Working Paper Series: Special Edition of 2016 to 2018 Interns

7.0 Policy Recommendations Based on the findings, the following policy recommendations are made in order to help the ECCU countries mitigate the impact of natural disasters while improving their prospects for debt sustainability: • A natural disaster sinking fund can be created using a portion of the Citizenship by Investment flows in the ECCU countries that have this programme. Five ECCU countries (Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis and Saint Lucia) have programmes where investors can acquire citizenship by paying a fee. Therefore, it may be beneficial if these countries allocate between 5.0 to 10.0 per cent of these inflows to a sinking fund. The countries can make regular payments into the fund thereby ensuring that their debt obligations can be paid when they fall due. Furthermore, these payments can also be used to repurchase bonds. • Given the vulnerability of the countries to natural disasters and the significant costs they incur, ECCU member territories are encouraged to pool 1.0 per cent of their GDP to create a contingency fund that can be disbursed immediately after the occurrence of a disaster. Also, it is important for the countries to generate primary surpluses on a regular basis so that there is adequate fiscal space to deal with disasters without undertaking high levels of debt. Strengthened expenditure management by the governments would be useful in this regard. • It is imperative that disaster risk management be integrated into the medium and long term planning and goals of each country. Weather-related hazards must be addressed in order to achieve sustainable development. • Greater emphasis must be placed on improving the quality of key infrastructure such as roads, hospitals and airports. The destruction of critical infrastructure during a disaster has the potential to halt economic activity in a country. Furthermore, regular maintenance of vital infrastructure must be done and vulnerability audits undertaken to enhance the quality of the housing stock and critical public sector structures. • It is important that building codes be improved and enforced in order to enhance resilience to future disasters. • Enhancing and maintaining drainage infrastructure is critical. This would help to reduce flooding and landslides during episodes of heavy rainfall.

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