How Developing Nations Battered by Climate Change Are Crushed by Debt From International Lenders – Inside Climate News

A new U.N. report on the impact of climate change on vulnerable nations

A new U.N. report sheds light on how climate change is driving some climate-vulnerable nations deeper into debt, locking them into unsustainable cycles of economic crisis and hampering their governments’ ability to provide basic services to citizens.

The Bahamas: Natural disasters and public debt

Focusing on the Bahamas, the report looks at how natural disasters impact public debt and the realization of Bahamians’ human rights.

The impact of hurricanes on the Bahamas

Attiya Waris, the report’s author and U.N. independent expert on foreign debt, found that the effect of five major hurricanes since 2012 has forced the country of about 400,000 people to take on billions of dollars in debt for reconstruction while imperiling its tourism-dependent economy. As a result, the Bahamian government has been less able to spend on programs like food assistance, business loans and unemployment benefits—the need for which increases after climate-induced natural disasters.

Hurricane Dorian and its devastating impact

In 2019, Hurricane Dorian, the most recent major hurricane to hit the Carribean nation of about 700 islands, caused a staggering $3.4 billion in damage, equal to roughly one-fourth of the country’s GDP. The category five storm killed upwards of 70 people and ripped apart homes and businesses, affecting an additional 30,000 people.

In the aftermath of the storm, the country’s then-finance minister K. Peter Turnquest announced that the government would cut taxes, rather than raise them to fund the recovery, given the hurricane’s deleterious impact on the economy and the need to help business restart. To fund the clean up, temporary shelters, food assistance and other expenses, the government was forced to borrow roughly $500 million, he said.

Dorian was the latest in a chain of expensive hurricanes to hit the Bahamas, including Joaquin in 2015, costing $105 million; Matthew in 2016, costing $438.6 million; and Irma in 2017, costing $118 million.

The burden of debt and its consequences

In her analysis, Waris found the country had barely finished paying off debt incurred after one of the hurricanes when another hit, compounding its debt burden. The Bahamas’ debt service costs alone were about $989.9 million for the last quarter of 2022, almost double the $525.5 million incurred during the first quarter of that year.

“Forget thriving, the economy under those circumstances is trying to survive,” Waris said.

The impact of climate change on the Bahamas

Because of climate change, the frequency and intensity of hurricanes and sea level rise are expected to increase. As a result, places like the Bahamas will be hit with increased flooding and coastal erosion, decreased seabed productivity and the intrusion of saltwater into groundwater sources. Sea level around the Bahamas has already risen about a foot over the past century.

In turn, that damage to nature has, and will continue to, directly affect the natural-resource dependent Bahamian tourism industry, which accounts for over 50 percent of the country’s GDP and employs over half of its workforce.

Call for international support

Waris said the Bahamas is emblematic of other climate-vulnerable nations that are, or will be, forced to rebuild repeatedly after more frequently occurring floods, drought, storms and other climate-induced natural disasters. She called on the international community to give more concessional (below market rate) loans, cancel debt related to climate-induced disasters and make contributions to the Loss and Damages Fund, which began operating in November under the U.N. Framework Convention on Climate Change to assist climate-vulnerable nations.

“These countries have often contributed the least to the problem of climate change,” Waris said.

The Bahamian government’s role in addressing climate-related disasters

The Bahamas contributes less than 0.01 percent of global greenhouse gas emissions and has some of the lowest per capita emissions worldwide.

Waris called on the Bahamian government to increase its efforts to prevent illicit financial flows. She’s also pushed for a global tax body to address that and other issues, which she said are directly related to climate financing and the realization of human rights.

Conclusion

Waris will present the report to the U.N. Human Rights Council on March 6.

SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 2: Zero Hunger
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social, and environmental shocks and disasters.
• Target 2.4: By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding, and other disasters, and that progressively improve land and soil quality.
• Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
• Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
• Target 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
• Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
• Target 17.2: Enhance global macroeconomic stability, including through policy coordination and policy coherence.
• Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions or implies several indicators that can be used to measure progress towards the identified targets:

• Indicator 1.5.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 2.4.1: Proportion of agricultural area under productive and sustainable agriculture.
• Indicator 8.1.1: Annual growth rate of real GDP per capita.
• Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.
• Indicator 11.5.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 17.2.1: Net official development assistance, total and to least developed countries, as a proportion of the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee donors’ gross national income.
• Indicator 17.3.1: Foreign direct investment, official development assistance, and South-South cooperation as a proportion of total domestic budget.

Table: SDGs, Targets, and Indicators

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Source: insideclimatenews.org

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