Natural Disasters Major Impact on GDP – Phillips

Minister of Finance, Dr. the Hon. Peter Phillips, says that reducing the effects of natural disasters is critical to the country’s economic programme, based on the significant impact of loss and damages on the Gross Domestic Product (GDP).

He said data from the Planning Institute of Jamaica (PIOJ) indicates that damage associated with hurricanes, floods and droughts has cost the country an annual average of two per cent of GDP since 2001 and could reach 56 per cent of GDP by 2025.

"The cumulative loss entailed from this damage is estimated at close to $120 billion. This is money, which would otherwise be spent on developmental tasks rather than simply protecting or relieving the effects of climate-related events,” Dr. Phillips said today (July 26), at a climate change workshop held at the Wyndham Kingston.

Stating that the effects of natural hazards on the development potential of the country have become “very stark” he said that this is “not only because of the actual loss and damage but because of the impact on our debt, an issue which is central to our current economic reality and the reduction of which, represents a central task in our current macroeconomic programme."

He noted that the Government has taken steps to mitigate or reduce the risk that natural disasters can have on the country.

"One is the involvement in the Caribbean Catastrophic Risk Insurance facility although we have suffered many events and none of these events have been deemed to be at a level sufficient to trigger an insurance pay out. Nevertheless we believe it is important to remain part of this particular facility,” Dr. Phillips said.

In his remarks, Minister of Water, Land, Environment and Climate Change, Hon. Robert Pickersgill, noted that climate change cuts across all hemispheres, borders, and affects all nationalities and all races. 

“It is not the problem of one country, but the problem of every country. In recognition of this, and with the full knowledge that Small Island Developing States (SIDS) are more vulnerable than many other countries to the effects of climate change, we are taking steps here in Jamaica to build capacity and adopt strategies to mitigate against the effects of climate change,” Mr. Pickersgill said.

He further noted that as stewards of this planet “we call home, we all have a responsibility to take the necessary action to ensure that our natural resources are utilized in a positive way to ensure their sustainability."

For her part, Mission Director, United States Agency for International Development, (USAID) Denise Herbol, noted that while Jamaica’s size and history of natural disasters makes it especially vulnerable to climate change, “it is positioned to make a positive difference and be a regional leader by developing policies and passing legislation to ensure that all necessary steps are taken to develop a comprehensive and inclusive plan, which will be implemented to the benefit of the country."

She added that the USAID is “committed to working with the government of Jamaica and other stakeholders to ensure that global climate change activities are synergistic and not duplicative and that each dollar is spent wisely."

The workshop was organised by the Ministry of Water, Land, Environment and Climate Change and the USAID, and aimed to generate discussion to inform the development of a national climate change policy framework for Jamaica.