Solutions must match our needs

MANY will agree with the President of the Caribbean Development Bank, Dr. Warren Smith, that economic growth across the Caribbean must be built on several pillars.

No longer can growth strategies be undertaken in isolation but rather through a coherent set of interrelated policies. They are necessary if the island nations of this region are to make a rebound from what has been the under performance by these economies for the most part over the last five to six years.  

Currently this region, with the exception of a few countries – Guyana, Suriname, and Haiti – is having severe economic challenges which cannot be solved by either tinkering here and there, or just by hoping that our major trading partners recover enough from their difficulties that there is the trickle-down effect to our benefit.

In his address to a High Level Caribbean Forum in the Bahamas recently, the CDB President suggested that macro-economic stability, a prudent public investment strategy, adequate debt management, more openness, and shared benefits once growth materialises, must be the core principles for growth going forward.

In particular, the point he made about dealing with the debt strategy, given the significance of where debt levels have reached in this region, is very significant. This is because there are many commentators who believe that just as the debt crisis of the decade of the 1980s had hovered around the necks of Latin America, the Caribbean might not be too far off from being so categorised.

 As head of the region’s leading financial institution and whose operations include interfacing with its Borrowing Member Countries (BMCs), the President is fully aware of the issues which this region has to address. The Bank, which is based in Barbados, keeps regular tabs on all the economies in the Caribbean; it knows their strengths and weaknesses; it is fully aware of economic policies pursued, and where they are likely to lead.

Therefore this gives him the authority to suggest appropriate options that would at least bring some measure of relief to our struggling economies.

The events of the last five years have shown that our countries are not coping with their recovery efforts. While some have opted to call on the International Monetary Fund (IMF) for assistance, others are relying on home-grown programmes to bring them out of the crisis.

The world economy has been undergoing changes since the decade of the 1990s. Liberalisation and more market-friendly policies were the signals coming from the international economy. While it was not expected that Caribbean island economies should have embraced all the components of these policies and follow blindly what was emerging from the metropolitan countries, it was time to take stock of where we wanted to go.

The region continued to hold on to trade preferences although it was clear with the coming into being of the World Trade Organisation that the props which kept our economies afloat for most of the immediate post independence period, were coming to an end. It could have been seen that the writing was on the wall for such commodities as bananas, sugar, rice and other tropical produce because reciprocity was now the watchword for the future.

It would therefore be good if governments can somehow find enough time to embrace the proposals outlined by the CDB President.