One of the ways forward in helping small island developing states (SIDS) and small to middle income countries to build back better post COVID-19 must involve a revisioning of global financial architecture.
Minister in the Ministry of Economic Affairs and Investment, Marsha Caddle, stressed this point during a panel discussion hosted by the Economic Commission for Latin America and the Caribbean (ECLAC), entitled Building Forward Better in the Caribbean Post COVID-19: Critical Issues to Keep the 2030 Agenda in Sight.
In response to the question what is the way forward in preventing what is now a health crisis from turning into a debt crisis, as well as a social and financial collapse of social economic systems, Minister Caddle stated: “We need a new mechanism. We need a revisioning of what is the global financial architecture that is going to provide the means of implementation for sustainable development in island economies in emerging economies and in low and middle income countries.”
In addition, she pointed out that the revision of the global financial architecture would need to involve what should be the allocation of the new Special Drawing Rights (SDRs). The SDR is an international reserve asset created by the International Monetary Fund in 1969 to supplement its member countries’ official reserves.
“I think that looking at the SDRs, looking at what is the plan for the allocation or reallocation is what will help us bridge the gap between what is happening with the climate crisis and the fact that country’s debt was extremely high before COVID and is now ballooning as a result of health and social protection of expenditure, that is going to give us the new financial architecture.
“I believe these SDRs should be reallocated and they should not just be reallocated towards lower income countries, because we all know that there are many middle income countries that are vulnerable to this debt crisis,” Minister Caddle noted.
Another factor for consideration towards building back better post COVID-19 is a sustainable approach to social protection and a new deal for human development in SIDS. Ms. Caddle noted that one such way to achieve that sustainable approach would be to change our model of education.
“We have an approach that focuses a bit on a formal system of education and what we realise in Barbados is that we need a better system for micro credentialing, that is, mini-qualifications that demonstrate skills, knowledge, and/or experience in a given subject area or capability, also known as nanodegrees,” she explained.
According to Ms. Caddle, this is needed because in speaking to young people some of them have expressed that they aren’t going to sit in classrooms or lecture theatres for two to eight years gaining a formal education when what they needed right now was an income to help out their households and to become independent.
Minister Caddle stressed: “If we insist on these traditional models of education, we are going to continue to have these missing markets and these missing opportunities for people to access income.”
United Nations (UN) Resident Coordinator in Belize and El Salvador, Birgit Gerstenberg, who spoke on behalf of all UN Resident Coordinators in the Caribbean and Latin America concurred that guarding a balance between economic growth, social inclusion and environmental sustainability was necessary for Caribbean and Latin American countries to build back better, post COVID-19.
Ms. Gerstenberg gave the commitment that the UN would continue working with all relevant stakeholders in Caribbean and Latin American countries to ensure a collective response to COVID-19, including the support of reviewing the criteria for official development assistance allocation, which could allow SIDS to address the looming recession.