To date, evolving economic developments in Europe have had limited effect on the financial environment in Barbados.
This point was underscored today by acting Prime Minister, Freundel Stuart, as he delivered the feature address at the opening of a two-day Inaugural Tripartite Productivity Conference, at the Hilton Hotel.
He said: "Although this is indeed good news, it should not predispose us to complacency, since the one lesson that globalisation and trade liberalisation have taught us is that contagion effects are much more fluid than ever before. What affects one country will either directly or indirectly impact on another."
Mr. Stuart described Caribbean economies as being "in anguished search of a compendium of policy options which are both suitable and feasible enough to weather the potentially negative effects of the economic recession.
??"Our economies, unlike Europe, cannot support fiscal stimulus packages without increasing our debt to GDP [Gross Domestic Product] ratio.
Neither can we continue to approach fiscal reform as individual states without due regard for congruence. If nothing else, this recession is highlighting the fact that there is a need not only for national budgetary management, but for discussion on a regional approach to fiscal convergence," he noted.
In light of this, Mr. Stuart stressed the importance of strategic and contingency planning, good management practices and governance tools as imperative for a small, open economy such as Barbados.
"We can ill-afford to wait until something happens before we take protective or precautionary measures. Regional economies require the ability to analyse, forecast, and make decisions influenced by data and information, all the while being guided by the precedents set by our past and the vision we have carved for our future," he added.
The acting Prime Minister maintained: "Our fiscal position could be improved with greater contribution to productivity through not only increases in labour productivity, but also greater acquisition and use of technology for domestic production and exports".
Acknowledging that Barbados was still facing some economic challenges, Mr. Stuart indicated that the country had suffered an estimated loss of foreign exchange from tourism to the tune of approximately $170 million.
??"This loss, and an estimated shortfall of $465 million in net private capital inflows relative to initial forecast, were the main factors in a lower than anticipated Net International Reserves (NIR) position. The contraction in tourism output had a knock-on effect on the traded sector which fell by an estimated 6.3 per cent in 2009, following a 1.2 per cent decline registered in 2008," he said.
However, the acting Prime Minister disclosed that there were some positive signs, with improved tourism activity, as tourism GDP expanded by 1.7 percent during the first quarter of 2010 as a result of the increase in long-stay visitor arrivals.
The acting Prime Minister lamented the fact that Caribbean economies were characterised by labour intensiveness and insufficient emphasis on innovation and were also guilty of lagging behind in the initiatives needed to boost productivity levels to propel trade competitiveness and economic development.
?????????????????????? Instead, he suggested that the countries needed to be more competitive and to discuss a Caribbean Productivity and Innovation Index, as well as to inculcate greater uses of technology and training for focused and productive approaches to what was done at the personal and professional levels.
The conference has as its theme: "Out of the Recession! Productivity Initiatives to Enhance Growth and Development in the Caribbean" and participants were drawn from Jamaica, St. Lucia, Trinidad and Tobago, St. Vincent and Barbados.??email@example.com