HELP ... STOP ... WAIT A SECOND ..... now what are you saying here, David ???

Now that we chopped down the last tree in our back yard and, following your heroic fight to hold on to and plant sugar cane ... because due to your endless efforts we were absolutely confident that the EU would cover for our losses, seemingly they use the highly appreciated term subsidies for this noble action, which means that in real world term we don't actually have to stay competitive but just pop the cane out the soil ... because if the EU makes a loss and we too make a loss, now mathematically that would be a loss x a loss and that, as we know from ground school suddenly adds up to a positive result ... so, please, you wouldn't suddenly be suggesting that we'd better had invested in technology, or turism, or education and alternative sources of income and developpment ???? Now don't scare me, the cane is already standing high in the field !

No hard feelings, David, but if you're living in this region, do you really need the World Bank to tell you that ? YES, we are living in an age of globalisation ... and that, unfortunately, requires to stay, or to become .... competitive. And that again, means to walk new path, explore new ways and approach new solutions. It means to adapt and it means to form new alliances and treaties.

And any second thoughts why the Dominican Republic chose to be part of the TLC, the free trade agreement between Central America and the US ?

What all this points to, dear David, irrespective of whether one agrees or not with what the World Bank has to say  ... girls seemingly perform really much better than boys .....

Greetings from Guatemala.


Lic. Manfred Bretbacher







The Week in Europe

By David Jessop

 

Late last month, the World Bank published a report that suggests that dramatic changes in economic thinking may be required in some Caribbean nations if they are ever to be able to accelerate let alone match previous levels of growth. If they do not, the report argues, then they and the region risk growing economic marginalisation and the erosion of many of the social gains of the last three decades.

 

The 303 page report, 'A Time to Choose: Caribbean Development in the Twenty First Century', argues that Caribbean governments should change their approach. In language that is in places direct, the study argues that business as usual 'will no longer suffice'. Rather than creating expectations about the continuation of preference or development assistance there needs to be a new focus at all levels in the region on how to achieve growth and competitiveness. 

 

The World Bank's experts paint a disturbing picture of the development prospects for much of the region.  They suggest that there should be concern for the sustainability of past accomplishments they provide illustrations of the implications of the slowing economic velocity in many nations. The report also questions the will within the region to achieve global competitiveness and points to figures that suggest that even the Caribbean's most successful nations have been overtaken in terms of growth by others - it cites Cyprus and unfairly Ireland - despite these countries having come from a lower economic base in the mid 1970s. 

 

In noting this, the report recognises that the region has to address simultaneously a number of challenges. These include youth unemployment, natural disasters, economic volatility resulting from the dismantling of trade preferences, an inefficient public sector and skills that in many countries that are not appropriate to the development of the knowledge based industries that much of the region is trying to migrate to. It also notes a 'massive increase' in public debt giving the region 'the unique distinction that it has some of the most heavily indebted nations in the world'. 

 

Despite this the report argues that these difficulties are not insurmountable if the region can improve its growth and competitiveness. To attain this it suggests that it is vital that there is greater inter-regional integration, improved labour mobility and harmonisation and co-operation between states. 

 

On trade, the World Bank belives that there should be a deal struck involving the 'orderly' dismantling of trade preferences in return for 'increased technical and financial support'. It also suggests that the region's infrastructure has to be made more efficient. Issues such as high taxation and wasteful customs procedures need to be addressed if the Caribbean is to attract more foreign investment. In places the report also proposes solutions that will be controversial in many Caribbean nations. These include the suggestion that the public sector needs to be made more cost effective and that one way of doing so would be to place greater reliance on the efficiencies that would come from involving, where feasible, the private sector. 

 

The report contends that while past growth rates in the Caribbean have been reasonable, these are now slowing and compare unfavourably with those of neighbours in Latin America. It quotes figures that show that since the 1970s, in the Caribbean the trend in average growth has been slowing down. An average growth trend of 4.7 per cent in the 1970s slowed to 2.1 per cent in the 1980s and to 1.7 per cent in the 1990s. While the Bank recognises that it is hard to make general assumptions about the region it notes that the gap between the rich and poor countries within the region has noticeably widened.

 

Some would argue that the World Bank solutions are typically prescriptive and represent a form of economic orthodoxy that is hard to deliver in nations with small domestic markets and all of the constraints that arise from having economies that are susceptible to external shock. Despite this, the tenor of the report suggests that the Caribbean may have little option other than to change rapidly or experience economic regression. 

 

The most obvious action is to complete as soon as possible the Caribbean Single Market and Economy and though economic integration begin to optimise the regions economic prospects: a theme that runs throughout the study. However, worryingly the report also points to a number of fundamental structural problems that if not addressed rapidly will cause the region to become less competitive and delay its prospects for growth. 

 

Of these, the most concerning relate to education and unemployment and the long lead times involved in creating a skilled workforce able to compete in newer sectors.

 

While the World Bank notes that the region's early emphasis on education after independence paid off for decades, it points out that many Caribbean countries have lost this momentum. It suggests that continuing high levels of unemployment arise from a disconnect between education curricula and the newer skills required by the private sector. It also notes that while the average years of schooling has increased from 4.8 years in 1980 to 6 years in 2000, this compares unfavourably with Latin America where the average rose from 4.9 to 6.3 years and the world average that has risen 5.1 to 6.5 years also over the same period

 

While the figures for some nations - Barbados and Trinidad - are well above average, the report notes that growth rates in Jamaica, for instance, suggest that it would take 120 years for the island's education system to catch up with that of the US today. Other figures relating to education are also worrying. Lower enrolment rates in secondary education are, according to the World Bank expected to lead to a further decline in the world educational ranking of certain Caribbean countries. Caribbean Exams Council (CXC) pass rates are very low in key subjects. Girls perform much better academically than boys. And low levels of enrolment in tertiary education have become an obstacle to building newer industries. 

 

The World Bank proposes solutions that space does not permit recounting in any detail. In part it argues that diversification within existing sectors including tourism, agriculture, health care, communications technology is vital if these industries and the Caribbean economy is to be revitalised. For those interested in this essential reading the details can be found at www.worldbank.org/lac.

 

What all this points to, irrespective of whether one agrees or not with what the World Bank has to say, is that the region needs to think differently, move on from its reliance on traditional markets and trade preferences and find new sources of growth. 

 

David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]

May 13th, 2007

 


        
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