Caribbean Export OUTLOOK 2016 - 2017

Pulse OF THE CARIBBEAN

Caribbean countries are small open economies that are dependent on trade and investment to lessen the impact of their debt burden. As a result, the region has chosen an export strategy to propel their economies.

Caribbean groupings negotiating the various agreements. The country’s financial services sectors are also integrated, with regionalisation ofmany operations. Our tourismproduct features regional brands, our grocery stores contain regional products, and our accounting firms are more regionalised. In more recent years, as we prepare for global integration, the introduction of a Standards Bureau and other institutions will be key to ensuring that Bahamian products make it to the wider Caribbean.” But in order to maximise on the benefits of trade arrangements and regional integration, the Caribbean must first overcome the challenges currently faced in intra-regional trade. “Some of themajor obstacles we face in increasing trade include deficiencies in key economic structure, such as trade-related infrastructure, particularly intra-CARIFORUM maritime links and maritime links to non-traditional markets; and the cost of energy and transportation, as well as the underutilisation of Information and Communications Technology (ICT), for instance when it comes to facilitating e-commerce. Then there are productive capacity challengeswithin the private sector, like access to finance, the absence of research and limited innovation, and market research. The region also faces competitive issues,

There is a lucid and inescapable strainworldwide amid the demands for employment, improved wages and living conditions today, and the environmental sustainability of the trade and economic policies implemented, to achieve these demands. This anxiety is particularly acute in many small island developing states, and certainly within the Caribbean. During a recent interview with Caribbean Export OUTLOOK , the Prime Minister of The Bahamas, the Honourable Perry Christie, shared his perspectives on trade and export development in the Caribbean, and how this could be used to address poverty in the region. The discussion also focused on export-led growth, the current state of regional, extra-regional and international trade, regional integration, and export competitiveness. In discussing export-led growth and its viability as a vehicle for sustainable development within CARIFORUM, Prime Minister Christie shared that the approach is critical to ameliorating the high levels of debt that currently confronts many Caribbean states, and that it would contribute to a reduction of poverty, through the creation of jobs particularly among youth and women. “Caribbean countries are small, open economies that are dependent on trade and investment to lessen the impact of their debt burden. As a result,

the region has chosen an export strategy to propel their economies. In many cases, Foreign Direct Investment (FDI) fills in the gap for domestic investment and enables the country to take on more expansion than could otherwise be accommodated using entirely domestic funds. The region has witnessed higher debt to GDP ratios over the years. The issue, however, is debt sustainability, and therefore an export-led economy is critical to ensuring that reduced debt levels with growth.” In The Bahamas, for example, there has been an increased debt burden over the last decade with debt to GDP entering the 60%-plus levels. As such, foreign exchange earnings are critical to maintaining the stability of the Bahamian dollar. Therefore, FDI is an important component of the Bahamian economy, but must be managed better to ensure the maximum benefit to the country. Prime Minister Christie also noted that regional integration processes, like the CARICOMSingle Market and Economy (CSME) are supportive of an export-led growth agenda. He further charged that as the country’s political leader it was important for him to ensure that the Bahamas supported the regional integration process.

“We became an active member of the various

25

www.carib-export.com