PORT-OF-SPAIN: 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 significant topic of discussion at the 34th meeting of the conference of heads of government of CARICOM.
The conference’s opening ceremony was held yesterday evening in Port-of-Spain. Working sessions will begin today and end on July 6.
The current economic scenario, including the slow recovery from the global financial and economic crises, heavy debt burdens and other developments, such as the policy of graduation by international financial institutions, have had debilitating effects on the economies of CARICOM.
Prime Minister of Saint Lucia, Dr. Kenny Anthony, bleakly described the situation while addressing the board of governors of the Caribbean Development Bank (CDB) a month ago.
“The crisis that we face was not of our making,” said Dr. Anthony. “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.”
Although 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 growth projected at around 5 per cent.
“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 per cent 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 per cent 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 which 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 listed 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.
According to Anthony, 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 in order to inform the decisions that had to be made going forward with respect to transforming regional economies.
The heads of government are expected to lead that assessment and provide direction on a new approach during the 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.