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Mr. Sebastian Acevedo Mejia
This paper studies the economic costs of hurricanes in the Caribbean by constructing a novel dataset that combines a detailed record of tropical cyclones’ characteristics with reported damages. I estimate the relation between hurricane wind speeds and damages in the Caribbean; finding that the elasticity of damages to GDP ratio with respect to maximum wind speeds is three in the case of landfalls. The data show that hurricane damages are considerably underreported, particularly in the 1950s and 1960s, with average damages potentially being three times as large as the reported average of 1.6 percent of GDP per year. I document and show that hurricanes that do not make landfall also have considerable negative impacts on the Caribbean economies. Finally, I estimate that the average annual hurricane damages in the Caribbean will increase between 22 and 77 percent by the year 2100, in a global warming scenario of high CO2 concentrations and high global temperatures.
Mr. Andy M. Wolfe and Rafael Romeu
This study measures the impact of changing economic conditions in OECD countries on tourist arrivals to countries/destinations in Latin America and the Caribbean. A model of utility maximization across labor, consumption of goods and services at home, and consumption of tourism services across monopolistically competitive destinations abroad is presented. The model yields estimable equations arrivals as a function of OECD economic conditions and the elasticity of substitution across tourist destinations. Estimates suggest median tourism arrivals decline by at least three to five percent in response to a one percent increase in OECD unemployment, even after controlling for declines in OECD consumption and output gaps. Arrivals to individual destination are driven by differing exposure to OECD country groups sharing similar business cycle characteristics. Estimates of the elasticity of substitution suggest that tourism demand is highly price sensitive, and that a variety of costs to delivering tourism services drive market share losses in uncompetitive destinations. One recent cost change, the 2009 easing of restrictions on U.S. travel to Cuba, supported a small (countercyclical) boost to Cuba’s arrivals of U.S. non-family travel, as well as a pre-existing surge in family travel (of Cuban origin). Despite the US becoming Cuba’s second highest arrival source, Cuban policymakers have significant scope for lowering the relatively high costs of family travel from the United States.
Rafael Romeu
An opening of Cuba to U.S. tourism would represent a seismic shift in the Caribbean's tourism industry. This study models the impact of such a potential opening by estimating a counterfactual that captures the current bilateral restriction on tourism between the two countries. After controlling for natural disasters, trade agreements, and other factors, the results show that a hypothetical liberalization of Cuba-U.S. tourism would increase long-term regional arrivals. Neighboring destinations would lose the implicit protection the current restriction affords them, and Cuba would gain market share, but this would be partially offset in the short-run by the redistribution of non-U.S. tourists currently in Cuba. The results also suggest that Caribbean countries have in general not lowered their dependency on U.S. tourists, leaving them vulnerable to this potential change.
International Monetary Fund. External Relations Dept.

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Mahbub ul Haq

This paper highlights that despite severe limitations of resources, developing countries have made substantial progress during the past three decades in sending more children to school and in generally improving their education systems. Enrollment of children in schools at all levels has expanded at unprecedented rates. There has been a significant decline in the proportion of adults who are illiterate—from 44 percent in 1950 to 32 percent in 1975. Public expenditures for education have increased steadily in developing countries to reach roughly the same share of national product as in industrialized countries.

International Monetary Fund


The relationship of an international organization to non-members raises a number of issues, not only in connection with the growing law of international organizations but also in connection with the older law of treaties. One of the leading issues is the legal effect of a treaty on states that are not parties to it (“third” states, “strangers”). Writing in 1960 as the Special Rapporteur of the International Law Commission, Sir Gerald Fitzmaurice, now Judge Fitzmaurice of the International Court of Justice, noted that the literature on this “amorphous and rather protean topic” was sparse and that both theory and doctrine were unsatisfactory.1