Caribbean countries are trapped in a vicious cycle of debt and climate disasters. Here’s why

SAINT GEORGE’S — When Hurricane Beryl smacked into Carriacou — part of the Caribbean nation of Grenada — in July, it virtually flattened the entire island, damaging every building in the community of 8,000 people.

Grenada had to rebuild, but it’s a daunting prospect. In 2022, the country spent $51.9 million just on making payments on its loans, and is currently in debt distress — a financial term that means it’s close to defaulting on its loans, or that they need restructuring. Paying for rebuilding will likely force Grenada to borrow more, putting it further in the hole. Beryl was the earliest Category 5 hurricane to form in the Caribbean, a shock even in a region accustomed to large storms. It was fuelled by unusually warm ocean water and intensified in strength from Category 1 to 4 in just 24 hours, something that could be more likely due to climate change. But for the island countries of the Caribbean, the trail of destruction left by tropical storms extends to government debt — and their ability to borrow the money to rebuild and recover. It puts these vulnerable places in an ever-deepening cycle of expensive debt, which never quite meets the immense costs of worsening climate disasters, while at the same time mortgaging the countries’ futures.