Economic Affairs Minister Marsha Caddle has warned of the need for steps to be taken to prevent the current health crisis morphing into a debt and social epidemic for Barbados and other Caribbean countries.
Caddle, who was critical of the Warsaw International Mechanism for Loss and Damage associated with climate change impacts, issued a call for a new “global financial architecture” to assist low and middle-income countries.
She was addressing an Economic Commission for Latin America and the Caribbean (ECLAC) online forum on Tuesday under the theme Building Forward Better in the Caribbean Post-COVID-19: Critical Issues to Keep the 2030 Agenda in Sight.
“What I do want to ask us is how do we prevent what is now a health crisis from turning into a debt crisis as well as a social and financial collapse of our social and economic systems? I think this is an important question that we have to answer,” said Caddle.
She reasoned that a part of the solution lied in the financial models that were being used to determine benefits to countries.
Singling out the Loss and Damage Mechanism, she said it “has not delivered for the regions and countries that are most vulnerable to the climate crisis”.
“So we need a new mechanism. We need a revisioning of what is the global financial architecture that is going to provide the means of implementation for sustainable development in island economies, emerging economies, in lower and middle income countries,” said Caddle.
She further explained that the new special drawing rights that were soon to be issued by the International Monetary Fund should take into account the debt of economies, adding that this could help countries “bridge the gap between what is happening with the climate crisis”.
Caddle said: “The fact that countries’ debt was extremely high before COVID and is now ballooning as a result of health and social protection expenditure, that is going to give us the new financial architecture I believe for how these SDRs should be allocated.
“They should not just be reallocated towards lower income countries, because we all know that there are many middle-income countries that are vulnerable to this debt crisis. So I think a new way needs to be found to reallocate these SDRs.”
Adding that there have been some discussions on the matter including at the level of the Centre for Global Development, Caddle said “we in Barbados are having this conversation to be able to make a strong proposal for how this should be done”.
She said in addition to the climate crisis response, there needed to be a more collaborative effort in tackling the social development of countries in the region. (MM)
The economic affairs minister said: “We cannot do this without global solidarity. We saw that with the vaccine distribution and the fact that COVID does not discriminate according to geography or nationality.
“So in addition to the climate crisis, in addition to fiscal sustainability in a global financial architecture, we also need to look at something I think we are missing – I think we are being called on to have a more sustainable approach to social protection and a new deal for human development in our countries.
“I don’t think we have solved the long-standing issue of how do we entrench real improvement in people’s social wellbeing in a way that can be sustained in our countries.”
But to achieve this, Caddle proposed a change in the education model, stating that the current approach was too focused on a formal system.
She said: “What we realized in Barbados is that we need a better system for micro credentialing. More and more young people are not going to sit for a year or two years, and not to mention three or four or even eight years that some of us have sat in classrooms. They are not doing that because they are not interested and they need income now.
The minister argued that if the Caribbean continues to insist on traditional models of education then regional economies will continue to “miss opportunities for people to access income”. (MM)
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