Guyana's Vice President Bharrat Jagdeo stood in Georgetown yesterday and said what every Caribbean economist has been thinking: the wars are coming for our wallets. At the 124th Special Meeting of COTED, Jagdeo warned that global conflicts involving Iran, Israel, and the United States are already disrupting energy markets and will soon hit Caribbean economies directly. Some CARICOM nations spend more than 10 percent of GDP on fuel imports. When oil prices spike because of a conflict halfway around the world, Caribbean families pay for it at the gas pump and in their electricity bills.
This is not the first time external shocks have rattled Caribbean economies. But the speed and scale of the current disruption, combined with existing vulnerabilities from climate change, pandemic recovery, and chronic structural challenges, make this moment particularly dangerous. The Caribbean needs tools that help it respond faster, plan better, and absorb shocks that it did not cause and cannot prevent.
The Vulnerability Map
Not every CARICOM nation faces the same risk profile. The vulnerability depends on energy dependence, tourism reliance, food import levels, and fiscal space:
- High energy vulnerability: Jamaica, Barbados, Haiti, the Eastern Caribbean states, and The Bahamas import virtually all their energy. A sustained oil price spike hits these economies directly through higher electricity costs, transportation costs, and manufacturing input costs.
- Tourism exposure: Nations where tourism exceeds 40 percent of GDP (Antigua and Barbuda, The Bahamas, Barbados, St. Lucia, Grenada) face secondary effects if global instability reduces travel demand or raises airfare costs.
- Food import dependence: Most CARICOM nations import 60 to 90 percent of their food. Global conflicts disrupt shipping routes, raise freight costs, and create commodity price volatility that directly impacts food prices in Caribbean supermarkets.
- Limited fiscal buffers: After the pandemic depleted fiscal reserves, most Caribbean governments have limited room to absorb higher import costs through subsidies or price controls without running unsustainable deficits.
How AI Tools Can Help: Practical Applications
AI cannot prevent wars or control oil prices. But it can help Caribbean governments, businesses, and households make better decisions faster when external conditions change rapidly.
Energy Price Forecasting and Procurement
- AI models can analyze geopolitical signals, shipping data, futures markets, and historical patterns to forecast energy price movements weeks ahead
- National petroleum companies and utilities can use these forecasts to time fuel purchases, building or drawing down strategic reserves based on predicted price movements
- Renewable energy investment decisions can be informed by long-term fossil fuel price projections that account for geopolitical risk
Supply Chain Monitoring
- AI agents can monitor shipping routes, port congestion, carrier schedules, and commodity availability in real time
- When a disruption is detected, automated alerts can notify importers and government agencies, allowing them to source from alternative suppliers before shortages develop
- For food imports, AI can track global production data, weather events in source countries, and price trends to predict supply disruptions before they reach Caribbean shelves
Tourism Demand Modeling
- AI can analyze booking trends, airline capacity data, travel insurance purchases, and consumer sentiment to forecast tourism demand weeks or months ahead
- When demand signals weaken, tourism marketing can be adjusted in real time to target less affected source markets or promote value propositions that address traveler concerns
- Hotel and tour operators can use demand forecasts to adjust pricing, staffing, and inventory dynamically rather than reacting after occupancy drops
Inflation Tracking and Price Monitoring
- AI can monitor retail prices across Caribbean markets in real time, identifying inflation trends before they show up in official statistics
- Consumer protection agencies can use price monitoring to detect price gouging during supply disruptions
- Central banks can incorporate real-time price data into monetary policy decisions rather than relying on lagged official CPI figures
Government Budget Scenario Planning
- AI-powered financial models can simulate the fiscal impact of different oil price scenarios, tourism decline scenarios, and trade disruption scenarios on national budgets
- This allows finance ministries to prepare contingency plans before crises hit rather than improvising responses under pressure
- Debt sustainability analyses can be updated in real time as economic conditions change
What CARICOM Should Do Now
Jagdeo's warning is timely. But warnings are only useful if they lead to action. Here is what I recommend for CARICOM as a region:
- Deploy regional economic monitoring. A CARICOM-wide AI-driven dashboard that tracks energy prices, food commodity prices, shipping costs, tourism bookings, and remittance flows in real time. Make it available to every member state's finance ministry and central bank.
- Accelerate renewable energy. Every dollar spent on solar, wind, and geothermal reduces the economy's exposure to fossil fuel price shocks. AI can optimize renewable energy deployment by modeling solar irradiance, wind patterns, and grid integration requirements for each island.
- Build strategic reserves. Where fiscally possible, build strategic reserves of essential imports. AI procurement tools can identify the optimal timing for reserve purchases based on price forecasting.
- Strengthen intra-regional trade. The Caribbean Single Market and Economy (CSME) can reduce dependence on extra-regional supply chains. AI can identify which goods currently imported from outside the region could be sourced from within CARICOM.
- Prepare fiscal contingency plans. Every finance ministry in CARICOM should have scenario-based contingency plans for oil at $100, $120, and $150 per barrel. AI financial modeling tools can generate these scenarios quickly and update them as conditions evolve.
The Recurring Pattern
The Caribbean has been here before. The 1973 oil crisis. The 2008 financial crisis. COVID-19. Each time, external shocks exposed the same structural vulnerabilities: energy dependence, food import reliance, tourism concentration, and limited fiscal buffers. Each time, the response was reactive, because the tools for proactive management did not exist or were not deployed.
AI tools change this dynamic. They do not prevent external shocks. They reduce the time between shock and response. They enable scenario planning before crises instead of improvisation during them. They give small finance ministries with limited staff the analytical capacity of much larger institutions.
VP Jagdeo is right that the Caribbean faces economic fallout from global conflicts. The question is whether CARICOM will face this fallout with 20th-century tools or 21st-century ones. The tools are available. The decision is ours.
Frequently Asked Questions
How are global conflicts affecting the Caribbean economy?
VP Bharrat Jagdeo warned at the March 2026 COTED meeting that conflicts involving Iran, Israel, and the United States are disrupting energy supplies and raising costs globally. Caribbean nations, many of which spend over 10% of GDP on fuel imports, face rising energy bills, supply chain disruptions, potential tourism declines, and inflationary pressure on food and goods.
How can AI help Caribbean countries manage economic shocks?
AI can help through energy price forecasting and procurement optimization, supply chain monitoring and alternative sourcing, tourism demand modeling, inflation tracking and price monitoring, government budget scenario planning, and trade diversification analysis. These tools help small economies respond faster to external shocks.
Which Caribbean countries are most vulnerable to energy price shocks?
Countries that import virtually all their energy are most vulnerable, including Jamaica, Barbados, the Eastern Caribbean states, Haiti, and The Bahamas. Trinidad and Tobago, as an energy exporter, is positioned differently, though disrupted global markets create their own challenges. Guyana's growing oil production also provides some buffer.
What did VP Jagdeo say about Caribbean economic risks?
At the 124th Special Meeting of COTED in Georgetown on March 26, 2026, Guyana's VP Bharrat Jagdeo warned that the war involving Iran, Israel, and the United States was already affecting countries worldwide and would soon impact the Caribbean. He highlighted the region's vulnerability due to high energy import costs, noting some Caribbean countries spend more than 10% of GDP on fuel.
What should CARICOM do to prepare for economic disruption?
CARICOM should deploy AI-driven economic monitoring systems, diversify energy sources and suppliers, build strategic reserves for essential imports, accelerate renewable energy deployment to reduce fuel dependence, strengthen intra-regional trade to reduce external supply chain dependence, and use AI tools for budget scenario planning.
"VP Jagdeo is right: global conflicts are coming for Caribbean wallets. The question is whether CARICOM responds with 20th-century tools or 21st-century ones. AI-driven economic monitoring, price forecasting, and scenario planning are available right now." - Adrian Dunkley, AI Boss