Geopolitical Risk and Economic Uncertainty in Small Open Economies: Rethinking Resilience in the Caribbean
Abstract
The global economic system is undergoing profound transformation, shaped by heightened uncertainty, intensifying geopolitical tensions, economic fragmentation and enduring structural vulnerabilities. Small Island Developing States, particularly those in the Caribbean, are disproportionately exposed to these shifts because of their economic openness, narrow production bases, high import dependence, limited fiscal space and vulnerability to climate-related shocks. Yet within this turbulence lies an opportunity to redefine economic relations, strengthen resilience and diversify pathways to growth. This paper examines the evolving dynamics of global uncertainty and their implications for Caribbean development. It identifies the region’s principal structural constraints and proposes a strategic framework for strengthening competitiveness, deepening regional integration and embedding resilience as a cornerstone of development planning. The framework emphasises productive diversification, food and energy security, digital transformation, resilient infrastructure, regulatory harmonisation and accountable governance. The paper argues that resilience must extend beyond recovery from individual shocks to encompass the institutional capacity to anticipate risks, adapt to changing global conditions and sustain economic and social progress.