Home' Trinidad and Tobago Guardian : February 22nd 2015 Contents SBG6 NEWS
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt FEBRUARY 22 • 2015
The private sector must take the lead in bol-
stering overall Caribbean economic growth
in 2015 and invest more in the region. This
was among recommendations put forward
in the Caribbean Development Bank s 2014
Caribbean Economic Review and Outlook
for 2015 report which was released on
Wednesday at a press conference at Hilton
Barbados Beach Resort, Needhams Point, St Micheal.
The CDB, in its 14-page report, is projecting regional economies
will grow by an average of two per cent this year and there will
be expansions in all of its 19 borrowing member countries (BMCs,)
"As was the case last year, most (economies) are set to grow
by between one per cent and three per cent with strongest per-
formances expected in tourism and construction, along with
some improvement in commodity exports," the report said.
However, CDB president Dr William Warren Smith and CDB
director of economics Dr Justine Ram both contended, on Wednes-
day, that the regional private sector has to be the driver of economic
growth as the Caribbean continues to recover from the ravages
of the global financial crisis.
"The Caribbean is moving out of the recession. We are slowing
moving out. But the overall level is not sufficient to lift people
out of poverty," Smith told journalists.
He said more gains are needed to get the region to a level of
prosperity and this is where the private sector needs to step in.
Ram, in his presentation, said that the region s business com-
munity can make a significant contribution to increasing the rate
of growth in 2015.
Ease of doing business
Ram stressed the need for countries to make policy changes
that will assist in making transacting business in their ter-
"The region is lagging behind with the ease of doing business,"
Ram, pointing to the strides that Singapore has made as an
economically sound country, said that the region needs to make
it "less costly and easier to invest" if the region expects higher
The report also suggested that there is a need for further fiscal
consolidation and greater savings within the region and that
means "much of the impetus for growth and job creation must
come from the private sector, including through foreign direct
"The private sector will also have to shoulder more of the
financial burden of investing in the region s infrastructure, both
social and economic. To this end, BMCs are increasingly turning
to public-private partnerships (PPPs) and CDB is rolling out new
facilities to support them in this regard," the report added.
Governments were also called upon, through the report, to
undertake "structural and other reforms to create the kind of
legal and regulatory environment and broader governance frame-
work that can attract investment, and within which the private
sector can truly become the main engine of growth."
The report also recommended that the region should seek to
encourage the use of more renewable sources in the energy mix
and greater energy efficiency; invest in universal education,
emphasising science, technology and mathematics (STEM) and
technical and vocational education and training (TVET), "with
a view to closing gaps in quality and matching human capital
development policies with changing private sector demand for
It also suggested the promotion of the use of technology in
general, including connectivity and collaboration tools, energy-
efficient and/or renewable energy-based systems and e-learning
modalities, as a potential driver of efficiency gains was key to
increasing economic growth.
Ram, in presenting the report, also contended that "unem-
ployment remains stubbornly high across the region."
The solution to this problem, he said, could be a regional one.
"Open borders to the movement of labour," Ram said.
While the CDB, in the report, contended it was cautiously
optimistic about the outlook for the region in 2015, it anticipates
a further strengthening of the regional recovery this year.
This, the bank said, "would allow for a continuation of the
reduction in unemployment that started to take hold in 2014.
Nevertheless, lingering development challenges continue to
dampen medium and long-run prospects in most BMCs."
Falling oil prices
The CDB contended that further reductions in oil prices "could
threaten the sustainability of the PetroCaribe arrangement, under
which many BMCs finance petroleum imports on extremely con-
cessional terms, representing a tail-end risk to fiscal and debt
Smith, in responding to questions from journalists on the
report, lamented that Venezuela is experiencing economic challenges
and this will also have an impact on the sustainability of PetroCaribe
"We need to intensify the work we have been doing promoting
energy efficiency in the region and we need to accelerate the
(thrust towards) renewable energy," he said.
Smith said the region should not view the present challenges
in commodity prices as a threat, but see it as an opportunity to
be more resilient.
The CDB report also contended that T&T will experience
growth between one and three per cent range, "albeit at the lower
end, as unscheduled maintenance activities that have been dis-
rupting petroleum production over the past few years are expected
come to an end."
In its assessment of T&T s performance in 2014, the CDB said,
this country s economic growth "slowed considerably to record
modest growth last year."
This came, it explained, in the "wake of operational challenges
and the significant drop in oil prices during the year which sup-
pressed petroleum output, thereby driving a decline in the mining
and quarrying sector."
Both Smith and Ram said there is a dire need for improvement
in regional transport, especially the inter-island air bridge.
Smith did not mince words about the poor service at regional
"There is no question that the type of service being offered
by LIAT is unacceptable, inefficient by any measure," Smith said.
He said if the region had a more efficient inter-island air
transport system then it would have the effect of bringing down
the cost of getting around the Caribbean.
"This is a matter that needs urgent attention," he added.
Smith also hinted at the possible inclusion of Cuba as one of
the CDB s borrowing member countries. He said the positive
strides in the restoring of relations between the US and Cuba
would impact on the CDB s consideration of including the Latin
"Cuba is part of the Caribbean. Cuba will be an excellent
addition to the CDB," Smith said.
What is the CDB?
The Caribbean Development Bank (CDB), is a regional
financial institution which was established by an agree-
ment signed on October 18, 1969, in Kingston, Jamaica,
and entered into force on January 26, 1970.
The bank came into existence for the purpose of con-
tributing to the harmonious economic growth and devel-
opment of the member countries in the Caribbean and
promoting economic cooperation and integration among
them, having special and urgent regard to the needs of
the less developed members of the region (Article 1 of
the Agreement establishing CDB).
A call for more
DR WILLIAM WARREN SMITH
DR JUSTINE RAM
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