Introduction:
The Caribbean region has a long-standing history of economic devastation, mainly due to its vulnerability to climate change and the impact of natural disasters. Natural disasters are events or process’s that destroy life and property, ranging from earthquakes, tsunamis and tornados. In the turn of the 21st century the world has become very familiar with just how catastrophic these natural disasters can be to the Caribbean economy, with Hurricane Maria in 2017, Hurricane Irma in 2017 as well and Hurricane Sandy in 2012, “causing damage that, for some small nations, can be larger than their annual gross domestic product (GDP). Such natural disasters have cost the region an estimated US$8.6 billion.” Despite natural disasters in the Caribbean being correlated with economic damage, there is still potential for the economy to grow, at least according to the World Bank. However, the question remains, at what cost, what must these small nations sacrifice in order to see economic growth in their developing countries after catastrophic events?
The World Bank:
As the economic and social implications of natural disasters become clearer for countries, negative repercussions for international organizations begin to arise. Most Caribbean nations fail to profit from organizations such as the World Bank, an international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement. The international organization was originally created after World War Two to help reconstruct European and Asian countries, today the top borrowers of the organization are Mexico, Brazil, Turkey, Pakistan, China, India and Argentina. There is a total of twenty-six countries in the Caribbean, and only 16 of these counties are members of the World Bank. The following members are listed below:
1. The Bahamas
2. Barbados
3. Belize
4. The Dominican Republic
5. Guyana
6. Haiti
7. Jamaica
8. Antigua and Barbuda
9. Dominica
10. Grenada
11. Saint Kits and Nevis
12. Saint Lucia
13. Saint Vincent and the Grenadines
14. Sint Maarten
15. Suriname
16. Trinidad and Tobago.
The incentive for having these nations as members of the World Bank is to reduce global poverty, and with strong economic growth a cycle of prosperity and social opportunity can be created in an undeveloped nation. The World Bank through proper development and
preparation, can be a stimulate for a Caribbean nation’s economy, helping raise people out of poverty and improving their quality of life. The international organization has also stated that it can be a partner in a post crisis scenario and has also created the Caribbean Catastrophe Risk Insurance Facility, which provides readily available funds for the recovery after a member country suffers a hurricane. More than 20 Caribbean countries have access to this low-cost high-quality insurance. “Perhaps this weakening has been a consequence of a number of vulnerabilities that governments attempted to address through higher spending and investment projects. But the problem is that higher public spending does not necessarily mean that vulnerabilities are addressed, and they were not.”
Economic History:
In addition to inadequate preparation during development, The World Bank fails to effectively manage advancement, favoring urban development that prioritizes elite real estate and corporate interests. Nine countries in Central America and the Caribbean experienced natural disasters with economic impact that exceeded 50 percent of annual GDP in the last three decades. The International organization policies have been camouflaged to help corporations grab land for cheap. “Their latest maneuver is the Doing Business (DB) rankings. Countries in the developing world are ranked on the basis of ease of doing business with them. In other words, fewer regulations equals a higher rank. Take the example of Philippines, one of the top ten countries in the 2014 DB ranking. By following the Bank’s advice on reforms, the country lost 5.2 million hectares of land to foreign corporations in 2013.” International organizations are meant to unite worldwide community’s through a global mission, and despite global advances, international organizations like the World Bank have underlying interests. According to a report released by The World Bank in 2012, the developing world owed 4 trillion dollars at the end of 2010, even after the bank, G8 and IMF cancelled billions of dollars of debt.
The alleged corruption spurred into claims that The World Bank was corrupted and led underdeveloped nations into more debt than they originally had. Borrowing by low and middle-income economies more than tripled in 2017. “Borrowing by low and middle-income economies from external official and private creditors surged to $607 billion in 2017 from $181 billion the previous year, the highest level in three years, as net debt inflows surpassed equity inflows for the first time since 2013, the World Bank’s International Debt Statistics 2019 shows.” The World Bank’s job is to bring liquidity to developing nations, however “ Equity – as opposed to debt – inflows to low and middle-income countries were down slightly to $511 billion in 2017, and foreign direct investment inflows shrank for the second consecutive year, falling 3 percent to $454 billion.” It is an ongoing debate in the international community over whether or not international organizations such as The World Bank are truly allowing member nations to benefit from such programs such as the Caribbean Catastrophe Risk Insurance Facility.
Public Perception/Concerns:
In recent years, international organizations such as The World Bank have been under pressure to reform their aiding methods. As news of economies worsening emerge, pressure is escalating. “The World Bank’s role in the global climate change finance architecture has also caused much controversy. Civil society groups see the Bank as unfit for a role in climate finance because of the conditionalities and advisory services usually attached to its loans. The Bank’s undemocratic governance structure – which is dominated by industrialized countries – its privileging of the private sector and the controversy over the performance of World Bank-housed Climate Investment Funds have also been subject to criticism in debates around this issue. Moreover, the Bank’s role as a central player in climate change mitigation and adaptation efforts is in direct conflict with its carbon-intensive lending portfolio and continuing financial support for heavily polluting industries, which includes coal power.” Economic inconsistencies continue, deficits continue to rise, GDP growth has declined and in some Caribbean countries turned negative. Higher GDP should equate to greater human progress, because it would mean more valuable goods and services. If GDP is rising the economy is in good shape, but if it’s declining the nation begins to lose sovereignty and ground. Taking measures to counteract these harmful effects may help turn the economy around for these nations.
Conclusion:
“With the World Bank, there are concerns about the types of development projects funded. Many infrastructure projects financed by the World Bank Group have social and environmental implications for the populations in the affected areas and criticism has centered on the ethical issues of funding such projects. For example, World Bank-funded construction of hydroelectric dams in various countries has resulted in the displacement of indigenous peoples of the area.” The structure of the global system serves to perpetuate underdeveloped nations and keep them unequal, strategic measures implemented by The World Bank have no stimulated growth in developing countries but instead cut them in half. If the current trend of decreasing GDP and economic crashes continues, there will not be enough global growth, threatening the economic positions of The World Bank and participating countries. In order to prevent an economic crash especially after natural disasters, The World Bank must take an official stance on the issue and implement proper terms to ensure the decline of global poverty. The World Bank strongly stands against world poverty, it has only protected the best interest of nations that are not failing, neglecting other members such as the Caribbean.