After four decades of little or not growth, the Jamaican economy is expected to grow at 1-2% over the medium term. The country is confronted by serious social issues that predominantly affect youth, such as high levels of crime and violence and high unemployment.
Read More »
ACKNOWLEDGEMENTSIt is my profound pleasure, ladies and gentlemen, to warmly welcome you to the island of Saint Lucia and to the third Regional Workshop of the Caribbean Growth Forum.I wish, in particu... Show More +lar, to extend a warm welcome to:- The Honourable Timothy Harris, Prime Minister of Saint Kitts and Nevis;- Senator the Honourable Lennox Weston, Minister of State within the Ministry of Finance & Corporate Governance, Antigua and Barbuda;- The Honourable Khaalis Rolle, Minister of State for Investments in the Office of the Prime Minister, Bahamas;- Senator the Honourable Darcy Boyce, Minister of State in the Office of the Prime Minister, for Energy, Immigration, Telecommunications and Investment, Barbados;- The Honourable Claude Hogan, Acting Premier of Montserrat;- The Honourable Lindsay Fitz–Patrick Grant, Minister of Tourism, International Trade, Industry and Commerce, Saint Kitts and Nevis.And from Saint Lucia, I welcome too:- The Honourable Harold Dalsan, Minister of Social Transformation, Constituency Empowerment & Local Government;- The Honourable Dr. Robert Lewis Minister of Education, Human Resource Development & Labour;- The Honourable Emma Hippolyte, Minister of Commerce, Business Development, Investment & Consumer Affairs;- Senator the Honourable Stanley Felix Minister of Physical Development, Housing & Urban Renewal; and- The Honourable Moses Jn. Baptiste, Minister of Agriculture, Fisheries, Food Production & Cooperatives.A special welcome is also extended to the region’s development partners, in particular the World Bank. The Bank has played a pivotal role in providing technical support to the implementation of the Caribbean Growth Forum and is today represented by an impressive team which includes Mr. Jorge Familiar, Vice President, Latin America and the Caribbean; Mr. Marcelo Giugale, Senior Director for Macroeconomics & Fiscal Management, Ms. Sophie Sirtaine, Country Director, Latin America and the Caribbean and a number of their colleagues.I acknowledge other development partners involved with this initiative including, the Inter-American Development Bank, the Caribbean Development Bank, the United Kingdom Agency for International Development, the Canada Department for Foreign Aid, Trade and Development and the Italian Ministry of Foreign Affairs and International Cooperation.I note too, the presence of the Governor of the Eastern Caribbean Central Bank, Sir Dwight Venner and the Director General of the Organisation of the Eastern Caribbean States, Dr. Didacus Jules.Other dignitaries, representatives from Compete Caribbean and technical advisors to the CGF process, Senior Government officials, private sector representatives, representatives of Non-Government Organisations (NGO’s), Civil Society Organisations, ladies and gentlemen, welcome and good morning!By all accounts this is an impressive list of sponsors, donors and partners!CARIBBEAN GROWTH FORUMWe gather, once more, against the backdrop of weak growth outcomes evidenced by low average growth of 1.1 percent for the Caribbean Region over the period 2008 to 2013. Given this anemic performance, the Governments of the region agreed to work with major donor partners to establish an initiative aimed at identifying short term policy actions to facilitate enhanced competiveness.Thus, the Caribbean Growth Forum was implemented with the support of the Compete Caribbean Programme, the Inter-American Development Bank, the World Bank, and the Caribbean Development Bank.It is also supported by the Canadian International Development Agency, the Department for International Development (DFID), CARICOM Secretariat, and the University of the West Indies.ACCENTUATED STRUCTURAL WEAKNESSESIt is no secret that the Global Financial Crisis which started in 2008 has adversely impacted the economies of non-commodity exporting Caribbean states. The crisis accentuated structural weaknesses within those economies as foreign exchange inflows decreased due to lower tourism arrivals. Added to this were high levels of unemployment, triggered in most instances by job losses and limited capacity of domestic firms to absorb new entrants in the Labour Market.While commodity exporters have fared somewhat better, these countries remain highly vulnerable to international price changes.POST FINANCIAL CRISIS PERIODIn the post financial crisis period, even as the economies of our major trading partners have begun to recover, all Caribbean countries have experienced decelerated foreign direct investment (FDI).A 2015 report by ECLAC on Foreign Direct Investment in Latin America and the Caribbean indicated that FDI inflows into the Caribbean sub-region declined by 4.7 percent in 2014 after falling by over one third since 2008. This holds true even for the region’s largest economy and top recipient of FDI inflows; the Dominican Republic. FDI into this nation, while increasing by 11 percent in 2014, was less than the amount received in 2012. Of concern, is the concentration of the FDI flows into tourism and natural resources that have not assisted our countries in diversifying their economies. This, coupled with decreasing workers’ remittances, have exacerbated the negative impact that the financial crisis has had on economies and on livelihoods.In the midst of the global crisis, this region has been exposed to other debilitating shocks. It has had to contend with the collapse of some financial institutions and in others, fragility emanating from the collapse of significant investments in the tourism plant in some states.Cognizant of our fiscal challenges and limited policy options, Governments of the Caribbean have had to implement measures to alleviate this crisis. Such efforts would have been futile had it not been for the technical and financial support provided by the multilateral community to our region.DECLINING GROWTHNotwithstanding this, if today’s discourse is to yield true fruit, we must acknowledge that declining growth in the Caribbean featured from the mid-1990s. This is not just a phenomenon of the post 2008 period. Such declining growth is particularly perceptible for the member countries of the Eastern Caribbean Currency Union. Moreover, the analytical work suggests that the countries which were most negatively impacted by the global financial crisis were countries where:1. Sudden stops in foreign direct investment resulted in disruptions to financial sector institutions;2. High deficits on the current account of the Balance of Payments existed prior to the crisis; and3. The pre-crisis boom was related to significant inflows of foreign investment.We all know that many member countries of the ECCU fall within the group of countries which I have just described.Sometimes too, we forget that we have been lurching from one crisis to the next, in quick succession. In the early years of this new millennium, we were all faced with managing economies that witnessed the almost sudden collapse of export agriculture, be it sugar or bananas. If all of this is viewed from a political economy perspective, we really have had little time to adjust, restructure and reform our economies.UNDERLYING REASONSRecent discourse in and about the Region has focused on the underlying reasons for their weak growth performance. Some camps suggest that our small size and in some cases multi-island status mean that the costs associated with the provision of security, infrastructure, regulatory oversight, foreign services, education and social services are comparatively higher and therefore adversely impact fiscal outlays. These groups postulate that greater focus on regional integration is the answer.Others point to our indisputable susceptibility to natural disasters. This camp cites reports such as a 2014 Inter-American Development Bank report on economic growth in the Caribbean. This report suggested that “the direct economic cost of natural disasters is also higher for smaller economies.” In terms of GDP in large economies, the direct loss due to natural disasters was estimated at US$59.5 per square kilometer. In comparison, similar losses for the Caribbean was estimated at five times that of the large states.This so called “bad neighborhood” effect, coupled with the natural frangibility of our recourses and ecosystems, placed within the context of a changing climate, constrains prospects for growth and development in the view of some.HIGHER PRODUCTION COSTSMore recent analysis has focused on issues of productivity and competitiveness that manifest in higher production costs. These costs are associated with labour costs, and high import content, particularly of strategic goods such as food and fuel, whose prices have exhibited high volatility.Moreover, the example of historical production patterns from sugar, bauxite, bananas, tourism and oil suggests that the region has maintained strong dependence on a narrow range of exports, thereby constraining foreign exchange earnings and growth outcomes.BUSINESS & STRUCTURAL REFORMSDebate on competitiveness in the region has suggested that these issues, whatever the causes, can be partly remedied through the implementation of core business and structural reforms aimed at enhancing the investment environment, improvement to labour productivity, and creating a more vibrant export sector.Reforms would include strengthening the legislative, regulatory and incentive frameworks to provide for predictability and transparency in the course of doing business. It has also been suggested that Labour Market reforms aimed at improving productivity and enhancing the skills and employability of those persons who are part of the Labour Force are vital and urgent. And may I add, only in passing, that our workers, by and large, do not believe there is an issue of productivity in our islands?Further work still needs to be done in raising the profile of the region’s private sector. It is dominated by smaller businesses; which sometimes have difficulty accessing finance and are less engaged in international trade. Additionally, the private sector has argued that the paucity of a reliably skilled Labour Force has limited the prospects for firm growth and product innovation.SOLUTIONS AND CONSENSUSSome of this I readily concede is tiresome. It is easy to dismiss it all by the usual quip: “we have heard it all before.” My simple point is that there has been no shortage of analysis on these issues. What eludes us is agreement on the solutions and consensus on the way forward.Frankly, we have little time. Our people are becoming impatient even as they lack the will to subscribe to the very reforms that are so necessary to a different future.Therefore, our gathering in Saint Lucia for this Third Region Workshop is a further step in both identifying solutions to effect change and building national and regional consensus on these proposed solutions.The launching of the Forum three years ago initiated dialogue between representatives from business associations, civil society organizations, Government, private sector, and international development agencies on growth and development in the Region.Twelve countries have launched their national chapters, including; Antigua and Barbuda, The Bahamas, Belize, Grenada, Dominica, Dominican Republic, Jamaica, Saint Kitts and Nevis Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, and Saint Lucia.These countries committed to work prioritized reforms in areas of Logistics and Connectivity; Investment Climate; and, Skills and Productivity.In Saint Lucia, this has been evidenced by reforms such as; the expansion of wireless internet access, reforms to improve access to government services, developing strategic interventions to enhance the competitiveness of the tourism sector and the development of interventions designed to measure and improve productivity levels.A TIME TO DISCUSS, A TIME TO DECIDEBeyond the Caribbean Growth Forum, the reform process continues in Saint Lucia with ongoing work in a number of areas including reforms aimed at improving access to finance, strengthening the regulatory environment and improving logistics and connectivity.I encourage you to dialogue with regional colleagues and share experiences to shape the next phase of the CGF.I also encourage you to reflect on the causes of the current development doldrums. Engage in discussion and debate on various perspectives; including the merits of regional integration, addressing our vulnerabilities, fiscal, social or otherwise and improving competitiveness of our islands.We need to dispel the widespread view that we are all managing failed economies. I do not subscribe to that perspective. These economies may be broken but I believe we can pick up the pieces. I believe that our historical task is to conceptualize, shape and define an economic model that answers to the times and to our needs.So, challenge yourselves, our development partners and the esteemed panelists to develop a new phase which builds upon the successes of the last CGF, and learns from its shortfalls. Now is the time to discuss. Now is the time to decide. Now is the time to act.Ladies and gentlemen, I thank you. Show Less -
Pigeon Island, SAINT LUCIA, June 16, 2015– A new World Bank report released today at the Third Regional Caribbean Growth Forum, suggests that the rapidly changing environment for Caribbean exports pre... Show More +sents both new opportunities and challenges for economies highly dependent on external markets. Despite high openness to trade of Caribbean economies, the Caribbean share in global trade fell from three percent in the 1970s to nearly a quarter percent in 2012. The report, “Trade matters: New opportunities for the Caribbean,” highlights that trade plays an important role in job creation - with exporting firms accounting for 34 percent of formal employment and being the largest employer for the poorest. However, exporting also makes employment more vulnerable to external shocks.“Entrepreneurs are already seeing improvements in the business climate. Continued efforts to improve trade facilitation and step up investments in research and innovation, as well as quality education, will help improve skills and generate well-paid jobs in the Caribbean,” said Jorge Familiar, World Bank Vice President for Latin America and the Caribbean.The report also highlights that the region’s trade performance is limited by lack of diversity and limited innovation. The number of patent applications in the Caribbean has been lower than in other region of the world.Looking at emerging trade opportunities, the report shows that the CARICOM agreements have driven a rapid increase in intra-regional trade and that a common market would lead to a substantial rise in exports in the region. Meanwhile, with the exception of the Bahamas, St. Kitts and Nevis, Saint Lucia, Belize and Haiti, exports from Caribbean countries to growing emerging markets remain small.The report suggests three main opportunities to boost trade and generate a positive cycle of shared prosperity in the region:Deepening trade integration with North America would boost trade and accelerate growth in the region. The gains for the Caribbean of entry to the North American Free Trade Agreement (NAFTA) would be six times the size of the gains for implementing a Caribbean common market. The negotiations toward a Canada-CARICOM free trade agreement launched in 2007 should also be pursued. Improving trade facilitation environment through modernized custom systems and better connectivity would have a major impact on trade. Efforts across the region to modernize customs administrations and border management should be accelerated. With the expansion of the Panama Canal and the expected increase in transshipment, recent initiatives to modernize ports infrastructures and regulation are being carried out in Jamaica, the DR, Bahamas and Haiti.Improving the business environment and investment climate would be essential to enhance productivity and competitiveness. While Caribbean economies recently adopted a record number of reforms improving local business regulatory climate, exporting firms remain affected by the limited access to electricity, telecommunication and transport services, and the need for policies to further promote technology capability and innovation. More efforts are needed to improve skills and access to infrastructure and finance.The report concludes that there is considerable potential for boosting trade and accelerating growth in the region. Some of the proposed policy recommendations are being discussed today at the Caribbean Growth Forum in view of identifying new strategies and tools to stimulate competitiveness, productivity and entrepreneurship.Learn more about the work of the World Bank in Latin America and the Caribbean: www.worldbank.org/lacVisit us on Facebook: http://www.facebook.com/worldbankBe updated via:Twitter: @WBCaribbeanYouTube: http://www.youtube.com/worldbank Show Less -
Most Honorable Prime Minister of St. Lucia, Dr. Kenny AnthonyHonorable MinistersSir Dr. Dwight K. Venner, Governor of the Eastern Caribbean Central BankDr. Didacus Jules, Director General of the OECS ... Show More +CommissionDr. Justin Ram, Director of Economics, Caribbean Development BankMr. Wayne Mitchell, Regional Resident Representative of the International Monetary FundGovernment Officials, Development partners, Ladies and Gentlemen· It is a great privilege to be here today on this beautiful island of St Lucia to discuss a new agenda for sustainable growth in the Caribbean.· I want to especially thank Prime Minister Anthony for hosting the Third Regional Caribbean Growth Forum and acknowledge his leadership on promoting a pro-growth agenda. Prime Minister Anthony has been a champion of the Caribbean Growth Forum initiative.· This initiative engages government, private sector and civil society leaders and has led to date to a substantial number of reforms throughout the region.· Just to name a few, for instance the creation of a fund by the Grenada Development Bank which supported Small and Medium Enterprises; the establishment of the National Competitiveness and Productivity Council in St Lucia which recently conducted an assessment to increase productivity in the workplace; or in the Dominican Republic where a Single Stop Shop for entrepreneurs helped reduce the time to register a business from 45 to 7 days.· Some of the key questions to be addressed during these two-days are:o What are the new strategies and tools necessary to achieve growth?o How can the region better exploit its openness to trade? Ando How can the Caribbean private sector better harness growth opportunities coming from trade?· We all know that the Caribbean region is very diverse in its rich and varied cultures, languages, geographical settings of mainland to island nations, as well as its economic profile from service based to resource based economies.· Yet we are here together because despite these differences, many of these small economies are facing common challenges:o Low growth: With some notable exceptions like the Dominican Republic, most countries in the region are finding it difficult to revive growth after the global financial crisis of 2008.o Small scale: as small and open economies, the island states tend to have production and exports concentrated in one or two sectors, which brings uncertainty driven by terms of trade volatility.o Vulnerability to external shocks: the global financial crisis exposed the fragility of the Caribbean region. Small Island Developing States typically have relatively higher investment rates, while their saving rates are low. This combination of high spending with low savings makes it difficult for a country to build enough buffers that can be used in bad times. This decreases their capacity to face external shocks.o Oil dependent energy matrix: Most small Caribbean countries, particularly the Eastern Caribbean States, depend almost entirely on oil to supply their electricity needs - with oil and gas expenditures taking between seven to 20 percent of some countries’ GDPs.· All these factors combined contributed to trap many countries in a vicious cycle of low growth, high debt and limited fiscal space.· Adding to these challenges, the region is also exposed to recurrent natural disasters: The hurricane season has started and Caribbean states are among the countries in the world most exposed to natural hazards. Five out of the ten most disaster prone countries in the world are Caribbean.· To revive growth and sustain it, we need to address these challenges together.· The first phase of the Caribbean Growth Forum has put the spot light on improvements in investment climate, logistics and connectivity, and skills. These are necessary foundations to harness growth. But, efforts need to be sustained to effectively respond to the changing economic environment.· Small economies have no choice but to choose. For instance, they have to choose what kind of industries they will rely on to spur growth. And for this, they have two strategy options:1. Let the market choose: this is the example of the medical industry in Grenada.2. Or take more proactive public policy approaches as per the example of Costa Rica, which embarked on a comprehensive set of reforms to transform an agricultural rural based economy into a high tech export economy. Costa Rica started by identifying industries in which it would be competitive, investing in human capital and changing its education system and curriculum, and opening up to the global economy with smart policies to attract certain types of Foreign Direct Investment (the case of Intel in the late 1990s). This was done in the context of resolving an unsustainable debt problem inherited from the 1980s.· We will have a chance to hear more about the Costa Rican experience from former Minister of Trade Alberto Trejos later this morning.· So, in a region like the Caribbean, in spite of diversity there are many challenges we can face together:· Tackling these issues effectively requires efforts at the regional level, since effective solutions call for either risk pooling or economies of scale:o The Caribbean Catastrophe Risk Insurance Facility’s (CCRIF), as the first multi-country catastrophe risk pooling mechanism able to mobilize emergency funds within the first two weeks of the disaster, is a good example of how regional integration designed to take advantages of economies of scale is critical. All OECS countries are members of the CCRIF and Central American countries are now joining the facility.o Trade matters: There is significant potential for boosting trade. Our recent analysis which will be released today suggests that while entrepreneurs are already seeing improvements in the business climate, continued efforts to improve trade facilitation and step up investments in research and innovation, as well as quality education, will help improve skills and generate well-paid jobs in the Caribbean.o Working together to improve the investment climate through better transport and better access to electricity:Connectivity: Movements of goods and services between islands are limited. Caribbean maritime connectivity remains low compared to other small island economies (WB’s Logistics Performance Index average score between 2007-2012 is lower than in other regions: 2.40). Coming to St Lucia, we have all experienced the challenge of limited connecting flights, even for those of you who came from a neighboring island. Improving connectivity through air and sea could unlock the potential for tourist’ island hoping and facilitate intra-regional trade.Energy security: Last January, Caribbean leaders and leading energy partners agreed to pursue a joint regional framework for energy development at the Caribbean Energy Security Summit hosted by US Vice President Biden in Washington D.C.In response, the World Bank is working with CARICOM and other partners to build a coordinating platform to share knowledge, technical assistance and resources in efforts to make the energy sector more efficient, sustainable, green and attractive to investors.· Let me conclude by telling you that as a partner, the World Bank Group is fully committed to support the sustainable development agenda that many Caribbean nations are pursuing and to identify innovative solutions to the particular development challenges they face.· I commend the Caribbean Growth Forum member Governments for their commitment and the progress made in opening a real dialogue between the public and private sectors.· During the last Annual Meetings in Washington, some of the Caribbean region Prime Ministers including Prime Minister Anthony raised the need to identify opportunities in value chain approaches to build linkages among growth sectors; and prospects to promote innovation and entrepreneurship.· This high-level forum is a great opportunity to learn from other experiences and look at new approaches and drivers to help build these linkages, and promote innovation and entrepreneurship in the region.· During these two days, I look forward to see how we can leverage lessons emerging from the region and other small island developing states.· I am confident that together we can create a virtuous cycle of faster economic growth and lower debt, generating opportunities for all. Thank you Show Less -