# **1. Introduction**

The Caribbean, a region highly susceptible to losses from natural hazards, is prone to tropical storms and hurricanes formed in the Northern Atlantic Ocean Basin, which includes the North Atlantic Ocean, the Caribbean Sea, and the Gulf of Mexico.<sup>6</sup> The official Caribbean hurricane season runs from June to November, although infrequent storms have formed outside these dates (Johnson 2015). According to the National Oceanic and Atmospheric Administration (NOAA), an average Atlantic hurricane season produces 12 named storms, including six hurricanes, three of which are Category 3, 4, or 5.<sup>7</sup> Between 2017 and 2019, the region experienced three Category 5 hurricanes.

With populations in the Caribbean often subjected to repeated hurricane strikes without respite, a sense of helplessness and hopelessness can set in (Gin and Lubin 1989). Despite overall improvements in living conditions, poverty rates in the region average 30 percent (Bowen 2007). Since 2010, most countries have shown persistently weak economic growth, with annual gross domestic product (GDP) growth rates for 2010–17 averaging only 0.8 percent, compared with 4.7 percent in other small states (OECD et al. 2019). Most Caribbean islands exhibit high levels of growth volatility, which creates uncertainty, hinders economic growth, and negatively affects public finances (Beuermann et al. 2018).

Meteorological damage has long-term consequences at both national and regional levels. According to the Emergency Events Database EM-DAT, 283 disasters caused by hurricanes either made landfall in the region or passed within 69 miles of the Caribbean islands between 1950 and 2014.<sup>8</sup> The database only recorded damages for 148 of these, which amounted to roughly $52 billion (in 2010 constant U.S. dollars). This is equivalent to an average of 1.6 percent of GDP in damages every year in the islands (Acevedo Mejía 2016).

Of the world’s top 25 countries with the most tropical cyclones per square kilometer, 15 are Caribbean islands. Acevedo, LaFrambroise and Wong (2017) find that hurricanes have caused major damage to hotel facilities and disrupted tourist arrivals in the region, where tourism infrastructure tends to concentrate in coastal areas, which are more exposed to hurricanes and floods. For example, when Hurricane Ivan hit Grenada in 2004, it damaged most hotels, while Hurricane Omar in 2008 essentially wiped out tourism in St. Kitts and Nevis by damaging its main hotel. In 2012, Hurricane Sandy caused severe disruptions to hotel operations in The Bahamas.

Recent scientific literature demonstrates that natural disasters have direct and indirect economic effects. The former include short-term damage to infrastructure, crops, extractable natural resources, as well as mortality and morbidity (Noy and Dupon 2018; Ishizawa, Miranda and Strobl 2019). The latter, on the other hand, are associated with emergency costs, business interruption, and longer-term consequences for economic growth, social and community network, as well as impacts on security and stability (Cavallo and Noy 2011; Hallegatte 2014). Direct impacts can also lead to indirect impacts, such as changes in economic activity after a disaster (Botzen, Deschenes and Sanders 2020).

However, both the nature of the storms and local community characteristics—such as weak infrastructure—mean that economic impacts can vary widely across space (Bertinellli and Strobl 2013). Developing nations are more susceptible to the adverse impacts of disasters than industrialized nations

> 6 For more information on Caribbean hurricanes, see https://www.nhc.noaa.gov/climo/

> 7 NOAA, “Extremely active hurricane season possible for Atlantic Basin”, last modified August 6, 2020, <u>https://www.noaa.gov/media-release/extremely-active-hurricane-season-possible-for-atlantic-basin</u> 8 It must be noted that not all hurricanes and tropical cyclones that pass close to a Caribbean island will result in a disaster, as the threshold for that classification requires that at least 100 people be affected, or at least 10 people killed, or a state of emergency declared.

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