become clean energy economies.


*David Gumbs is the former Chief Executive Officer of the Anguilla Electricity Company, Ltd (ANGLEC). He is a graduate of the University of Hartford with a Master of Science in accounting and Connecticut College with a Bachelor of Science in economics and Africana studies.

**James Fletcher was Minister for Public Service, Information, Broadcasting, Sustainable Development, Energy, Science, and Technology in St. Lucia from December 2011 to June 2016. During his tenure, Fletcher led St. Lucia on an aggressive path toward the modernisation of the energy sector with a strong push toward the use of renewable energy. He has been very active in international climate change negotiations. He played a leading role in the Caribbean’s “1.5 to Stay Alive” climate change campaign. Fletcher holds an Honours Bachelor of Science degree in biochemistry from the University of Ottawa, Canada, and a Doctor of Philosophy degree in crop physiology from the University of Cambridge, England.

***Justin Locke is a Senior Director at Rocky Mountain Institute (RMI). He co-leads RMI’s Empowering Clean Economies Program and is the senior lead for the Islands Energy Program. He holds a master’s degree in public administration in international management from the Monterey Institute of International Studies in Monterey, California and a bachelor’s degree from the University of California, Davis.

The opinions presented in this content belong to the author and may not necessarily reflect the perspectives or editorial stance of iWitness News. Opinion pieces can be submitted to [email protected].

2 replies on “COVID-19: The Caribbean the first domino to fall, but there is hope”

  1. When Ralph Gonsalves decided it was now the era of tourism, agriculture is a thing of the past. He signed a partial death warrant for Saint Vincent. But despite the head being dead the body has continued to live, but only just.

    The Saint Vincent island is one of a few islands able to support agriculture, which should now be fully revived. Because now it is tourism that is a thing of the past and agriculture is the future.

    Thank God that the destruction of agriculture in Saint Vincent was not yet complete.

    All the new hotel projects in SVG will grind to a halt and the unwise move of government funding the building of unaffordable projects will become a Gonsalves folly.

    I fact all construction of hotels that are being built with government funds should be stopped with all haste to conserve further losses. Because the whole international hotel industry is about to go broke, along with airlines and tour companies.

  2. Some years ago – maybe 30 after a storm interrupted the electricity service in SVG, I mentioned grounding the power lines to A Guyanese running the electricity system in SVG. He was very critical and said he traveled the world and didn’t see lines being grounded. I was observing the Ontario electricity folks going underground, especially where there were new homes being built. I am glad to see its being raised again to curtail the damage by hurricanes.
    My second point is about renewable energy: I raised that issue again several years ago. I wanted VINLEC to order solar panels and sell them to homeowners. VINLEC did order panels but for itself to avoid losing jobs I was told by a guy Jack – a VINLEC worker. He didn’t even want VINLEC to purchase excess electricity from homes using solar panels.
    Then Bequia had a run-in with Ralph and VINLEC who wanted the people of Bequia to pay extra on their electricity bill to cover an environmental tax that mainland users pay. I encouraged the Bequia people to come together and buy solar panels to get around depending on VINLEC. They did nothing. Now they have a water problem due to drought throughout SVG and want the government to purchase salt processing system to generate clean water. They system has to cover the entire Grenadines and that will and could be costly. A solar system may and can reduce the maintenance price.
    I totally agree with the sentiments expressed in the article and hope the islands will return to agriculture with something like the banana industry that was the back-bone of the islands, especially the Windward Islands. Tourism is slave labour with the money going to the owners of the hotel and little to the front-end workers.

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