Caribbean SIDS face unique challenges in their effort to diversify their economies and markets in order to increase their degree of food security, self-reliance and promote sustainable livelihoods. The impact of the global financial and economic crisis of 2006 has been particularly devastating on SIDS given their openness to the global financial and economic system and high dependence on a narrow range of income generating sectors such as tourism.
The growing debt burden of many Caribbean countries is also generating considerable concern. The net result of this increasing debt burden has been a deepening of the economic vulnerability of the region and the erosion of the impressive social development gains that were achieved from the 1970s through to the mid 1990s. Caribbean countries must also contend with declining FDI and ODA. The economic growth prospects of the Caribbean region are also constrained by a variety of natural factors, including adverse physiographic conditions in many countries.
In the area of poverty, while the Caribbean – prior to the recent economic downturn – has experienced steady economic growth rates, systematic eradication of poverty has remained a challenge for most countries. Social security systems are in place that, due to lack of efficient targeting and monitoring, only provide limited relief to those in need in the majority of countries.