Caribbean economies experience ‘mixed fortunes’ in ‘topsy-turvy’ external environment
BRIDGETOWN, Barbados - St Kitts and Nevis, Grenada and the Turks and Caicos Islands showed 4 percent growth, due to improved tourism arrivals and increased tourism related construction, while the region's economic powerhouse Trinidad and Tobago grew by just 0.2 percent due to weaker oil and gas prices.
That's according to the Caribbean Development Bank (CDB)'s Economic Review for 2015 and Outlook for 2016, delivered on Wednesday at its headquarters in Barbados.
The report struck familiar themes and again pressed for urgent, meaningful policy reform in the region that includes labour market reform, private sector led-growth, deeper regional integration and governments to act primarily as efficient regulators.
"We could say that 13 of the 19 borrowing member countries (BMCs), we would expect them to grow faster in 2016 than in 2015, but two of our stronger credits Trinidad and Tobago and Suriname will experience negative growth in 2016. Interestingly all of the service dependent economies should grow, even if marginally..." said CDB president Dr William Warren Smith, while explaining the downturn in the commodity-driven economies.
He described Caribbean economies as being in recovery mode at a time of great uncertainty in what is emerging as a somewhat "topsy-turvy economic environment".
"These external threats include the possibility of economic weakening in Europe and in North America, at the same time that China's growth rate is slowing as that country addresses internal structural weaknesses," Smith said. "The threats also loom ominously in the shape of the correspondent bank de-risking crisis, which portends challenges for the movement of money into and out of Caribbean economies."
Smith also reminded his audience that in addition to the prevailing challenges there were also the "ever present threats to economic and social infrastructure, posed by natural hazards and climate change, broadly defined".
"In the face of a surfeit of threats to economic stability and growth it is not surprising therefore that the term ‘sustainable’ is almost de rigueur in describing the menu of actions that need to be taken in managing Caribbean economies," he added.
In an effort to help Caribbean countries surf last year's challenging economic swells, Smith said the CDB granted 12 capital loans, three policy-based loans and 62 technical assistance interventions in 2015, at a cost of US$292 million – a US$22 million increase over 2014.
Antigua and Barbuda, Grenada and Belize were the main beneficiaries.
"The operations of the Bank in 2015 were directed at long term, inclusive and sustainable growth, it was also targeted at good governance and the building of resilience," said the CDB president. "The bulk of the financing was targeted at investments to strengthen and modernize social and economic infrastructure; to improve environmental management and disaster risk management; to build climate resilience, whilst promoting energy efficiency and renewable energy and to promote private sector development."
By Clive Bacchus
West Indies News Network