IN INTERNATIONAL LANGUAGE Barbados is considered an emerging market economy, as are the other countries in the Caribbean.
Where it gets complicated is that large economic forces, including China, Russia, and India, and Brazil are also considered emerging economies, a term some individuals interchange with “developing countries”.
Investopedia.com defined an emerging market economy as one with lower to middle per capita income. “Such countries constitute approximately 80 per cent of the global population, and represents about 20 per cent of the world’s economies,” it said.
As the world’s largest economies – including the United States (US), United Kingdom (UK) – were being hit by financial crisis and economic recession six years ago, attention shifted to the performance of other countries, specifically the emerging markets.
Economists and financial experts wondered how it was that these countries, including some in Latin America, Asia and Africa, were performing so well compared to their larger counterparts.
However, in recent times with the US, UK and others showing signs of recovery, there are fears that the emerging markets are now the ones that will struggle.
For the Caribbean, the situation is different. For Barbados and other countries in this part of the world that are so heavily dependent on international markets, they were affected by the international recession, and in most cases are still struggling.
Most have instituted home-grown recovery and growth programmes, while others, including Jamaica, have turned to the International Monetary Fund (IMF) for help.
Economic instability
In a news report published by the Financial Times last week, IMF managing director Christine Lagarde warned that emerging markets were set to face a renewed period of economic instability when US interest rates rise this year.
She also said emerging economies faced a second risk from the recent strength of the US dollar, with indebted companies that took advantage of low rates to borrow in US dollars facing sudden and steep jumps in debt servicing costs.
Investopedia.com said with Brazil, Russia, and Greece already experiencing economic misfortune this year “the global economic outlook may look bleak”.
But it observed that “many emerging and developed economies forecast a prosperous 2015 in terms of growth”.
In its World Economic Situation And Prospects 2015 report, the United Nations said “growth rates in developing countries and economies in transition [became] more divergent during 2014, as a sharp deceleration occurred in a number of large emerging economies, particularly in Latin America and the Commonwealth of Independent States”.
At his recent annual Press conference at Hilton Barbados Resort last month, Caribbean Development Bank president Dr Warren Smith said last year’s economic recovery, though still at a modest pace, continued for the fourth consecutive year in the Caribbean.
And while noting that policy makers in the region “sought to overcome the legacy effects of the great recession” and other issues, Smith said “in 2015 and beyond, the region’s policy agenda must provide for a redoubling of our efforts to grow our economies and create jobs”.
“This is the only way I know that we can enable our people to lift themselves out of poverty. Most countries in the region are now on a growth path, but still far below the level needed to be considered sustainable and to yield real benefits,” Smith said.
