Jamaica Needs To Rebuild A More Resilient, Less Tourism-Dependent Economy

An Analysis By NAN BUSINESS EDITOR

News Americas, NEW YORK, NY, Fri. Nov. 21, 2025: Jamaica now has a clearer picture of the devastation left behind by Hurricane Melissa. According to a new joint assessment by the World Bank and the Inter-American Development Bank, (IDB), the storm caused US$8.8 billion in physical damage – equal to 41% of Jamaica’s 2024 GDP and the costliest hurricane in Jamaica’s recorded history.

An aerial view shows damaged buildings in the aftermath of Hurricane Melissa in Lewis Town, St Elizabeth, Jamaica, on October 31, 2025. (Photo by RICARDO MAKYN/AFP via Getty Images)

This preliminary estimate comes from the Global Rapid Damage Estimation (GRADE) methodology, which analyzes sector-by-sector destruction. The figures do not include broader economic losses, which are expected to be substantial. That means Jamaica’s total recovery need may still approach — or exceed — the US$10 billion figure cited by Jamaican Finance Minister Dr. Nigel Clarke.

The breakdown of physical damage shows the scale of the crisis:

41% — Residential buildings

33% — Infrastructure (roads, bridges, ports, utilities)

21% — Non-residential buildings (businesses, schools, hospitals)

5% — Agriculture (though losses to farms and livestock are likely to surge over the long term)

“This disaster demands a fast, coordinated, and evidence-based response,” said IDB Vice President Anabel González. The World Bank echoed that sentiment, reaffirming its readiness to “mobilize its full range of support.”

But even with multilateral assistance, Jamaica faces a difficult truth: the country cannot rebuild its economy on the same fragile foundation that climate change is repeatedly destroying.

Climate Reality: Jamaica Cannot Depend on Tourism Alone

State Minister Alando Terrelonge, during field assessments in St. James and St. Elizabeth, stated bluntly that Hurricane Melissa “reflects the growing climate vulnerability of Small Island Developing States, (SIDS),” warning that climate-related disasters pose a “direct threat to life, property, and economic and national security.”

Tourism — Jamaica’s largest foreign exchange earner — is also its most exposed industry:

Hotels are built on vulnerable coastlines

Insurance premiums have soared beyond affordability

Storms wipe out years of investment in hours

Airline disruptions reduce arrivals

Tourism jobs vanish instantly after disasters

U.S. economic uncertainty affects visitor spending

Cruise lines dominate arrivals but deliver minimal local revenue

Jamaica, like the wider Caribbean, cannot keep rebuilding the same tourism-centric model that collapses every hurricane season.

Melissa proves: Economic diversification is no longer optional — it is a survival strategy.

So How Can Jamaica Potentially Mobilize the Funds It Needs?

Given the updated GRADE findings, Jamaica will need a layered, multi-year financing strategy. Below are realistic, responsible pathways — not guarantees — based on global best practices for SIDS and the instruments the World Bank, IDB, CDB, and partners already use.

1. Additional Multilateral Financing (Possible US$2–3B Over 3–5 Years)

The World Bank and IDB have already activated some disaster-response instruments, but the agencies publicly confirmed:

“We are ready to mobilize our full range of support.”

This could include:

expanded IDB resilience loans

new World Bank climate-resilient infrastructure windows

targeted CDB emergency programs

Green Climate Fund adaptation financing

Japan-funded disaster-risk programs (already tied to GRADE)

These would require new negotiation rounds and multi-year programming.

2. Diaspora Bonds & Investment Notes (US$500M–1B Potential)

Jamaica’s diaspora is powerful, high-earning, and deeply connected. A “Rebuild Jamaica 2030 Diaspora Bond” series is one of the most viable tools available. Even modest uptake could raise hundreds of millions.

3. Catastrophe & Resilience Bonds (US$250M–500M)

Beyond CCRIF, Jamaica could structure its own cat or resilience bonds — instruments increasingly used by climate-vulnerable countries to pre-finance future risk.

4. Public–Private Partnerships (US$500M–1B)

PPPs can accelerate funding for:

hospitals

roads and bridges

renewable energy

water and wastewater infrastructure

coastal protection

telecom upgrades

This eases fiscal pressure while modernizing infrastructure.

5. Sector-Specific Donor Windows (US$500M–1B)

Especially strong opportunities exist in:

Resilient housing reconstruction

Climate-smart agriculture and agri-tech

Tourism resilience retrofitting

Digital and creative services

Renewable energy and microgrid expansion

These areas align perfectly with donor priorities for SIDS.

Total Possible Funding Pathway: US$4–7 Billion

Not guaranteed — but achievable with coordination, diplomacy, and clear investment frameworks. The remaining gap could be covered through domestic reprioritization, private capital, and phased rebuilding.

Rebuilding Better: What Jamaica Must Do Now

Here is where we fold in the “look beyond tourism” message grounded in the official climate vulnerability framing:

1. Climate-Resilient Housing & Infrastructure

Elevated homes, stronger building codes, underground utilities, seawalls, river training, mangrove restoration.

2. Climate-Smart Agriculture & Agri-Tech

Greenhouses, aquaculture, drought-resistant crops, digital farming — reducing Jamaica’s food-import vulnerability.

3. Digital & Modern Services (Low Climate Exposure)

Animation, fintech, creative industries, remote services — sectors that continue operating even after storms.

4. Renewable Energy Independence

Solar microgrids, wind, storage, resilient energy hubs — reducing reliance on imported fuel.

5. Nearshoring & Light Manufacturing

ECLAC’s new data shows Jamaica now faces lower U.S. tariffs than Asia — a strategic opening for exports.

The Road Ahead

Hurricane Melissa marks a turning point. Jamaica must rebuild — but not back to what it was. The Government’s early damage assessments and calls from Minister Terrelonge make the message clear: Jamaica must rebuild safer, stronger, and more climate-resilient — and it must diversify beyond tourism to survive the next generation of storms.