Executive Secretary Alicia Barcena of the Economic Commission for Latin America and the Caribbean (ECLAC), is now proposing the creation of a Caribbean Resilience Fund (CRF) as a companion measure to the debt swap programme being pursued for the island nations by her organization.
Bárcena, met on September 23 with Prime Ministers Gaston Browne of Antigua and Barbuda, Allen Chastanet of Saint Lucia, and Ralph Gonsalves of Saint Vincent and the Grenadines to review progress on the Debt for Climate Adaptation Swap Initiative.
The meeting took place in the framework of the Climate Action Summit and the 74th session of the United Nations General Assembly, which was held in New York.
Barcena, in a release from ECLAC, said while the debt negotiations take place, the authorities could proceed with the establishment of a Caribbean Resilience Fund (CRF).
“This Fund could, on the one hand, attract resources (concessional and grant) from countries and agencies that want to support climate resilience building in the region and, on the other hand, could also be capitalized from resources arising from the successful implementation of the debt for climate adaptation swap initiative,” she stated.
“The Caribbean Resilience Fund,” Bárcena added, “should be housed in institutions from the subregion, such as the Caribbean Development Bank, for example, and/or the Caribbean Development Fund, to help channel funds for construction projects related to climate and resilience.”
The debt swap initiative seeks to respond to the Caribbean’s most urgent development needs: its high level of debt, and vulnerability to climate change and natural disasters.
On that subject, Barcena said, “This proposal goes beyond a traditional debt restructuring since it links debt relief to investment in sustainable development and green economy projects. In other words, it offers a strategy to provide fiscal space and relief to economies overburdened by public debt and debt servicing costs, while at the same time directing increased resources towards investment in climate adaptation projects and green industries to build resilience.
Several Caribbean countries rank among the most highly indebted in the world. In 2018, the average Caribbean debt was 70.5 per cent of GDP. According to ECLAC’s assessment, without meaningful intervention, the countries of the Caribbean cannot grow their way out of the current debt crisis.