The effects of the current economic climate on Member States of the Caribbean Community (CARICOM) and the framework within which the Community can achieve growth and development will be a major agenda item at the upcoming Thirty-fourth Meeting of the Conference of Heads of Government of CARICOM.
The meeting begins in Port-of-Spain, Trinidad and Tobago with an Opening Ceremony on the evening of 3rd July, 2013 with working sessions beginning the next day and ending on the 6th July.
The current economic scenario, including the slow recovery from the global financial and economic crises, heavy debt burdens and other exogenous developments such as the policy of graduation by international financial institutions have had debilitating effects on the economies of CARICOM.
Dr. the Hon. Kenny Anthony laid out the situation starkly when he addressed the Board of Governors of the Caribbean Development Bank (CDB) a month ago. The Region’s vulnerabilities, he pointed out then, were fully exposed by a global economic climate that was “complex, uncertain and worrisome”.
“The crisis that we face was not of our making. We did not precipitate it. What it did was to expose our weaknesses and vulnerabilities. What could well be our fault is how we handle the aftermath of the crisis, how we re-position our economies in that elusive search for growth,” he said.
While there is an optimistic prognosis for a resurgence of economic activity in developing countries in general, and while there has been growth in some areas in CARICOM, it has not at all been widespread and sustainability is a challenge. Several CARICOM Member States have had to approach the International Monetary Fund (IMF) for support and the CDB has indicated that many Member States were carrying unsustainable debt.
According to the CDB in its 2012 Annual Report, growth in the Region “is cautiously expected to be positive. Supported by stepped-up public sector investment and gains in agriculture, Guyana is forecast to lead the way with real GDP gowth projected at around 5 percent. This is followed by Belize at 3.3 percent while the Region’s average output growth had slipped to 1.0 percent in 2012 compared with 1.2 percent a year earlier.
Haiti is also expected to register strong growth on account of reconstruction efforts, together with improvements from gains in the manufacturing and agriculture. Moderate growth of 1-2 percent is projected for most of the member countries of the Organisation of Eastern Caribbean States (OECS), reflecting ongoing efforts at fiscal consolidation. Marginal growth of less than 1 percent is projected for Barbados on the basis of an uptick in tourism based on anticipated growth in major markets, while in Jamaica, the outcome of IMF negotiations, which has the potential to release resources from other multilaterals, could boost output.”
According to the CDB, in the Associate Members of CARICOM who are Overseas Territories of Great Britain, growth is also expected to be positive based on the projected sustained recovery in offshore business activity, together with a pickup in leisure activity in 2013.”
The CDB pointed to the challenges the Region faced in key sectors such as tourism which is suffering as a result of multiple factors including the adverse effects of the Air Passenger Duty (APD) on flights to the Caribbean from the United Kingdom, reduced airlift and the high cost of intraregional travel.
An assessment of the policies of the Community over the past five decades, and a thrust that involved thinking “outside of the box” are necessary, according to Prime Minister Anthony, in order to inform the decisions that had to be made going forward with respect to transforming regional economies.
Prime Minister Anthony had honed in in the need for a new development thrust in February, at the opening of the Intersessional Meeting of the Heads of Government, where he called for a “big conversation” on the future of Caribbean economies, and had expressed the hope that conversation be held at the July summit. Such a discussion, he had said, would provide an opportunity to chart a new paradigm for growth, review the role and performance of regional institutions to determine how they could better assist in the restoration of growth to regional economies.
The Heads of Government are expected to lead that assessment and provide direction on a new approach during this Thirty-Fourth Meeting which is being held as the Community celebrates 40 years of integration in the country where the founding Treaty of Chaguaramas was signed in July 1973