The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama’s share of total Bahamian economic output dropped by 4.5 percentage points in the six years to 2018 based on the the strength of “night lights” seen from space, a study has revealed.

A newly-released Inter-American Development Bank (IDB) report, which attempts to measure Hurricane Dorian’s impact on Abaco and Grand Bahama based on their “luminosity” as picked up by orbiting satellites, says this methodology shows the latter island’s share of Bahamian gross domestic product (GDP) was already falling before the storm.

The study, which marries the satellite images from NOAA’s National Geophysical Data Centre with indicators such as population density and national GDP, found that Grand Bahama’s share of national economic output had dropped from 14.58 percent in 2012 to 9.89 percent in 2018. Dorian dropped this further to 9.5 percent in 2019.

Many Bahamians will query whether the report, and its methodology, truly shines a light on the extent of Dorian’s devastation and long-term economic, social and psychological consequences. Nevertheless, it suggests that Abaco’s share of Bahamian GDP fell from 5.29 percent in 2018 to 4.8 percent last year.

Basing its findings on “luminosity”, the IDB report’s authors wrote: “Despite the reduction of its relative importance in GDP, New Providence still had the highest share in economic activity of The Bahamas, with 73.16 percent of total GDP in 2018 being produced in this island.

“Abaco’s share of GDP increased from 2.65 percent in 1992 to 5.29 percent in 2018, but due to the impact of Hurricane Dorian it is expected to decrease to 4.8 percent in 2019. On the other hand, Grand Bahama’s participation in economic activity has decreased, going from 12.87 percent of total GDP in 1992 to 9.89 percent in 2018, and it is expected to continue to decline to 9.50 percent in 2019.”

The report said comparisons between Abaco’s “night lights” in September 2018 and those last year showed “the devastating impact” of Dorian as the yellow glare picked up by orbiting satellites was much diminished.

There was also a “a decrease in illumination” in west Grand Bahama in September 2019, but the IDB study added: “However, the illuminated grids in the Freeport region increased in intensity in the month of September 2019 compared to 2018. The higher level of observed intensity could be explained by the displacement of the population from the affected areas to the Freeport region.”

The authors concluded that Dorian had a greater impact on Abaco because, based on their methodology, that island’s economy contracted by 23.66 percent for the nine months to end-September whereas Grand Bahama’s activity only shrunk by 0.56 percent.

“Since the satellite night lights are publicly available for every month of the year, it was possible to follow the reconstruction of the regions affected by Hurricane Dorian and analyse the displacement of economic activity throughout the region at a monthly frequency,” the report concluded.

“This study could be replicated in the future to measure the effectiveness of the actions being taken to recover the dynamism of the Bahamian economy... Sea level in The Bahamas has already risen 0.3 metres in the past 100 years, and there is a small but important risk (less than 0.1 percent) of at least one flood over one metre taking place between today and 2050 in The Bahamas area.

“This makes the Bahamian economy and population particularly vulnerable to climate change, since the main financial and tourism activity areas lie adjacent to the coastal zones, and about 130,000 people live on land below one metre” (above sea level).

The authors continued: “The impact of Hurricane Dorian is an unfortunate example of what could happen to Caribbean countries if adaptive measures and policies are not adopted soon. The urgency of this topic transcends the destruction of infrastructure and the loss of human lives.

“According to the IMF, large natural disasters can set back output growth and contribute to a significant rise in public debt. Since the impact of disasters can be partially contained but not eliminated, disasters will still create sizable fiscal and financing shocks that need to be anticipated. This is another reason why investing in structural resilience should be a high priority.”