On
its current development path, the Caribbean in 2050 will face
unmanageable debt, poor growth, and greater socio-economic problems,
warns a Commonwealth report launched today at the Fourth Global Biennial
Conference on Small States in Seychelles.
The report,
Achieving a Resilient Future for Small States: Caribbean 2050, considers
current policies and trends in six Caribbean countries - Bahamas,
Barbados, Jamaica, St Lucia, Grenada, Trinidad and Tobago and Guyana -
and makes a 34-year projection across different sectors. The research
shows five out of the six countries would have a debt-to-gross domestic
product (GDP) above 100 per cent – dangerous levels if growth continues
to lag. Projections also suggest interest expenditure on debt is likely
to sap public finances, reducing funds for development and giving rise
to greater socio-economic problems.
The
Caribbean faces mounting challenges, according to the report, and
unless there are seismic shifts in policy-making, the outlook is stark.
Sluggish growth, spiralling debt, high youth unemployment, rising crime
rates, piecemeal investment and low productivity all pose serious
threats to the region’s future. Climate change also casts a long shadow;
small island developing states are most vulnerable to extreme weather,
rising sea levels and diminishing natural resources but lack the funds
to plan ahead and minimise risks. The report challenges the status quo
and sets out policy interventions in targeted areas aimed at tackling
persistent barriers to the region’s growth.
“This
publication offers strategies that seek balance for the Caribbean in
the survivability of today and the sustainability of tomorrow,” said
Commonwealth Deputy Secretary-General Deodat Maharaj. “We have taken on
board current and future threats facing the region, such as lack of
competitiveness, human and financial resource constraints, crippling
debt and limited access to development finance and put forward practical
steps that set out a new trajectory to help realise the full and rich
potential of the region.”
So
how can the region transform? The report provides recommendations on
productivity, export growth, increasing youth employment and fiscal
reform. Findings show a two per cent a year increase in productivity
would have the greatest impact on development and growth among the
Caribbean countries profiled. And if a regional focus on productivity
is combined with policies aimed at stimulating export growth, the report
points out, it is likely growth and debt targets set by governments
will be met.
The
islands of the Caribbean have made good progress relative to their
short-lived independence, the report states, but a number of crises
brought about by societal change, natural disasters and economic shocks
have created major setbacks. For example, the region has struggled to
make progress on development goals because of the protracted economic
downturn. The report attributes the overall decline in economic
development to ‘a lack of systemic transformation’ and calls for
policy-driven innovation in partnership with the private sector. It also
makes a strong case for deeper regional integration.
“At
a time when policy-makers are loathe to look beyond the short term,
this book takes a long view of the policy challenges facing the
Caribbean and reminds us of what could happen if we do nothing today. In
doing so, it also initiates a much-needed dialogue on what might be an
alternative scenario, and the social and economic policies that could
take us there,” said Wendell Samuel, an official from the International Monetary Fund attending the conference.
One
of the recommendations to free up revenue and boost growth, the report
suggests, is for Caribbean governments to actively pursue sustainable
energy systems by investing in new technology and improving efficiency.
Living standards will increase, foreign investment will go up because of
lower business costs and damage to the environment will go down. This
it says will also provide the region with a moral high ground in global
climate change negotiations and signal to the rest of world that
transitioning from fossil fuels to renewable energy is indeed possible.