Economics and Hurricanes

The response of Barbadians to the call for money, food supplies and water for our neighbours hit by hurricanes has been commendable. There has been an outpouring of generosity which shows that Barbados remains a genuine and caring society in large measure.  The effort which is being made is even more humbling because several Barbadians are themselves grappling with adjustments and significant changes in their own financial positions.

I wish to share two reflections with you; one from an economic standpoint and the other as we look toward being more hurricane ready. Whenever I write an article about economics, I always make the disclaimer that I only run a house. Apart from accounts at Caribbean Examinations Council, I have no formal training in economics. Without training though, there are still observations which a reasonable person can make.

Firstly, I wonder about the impact to our economy that our donations are having. Natural disasters work as both economic destabilizers and stimulants. While Dominica’s economy will diminish significantly as an immediate short term effect of the hurricane due to the loss of infrastructure and tourism opportunities, the event acts as a stimulus for other economies such as Barbados.  In the countries answering the call for help by their neighbours, extra demand is created from people buying goods to donate. 

The Minister of Finance of Barbados recently put a set of tax measures in place to dampen demand in the Barbadian economy. According to the Minister of Finance, there were two things which needed to be adjusted in the Barbadian economy. One of the major concerns was the depleting levels of foreign exchange at the Central Bank. The other related issue was that the Central Bank was printing money to meet the Government’s monthly demands. 

In order to address the difference between the money in circulation in the local economy and the demand which the frail foreign reserves could support, there were a series of demand dampening taxes implemented. Where the measures were effective in getting the public of Barbados to curb spending, the recent disasters but the experience of Dominica especially have made people dig a little deeper in order to respond to the calls to offer resources.

The toilet paper which Barbadians are donating, the canned items, bottled water, the toiletries — all these items are largely imported. This means that the country must expend foreign exchange to purchase the items. This action, as laudable as it is,  perhaps has the potential to bring us closer to our day of economic reckoning.

The extra demand for goods will mean extra foreign exchange demands. Some business people in the country are already complaining about the length of time it takes between making requests for foreign exchange at the Central Bank and receiving it. The Minister of Finance has alluded to there being some evidence of foreign exchange hoarding. 

With merchants buying Christmas stock, extra demand coming for resources for Dominica and the country in its traditionally low months for foreign exchange, we will have to see how our economy responds to the stress. 

The other reflection is perhaps an expansion of the points I made last week about weather preparedness.   Instead of talking about one island now, we are examining our CARICOM response mechanism, the Caribbean Disaster Emergency Management Agency (CDEMA). It seems as if Dominica has laid bare the fact that we have some extensive capacity building and reorganizing to do at the level of our agency responsible for first response to weather events. 

A review of CDEMA’s mandate reveals when the agency was reorganized in 2009, there was a strong focus on preventative planning. However, with the effects of climate change making weather events more catastrophic, we will have to rethink how CDEMA functions.

We cannot now only focus on prevention, we must ensure that we can bring ourselves back to normalcy after a weather event. I do not mean to bring ourselves out of an event hand-held by a foreign sovereign or multinational effort. I mean that we must now be the independent region that we are and make plans and more importantly execution strategies which can bring an island affected by a weather event speedily back to functioning.  

The idea of the department is that it works with local stakeholders in the affected island to mount a disaster response. Dominica’s experience of category five Hurricane Maria has revealed the weakness of this mechanism. The 2010 earthquake in Haiti had underlined the point, but since Haiti is our complicated outside cousin, perhaps we will now heed the point after Dominica. 

When there is a disaster that renders a territory completely destabilized, the stakeholders in the island itself find themselves unable in some cases to offer assistance. First responders in the affected island also have to deal with the same psychological and property loss upheaval as the rest of the population.

In the case of Dominica, CDEMA partners would have been out of telephone service and electricity like the rest of the citizenry. Office buildings in Roseau were affected by wind and rain. The result was a seemingly sluggish start to the relief effort for the island. Perhaps a more effective way to organize CDEMA is to have staff from other islands learn the overlay of one or two other islands so that the first response can be made by an unaffected island. 

While local knowledge is an indispensable asset, to have the team commanded by outside personnel would take some burden off people grappling with a public responsibility, personal displacement and shock simultaneously. Additionally, we need to strengthen how collection drives are organized and dispatched to ensure that both people who donate and the intended recipients of donations are protected. 

Although groups who are well meaning spring to action to co-ordinate drives across the CARICOM countries, strengthening the process is desirable to ensure that no nefarious practices become engrained. CDEMA could offer permits to charities and companies who wish to coordinate collection drives instead of the free for all that exists. 

Additionally, there needs to be a clear articulation to get Caribbean people to understand that the relief effort is not a one-off initiative. Dominica will need support for a long time and thus management of the process is important to ensure that donor burnout does not occur.

The Prime Minister of Dominica made an urgent appeal for helicopters in the early aftermath of the hurricane.  Does CDEMA not make arrangements with international agencies to guarantee such needs? With so many Islands being affected at one time, the more we can plan and organize beforehand, we need to.

I wish the people of Dominica well. I also wish our country well.  Hope is an important factor in not feeling despair in the current times we live in. 

 

Source: (Marsha Hinds Layne is public relations officer of the National Organization of Women. Email: mhindslayne@gmail.com)

One Response to Economics and Hurricanes

  1. louis walker September 29, 2017 at 2:36 pm

    There must be hundreds of thousands of Barbadians like myself who reside either in America or in Europe. If each of us were to contribute just one Dollar, and in my case one Pound per month towards a Hurricane Disaster Relief Fund; most of us would see this as a worthy cause.
    Is the setting-up of such a fund possible? I don’t know,but I think
    the need is there.

    Reply

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