Central Bank governor Dr Kevin Greenidge has issued a stark warning about the challenges facing Caribbean economies, highlighting climate change and de-globalisation as major threats to the region’s future prosperity.
Speaking at the opening of the bank’s 44th Annual Review Seminar, Dr Greenidge painted a sobering picture of the economic landscape confronting Barbados and its neighbours.
The governor did not mince words about the threat of climate change.
“We in Barbados and our regional neighbours are vulnerable to climate change because of the geographic and economic characteristics we have,” Dr Greenidge told attendees at the Radisson Aquatica Hotel. “Rising sea levels, increasing temperatures, and more frequent and severe hurricanes threaten our infrastructure, our tourism products, and our culture. It threatens our food security, our lives, and our livelihoods.”
Citing recent natural disasters, Dr Greenidge highlighted their devastating economic impact: “Our neighbours in Grenada, St Vincent and the Grenadines, and Jamaica have experienced firsthand the impact that Hurricane Beryl had on them. The damage is almost north of half a billion dollars so far. These sorts of devastations push up our indebtedness as countries, constrain our fiscal space, and restrict how we can move forward.”
The central bank governor also focused on the rising tide of de-globalisation.
“De-globalisation, which is characterised by the threat of the retreat of international trade and the rise of protectionist policies, has a profound effect on Barbados and the Caribbean,” he said.
“Our regional economies heavily rely on international trade, tourism, and foreign investment.”
He warned that policy shifts by major trading partners like the United States and the European Union are already draining the region’s export revenues.
“We see it impacting our financial sector and our international business sector,” Dr Greenidge said. “The decline in global tourism due to political tensions can further strain our economies, especially those dependent on tourism.”
The governor further noted: “[Barbados], like most countries in the Caribbean, are highly import-dependent economies, particularly as it relates to goods, food, and services. This de-globalisation threatens to push up our costs, further reduce our availability of essential products, and impact both our consumers and businesses.”
Addressing strategic competition, he pointed out the difficulties small island nations face in competing with larger, more diversified economies.
“Small island nations like Barbados often struggle to compete with the larger, more diversified economies in terms of attracting foreign direct investment and in terms of trade opportunities,” he said.
To remain competitive, Greenidge stressed the need for significant investment in infrastructure, education, and technology.
“As the global supply chains evolve, our region must adapt quickly and remain relevant,” he emphasiaed. “This requires significant investment in infrastructure, in education, and in technology to improve our competitive economic resilience.”
To remain competitive, Dr Greenidge stressed the need for significant investment in key areas.
“As the global supply chains evolve, our region must adaptquickly and remain relevant,” he emphasised. “This requires significant investment in infrastructure, in education, and in technology to improve our competitive economic resilience.”
The seminar, themed Applying an Innovative Lens to Reshape Caribbean Economies, aims to address these critical economic issues confronting the region. Over the next five days, participants will cover topics ranging from the blue and green economy, trade, and climate financing to debt developments and financial and monetary sector modernisation.
Dr Greenidge highlighted the seminar’s legacy and educational role, particularly for young economists.
“This being the 44th seminar, the largest seminar in our region, is one of our many legacy programmes to promote public education, edification of current and important economic matters, and produce rich economic thought,” he said.
“For young economists here and also many interns I see around the table, these seminars help you to cut your teeth, as we say in Bajan parlance, or to hone your research skills. I remember not too long ago I was a young economist, sharing my work, benefiting from the rigorous critique of my peers, and contributing to intellectual discourse in training and participating in this machinery. This is where you get to hear good ideas and feedback on your work, and it’s a platform for us to learn and to build our Caribbean collective response to our unique challenges.”
The governor encouraged robust debate and active participation, urging attendees: “I want to encourage young economists and those presenting not to be shy or shy away from comments, and I want to encourage the senior and more seasoned economists and us not to put on the rubber gloves too much but to be firm. We are economists, so we all learn together.”
He noted that the seminar’s insights and discussions will play a crucial role in shaping the future economic policies of Barbados and the wider Caribbean region as they navigate an increasingly complex and challenging global landscape.