Minister in the Ministry of Economic Affairs and Investment, Marsha Caddle, believes that there can be no separation between physical or environmental resilience and financial resilience. According to her, “the two go hand in hand because one determines the other”.
Minister Caddle shared that opinion last evening, during a panel discussion entitled “Success Stories and Opportunities for a Sustainable Economic Recovery”, which was hosted by the Inter-American Development Bank with Latin America and Caribbean Ministers of Finance.
She continued: “A complete loss from a hurricane or even small onset events, like drought, as we’re experiencing now in Barbados because of the climate crisis, can completely remove all of your fiscal space, and so the two are very much linked.”
In addition, she said the matter of insurance is critical because it is not possible to completely insure the tremendous loss small island developing states (SIDS) can experience from an extreme weather event, like a hurricane.
In response to the question of what Barbados’ Ministry of Finance had implemented in its budget to include resiliency as a recovery strategy, Ms. Caddle stated: “I will say that we haven’t included resilience as a recovery strategy; resilience is the recovery strategy and that comes with managing an island economy….
“Barbados is the largest issuer of natural disaster clauses in our debt instruments, and we had to do that because when we restructured our debt, we needed to make sure that if we had a natural disaster event that we would have a space of two years, where we did not have to make payments, and that we could provide a real chance for the people of the country to be able to survive and to recover. That has been a key part of how resilience is our recovery strategy.”
Minister Caddle also spoke on the specific role of finance ministries in their countries’ sustainability agenda and how to go about strengthening that agenda.
“I think the role of ministries of finance is, first of all, to make visible the climate resilience agenda and the climate crisis, and I say make visible because we all know the kind of focus and influence that ministries of finance have in the governance of a country.
“You know they say that the way that a government shows its priorities is the way in which it allocates resources, and so, in terms of a country’s national budget, the role of the ministry of finance is to make sure that the sustainability agenda is financed. But in very practical ways, ministries of finance have to look at new instruments for financing resilience. We are working on growth and resilience bonds to be able to take advantage of the over $50 billion in savings in the CARICOM region, and beyond growth and resilience bonds, also green bonds,” Ms. Caddle stated.
She also touched on the lack of financial support from the international community, and cited as an example the Warsaw mechanism for long-term damage that was agreed under the Paris Agreement.
She noted that hardly any financing had been given to vulnerable economies, so that they could deliver on the Paris Agreement, and pointed out that SIDS have to set very clear fiscal targets in order to build resiliency, in order to comply with the Paris Agreement.
However, she added that fiscal space is an issue, and international financing mechanisms must be put in place to assist.
Minister Caddle expressed the hope that at the upcoming United Nations Climate Change Conference that solidarity would be reflected in agreeing to provide financial agreements for small island and middle income economies to build their green sustainability.
President of the Inter-American Development Bank (IDB), Mauricio Claver-Carone, in his remarks, noted that in order for a sustainable recovery of Latin America and the Caribbean, countries must work together to attain the results that the region needs, in order to emerge successfully from any crisis.
“More than ever, we have to do that, every effort will count. Our region is extremely vulnerable to climate change and investments and must bring about the expected yield, all of us here have the responsibility of forging stimulus for economic development aligned with the sustainable development goals and the Paris Agreement, so that the region will move forward towards a green recovery.
“The IDB group is committed to accelerating the road towards recovery. We will work in a strategic way, in a tireless way with a joint agenda with the governments in each one of your countries in order to take care of the specific needs of each country. We have in our hands the possibility of changing the future of the region, I sincerely believe a future that is green, inclusive and sustainable,” Mr. Claver-Carone stated.