Central bank heads: Covid19, climate change offer opportunities

THE covid19 pandemic and climate change create opportunities for greater regional and international co-operation. Central Bank Governor Dr Alvin Hilaire made this observation during a virtual Caricom central bank governors' forum on Monday.

While covid19 and climate change each pose challenges to the entire world, Hilaire said they reinforce the longstanding fact that "a house divided cannot stand." Referring to information from the World Meteorological Organisation, Hilaire said, "The Caribbean region is warming more than the global average."

He said this means that sea levels in the region are rising and it is not far-fetched that regional tourism infrastructure, the majority of it on the coastline, could end up underwater as the land is eroded.

"This is a very important thing for many of our countries that depend on tourism."

For Trinidad and Tobago, Hilaire said a coastal zone assessment last year "showed how real the climate change issue is for TT."

He added that rainfall patterns are changing, droughts are drit was importantier and a lot more flooding happens in the wet season. Hilaire said this means areas like Las Cuevas and Buccoo Reef "are really feeling the hit, and so climate change is not an abstraction, it is not something in the future, it is real."

He said the bank has been liaising with various domestic and foreign partners to examine how financial polices can be used to address climate-change issues.

"We are examining our carbon footprint. We have our strategic plan which is focused directly on climate change."

He said, "International co-operation has shown to be very important and it could come in a crisis."

Referring to the COP26 climate-change summit taking place in Glasgow, Scotland, Hilaire said, "There is a lot of cynicism but there is a lot of attention now and I think something will happen out of this."

He said the imperative of dealing with climate change is seeing countries coming together to address it.

"We see that also in the pandemic. The Covax facility, the other ways of coming together to improving financing for vaccination, production and accessing in a very short time." Hilaire reiterated, "A lot of these huge international co-operative efforts have come out of crises."

He said in the Caribbean greater co-ordination on climate change, covid19 and other issues were important because "we have a great opportunity and I think we should not waste it."

Given the different types of economies in the Caribbean, Hilaire suggested that countries which have greater tourism potential partner with others who do not, in exchange for assistance in areas such as energy supplies.

Bank of Guyana Governor Dr Gobind Ganga agreed with Hilaire. While tourism-based economies may struggle to get back on their feet, Ganga opined that recovery may be quicker in commodity export-oriented economies such as TT and Guyana. He said once there is resilience in regional economies, it will encourage the private sector to invest and take the lead in driving growth.

"We have to ensure there is inclusiveness."

Ganga also said regional education must be bolstered to ensure young people can access the emerging jobs in the future.

Eastern Caribbean Central Bank Governor Dr Timothy Antoine said, "Let us not talk about getting back to normal."

He said regional central banks have their role to play alongside governments and the private sector to help the Caribbean to better face current and new challenges. "The heat is on."

He added that the ECCB is currently exploring opportunities where financing of renewable energy and climate change initiatives are concerned.

Maarten and Curacao Central Bank Governor Richard Doornbosch said the pandemic showed the importance of countries having adequate capital buffers in place. Doornbosch said this has allowed some countries to better support their populations during the pandemic. He supported continued co-operation on both covid19 and climate change.