There is no doubt that Caribbean countries have done well socially and economically over the past few decades despite the very limited financial and natural resources most countries had at their disposal. With the exception of Guyana and Trinidad and Tobago, other countries in the region do not have the kind of flexibility to allow them to respond to adversities whether of a domestic, regional or international nature. Yet still, several countries including Antigua and Barbuda, Barbados, The Bahamas, and Trinidad and Tobago have at various times been classified by the World Bank as high income countries based on their per capita incomes.
What is amazing is that Antigua and Barbuda and Barbados are both extremely small in terms of physical size and population and do not have much natural resources to speak about. Both economies have been able to develop mostly on account of tourism and other services. The Bahamas too has developed in a similar fashion but it for many years enjoyed the advantage of being close to the United States and hence trade between those two countries is much easier to facilitate, particularly in relation to the cost of travel and movement of goods and services. In the case of Trinidad and Tobago its oil and gas have allowed it to develop a relatively strong manufacturing industry and with its fairly dynamic private sector has been able to build a strong economic base.
But generally speaking, all of the countries in the Caribbean have been able to improve their economic and social fortunes through massive investments in activities such as education, health, social services, and infrastructural development. Hence today, most countries can proudly boast of high quality educational systems, relatively good health care facilities, modern telecommunication and electricity generating systems, adequate water supplies, good road networks, and welfare programmes to support the less fortunate and underprivileged among us.
To facilitate these widespread undertakings, our governments resorted to local and foreign borrowings because logically no amount of domestic savings could have been sufficient to facilitate such huge investments.
The net result has been the accumulation of public debt that is now proving difficult to manage in a challenging global economic environment.
Consequently, many governments have been forced to take corrective action to address rising fiscal and debt situations by a combination of measures that include increasing taxes and cuts in expenditure that clearly have affected the ability of many consumers to expand spending because of significant reductions in their disposable incomes.
If consumer spending is down, and the governments are limited in what they can do in terms of borrowing to aid investments, then, logically, the only alternative for our countries is to rely on investments by our private sector and foreign investors to grow our economies, which by extension would create jobs and increase Governments’ tax revenue collection without any need to raise taxes.
Going forward then, our private sector has to decide what areas of investments would be most viable for the long term and by working together with the Governments and other stakeholders come up with appropriate strategies to ensure “investment-led growth” in the Caribbean that is sustainable. Are you up to the challenge?
Email: bfrancis@uwichill.edu.bb