Director of the Sir Arthur Lewis Institute of Social and Economic Studies at the University of the West Indies (UWI) Professor Andrew Downes has called for more financing and other incentives to encourage entrepreneurship, innovation and the growth of micro and small businesses as part of the overall effort to advance the economies of the region.
The call for more official support for the region’s small business sector was made during sessions on policies designed to overcome market failures in Caribbean countries at a recent conference of regional academics and policymakers organized by UWI, the Central Bank of Barbados and the International Monetary Fund and titled ‘Caribbean Policy Challenges After The Global Crisis’.
The forum was convened against the backdrop of the implications of the sluggish recovery of the United States and Europe from the global economic crisis for the economies of the region. The Barbados forum noted that while regional governments had mounted appropriate responses to reduced tourism, trade, remittances and capital flows occasioned by the global crisis, the prevailing economic challenges now required the Caribbean to initiate fresh ideas and a renewed policy resolve to arrive at a more sustainable growth path.
Assessments of the economies of the Caribbean undertaken at the Barbados forum concluded that the region had lagged behind other parts of the hemisphere even before the global economic and financial crisis and that this was due primarily to weak productivity growth, low rates of investment, and weak integration with the so-called global “growth poles,” large, vibrant, emerging market economies like Brazil and China. Against that backdrop the conference agreed that the region needed to diversify its economic partners and export markets to take account of those new growth poles. Some countries in the region, including Guyana, have already taken initiatives to diversify its traditional economic partners by accelerating initiatives to strengthen bilateral economic ties with Brazil.
Director of the IMF’s Western Hemisphere Department Nicolas Eyzaguirre told the conference that the Caribbean now needed to follow the example of the more advanced economies by developing home-grown strategies in order to enhance its prospects. And while participants at the deliberations agreed that tourism remains a core regional economic activity that has contributed positively to growth in the Caribbean, the view was expressed that the sector could play a stronger role if steps were taken to increase its competitiveness to attract more tourist arrivals. Additionally, the forum was of the view that while the region has benefited from offshore financial centres in terms of revenue and growth, increasing compliance costs associated with a number of global initiatives to strengthen regulatory standards could impact negatively on that sector.
The Barbados deliberations also explored new potential sources of growth for the region including additional offshore services in the areas of health, education, and specialized financial services. It was noted that if advantage is to be taken of these sectors some countries in the region would need to improve the efficiency in some critical areas including information technology and energy production.
The Barbados conference brought together experts from across the Caribbean, Canada, the Seychelles, the United States and the United Kingdom.
