The War in Ukraine and its Effects on the Caribbean

As Russia invades neighboring Ukraine with its shocking military assault, the world observed and reacted as we are all horrified by the significant loss of civilian lives and the threat of violence and suffering facing families across the country due to war in ukraine.  

There are unavoidable global political and economic implications because of war of Ukraine and the Caribbean is no exception to these impacts, and various countries are already beginning to feel the war’s effect on everything from the cost of fuel to food security. 

So how will the conflict in Eastern Europe affect the Caribbean specifically? What has been the Caribbean’s response to the war? And how will this conflict affect potential travel in the region?

Jirie Caribbean stands in solidarity and support with the people of Ukraine and all those affected by the violence and joins hearts with people around the world to condemn this war and pray for peace and security on our planet.

According to Ukrainian President Volodymyr Zelensky, “This war will be very difficult, and the enemy will use all available forces to break the resistance of the Ukrainian people, but… We will not give up and we will not lose. We will fight till the end, at sea, and in the air. We will fight for our land, whatever the cost. We will fight in the forests, we will fight in the fields, on the shores, and in the streets. We will fight on the banks of the different rivers like the Dnieper, and we are looking for your help, for the help of the civilized countries of the world.”

“We do not want to lose what we have, what is ours, our country Ukraine,”

People of the Caribbean know exactly what it’s like to fight for the freedom of our land and our people!

Once the invasion of Ukraine by Russia started, many international persons found themselves in the midst of a growing war zone and increasing danger. Some Caribbean nationals were not immune from this fact, with the most notable being a group of Jamaican Students stranded in Ukraine. 

20 Jamaican students, primarily in the Capital Kyiv, had to be evacuated. Thankfully, the students were able to leave the country soon after the war started and arrive in Montego Bay Jamaica shortly thereafter, with none experiencing any serious injuries. 

One student recounted the generosity and kindness of the Ukrainian people stating, “ … we wouldn’t have been able to leave this country without the help of these people,” and others explained that their university has essentially been destroyed and not knowing what their next steps would be. Fortunately, there were not many other Caribbean nationals in Ukraine when the conflict started. 

What will be The War’s Effects on Food Security?

 In the Caribbean, economists and leaders are most worried about how the conflict in the breadbasket of Europe will affect an import-dependent region. The Caribbean imports more than 80% percent of its food from outside the region, spending approximately $4.75 billion in 2018. This number is expected to increase to over $10 billion in 2022 as the region’s population grows.

The impact of this war affects food imports in two ways. The first is the direct cut-off of Russian produce from the international markets, many of which is sent to the Caribbean. For example, imports of wheat and onions will most likely significantly increase.

 The second has to do with the increased price of oil’s impact on shipping. Russia is the second-largest exporter of crude oil and the world’s largest natural gas exporter, and with it being cut off from global markets, oil prices spike. 

This will have knock-on impacts on the shipping industry, which the Caribbean heavily relies on. Indirectly causing increases in not only food prices but also all imports.

 Former Managing Director of the World Bank, Juan José Daboub, has suggested that most Caribbean governments may need to increase national budgets by at least 20% this year to adjust just for these effects.

The Price of Oil

 Oil prices per barrel are expected to hit a peak of US $120 per barrel, which are levels unseen since the 2008 Great Recession. Like other countries in the world, the Caribbean has already begun to feel this shock.

 However, this will hopefully not be the long-term scenario as other sources of oil begin to increase production. There is a very high probability that Venezuela, a Caribbean neighbor, will soon be able to increase their production and exportation of their oil resources to the Caribbean and the world. This coupled with OPEC increasing production will likely lead to a reduction in the price of oil significantly by the end of the year.

The Caribbean Leader’s Response

The Caribbean Community (CARICOM) made up of 20 nations, released a statement shortly after Russia’s invasion of Ukraine stating “it strongly condemns the military attacks and invasion of Ukraine by The Russian Federation and calls for the immediate and complete withdrawal of the military presence and cessation of any further actions that may intensify the current perilous situation in that country.”

CARICOM in their statement also criticized the recognition by Russia of the Ukrainian regions of Donetsk and Luhansk as independent, calling it a “violation of the territorial integrity and sovereignty of Ukraine.”

Individual leaders from the region have taken even further steps. In a direct letter, the prime minister of St Vincent and the Grenadines Dr. Ralph Gonsalves urged Russian President Vladimir Putin to end the war with Ukraine. In the publicly released letter, Prime Minister Gonsalves stated he was “deeply disturbed” by Russia’s “special military operation” and that this will undoubtedly add much suffering to ordinary folks the world over, especially those still finding it very challenging to handle the Pandemic, climate change, and natural disasters. “We seek peace, security, and prosperity for all of mankind. 

Prime Minister of Barbados, Mia Mottley also joined the chorus of world leaders who condemned the actions of the Russian Federation in launching military action against Ukraine. Mottley said, “instead of the use of force, a peaceful solution could be found by diplomatic negotiation. The Government of Barbados, therefore, calls on the Russian Federation immediately to cease its hostilities and respect the sovereignty and territorial integrity of Ukraine.

Andrew Holness, the Prime Minister of Jamaica, has come out condemning the military actions of Russia on Ukraine, stating, “The crisis in Eastern Europe is of great concern for global peace, prosperity and for the timely sustained economic recovery.” In his speech, he also reiterated, like many, Jamaica’s support for universal respect, territorial integrity, and the right of sovereignty of all nations. 

What’s important to note is that all three major cruise lines reserve the right to add a fuel surcharge even after you have finished paying for your cruise but being able to do something and actually doing it are very different. And like many airlines, cruises also have protected themselves from increases in oil prices (at least in the short run), so you might not see this change immediately. But should oil prices remain elevated; however, it’s likely that all three will eventually have to pass these costs on to consumers.

All images taken from unplash.com and all are royalty free

The War’s Effect on Caribbean Tourism and Travel

 The Ukrainian war’s impact on the Caribbean and tourism almost directly relates to the increases in oil and subsequent fuel costs. Unfortunately, you might find it is a little more expensive to travel to the warm and sandy paradise islands of the Caribbean when you decide to take your next trip. 

The share of the fuel in the price of a plane ticket is usually tiny since you are paying for a lot more than just the fuel, but it is still significant. To give a rough example of how fuel price rises could affect a ticket, if you have a $500 ticket to the Bahamas, 30 – 40 percent of that ticket is fuel price. Therefore if fuel costs were to increase by 50 percent, you could expect your ticket to be increased by approximately $80 as a worst-case scenario.

 It is more complex since airlines purchase fuel in advance and have reserves, but the central premise is the same. Airlines typically protect themselves against rises in jet fuel prices, so this increase may not happen overnight. Still, if oil is exceedingly high, you may, unfortunately, pay slightly more for your plane ticket.

When it comes to cruises, the situation is similar. Royal Caribbean, Carnival, and Norwegian all have clauses where they retain the right to implement a “fuel surcharge” when there is an unexpected rise in fuel prices, but there’s no hard line as to when they might implement one. 

Some cruise lines have a specific price per barrel of oil level, above which the charge can be implemented. For example, Carnival says that when oil price is more than $70 per barrel, they can implement this surcharge. Exactly how much each cruise line might charge varies. Carnival and Norwegian have stated a $9 and $10 per day added fee in their cruise contracts respectively, but many others do not have a specific number.

Therefore, The most significant impacts will likely come from the increased fuel costs on the region specifically as it relates to food and travel during war in Ukraine. But there is no need for significant worry, as other sources of fuel become available and the fact that the travel industry has protected itself from these shocks. 

So still plan your trip to visit the Cayman islands of the Caribbean for your future travels.

Let us know in the comments below.