Building an inclusive economic recovery in the Caribbean

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Phil Crehan, Principal Investigator, Independent Consultant

• A new study, The Economic Case for LGBT+ Inclusion in the Caribbean, shows the impact of exclusion and violence on LGBT+ people in the region, and how their livelihoods have been affected by COVID-19.
• The legal and social exclusion of LGBT+ people has a negative economic impact of between 2.1-5.7% regional GDP.
• Governments, economic development institutions and businesses must work together to include LGBT+ people in post-COVID recovery plans.

Generating data on socially excluded groups is critical for inclusive development and stronger societies. Such data is needed more than ever during the pandemic, to guide public health and economic recovery strategies. But governments and economic development institutions have done relatively little to support its collection, relying instead on studies generated by civil society, the private sector and academics.

My recent research with the organization Open For Business, with support from Virgin Atlantic, is called The Economic Case for LGBT+ Inclusion in the Caribbean, and it aims to fill part of that knowledge gap. Starting in April 2020, and through dozens of partnerships with organizations and academics, we collected and analyzed data on LGBT+ exclusion throughout 12 countries in the English-speaking Caribbean.

Our analysis shows the significant impacts of exclusion and violence, as well as COVID’s impact on livelihoods. Looking forward, we must understand the extent of these challenges in order to develop effective solutions.

The economic impact of exclusion

The legal and social exclusion of LGBT+ people is not only a serious challenge to human rights, but also a major constraint on economic growth. The loss is stark in the Caribbean: we estimate that between 2.1 – 5.7% of regional GDP is lost due to LGBT+ exclusion.

Using the economic model created by the World Bank, we looked at the most quantifiable economic losses, including diminished human capital and labor output, health disparities, and more. Two large-scale surveys and numerous in-depth interviews allowed us to capture the many challenges LGBT+ people face, while measuring corresponding aggregate economic impacts.

Other powerful findings emerge from our survey of the LGBT+ community in the Caribbean. First, one in two experienced exclusion within their own family (the chart below includes the straight and cisgender sample for comparison). Second, labor market discrimination is so systemic that it acts as occupational segregation, keeping the community out of higher paying jobs in the formal economy and often confined to the informal economy. Impacts include an 11% wage gap in comparison to the general population.

Third, anti-LGBT+ laws and stigma create “push” factors for migration, especially for skilled workers, which contributes to ‘brain drain’ in the region. Finally, the social and economic impact of decriminalizing same-sex intimate acts seems to be powerful, with better outcomes in education, labor markets, and accessing justice.

A second survey of potential tourists to the Caribbean (LGBT+ and otherwise) allowed us to capture the strong relationship between anti-LGBT+ laws and a reduced likelihood to visit. From our sample, close to one in five would not visit due to their perception of LGBT+ treatment in the region, which impacts their own perception of personal safety upon a visit. On the other hand, 60% of the entire sample said they would be likely to visit a Caribbean country after it adopted same-sex civil unions (see Chart 2, below).

LGBT+ livelihoods

As the pandemic exacerbates historical inequalities, some of the hardest hit are marginalized communities. Our research in the Caribbean confirms that LGBT+ people are no exception. From our sample, more than one in four had an annual income of 5,000 (local currency), which is often below the average income at a country level. COVID’s economic toll exacted harsh impacts, as more than one in five overall reported a loss in income between 40-100%. One further devastating impact of COVID was food insecurity, as around one third were forced to skip some meals during the height of the pandemic.

LGBT+ livelihoods are impacted by exclusion from governments and economic development institutions. Often governments did little to provide PPE to the community, which led to a lack of crucial services with some LGBT+ organizations having to secure international funds to fill those gaps. Similarly, economic development institutions like the World Bank and other development banks overlooked the challenge of LGBT+ exclusion from COVID programming, and made little effort to consult the LGBT+ community in multi-million dollar public health loans or even general programming.

The private sector, on the other hand, is starting to address LGBT+ inclusion, as a matter of recruitment and talent. In fact, as we launched our research in partnership with CAISO: Sex and Gender Justice in Trinidad and Tobago, this group unveiled the country’s first LGBT+ Workplace Policy that was endorsed by many businesses. This sets a positive standard for the improvement of livelihoods through employment.

Going forward – a strong case for inclusion

By using participatory research methods, and in collaboration with numerous partners, we built a strong case for inclusion based on livelihoods and economic growth. The next phase of our project is to help cultivate the region’s LGBT+ business voice. Yet governments, economic development institutions and businesses can do much more to help. This should include:

• Governments must work with LGBT+ organizations to ensure that post-COVID economic recovery plans are inclusive – both for human rights and economic reasons.
• Economic development institutions must address legal discrimination and the impacts of LGBT+ exclusion in the countries where they operate, and promote LGBT+ inclusion in programs in response to their own non-discrimination mandates.
• Many corporations are advancing pro-LGBT+ policies, and this should be cultivated and expanded to address significant gaps due to governmental inaction.