12 Challenges Facing Caribbean Small Island Developing States

By: Caribbean Journal Staff - March 8, 2015

By Runy Calmera and Miguel Goede
Op-Ed Contributors

On a daily basis we read many good articles about issues in the Caribbean. In this first article, we make an inventory of the trends we think we Caribbean people have to watch, follow and make policy on. Why? Because these trends might have significant impact on your income, job, health and live if you live on a Caribbean island. The order is random and we discuss them here one by one. Know that they can all work simultaneously on the Caribbean. And they don’t necessarily start in the Caribbean either: in many cases these trends are a variation of a global trend. In next articles this month we will elaborate on these trends..

Climate change

For many years, it has been known that global sea levels are rising. For example, the World Heritage Site  inWillemstad in Curaçao in a few years will confront certain unenviable consequences if no measures are taken to adapt. Other related issues are trends of hurricanes, extreme periods of dryness, and those marked by extreme rainfall. The United Nations for many years has been creating awareness on these issues. Despite this all, only a few islands’ governments and NGOs are addressing the critical issue of climate change.

Oil prices

A number of Caribbean countries extract precious minerals and fuel from nature for their economies. But guess what: oil prices have dropped from above $100 dollars a year ago to around half that price for a barrel of oil. This decline affects the Caribbean directly, as most Caribbean islands consume a significant amount of oil, often at a very high cost. The incomes of the oil producing states will be affected directly; the resource curse continues. Also some Caribbean islands are dependent on foreign direct investments (FDI) and tourist arrivals from Russia and Venezuela, which, at a lower oil price, have trouble balancing their budgets. In a previous CJ article, we showed the effects of declining oil prices for the Eastern Caribbean islands. https://www.caribjournal.com2015/01/30/how-does-the-oil-price-decline-affect-the-eastern-caribbean/. On top of that the future of the Venezuelan PetroCaribe programme remains uncertain.


China is one of the world’s main importers of oil. China’s political and economic involvement in the world and in the Caribbean is relatively new and unknown, but remains a potential game changer. The Chinese government sponsors big projects in the Caribbean like hospitals, hotels, bridges, channels and roads and the foreign direct investment inflows from China are an important factor in the balance of payments of the Caribbean. But China’s way of doing business is different from the West, and we do not know what the long-term effects will be. It’s not only China that’s getting more active in the Caribbean, but also countries like Russia.


Despite increasing FDI and growing tourism sectors, poverty has been an issue in the Caribbean islands. The global trend of the rich getting richer and the poor getting poorer is also reflected on these islands. With poverty comes high levels of youth unemployment and some people unable to acquire the right skills to earn a living in their economies.

Crime, drugs

With high levels of unemployment and increasing poverty in some neighborhoods in the Caribbean islands comes the problem of trafficking. This is a fertile soil for transnational crime and gangs, and has been for several years now.

Financial markets

Many islands have diversified their economies by getting involved in the financial markets. In recent years, rich countries, led by President Obama, were determined to reduce tax evasion and cracked down on the industry. This will eventually result in the loss of income and jobs in this sector. In some islands we see a decline in the international financial business sector and this downward trend has been difficult to reverse.


Another factor affecting the Caribbean is Cuba. When Cuba was closed off, most Caribbean islands were able to cater for the United States market. The normalization of the relationship with the United States could potentially result in a drop of tourist arrivals to the rest of the Caribbean islands from America. Caribbean islands will have to try to diversify their economies and target new markets for tourism.


The Internet has had a disruptive impact on most sectors in the global economy. Caribbean islands are becoming more digitalized, but are they becoming smarter? More and more islands are changing their educational systems to meet the challenges of the digital era. Caribbean governments can also open their data and share it with their businesses so they can become more competitive in the global and regional markets.


Despite the digitalization, physical goods must still be moved. This will remain a challenge for the Caribbean islands, given the geographical, political and cultural divide.


We see new terrorism using the internet to get global attention for their cause. The global trend of terrorism sooner or later coiuld come to the Caribbean. We hope that will not be the case.

Good Governance and education

To reduce corruption and the other negative trends, good governance and value-based education will become more important. Some Caribbean islands have put laws in place of Corporate Governance, while others still have yet to start.

Demographic changes

We are living longer. This trend has made the system of pensions unsustainable and the healthcare system very expensive as more people consume more healthcare, while the social and healthcare premiums have to be paid by a young population. This is why the aforementioned high youth unemployment can be so disruptive. Many young citizens traditionally leave the islands for opportunities abroad, making matters even worse.


In addition to the elderly’s needing more care, we are faced by the threat of contagious diseases all over the world, like Chikunguyan and Ebola. These threats also pose potentially negative effects on the tourism sector in the Caribbean.

How will Caribbean governments, corporations and organizations face these challenges? What can policy advisors, managers and small business owners do to stay ahead?

On 17, 18 and 19 March 2015 these issues will be addressed in a free online conference on “The Future of the Caribbean.” For more information, visit

Miguel Goede is a strategist and trend watcher in the Caribbean. He is based in Curaçao and works for governments, corporations and NGO in the region. You can find out more on

Join the discussion on facebook Caribbean 3.0:

Runy Calmera is an economist, consultant, trainer and coach on economic analysis and policy for the 52 small island developing states (SIDS). You can find out more on and on Facebook at

Note: the opinions expressed in Caribbean Journal Op-Eds are those of the author and do not necessarily reflect the views of the Caribbean Journal.

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