Barbados Prime Minister David Thompson said a more tightening circle of development financial options now confronts the Caribbean region, so there is need for a deeper reform of the national business culture in each territory, particularly at the corporate level, to better access whatever finances are available.
With the possibility of a prolonged recession across the globe and by extension implications for the region Thompson emphasized the importance for a regional mechanism for funding, particularly disadvantaged countries and sectors. He pointed to Caricom’s enterprise and funding, noting that it must engage new levels of corporation and integration.
Economies in the region have pursued divergent and largely, individualistic programmes for development and finances, the Barbadian leader said, noting that the region has established, national development financial institutions, but that they have had limited impact. The region’s productive sector development reflects this uncoordinated and intermittent policy, according to him.
In a feature address at the Guyana Manufacturing and Services Association Limited (GMSA) annual presentation dinner and awards at Thirst Park on Friday night, Thompson argued for a change in the business culture of the region, while pointing to initiatives that must be explored if Caribbean territories are to propel forward.
He said a complete upheaval of the current enterprise culture is needed for the generation of a greater volume of exports by the manufacturing sector, but assisted by new regional financing programmes such as Caricom’s Development Fund (CDF), which he anticipates will assist member states in accelerating growth.
But President Bharrat Jagdeo, also speaking at the function, said the region has to use the resources it has more productively; pointing to the collective central bank reserve. Jagdeo noted that some 90 per cent of those reserves are held outside the Caribbean performing development task in other parts of the world “when we need this scarce resource here so we have to as a collective have to get these reserves re-invested in the region”.
He said that region also has the option of approaching the financial institutions as a collective for a contingent line of credit underscoring the need for regional integration. The region, he said, needs to develop a strong macro-capacity and with management analysis and capability that will ensure greater scrutiny of the returns to impact directly on broadening the economic base of countries. What this requires, he said, is judicious review of the region’s borrowing policies and the establishment of rigid standards.
However, Thompson said policy makers should be concerned about the degree of inconsistency in the region’s manufacturing output. He said that with Trinidad and Tobago, and Guyana the Caribbean can boost of significant energy resources, stable labour and tremendous natural resources yet the region is struggling to propel its industrial sectors into global competitiveness.
“The community needs more pan-Caribbean enterprises, by removing barriers we only reach economic liberalization, integration requires a much greater degree of commitment and investment of resources. Failure to effectively stimulate regional enterprise may open the opportunity within our own region to others,” he opined.
He said the levels of production across the region are far from at their full optimization even for small economies, but pointed out that the potential of the region with relatively large agricultural and mineral capacity have been seriously been constrained by myriad factors external and domestic. But the establishment of a regional capital market would improve access to regional finances, Thompson said, adding that the market for long-term borrowing and lending is critical to the sustained progress of Caribbean countries.
Though limited shadow capital markets exist on small scale in the region, he said, that it is not enough to foster vibrant, pan-Caribbean enterprises, which can compete vigorously in a liberalized trading environment, adding that governments need to find a way to assist investors and business persons to finance their business initiatives.
He opined that regional development financing is an imperative if the region is to chart its own development path and ensure a meaningful contribution to productive sectors including manufacture, noting that the recent signed Economic Partnership Agreement (EPA) between Cariforum and the European Union is funded on the deepening of regional integration.
“This union of massive access and development financing provides us a new opportunity to really get our goods and service providers on a sound footing. As a grouping of micro states our very future depends on the capacity to create and export goods and services beyond our region,” he noted.
Further, he called on governments across the region to denounce what he termed the financial condemnation of middle-income developing countries, explaining that some Caricom states are being punished for graduating from accepting preferential rates extended to developing nations on the account of economic and social development status, adding that it effectively alienates them from the considerable capital required for industrialization. According to him, the punishment for being successful is a dangerous economic paradigm that threatens the stability of middle-income nations that still have important development needs.
GMSA awards were handed out to several companies and individuals for export achievement and increased sales, in addition to personal contributions to the local community. Among the companies were Edward B. Beharry and Company Limited, Kings Jewellery World and individual recognition went to Hemraj Kissoon of Kissoon’s Furniture Store and Denis Morgan of Denmore Garment Factory, among others.
