On reflection, it is sometimes extremely difficult to understand the plight of Caribbean economies and the reaction of our governments to the challenges we face.
That difficulty has to do with the perception that history does not seem to matter much as we seek to further the cause of our people and nations.
If history matters, why is it then that we seem not to be learning from past experiences, thereby lowering the degree of vulnerability of Caribbean economies?
That question is posed against the backdrop of a recent report that pointed to several worrisome developments with respect to regional economies from the perspective of the International Monetary Fund (IMF).Â
These developments included weak balance sheets and reduced external demand for the region’s goods and services, adverse terms of trade, lofty debt, little economic growth, and larger challenges for tourism-dependent economies. Indeed, neither the objective conditions presented by the IMF nor the dire implications for the region are new.
Furthermore, the kind of response mechanism we need to appropriately address our plight cannot be a secret since every country in the Caribbean has had to face adversity after adversity over many decades and was forced to come up with creative ways to overcome and survive harsh conditions.
The reality is that from a historical perspective, Caribbean countries have tried export-led growth, import substitution, industrialization, and the more recent outward-oriented development paradigm. Evidently none of these approaches has guaranteed the sustained growth and development of the region. It is for this reason that our strategic responses have to be based on a mixture of engagements with the rest of the world as well as broader interactions among ourselves.
If the region continues to rely heavily on trade and investment exchanges with the advanced economies of this world, such as the United States, Canada and European countries, our economic survival will forever be linked to their performance in good and bad times. And that is precisely what we have been witnessing since 2008.
The signal from the IMF is that the projected weak performance of advanced economies spells gloom for the global economy and consequently restricts growth potential in vital areas, such as tourism – the most important sector of Caribbean economies.
In the circumstances, therefore, the most logical response for the region is to look inwards, which means more effort must be made to deepen Caribbean integration via the CARICOM Single Market and Economy.
Deepening integration must be manifested in the implementation of sensible policies as opposed to the pronouncement of grand ideas that eventually end up in archives.
As a simple practical example, if the region is interested in tourism, why not invest more heavily in intraregional travel? The IMF has already hinted that the impact of external tourism on growth is likely to be small in the current global environment, even in the face of increasing arrivals.
Given the role that LIAT, for example, has played in regional travel, all Governments should invest adequate levels of funds in that carrier to not only ensure its survival but also try to reduce the cost of travel within the region.
It is time that we get bold and creative in our strategic responses to the challenges we face. This is the only feasible way that we as a people and region can reduce the degree of vulnerability of Caribbean economies.
What say you?Â
• Dr Brian Francis is an economics lecturer at the University of the West Indies, Cave Hill Campus.
