The Economic Commission for Latin America and the Caribbean (ECLAC) has discussed improvements to the Caribbean’s economy, and in particular its trade sector, at two conferences held in November, 2017
The Economic Commission for Latin America and the Caribbean (ECLAC) has discussed improvements to the Caribbean’s economy, and in particular its trade sector, at two conferences held in November, 2017.
The first, the Annual Monetary Conference in Belize on November 8-10, 2017, held discussions on how the external sector deficit, lack of growth and accumulation of debt was affecting the region’s economy.
ECLAC’s Deputy Director, Dr. Dillon Alleyne, presented a paper on how to model regional economies using the United Nations’ Sustainable Development Goals.
The Deputy Director said the aim of the study was to find out how trade deficit was driving debt accumulation and its impact on the region’s growth and income distribution.
A modified Kaleck model was used to investigate whether excessive fiscal spending led to debt, or if it was due to deeper structural challenges like a fall in production competition, which puts pressure on governments to maintain spending.
Caribbean governments have focused on raising taxes and curbing expenditure to offset the region’s high debt burden, despite slow domestic and external demand for goods and services.
Dr Alleyne noted that Caribbean economies achieved an average growth of 1.8% in 2011, 0.4% in 2015 and less than 2% expected for 2017, a poor level of increase since the global economic crisis.
It has been matched by high unemployment, with rates ranging between 12% and 15% between 2011 and 2015.
This lack of growth reflects the major constraint of falling import capacity faced by small open economies within the Caribbean.
The second gathering, at ECLAC Caribbean headquarters in Port of Spain on November 14, 2017, examined the trade performance of three Commonwealth Caribbean countries, Belize, Grenada and Trinidad and Tobago.
An expert group of trade representatives analysed the challenges faced by export-orientated countries trying to capitalise on market opportunities provided by Preferential Trade Agreements (PTAs).
Its basis for discussion was the ECLAC study, `Monitoring trade agreements: Improving export performance and promoting industrialization in the goods-producing economies of the Caribbean’, which showed that exports from Belize, Suriname, and Trinidad and Tobago are concentrated mostly towards US and EU markets.
It also found that a relatively small amount of products account for a significant share of exports, which can be categorised as either primary production, or commodities, or production with limited technological imput.
Experts therefore discussed the need for producers to increase the value added in their product chains and what limitations prevent producers from diversifying.
Specific challenges were identified, including a limited access to finance, market information and raw materials, high costs of market entry, logistic bottlenecks and quality-related issues.
In response, the group emphasised the importance of implementing trade and industrial policies that address logistic bottlenecks, encourage the sector’s structural transformation and increase productivity.
Furthermore, participants urged for PTAs to be driven by the private sector so that it can take advantage of preferential market access opportunities.
