By the time Beryl arrived, Grenada had already spent 20 years recovering from Hurricane Ivan (2004), a disaster that caused a staggering 200% of GDP damage and sparked a debt crisis. In neighbouring Dominica, Hurricane Maria (2017) caused damages of 226% of GDP. One of the most highly indebted countries In the world.
Think about these numbers: Can you imagine any event, other than nuclear war, even remotely comparable that would cause damage on a similar scale to larger, wealthier countries, and that would happen repeatedly?
Debt-Disaster-Debt
Flooding is still ongoing and the full impact of Beryl has yet to be assessed. But one thing is clear: the cost will be far more than these countries and their people can afford. Disaster funds have been mobilized in Grenada and St. Vincent and the Grenadines, along with public disaster funds. Appeal for cash donations There will be insufficient support to restore services, and the government will have to borrow even more to rebuild.
A damaged fishing boat sits on the coast of Bridgetown, Barbados, after Hurricane Beryl passed over the island.Randy Brooks/Getty Images
This extremely high public debt burden It is not a financial wasteRather, they are the inevitable consequence of the vicious cycle of debt-disaster-debt in which small island states find themselves, continuing to borrow, often at low interest rates. High commercial feesWe just need to recover before the next hurricane hits.
This leaves less money for education, health, infrastructure, etc. To achieve their development goals, small island developing states need to increase social spending by 6.6 percent of GDP by 2030. But debt servicing costs are Swallow the average It accounts for 32 percent of revenues.In fact, in 23 of these states for which data are available, service payments on external public debt are growing faster than spending on education, health, and capital investment combined.
The rest of the world must help
Small island developing States cannot, and should not, solve this problem alone: the international community has a historic responsibility and a moral obligation to help these countries escape the debt-disaster-debt cycle, fund basic services, invest in development, and adapt to a changing climate.
Donors can do a lot: they can provide more aid rather than loans; they can help small island countries get the kinds of loans they are often excluded from by their very nature. Misleadingly high levels Per capita income (often distorted by one or two very wealthy residents).
Donors can help reduce the excessively high and unaffordable interest rates that small island countries must pay on their debt; and Our workAfter a shock the size of Beryl, developed countries could offer immediate debt relief (but not postponements) to free up valuable fiscal space for relief and recovery.
