Status quo is a fancy version of policy paralysis and lack of leadership. Furthermore, those already in power will protect the status quo at any cost because it simply benefits them and the public good is eroded at the expense of preserving the status quo. But that is not rocket science for people to know. The problem lies with twisting the policy objective to hide between slogans like: oh well it cannot be done or this option is not available. In many cases, certain options are not available but that is why new paths must be charted in order to achieve new policy objectives in an ever changing global environment. Walking away with your hands up with a mantra on your lips that: well, this option is not available or this policy objective cannot be done; is nothing but a policy and political copout. If you start the policy debate with a mindset that it cannot be done; well, you have already lost. In an ever changing global policy landscape; no idea is out of reach and no policy option should be disregarded because it is not possible.
I have had many questions about the recent situation in Jamaica and especially regarding the insurance/reinsurance/climate finance and CATbonds. Although these concepts alone would require at least a 50 page analysis. But in any case, here is a quick take away:
1) Most of the responses who are either questioning the effectiveness or utility of the Bond structure basically fall into two categories; The first category has literally no clue or knowledge how these products operate and the second category is of the people or leaders who are been told by their so called policy advisors either a wrong description of these products or as I said: prefer status quo.
2) Small Island States ( regardless of their governance structure; I know how UK OTs operate and others) they all share the same fate: size of their physical space and the finance. Some Small Island States have impressed the giants like the US, UK and China. (Vanuatu has raised more funds in the climate finance than any other nations in that category (btw- 90 percent of is out of debt that is invested in high yield green infrastructure)
3) Are bonds a debt? Duh… yes… any economic 101 student will tell you that. But here is the thing about the debt; especially state debt. The only question is that you have to ask: how it is structured and not how much it carries forward. (US debt vs Greek vs Japanese debt). If anyone wants more information on these debt comparison; do reach out and I will have no issues explaining it in simpler terms that even a non-economist would understand.
4) Lastly: no one has a cure for stupidity and ignorance. I get that. But when you are a policy advisor; you must provide all options to the leader including those that are nor explored or even thought of. That alone is a hallmark of a great policy/economic advisor. Ledare on the other hand must be open to all possibilities; even those who are so called not available at any given time. That is the hallmark of a great leader. Also: it is never too late to brush up on the elementary definition of insurance; reinsurance, climate finance, debt and Bond structure.
Thanks so much for all that interest. Climate change is the quintessential threat and policy advisors and leaders have a cardinal responsibility to pursue every option to mitigate its impact; even those who are so called: not available to certain nations; for any number of reasons.
