Hurricane Beryl, Jamaica, and Fiscal Resilience

Hurricane Beryl, Jamaica, and Fiscal Resilience

As I write, the rain has begun to fall, there are occasional strong gusts, the light has gone, and internet is spotty. There's time still before my island home feels the full impact of Hurricane Beryl.

There are already reports of blocked roads, high storm surges, and communities cutoff because of flooding.

Already there is damage, and there's more to come when the storm makes its way past us. Yet for all that, I have one bit of reassurance. In the face of this hurricane, Jamaica is the most fiscally resilient it has been in the past four decades.

Jamaica has catastrophe risk insurance. This means that in the event of a major natural disaster, it will receive a quick insurance payout. Not big. but every bit helps. Jamaica also issued a catastrophe bond designed to provide a payout when a major catastrophe occurs.

Jamaica has fiscal buffers. These are funds, like the Natural Disaster Fund, put aside, literally, for the proverbial rainy day. It also has contingent lines of credit negotiated with multilateral financial institutions, such as the IDB. These can be drawndown quickly once a disaster strikes.

Even better, Jamaica has fiscal responsibility legislation. This has led to balanced budgets and declining debt. More importantly, we are at little risk of debt distress.

So, Beryl will cause pain. There will be damage; very likely extensive. People will hurt.

Yet, as the gusts get stronger, I believe that my country will be able to recover without precipitating a fiscal or debt crisis. We will be resilient!