CARICOM SG commends Region’s COVID crisis management system

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CARICOM Secretariat, Georgetown, GuyanaCaribbean Community (CARICOM) Secretary-General, Dr. Carla Barnett has lauded what she described as CARICOM’s extremely proactive crisis management system, which allowed it to cope reasonable well with COVID-19 pandemic over the past two years.

Even though the Community learnt many lessons along the way and in hindsight would do differently, the Secretary-General posited that is what risk management is all about.

“We plan, we learn from the past, so we do better in the future,” she stated.

Speaking at the 2022 Caribbean Regional Risk Management Conference, organised recently by the Caribbean Development Bank, Dr. Barnett urged regional governments to put comprehensive domestic arrangements in place to identify, measure, monitor and evaluate their country’s risk portfolio, in rebuilding economies and lives in a post-COVID-19 world.

Speaking to the theme ‘Country Risk Management- a Key Imperative for the Caribbean and a Pathway to Resilient and country’s risk portfolio,’ the Secretary-General opined how governments could minimise exposure.

In doing so, she said they should create space for shared action and responsibility at different layers of the society, taking advantage of the emerging opportunities such as the acceleration towards the digital economy occasioned by remote working, schooling, and the delivery of social assistance digitally.

“The prospect of building for the future within the context of a stronger push for investment in technological infrastructure is clear. This will require investments in innovation, infrastructure, and human resources. In addition, the legal and regulatory framework for the digital economy will need to address at minimum, issues of affordability, access and security,” Secretary-General Barnett stated.

Global uncertainties, rapidly widening development-financing gap, unsustainable and still growing debt burden represent the main sources of risks were among the risks she said the Region faced.

The unfolding Russia-Ukraine conflict and the resulting price increase in commodities such as wheat and fertilisers, as well as rising inflation rates in major markets, were other risks.

Dr. Barnett added that the debt associated with disaster relief and infrastructure replacement during and after every hurricane season, weakened fiscal space, and increased economic and financial risks.

Underscoring the need for international financial institutions to consider inherent vulnerabilities of CARICOM Member States in relation to concessional development finances, the Secretary-General bemoaned the fact that multilateral efforts to ease the “liquidity bind on developing countries,” largely exclude CARICOM countries.

“The proposed eligibility criteria for the newly launched Resilience and Sustainability trust show this reality, as does the lack of progress on a comprehensive sovereign debt work-out mechanism for middle-income development countries,” Secretary-General Barnett stated.

She added that the reputational damage CARICOM Member States have endured because of global tax governance initiatives amplify the economic risk countries in the Region face.

“Changes in the international regulatory standards for global taxation and Anti-Money Laundering Combating the Financing of Terrorism (AML/CFT) regime have led to the blacklisting of several Member States deemed to be non-compliant from time to time, and resulted in financial marginalisation and risk aversion by international investors,” Secretary-General Barnett said, calling for a study on the impact of those actions.

Positing two effects, she said that the loss of correspondent banking relations may be driving legitimate business underground, and exporters of goods and services may be keeping their foreign exchange earnings abroad, to ensure ready access to foreign currency when they need it.

This, the Secretary-General said, would result in a reduced flow of export earnings into regional economies, an expansion of the informal sector and the increased likelihood of macro-economic instability, thereby increases the same risks CARICOM States are trying to mitigate.

“Building resilience really means achieving success in managing risk and uncertainty as we seek to build stronger economies and societies,” Dr. Barnett stated.

She said that a key lesson from the pandemic is that the strength of the regional crisis response is “inextricably linked” to the quality of national crisis preparedness and management system.

At the Community level, Dr. Barnett said the Regional Comprehensive Disaster Management (CDM) Strategy 2014-2024, established by the Caribbean Disaster Emergency Management Agency (CDEMA), embraces a cross-sectoral approach and focuses on themes such as gender, climate change, environmental sustainability, and technology.

She recommended CDEMA’s involvement in the Integrated Sovereign Risk Management Project, which was launched in 2017 by the CDB and the Caribbean Catastrophe Risk Insurance Facility (CCRIF) to take a more proactive approach towards country risk management.

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