With USAID sidelined, Caribbean politicians need to double down on foreign investment

The Trump administration’s hefty cuts to foreign aid require Caribbean nations to double down on economic dynamism as the regional order shifts under their feet, writes Peter Burdin, ex-BBC World Assignments editor.

Even at the micro scale of many island nations, none will be immune from the impact of deep reductions of US overseas spending. The smallest country of all, Saint Kitts and Nevis, is doing what it can to hit the ground running in this new phase of Western Hemisphere politics.

Earlier this month, Nevis’ Premier Mark Brantley announced USD $37m worth of funding for a sizeable geothermal energy exploration project, which included a major Saudi loan.

Based on volcanic formations, the Eastern Caribbean has over 6,000 megawatts of geothermal energy potential.

However, despite being on the frontline of climate change, the region has been forced to rely on outdated energy grids and diesel-powered energy generators which often fail during extreme weather events and due to high usage.

Combined with weak administrative capacity, instances of corruption and supply chain issues, investors in the space have looked elsewhere. But now there is lift off in Nevis.

The smaller neighbour of its sister island Saint Kitts, Nevis could soon become a major energy exporter, reversing a lengthy trend which has seen Caribbean nations struggle to meet their energy needs.

Needless to say, Nevisians would also benefit from a sizeable reduction in their energy bills, while blackouts would become a thing of the past.

This development reflects the Nevis Island Administration’s doubling down on attracting sizeable, game-changing investments – rather than chasing foreign aid donations.  

To attract investors to Nevis, a favourable investment environment has been paired with public spending on roads, healthcare, education, and infrastructure – raising living standards and making long-term geothermal energy development viable.

As a result, Nevis has outperformed other regional markets. The Eastern Caribbean Central Bank (ECCB) forecasts growth of 5.5 and 3.42 percent in 2025 and 2026 respectively for Saint Kitts and Nevis compared with the regional average of 2.1 and 2.5 percent.  

Securing a stable energy supply could take this growth to new heights. The Caribbean, long dependant on fossil fuel imports, is behind on renewable energy development. But Nevis is breaking the cycle.

The Nevis project is expected to deliver 400 megawatts of geothermal energy. This equates to roughly eight times the total power consumption of Saint Kitts and Nevis as a whole. Moreover, this new energy source is fully renewable, in-keeping with Saint Kitts and Nevis’ strong commitment to environmental sustainability

With surplus energy to sell, Nevis would become one of the go-to energy suppliers for the Caribbean. This could fundamentally change the region’s economic and geopolitical position, making it less dependent on external suppliers.

Far from focusing on energy development alone, Nevis is doubling down on new partnerships across the economic space.

Premier Mark Brantley’s administration has capitalised on the island’s natural beauty, long a magnet for luxury tourism, which is crucial to sustaining high employment and wages.

Indeed, Nevis has seen growing demand from international tourists since the pandemic. In turn, this has generated funds for the expansion and modernization of its airport to accommodate larger aircraft and further increase overall revenue.

What might be next? Premier Brantley has highlighted on several occasions that his administration is seeking a game-changing partnership for the island ‘in the coming months’.

He maintains that Nevis can only unlock its true potential by refusing to settle for ‘small island status’ and by ‘unleashing prosperity’ through the adoption of tactics traditionally utilized by leading global powers.

Geothermal energy production is the latest string in Nevis’ bow on its journey to true economic self-sufficiency. But the island can travel even further and faster with such a dynamic economic model, more akin to Dubai than the traditional Caribbean approach.

This is certainly something for other regional administrations to reflect on. Geopolitics is turbulent but that is no excuse to put reform on hold. To the contrary, the US’s seeming disengagement from multilateralism makes it incumbent on political leaders to proactively pursue new partnerships.

If they need inspiration, look no further than Nevis.

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