Caribbean islands are small island developing states (SIDS) with rich biodiversity, vibrant cultures and physical beauty. They are unique, but have similar vulnerabilities, including small and open economies, insufficient institutional capacities, limited resilience to external shocks, few economic alternatives, dependence on climate-sensitive sectors, high debt, and degraded natural ecosystems. These challenges are compounded by the high risk of natural disasters and climate change, and amplified by COVID-19. However, the Caribbean, like other small island states, is recognized for its involvement and leadership in advancing the SIDS Agenda.
How do these countries seek to address these diverse and interconnected challenges? Key partnerships are essential to generate sustainable solutions. As a priority region for both organizations, the European Union (EU) and the United Nations Development Programme (UNDP) are working together to address key development priorities in Latin America and the Caribbean (LAC). In fact, the EU and LAC agreed on a New Agenda1 earlier this year to strengthen partnerships between the two regions.
In this context, I wish to share reflections on three integral areas for Caribbean development: climate action, sustainable use of biodiversity and sustainable tourism.
Climate action
Climate change threatens the Caribbean population, affecting their social, economic and environmental well-being. The region continues to be disproportionately impacted by climate change and natural disasters such as storms, floods, heat waves and droughts. Since 1950, more than 500 disasters worldwide have affected small states with populations of less than 1.5 million2. Of these, more than 320 were in the Caribbean, leaving more than 250,000 fatalities and affecting more than 24 million people, either through injury or loss of property and livelihoods. UNDP's Post-Disaster Needs Assessments (PDNAs) between 2017 and 2022 record the impacts of natural disasters in the Caribbean, measured in terms of Loss and Damage. For example, in 2017, the cost of Hurricanes Irma and Maria in Dominica was equivalent to 192% of the previous year's GDP.
UNDP is at the forefront of helping countries improve resilience to climate change. In this journey, the EU has been a key partner. Supporting more than 120 countries, the Climate Pledge is UNDP's main response to climate change. Working with other UN agencies and partners, UNDP is helping countries meet their ambitious targets in their Nationally Determined Contributions (NDCs). In addition, UNDP is expanding its support to help countries transform their NDC targets into concrete action, while continuing to push for greater ambition. Leveraging the NDCs as an umbrella, UNDP is bringing together its extensive infrastructure, global knowledge networks and substantive offerings to provide comprehensive support for NDC implementation.
Sustainable Use of Biodiversity
The Caribbean is considered a biodiversity hotspot. However, many countries are experiencing rapid biodiversity loss and environmental degradation, which is a critical development concern. Countries rely heavily on their natural resources for socioeconomic survival, driving economic activities such as tourism, mining, agriculture and fisheries, among other sectors.
UNDP advocates and supports the conservation, rehabilitation and climate-based management of biodiversity and ecosystems, which increases resilience to climate change and provides long-term, low-cost solutions to protect lives, livelihoods and infrastructure. The Caribbean could be well positioned to implement adaptive policy packages to maximize blue and green economies with innovative nature-based and green solutions driven by catalytic investments.
In the New Agenda, the EU and LAC see opportunities to work together towards climate-neutral and nature-positive economies. Both regions are therefore committed to protecting biodiversity, halting deforestation, promoting more circular economies, improving waste and water management, increasing resource productivity, tackling pollution and investing in climate resilience.
Sustainable financing for biodiversity is essential. In an innovative way, UNDP and the European Commission have been advancing biodiversity financing by raising and managing capital and using financial incentives to support sustainable biodiversity management through the Biodiversity Finance Initiative (BIOFIN). In the Caribbean, at least two countries have already initiated BIOFIN processes.
Sustainable Tourism
A significant proportion of the GDP of Caribbean, Latin American and European countries depends on travel and tourism. It is a major component of Caribbean economies, although there are challenges. The region is highly dependent on travel and tourism globally. COVID-19 had a significant impact on the Caribbean, with GDP contractions of up to 16-20%3 in some countries by 2020. Travel & Tourism GDP fell by 53.2% in 2020, above the global average decline of 50.4%4.
Undoubtedly, the pandemic has been devastating, however, the challenge ahead is to rethink the Future of Tourism in the Caribbean. The traditional tourism model has created benefits, but is not generating enough social and economic value for the countries. The pandemic provided a turning point to shift the paradigm to more sustainable and diversified forms of tourism based on maximizing the blue, green and orange economies.
In 2021, UNDP and the EU-LAC Foundation partnered, through a series of national dialogues, to promote recovery and foster policies to support sustainable development and diversification of the tourism sector in LAC. The objective of the initiative was to promote “Good practices and recommendations to mitigate the impact of the COVID-19 pandemic and sustainably transform tourism in Latin America and the Caribbean and the European Union”. A key finding of the dialogues showed that reaching the full potential of Caribbean tourism requires diversification, enabled by digitalization, innovation and financing for micro, small and medium-sized enterprises (MSMEs).
The new tourism model should be more sustainable and inclusive and embrace a shift from mass market to unique niche markets characterized by smart and personalized travel, higher spending rates, higher value niche products and lower impact on the environment. Governments could develop and expand cultural, community, eco, business and sports, health and wellness tourism. The potential of health and wellness tourism remains untapped. The global wellness tourism market size was valued at USD5 814.6 billion in 2022 and is expected to expand by 12.4% from 2023 to 2030.
Despite the many multidimensional challenges faced by Caribbean SIDS, there is still hope for a brighter future built on resilience and solidarity. The regional strategic vision is clear, UNDP and the EU will continue to work together to support and advance sustainable and resilient development in the region so that all can reach their full potential.
1 Joint Communication: New Agenda to strengthen EU's partnership with LAC (europa.eu)
2 International Monetary Fund
3 World Bank 2021
4 World Bank 2021 World Travel & Tourism Council 2022
5 Grand View Research: Market Analysis Report