Business Page September 19, 2004

 Disaster economics: The Grenada experience

Introduction

Grenadians are yet to come out of the nightmare of Ivan, the terrible storm that roared through the Caribbean causing death, destruction and despair not witnessed or experienced for several decades. It was a reminder of the one- Caribbean reality, even as the scale of the damage to Grenada masks that of Jamaica and Cuba, the citizens of both of which consider that some divine intervention averted even greater damage as the hurricane made sudden last-minute changes of direction from its feared deadly path.

The reports of those who have seen the actual damage all suggest that no picture or television shots convey the full extent of the horror. Understandably, most of the pictures are from the areas including and surrounding the capital city, St George's, where the more sturdy medium and high-cost housing exists. The rural areas in which the nutmeg plantations are located have still not been shown to the world, and like a wake, the tendency is that the survivors will soon be left on their own as everyone else goes on with their own lives. We in the Caribbean have a reason and a duty to ensure that this does not happen.

Soul sisters and brothers

Grenada is close to the hearts of many Guyanese. The late President Hoyte was an outstanding teacher in that country for years, the PPP and the WPA found refuge and comfort from the Bishop regime for its entire but abruptly-ended life. Ironically it was the country in which I met Miles Fitzpatrick, Clive Thomas and Walter Rodney. It was a country that had experienced an eccentric dictator, but managed to avoid the bitterness that cried out for revenge. When I first arrived there in 1978 to work with Coopers & Lybrand, I was shocked to learn that 'Dr' was not part of the name of persons in that profession, that Grenadian hospitality was on par with that of Guyanese, that it was a country that as one friend familiar with the island describes as possessing the combined beauty of St Lucia and Jamaica.

Along with scores of other Guyanese, including Eddie Dewar, Clairmont Kirton, Freddie Kissoon, Valerie Holder and Lou Bone, I found the Grenadians a people who saw themselves as they saw us - as West Indians first and last. They did not envy the positions of seniority enjoyed by non-Grenadians in the Maurice Bishop government and sought to make full use of the skills available.

Finance Minister Bernard Coard, now a prisoner for his part in the death of Bishop and an undetermined number of other Grenadians, was always willing to learn from the likes of Omar Davies, now Finance Minister of Jamaica, and Dr Norman Girvan of the University of the West Indies, regular visitors to that country. With Bernard La Corbiniere of St Lucia as the Budget Officer and a number of sector specialists helping to move the country forward socially and economically, and with Grenada readmitted to the Caribbean fold after expulsion arising from the overthrow of Gairy, many hoped that that small but beautiful country would be the model for the rest of the Caribbean. It was after all, a world which had tasted freedom in places as far apart as Iran and Nicaragua with the fall of the dictatorships of the Shah and Somoza.

I have visited Grenada a number of times since then, first to make up numbers in a Guyanese contingent of golfers for an inter-club competition, and on another occasion to give a talk on the challenges in the accounting profession in the post-Enron world. Most co-incidentally, I was due to present a paper on Corporate Governance in that country later this month, an event which has now given way to the emergencies of Ivan.

Imagine

For us to understand the destruction and devastation, we would have to bring ourselves to appreciate Guyana with its sugar and rice crops all destroyed; almost all the houses in Demerara, Berbice and the more densely populated areas of Essequibo damaged or flattened; the poultry and cattle industry gone along with the instruments of civilization such as the legal system, the schools and the hospitals out of operations. That is beyond imagination. And even for those with exceptional imagination, how does a 'Mudhead' from natural disaster-free Guyana understand the horror, fear and panic of a hurricane - imagine winds travelling at 160 mph accompanied by heavy and torrential rains for what appears to be eternity?

I understand from one of the officials who attended the recent Heads of Government of the Caribbean countries convened to assess the effects of Ivan on the member territories, the leaders from the other countries which had felt some of the effects of Ivan chose not to speak after they heard the report from the Grenada delegation. How do you tell a man who has just lost his house that you have lost your handkerchief?

The scale

Here are some of the more direct, tangible and measurable costs of the damage in Grenada.

Ninety per cent of the housing stock damaged or destroyed. Of the sturdier houses, 50% had their roofs substantially damaged, their walls cracked or their foundations compromised. In some of the squatting areas, the destruction was 100 per cent, while in the north of the island which experienced only 'collateral' damage, the loss was substantially lower. Rough estimates put the cost of replacement at close to US$2B. Given that a number of these homes would have been under/uninsured, the cost will have to be borne by the owners.

Most of the eighty schools would have been destroyed, including buildings, furniture and records. It is estimated that the cost of rebuilding would be about US$72M. Many if not most of these schools would not become operational for several months, placing an additional challenge on parents, police and the social services when they themselves have been severely incapacitated.

The rebuilding of hospitals is estimated to cost about US$2M, while the reconstruction of roads and bridges, some of which were washed into the sea by the rains or swallowed up by the colossal waves will cost some US$4M.

Hotels and other physical infrastructure serving the tourism industry have received significant damage, ruling out the 2004 winter season and some of 2005 also as tourists plan their vacation some time in advance.

Rural Grenada still depends largely on its cocoa and nutmeg for which that country has an enviable reputation, reflected in the premium which they command on the world market. Fig, root and other food crops are local, and form a significant part of their Grenadian diet. Much of these have been wiped out, and with the maturity of the nutmeg tree being over seven years, the road to agricultural recovery will be a long and painful one. It is estimated that the agriculture industry urgently requires over US$12M for the reconstruction effort to take shape.

The private sector and the shops will need to inject new working capital to replace goods that were destroyed by the rains and sadly, the unfortunate looting that followed the hurricane. As we saw with Gilbert in Jamaica, looting is now a by-product of hurricanes in the Caribbean. Remember the words of the calypso: "You see me TV, is Gilbert gimme."

 

 

 

 

 

 (Back to top)