Grenada small island developing state

Moving Beyond GDP in the Caribbean

Growth in GDP in the Caribbean isn't capturing the full story of natural disasters, climate change, and social disruption—but action is already underway to move beyond GDP as the sole goal and measure of policymaking

By Zakaria Zoundi, Dindial Ramrattan on February 1, 2024

The 2023 Statistical meetings of the Caribbean Community (CARICOM) conducted from October 30 to November 3 in Nassau, Bahamas, were an opportunity for statisticians and policy-makers to agree on key statistical initiatives that will better support policy-making across the region. The meeting covered several important issues, including gender statistics, national accounts, censuses, geographical information systems (GISs), and the Sustainable Development Goals (SDGs). Moving beyond GDP emerged as a key step that will contribute to fostering resilience and guaranteeing the well-being of future generations.

In his address, Halim Brizan, Regional Director of Statistics of the CARICOM Secretariat and Chairman stressed, “We should make sure the statistics that we produce are fit for purpose... we need to complement [GDP] statistics to assess the situation of our economy.” In inviting member states to complement GDP statistics, the Director addressed two concerns regarding GDP: its usefulness and sufficiency in policy-making.

On the former, GDP remains an important tool for policy-makers due to its complete coverage of domestic activity, harmonization, and standardization over time and space. Regarding the latter, global leaders, including the United Nations Secretary-General, the Organisation for Economic Co-operation and Development, and the World Economic Forum are raising concerns around the use of GDP to assess national well-being. These concerns have prompted the design of complementary measures to GDP. One such measure is comprehensive (or inclusive) wealth—the sum of natural, produced, human, financial, and social capital. Comprehensive wealth is measured by the World BankUnited Nations Environment Programme, and the International Institute for Sustainable Development.

In the list of assets composing wealth, natural capital is the most at risk today. While GDP in the Caribbean has more than tripled since 1970, the region has lost 80% of its coral reef cover in just a few years. This significant decline jeopardizes the supply of crucial fish stocks and shoreline protection. The region is facing several other environmental risks, including rising sea levels and surface temperatures, depletion of forest resources, pollution of marine ecosystems (with consequences for the tourism upon which many small islands rely) and increasing frequency and cost of natural disasters. Since 1950, Caribbean countries have suffered the impacts of more than 60% of disasters that struck small states. Large segments of the Caribbean population live on coastlines and are dependent on natural resources for economic opportunities. Around 70% of the region’s population lives on coastlines, and the ocean alone accounts for almost 20% of GDP. Estimates suggest that the Caribbean’s 88,170 km2 of seagrass provides more than USD 255 billion in ecosystem services and stores more than 1,300 Tg of carbon. This puts these countries at greater risk of "importing climate effects" despite being among the lowest contributors to greenhouse gas emissions.

Because GDP does not account for these challenges, comprehensive wealth accounting is required to complement GDP measures and equip policy-makers with better tools to monitor the economy’s health.

Comprehensive wealth accounts should be incorporated into current and future data collection, compilation, and dissemination activities in the Caribbean. This is growing in importance as the international reporting requirements for environmental data increase due to rising climate impacts on small states. Work on comprehensive wealth accounting should initially focus on compiling natural capital accounts (NCAs). In this, countries in the region can draw upon the international standards available from the United Nations under the System of Environmental-Economic Accounting (SEEA) framework. SEEA-based natural capital accounts can contribute directly to the efforts to move beyond GDP by measuring the extent and condition of ecosystems, their uses in productive processes, and their degradation over time. NCAs can help countries quantify their stock of natural assets and monitor their contribution to national income and wealth. In this regard, NCAs will be a useful tool to track the losses and damages faced by Small Island Developing States.

To produce NCAs, a whole-of-statistics approach that stretches across data producers, users, and partners is necessary. To achieve this, the Caribbean must address structural issues that inhibit the coverage and scope of data collected. In this regard, improving national statistical systems and building relationships between data producersat local, regional, and international levels–and national statistical offices are essential steps for creating responsive national statistical systems and enhancing the data value chain in these countries. This includes the need for integrated data-sharing systems, a natural asset register through administrative sources, and real-time reporting on the impacts of natural disasters on populations and key natural assets. Such an approach will improve the accessibility, timeliness, and quality of statistics on population, living conditions, and housing conditions, thereby equipping policy-makers with more adequate tools for monitoring the well-being of both current and future generations.