Country perspectives on pre-arranged financing: Belize, Grenada and Jamaica

This report presents a comparative synthesis of how stakeholders in three Caribbean Small Island Developing States — Belize, Grenada, and Jamaica — value the core attributes of pre-arranged financing (PAF) for sovereign disaster risk. Rather than starting from instruments, it adopts an attribute-led approach, asking what governments and other stakeholders most want PAF to provide and where these preferences converge or diverge across countries, institutional roles, and recent disaster experiences. This framing lets diverse instruments — domestic contingency mechanisms, parametric insurance, contingent credit, catastrophe bonds, and debt-contingent clauses — be assessed through a common lens organised around six attributes: reliability and trigger credibility; speed to sovereign liquidity; impact on public debt, fiscal space and sustainability; affordability and value for money; flexibility; and coverage. The evidence draws on 50 semi-structured key informant interviews (14 in Belize, 15 in Grenada, 21 in Jamaica) and a structured documentary review, distinguishing throughout between stated preferences (what stakeholders say) and revealed preferences (what policy and portfolio choices show), with three recent shocks — Hurricanes Beryl, Lisa, and Melissa — serving as practical stress tests.

The study finds strong cross-country convergence on reliability and trigger credibility, speed to sovereign liquidity, and affordability, while the impact on debt and fiscal space is most pronounced in fiscally constrained Belize and Grenada, and coverage and flexibility vary more by context. Credibility emerges as relational rather than purely technical: instruments may be actuarially sound yet weakly credible if non-trigger outcomes cannot be explained against visible losses — as when Jamaica's catastrophe bond did not pay out after Beryl but later triggered after Melissa, and as Grenada's CRDC activation (providing roughly USD 12.5 million in deferred-debt liquidity) showed how legible, rules-based pathways sustain trust. Speed is best understood as speed to sovereign liquidity rather than speed to delivery, shaped by procedural and visibility factors as much as contractual terms, while debt-based instruments are judged not in binary terms but by their cost, timing, and fit within the wider fiscal strategy (Belize's Blue Bond, for instance, cut national debt by about 12% of GDP). Preferences diverge systematically by institutional mandate — finance actors prioritising affordability and debt sustainability, delivery and civil society actors emphasising legitimacy and whether support reaches affected communities — supporting the report's mandate, constraint, and credibility hypotheses. The overarching conclusion is that PAF effectiveness should be understood as a strategic problem of fit among trigger design, hazard profile, fiscal space, delivery systems, and stakeholder expectations, rather than judged by the presence of instruments or the occurrence of payouts alone.