Economic diversification is a necessary insurance against future storms

This is the third in a series highlighting Youth Voices in Hurricane Melissa recovery, featuring young people’s perspectives on resilience, rebuilding and the future after the storm.

To rebuild – and how to rebuild – that is the question.

The untold destruction caused by Hurricane Melissa once again highlights how vulnerable Jamaica’s economy is to natural disasters. While attention has rightly focused on rebuilding what was lost, the country now has an opportunity to consider transformative approaches to renewing its shattered economy.

From an economic standpoint, the most urgent challenges are controlling inflation, addressing rising unemployment, and ensuring Jamaica maintains access to much-needed foreign exchange. A fourth issue, arguably the most important for resilience, is: How do we reduce our vulnerabilities to natural disasters and other economic shocks?

This question carries added urgency as Jamaica has endured several storms in recent years – Eta (2020), Zeta (2020), Elsa (2021), Grace (2021), Ian (2022), Beryl (2024), Rafael (2024) and now Melissa. While Melissa has proven the most destructive, it underscores the increasing frequency of adverse weather events in the region. Vulnerability has been compounded by economic downturns, global supply chain disruptions and the COVID-19 pandemic.

The Temptation of Immediacy

Despite the frequency of these shocks, there remains a temptation among the public and policymakers to focus on quick fixes rather than long-term solutions. This is understandable: more than 135,000 homes were damaged and the repair bill stands at US$8.8 billion. Restoring bridges, electricity and water must be a priority, but responsible planning requires more.

Take inflation, for example. Prices will rise in the short term as Melissa devastated agriculture. As in previous crises, the government will temporarily allow imports to offset food shortages, while farmers receive subsidised seeds and inputs to aid recovery. Production will grow – until the next storm arrives.

A similar approach will likely be taken with unemployment. As businesses close, the government will provide cash grants and other relief to affected workers. Infrastructure will be rebuilt, farmers assisted, tourism promoted, and the economy will chug along – until the cycle repeats.

A New Approach

What is wrong with this? In truth, nothing – except that it leaves us no less vulnerable than before. Tourism illustrates the point: every disaster hits the sector hard. Because it provides jobs and most of our foreign exchange, steep concessions are made to restart it after crises.

With weather shocks increasing, we must ask serious questions. Do the industries we specialise in heighten our exposure to downturns? What else can we do to mitigate vulnerabilities? Must recovery always rely on the same interventions?

Thanks to shrewd macroeconomic planning, Jamaica can now afford to think long-term. Recovery should follow the systematic approach used when the country invested in layers of disaster insurance to minimise impacts.

Melissa’s impact was acute: it tore through the agricultural belt before exiting via the tourism heartlands. Two pillars of the economy were decimated in one swoop. This could happen again next year if we continue on the same path.

The Dutch Example

Consider the Netherlands. During the Second World War, the country suffered extensive infrastructure damage and famine. Yet 70 years later, it is the world’s second-largest food exporter after the United States.

How does a nation smaller than the Dominican Republic export more food than China? By learning from its vulnerabilities. Driven by the “never starve again” mantra, the Dutch modernised agriculture, increased efficiency and secured food security. The government consolidated farms, invested heavily in research, and developed innovations such as improved fertilisers.

Mechanisation, greenhouses and hydroponics were widely adopted, supported by collaboration between universities, the private sector and government. Jamaica can pursue similar reforms.

In contrast, Jamaica has historically focused less on international competitiveness and more on supporting small farmers for the domestic market. To its credit, the government has encouraged research and greenhouse use, especially on rehabilitated bauxite lands. But greenhouses should be standard across the sector, not just a rehabilitation tool. This would expand production and shorten recovery time after storms.

Hence, agriculture must be internationally competitive. A first step was the creation of the National Reconstruction and Resilience Authority (NRRA) to lead rebuilding. Going forward, the NRRA should prioritise infrastructure that expands sector capacity in the months and years ahead.

Complementary Industries

Resilience also requires new economic pillars. Jamaica can capitalise on its Caribbean location to grow the shipping industry – expanding ship repair capacity, offering registration and bunkering services. These would provide skilled jobs, diversify foreign exchange sources and lift anaemic growth.

Like the COVId-19 pandemic, Hurricane Melissa invites us to rethink economic development and the industries we target. This requires serious reflection on what Jamaica should look like in the next ten, twenty or fifty years. It is necessary, because we never know when the next Melissa will appear on the horizon.

David R. Salmon is a public commentator, policy analyst and a Rhodes Scholar. Send feedback to davidsalmon@live.com or on X @DavidSalmonJA.