|Prime Minister Freundel Stuart (fourth from left) is pictured at the US Chamber of Commerce in Washington, D.C??where he gave an address on the topic:"The Caribbean Economy and Society: Facing Down the Challenges". (C. Pitt/BGIS)|
A regional Head of Government has described the current period as one of the toughest in almost 100 years, characterising it as "The Great Recession" that has caused Caribbean countries, like Barbados, to have suffered major material fallout.
The comments were made yesterday by Prime Minister Freundel Stuart to the US Chamber of Commerce during a keynote address entitled:?? "The Caribbean Economy and Society: Facing Down the Challenges."
They come in the face of the ongoing economic downturn in which the world seems mired.
The Prime Minister said the most casual look at our economic profile would reveal that we had never experienced a recession as severe as the one we currently face. "For Barbados, as for many others, it is the Great Recession; many countries and companies around the world are facing some of the toughest economic challenges of our lifetime," he said.
Noting that Barbados and Caribbean societies were going through their sternest test ever, he, however, made a case for a regional approach to the difficulties being experienced.
Prime Minister Stuart said: "In our journey, regional integration has always been part of our plan. I have the honour of being the Head of Government charged with responsibility for the Caribbean Single Market and Economy (CSME) project, which is still a work in progress. Indeed, Barbados has always been at the forefront of the regional integration movement, and we continue to be committed to the regional cause and to discharging our responsibilities for the realisation of the CSME."
In spite of the challenges in the local economy, Mr. Stuart nevertheless indicated that there was some gratification from the recent ???green shoots’ in the economy, demonstrating that it had started to show signs of modest growth. He has credited Government’s corrective measures and its medium term fiscal policy, as well as the tenacity of the Barbadian people and their patriotic spirit, particularly that displayed by the Social Partnership, as being responsible.????
He said: "Barbados pursues a robust policy framework that works well. All of the key players in the economy meet regularly with the objective of reviewing and planning policy for the future, maintaining expenditure at stable levels, increasing revenues and keeping the other key fundamentals on track. In short, our saving grace has been our Social Partnership.
"This partnership comprises the private sector, trade unions and the Government as equal stakeholders. Our consultations are bound by Protocols (we are now on our Sixth Protocol), and these are renewed periodically. This mechanism has maintained significant social cohesion in what is a very difficult economic and social environment.?? Job layoffs are much lower than they would normally have been and broad-based support to keep the economy on track is evident," Mr. Stuart said.
The Prime Minister also told his audience that over the years Barbados had done well, based on investment in its human capital, as well as from favourable upswings in the US business cycle. "This fact notwithstanding, we have endured several exogenous shocks – social, economic and physical – and suffer from the severe vulnerabilities which attach to being a small island developing state.
"Due to our geographical location and historical relationships, Barbados’ trading patterns have been closely tied to the US, Canada and the UK. This means that we are directly impacted by economic downturns that affect these countries. Our tourism declines if there are job losses in these developed economies, or if for any other reason their citizens have less disposable income, since under these circumstances they are less likely to travel to our shores. If businesses in the developed countries are suffering and there is not a lot of money to invest in their local economies, then fewer opportunities exist for them to engage in financial services as well," he said.
Prime Minister Stuart also observed that "in addition to the economic downturns over the years, Barbados and other Caribbean countries suffer from food price and commodity shocks as well. Given that most of our countries are net importers of oil and many other commodities, sharp hikes in the value of these commodities increase domestic prices and cause the cost of living to rise exponentially. This impact is very easily seen in our economies. As we ride out the Great Recession, and though we have seen some marginal growth in the last few months, the outlook is still tentative as the experts have indicated that the crisis has not ended for us as yet."
The Prime Minister told the gathering of business persons that he had given them a brief look at the main challenges that the Caribbean in general and Barbados faced, but there were many opportunities that ought to be seized as well. "The Caribbean bristles not only with challenges, but also with opportunities," he stressed.
The Barbados leader predicted that the region would rebound from the global crisis, and said: "As economic growth returns, I am confident that the Caribbean region will have a very prosperous future. There will be a number of scars, but there must be new approaches in the way forward. For example, there must be diversification to new markets for goods and services. One lesson that the Caribbean has learned during this last crisis is that diversification has to be taken seriously," he cautioned.