Home' Trinidad and Tobago Guardian : January 22nd 2015 Contents BG4 NEWS
BUSINESS GUARDIAN www.guardian.co.tt A A 2 15
Former Prime Minister of Bar-
bados, Owen Arthur, believes
the Caribbean region is facing
its worst economic crisis since
Arthur quoted former T&T Prime Minister
ANR Robinson who, in 1989, said that if the
economic situation did not change in the
Caribbean region it could become a "back-
water" place moving against the tide of lib-
eralisation in the world.
"It is now, however, beyond dispute that
the situation which the Caribbean finds itself
is in every respect more dire than that which
was said by ANR Robinson. In many instances,
there are no domestically articulated solutions
that can suffice. Compounding this is the fact
that there are no regional mechanisms that
countries can look to at this time of great
crisis to provide effective solutions to economic
problems which require immediate respons-
es."Arthur called the economic crisis gripping
the region the worst in its history.
"The economies of the Caribbean commu-
nity stand in danger of being overwhelmed
by the most debilitating crisis in the region s
history. To begin with, in their individual
capacities the countries are experiencing the
worst growth performance of any class of
economies in the global arena. The typical
Caribbean economy is now grappling with
debt management problems which will not
only evoke actions that will lead to drastic
cuts in the standard of living of citizens but
also compromises the capacity to finance
regional institutions and to create new ones."
Arthur, who is an economist by profession,
spoke on Monday night on Caribbean
economies at the Distinguished Lecturer Series
at the Institute of International Relations at
the St Augustine campus of the University of
the West Indies (UWI).
Arthur added that there will not be any
quick solutions to the low growth and high
debt of the region.
"What is more disturbing is, taken as a
group, the Caribbean has under performed.
It has under-performed compared to the global
group of island economies on almost every
major determinant of competitiveness."
He quoted from statistics and said the
Caribbean s economic failures are "stagger-
"According to a recent study of the region s
trade performance, the Caribbean share of
world exports has declined from 0.5 per cent
in 1980 to 0.2 per cent at recent count. The
report also indicated that the region s inte-
gration into the global economy has been
much slower than countries that have not
enjoyed preferential access to some of the
major markets in the world. Over the past five
years many Caribbean economies have lost
market share in their principal export sectors,"
He said as small, open economies facing a
rapidly changing global environment, the
Caribbean are becoming increasingly uncom-
"The region s average tariff is 11.6 per cent
and is higher than any region including south
Asia and significantly higher than all other
small island economies. Higher tariffs lead to
a higher cost inputs especially for export-ser-
vice industries and this results in the capacity
of domestic firms to compete operating on a
lower tariff regime," he said.
He said the bureaucracy and inefficiency of
the region s ports have contributed to the
Caribbean s backwardness.
"According to the World Bank s Trade Logis-
tics Performing Index, the Caribbean has a
lower index than any other region in the world.
We have the most inefficient ports and the
most inefficient customs," he said.
He said while the Caribbean region continues
to do poorly on international rankings like the
competitiveness reports, Singapore and other
small countries located in Asia are doing well.
Arthur also said the region s economies are
not competitive because of macro-economic
imbalances and a "lack of fiscal space."
"The economies of the region do not have
the fiscal space to stimulate growth. Jamaica s
recent significant improvement on its industries
measuring its competitiveness in the area of
doing business is a hopeful sign for the region.
It is clear that a widespread failure to adopt
international best practice is proving to be
bad. Tragically, this departure from interna-
tional best practice determines the enterprises
capacity to compete," he said.
Arthur argued that regional integration has
come to a standstill.
"In recent years, there is abundant evidence
that the regional integration movement has
come to face a growing crisis and is manifested
in the region s inability to put the engines of
integration to work as warranted by circum-
stances," he said.
He said the Caricom Single Market and
Economy was originally designed to create
opportunities for the region and serve as the
principle agency for which the regional econ-
omy would be integrated into the global econ-
"Our region for the first time in its history
sought to wrest its own development by
embracing economic liberalisation as an ide-
ology. In this regard, the creation of a single
market was supposed to remove constraints
of movement in the region of goods and labour
and served to remove the constraints of 300
years so that our people would be able to create
He pointed out the benefits of a monetary
union in the Caribbean region.
"If Barbados were part of a monetary union
and we had one single currency in the
Caribbean, it would save Barbados US$500
million a year."
Despite the existing problems, he said it is
time to remove the "constraints" that have
kept the Caribbean underdeveloped for so
"There is a new Caribbean economy that
is waiting to evolve. The old paradigm of
domestic economies based on the use of land,
labour and capital is giving way to a new par-
adigm of a new Caribbean economy driven
by innovation, entrepreneurship, technological
sophistication, and the adoption of global best
practice in every field of economic endeavour.
There is an embryonic entrepreneur class
emerging in the creative economy which is
capable of integrating in to the global economy
by using ICT to create their own value chain.
This class does not need protection but
He said this new entrepreneurship class
does not need regional governments to imple-
ment new tariffs for protection but it needs
to be given new opportunities in the region s
participation in new trade agreements inter-
"Look at Africa. They are now finding these
new agreements so effective in their own
region. The Caribbean region must show that
it can join the rest of the world with confi-
Former Barbados PM Owen Arthur on new Caribbean economy:
Waiting to evolve
Bio of Owen Arthur
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