Caribbean Export OUTLOOK 2016

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

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,

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.

Pulse OF THE CARIBBEAN