BRIDGETOWN, Barbados – Highlighting the importance of restructuring Caribbean economies, the Director of Economics at the Caribbean Development Bank (CDB), Ian Durant says increasing competitiveness has to be the top priority for inducing strong and inclusive growth and overcome the impact of the COVID-19 pandemic.
Speaking at the seminar “Reimagining Caribbean Economies in the Wake of the COVID-19 Pandemic”, held virtually June 17 as part of CDB’s 51st annual meeting; Durant explained that the region’s economies were small with no reserve currencies and were heavily reliant on imports to maintain standards of living.
“This means that increasing gross domestic product, increasing incomes and improving standards of living in a sustainable way requires export growth. But this export growth must be diverse to ensure that there are not major setbacks when one export industry is affected by a shock. In turn, diversification requires enhanced competitiveness,” Durant said.
Highlighting the way forward for increasing competitiveness, CDB director of economics stated: “First, at the center of our strategies must be digitalisation and physical resilience. We need to create digital citizens with access to the internet and services online.”
Given the geographical location of Caribbean countries, it is equally important to improve physical resilience to natural hazards, and to upgrade infrastructure that makes it easy and quick to transit the country, Durant stressed. Improving governance to hold senior officials accountable and keep them focused on national development objectives, is also key, he noted.
In his presentation, he shared the deep impact which COVID-19 had on Caribbean countries: 13 of CDB’s 19 Borrowing Member Countries (BMCs) recorded double-digit declines in gross domestic product (GDP) with an average downturn of 7.2 percent in 2020. Regional exports fell by 26 percent while imports decreased by 27 percent in 2020. BMCs that had debt-to-GDP ratios above 60 percent increased to 13 in 2020, compared to nine in 2019.
CDB projects a moderate, average growth of 3.4 percent in BMCs in 2021, and a slow return to debt sustainability in the region, with only countries exporting services, reaching an average of 60 percent in 2026/27, while the debt to GDP ratio of commodities exporting countries will stay at about 80 percent throughout this decade.
Discussing policy imperatives for a green recovery post-pandemic, debt sustainability challenges that have emerged and how to build economic resilience, panellists of CDB’s annual meeting seminar included:
- Gregory Bowen, minister of finance, economic development, physical development and energy;
- Grenada; Marsha Caddle, minister, economic affairs and investment in the ministry of finance, economic affairs and investment;
- Barbados; Nigel Clarke, minister of finance and the public service;
- Jamaica; James Thompson, minister of state for finance;
- Timothy Antoine, Governor, Eastern Caribbean Central Bank;
- Senator Don Wehby, CEO, GraceKennedy Group;
- Jamaica; Nigel Chalk, acting director of the western hemisphere department, IMF; and,
- Ali Mansoor, chairman, board of directors at regional multi-disciplinary centre of excellence, USA.