There must be sustained economic diversification if regional governments are to successfully reduce their fiscal deficits.
Prime Minister Freundel Stuart made this clear today, as he addressed the opening ceremony of the 31st Annual Caribbean Conference of the Institute of Chartered Accountants of the Caribbean at The Hilton Barbados.
Mr. Stuart noted that it was imperative for the region to overcome some of the global challenges that had emerged, while continuing to maintain “a reasonably adequate safety net”, and social development system. In order to achieve this, he outlined a six-pronged strategy, which, he said, would put the Caribbean back on a path of development and expansion.
He explained that the plan would involve diversifying the sources of our economic drivers to align them more with faster growing areas of the world,through expanded and more intensive tourism marketing and product development.
The Prime Minister added that “expanded and more focused international business marketing, more and faster product development, increased labour content of our international business, and intensive work on the removal of foreign administrative hurdles to international business” would help Caribbean nations chart a path to recovery.
“We must restructure the energy basis of the economy and improve the competitiveness of production through greater energy efficiency; greater use of alternative renewable energy; an enhanced technological platform for the economy; and greater availability of requisite labour skills.
“We must improve the productive capacity of our economies through???? infrastructure development. We must rationalise and consolidate the fiscal sector by reducing wastage; cutting unnecessary programmes; confronting the ???entitlement’ mentality in our countries; providing public goods and services more efficiently; and improving the facilitation role of Government,” he noted.
The Prime Minister pointed out that the economies of the Caribbean had suffered along with the rest of the world over the last six years from a generally low level of economic activity and had continued for this period because of increasing uncertainty about likely changes in global economic fortunes.
This world uncertainty, he disclosed, had “badly shaken business and consumer confidence”, and as a consequence, there had been less investment and spending than usual throughout the world.
Consequently, he advised that regional states had to “shift the locus of investment and growth more towards the private sector”.?? Mr. Stuart also suggested that both the public and private sectors needed to cooperate more on a regional basis on economic matters and deepen regional economic relations, by increasing regional cooperation in tourism and investment marketing, especially in new markets, in order to diversify the countries of origin of the economic drivers.
He said that this could be achieved by collaborating with airlines to increase intra-regional airlift and to increase and diversify airlift to the region; and by multi-destination marketing; tourism marketing and product development; international business marketing and product development.
The Prime Minister also called for greater collaboration on security matters; more intra-regional trade in food; more intra-regional tourism; increased intra CARICOM trade in both goods and services, and more direct and portfolio investment in each other’s economies.
During the conference, it was pointed out that Caribbean economies had been underperforming since 1990, with growth stagnating in the last two decades, except for commodity producers. It was announced that since 2008, economic activity grew by less than one per cent in tourism oriented economies, and that slower economic growth was compounded by competitiveness issues, widening external current account deficits, declining share of world exports, and falling tourist arrivals and tourist receipts.