Alicia Nicholls The Economist Intelligence Unit recently released a report entitled “Private Sector Development in the Caribbean: A Regional Overview” commissioned by Compete Caribbean. The report discusses private sector […] development in the Caribbean region and is based primarily on the analysis in the Private Sector Assessment Reports (PSARs) on fourteen Caribbean countries which are…
Alicia Nicholls The Economist Intelligence Unit recently released a report entitled “Private Sector Development in the Caribbean: A Regional Overview” commissioned by Compete Caribbean.
The report discusses private sector […] development
in the Caribbean region and is based primarily on the analysis in the Private Sector Assessment Reports (PSARs) on fourteen Caribbean countries which are available as separate reports.
2015 will be a difficult year for both policymakers and entrepreneurs in the Caribbean. The IMF estimates that the tourism – based economies that make up most of the countries profiled in this report grew by only 1.1% in 2014 and will expand by 1.7% in 2015. These countries are still being held back by numerous structural challenges that have constrained their economic performance in recent years.
One of those challenges includes the legacy of inflexible fiscal policies, which left governments little room to manoeuvre when the global financial crisis struck. Public debt exceeds 90% of annual GDP on average in the Caribbean’s tourism – based economies. Their global competitiveness as tourism destinations has been eroded over the years. In 2001 foreign visitors spent around 75% more per capita in the Caribbean than in broadly comparable destinations in the Pacific. By 2010, that advantage had disappeared. Meanwhile, in most Caribbean countries, employment is provided mainly by the public sector, whose unionized workers are often unwilling to support necessary changes that policymakers propose.
The other new factor is the possibility that economic and political developments in Venezuela could result in a substantial reduction in, or the total ending of, the benefits that are currently made available through the PetroCaribe mechanism. The main advantage of PetroCaribe has been that up to 50% of oil purchases can be converted into 25-year loans carrying interest rates as low as 1% . Without this arrangement, the oil – importing Caribbean countries would have to pay for all oil purchases at world prices. This would likely be a difficult adjustment, even though global oil prices have fallen sharply since mid-2014
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While I have not read all of it, the outlook of this report is still very traditional. It stresses manufacturing, tourism and agriculture and encourages entrepreneurship. 10 years from now very little in the world will be left un-computerized. In my opinion IT where the focus of the private sector should be. They should be trying to develop a competitive advantage comparable to India in terms of IT.
@Heather
While what you opine is true you must know the transformation of India to IT started many years earlier by planning/aligning the education system to national priorities.
The Economist is an ideological rag with the same message for every country in the world – privatization is good, more privatization is better; unions are a problem; and Maggie Thatcher and Ronald Reagan were the Greatest Leaders of the 20th century. That’s all they ever have to say. They are chuckleheads
@chad99999
After your critique of The Economist which may or may not be justified how do you explain all the economies in the region being in the soup?
@David
The problem with the Caribbean is a familiar one. The same problem Latin America has had to deal with. Independence strains the economy because the limitless “needs” of the ‘masses’ have to addressed. The economic pie is small, and while it is growing, it cannot keep pace with the ambition and aspirations of the poverty classes. Colonialism kept these people poor and humble and limited their consumption to the bare minimum. Unleashed by independence they now want all the good things in life. As voters they compel the attention of the political class, which tries to meet their needs by borrowing heavily and diluting the orange juice so that everyone has a little sugar. The quality of life is bound to go to hell for those who used to live undiluted lifestyles as part of the privileged minority.
Excellent analysis Chad.
It is called unbridled GREED.
There is nothing wrong with wanting all the good things in life, the problem is that we MUST BE PREPARED to work to earn these things….. not borrow.
We now have a government who is bragging about their ‘ability’ to borrow money from the Chinese….
Bushie had a rottweiler who used to happily ‘lend’ his food to the birds too…
He ate at least one of them every week….
@chad
A very worrying insight the BU family has been debating through the years. Our taste/culture is being shaped by cable and other external influences at the expense of what is commonsense.
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