Caribbean Development Bank predicts regional comeback after sluggish 2019

Published by BBN Staff at February 12, 2020

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Posted: Wednesday, February 12, 2020. 1:52 pm CST.

By Aaron Humes: On Tuesday the Caribbean Development Bank (CDB) hosted its annual news conference.

The CDB takes this opportunity to discuss trends that they’ve noticed emerging over the last few months within the economies of the region. They often share what recommendations they would make to either improve on the gains or turn things around financially for the struggling member state.

Dr. William Warren Smith, President of the Bank, reported that collectively, the region’s economies only grew by 1% last year, which is less than the 1.6% growth in 2018.

In addition to issues with U.S.-China trade relations, problems in the Middle East and increased protests against corruption, inequality, climate change, and lack of political freedoms, the slowdown also reflected the effects of prolonged drought in Belize, Haiti, and Jamaica, as well as social unrest in Haiti.

But for 2020, the Bank projects regional GDP growth of 4.1% “consistent with expectations of accelerated global economic activity. With an estimated daily production of about 100 thousand barrels of oil, Guyana should dominate regional growth performance this year. Other growth drivers in the region should be the construction, tourism, and agriculture sector. But, economic growth will remain lopsided, and below the sustainable rates needed for long-term resilience. Borrowing members like Barbados, Grenada, and St. Kitts and Nevis must stay on-course with their home-grown socio-economic reform programs. Others should join the bandwagon and commence, with alacrity, implementation of their own adjustment programs,” explained Dr. Smith.

The Bank has also taken notice of crime as a regional issue.

Belize’s representative at the conference, Dorian Pakeman of the Government Press Office asked to explain the link, and Dr. Justin Ram – Director of Economics for CDB – stated, “It’s a topic that we’re going to examine in our research in 2020 because we recognize how important this is for the overall wellbeing of our stakeholders in our borrowing member countries, and of course, the likely impact that this can have on economic activity. So, just to give you a quick overview, we’re likely to look at crime from a public health standpoint, the protocol associated with public health, like if there is a public health challenge, there are certain protocols that you examine when you actually try to deal with such a challenge. And we want to look at can we utilize such an approach to the reduction of crime. Now, crime has a number of impacts. It impacts productivity in a number of negative ways, when, for example, people are either injured or for example, it might increase mortality rates. It impacts the economy in that way, but for our types of economies, for many of them that are service-oriented, that are really reliant on the tourism industry, crime can actually play a very negative role in actually discouraging visitors to our shores. So, it’s really important that we manage what is currently happening with criminal activity, and I think some of our countries are doing a pretty good job of this. Others, of course, need to improve, but I think for us, that tourism and that service sector-based economic activity, crime is really important for us to manage and to minimize, so that it doesn’t have knock-on impacts, on visitor arrivals, as it relates to economic activity.”

The Bank’s representatives say that later this year, they will be working on the development of youth strategy to address crime in a hopefully meaningful way. They say that the strategy came about as a result of consultation with a cross-section of Caribbean youths, including those who have come in conflict with the law in their country.

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