The recent High Level Caribbean Forum in Nassau was the latest in a series of discussions to develop a road map for the region’s long-term economic growth while addressing persistent debt and fiscal. A significant consensus about the path forward is clearly taking shape.
It's time for decisive action, so that the region can build on hard won social and economic gains.
The reasons are multiple.
The region’s poverty reduction and shared prosperity gains in the past decades are at risk of being reversed. In the three decades after 1980, the Caribbean region’s gross domestic product per capita increased six fold, bringing about significant poverty reduction. Then, the global financial crisis of 2008/09 hit exposing the fragility of the growth model in some Caribbean countries. Jamaica and the OECS islands experienced contractions of 3.1% and 5.3% respectively in 2009. Jamaica, which had seen its poverty rate drop almost 20 percent over two decades, saw it increase by eight percent in a few years.
The Forum took place the day after the U.S. Federal Reserve revealed that it would not start tapering its asset purchases after all. By then however, countries in the Caribbean such as Belize and the Dominican Republic had already seen yields of sovereign bonds rise by 130 and 40 basis points, respective.
That episode served as a stark reminder that, for the Caribbean, challenges from outside can be significant and uncontrollable, yet Caribbean nations have many good reasons to be open to foreign investment, increased trade, and financial market access. The benefits outweigh the uncertainty of global economic and financial engagement.