CONTENT PREVIEW
Country Risk

Policy instability and contract risks likely to remain high in Caribbean following hurricanes; looting and protests likely

29 September 2017
A rescue plane lands at the Princess Juliana International Airport in Sint Maarten days after Hurricane Irma hit the island, 12 September 2017. Source: Jose Jimenez/Stringer/Getty Images

Key Points

  • Infrastructure disruption will affect tourism, a major source of income for most of the affected islands, and will delay non-humanitarian aid cargo, undermining economic growth.
  • Policy paralysis is likely in the six-to-12-month outlook, as governments will focus on reconstruction efforts, delaying passing policy.
  • Contract risks are likely to increase if financial aid is slow to come, as governments will seek alternative financing for reconstruction, and will likely suspend non-reconstruction-related works.

Event

Hurricanes Irma and Maria hit the Caribbean region between 4 and 22 September, causing extensive infrastructure damage and severely disrupting basic services provision.

Category 5 Hurricanes Irma and Maria passed directly over the Caribbean region between 4 and 22 September, damaging and destroying buildings, severely disrupting electricity, communications, the provision of basic health services, and food and water supplies. At least 90 people have been reported dead, and thousands displaced. Barbuda and Dominica were particularly hit, with up to 90% of their buildings damaged. In Puerto Rico, most of its 3.4 million inhabitants had no access to electricity, while economic losses were estimated at USD40–80 billion.

Anguilla

The scale of hurricane damage on Anguilla was estimated by Chief Minister Victor Banks at approximately USD1 billion. Authorities have reported “moderate to severe” damage to the island's electricity, cable, and water networks, as well as to its schools and domestic housing. Although operations at the territory’s main port resumed quickly after the hurricane, the ferry terminal at Blowing Point, which handles 85% of international arrivals, is now considered structurally unsound and will need to be rebuilt. The port of Road Bay has been reopened, mitigating the effects on tourism, but luxury hotels such as the Four Seasons and the CuisinArt Golf Resort have suffered damage for approximately USD20 million.

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