BEHIND THE HEADLINES: Rays of hope over region
The economic picture of Barbados, Jamaica and the rest of the Caribbean is an enigma wrapped in paradox.
The enigma is that the more Jamaica implements its International Monetary Fund (IMF) austerity and revitalization programme, Barbados talks a lot about trying to deal with declining financial fortunes but fails to implement its own programme.
The more the Bahamas, Belize, Barbados, Grenada and their neighbours try to improve their people’s living standard by spending more on human development, the wider their deficits grow and the higher their mountain of debt skyrocket.
The paradox, on the other hand, is their decreasing competitiveness. Jamaica, the Bahamas and Barbados, for instance, are spending large sums to promote their tourism and other services but competition is coming faster and more furious from what some of them call “non-traditional” sources, meaning new entrants into the marketplace. It seems a situation guaranteed to make them run fast but remain in the same place.
As she surveys the economic and social environment, mainly of her country, Portia Simpson-Miller, Jamaica’s Prime Minister, recognizes the problem, challenges if you will, but prefers to see rays of sunshine on the horizon for the Caribbean region, especially her country in 2014 while remaining unabashedly optimistic that Jamaica, now in the throes of yet another IMF stabilization programme, can travel a pathway to prosperity.
“I look at the world in 2014 from the vantage point of a leader of a small nation which faces development challenges, but is blessed with possibilities and boasts an international name recognition beyond its size,” she saidt in an assessment of what lies ahead for Jamaica and its neighbours next year.
“The challenges which Jamaica will face in 2014 are neither unique nor isolated. They include an unsustainable level of government debt, the high cost of imported energy and unemployment.”
But that’s not all.
“As part of a wider Caribbean, the region has to contend with the impact of climate change, a heightened vulnerability to natural disasters, weak export competitiveness and the HIV/AIDS pandemic,” she wrote in The World in 2014, an annual publication of The Economist, one of the world’s leading English-language weekly news publication. “More job opportunities have to be found, especially for the youth, to slow the rate of migration to some our best talent.”
But how can the Caribbean in general and Jamaica in particular respond to those obstacles?
Simpson-Miller thinks that deeper regional integration between the Caribbean and Latin America is one way. Expanded global cooperation, trade and investment are another.
Thirdly, she says, when Caribbean states attend the third International Conference on Small Island Developing States in Samoa in September they “can build partnerships with other countries for action on sustainable development.
She sees the visit of China’s President, Xi Jinping, to the Caribbean earlier this year as an example of how partnerships can be forged to the mutual advantage of those countries involved.
“First we have taken steps to stabilize and expand traditional sectors such as agriculture and tourism,” she explained. For one thing, the sugar industry has been privatized, “triggering long delayed investments. We are taking similar initiatives with coffee and cocoa.”
For another, Jamaica has broadened the range of foreign direct investment in tourism. Several Spanish hotel chains have entered Jamaica, for instance.
Second, the island is trying to transform itself into a logistics centre for the Caribbean by investing in information technology and port facilities. “Implementation of a public-private partnership to expand and modernize the Port of Kingston – the world’s seventh largest natural harbour – is now underway,” she said.
But here in lies the rub. As Jamaica proceeds there is the major question of the cost of energy. But solar, a renewable source of energy may be an answer.
She is looking to the IMF and other multilateral financial institutions to help the country’s financial house in order. But that comes with a price, what she calls the “necessary sacrifices” and their impact on children.
“Our objective is to ensure that the children of the poor benefit from increased access to education and health services,” she insisted.
The issues don’t end there. Already over-burdened with a monstrous pile of debt, Jamaica isn’t eligible for debt relief under the special initiative for highly indebted poor countries for a simple reason: it is not considered poor by World Bank standards. As an upper middle-income country it is expected to pay its bills without the help of the international financial community.
That’s why Simpson-Miller says she wants to “work with countries in a similar situation to persuade multilateral institutions of our need for such support”.
But Jamaica has something going for it: it’s prowess in sport, specifically, track and field competition at the highest levels, what Simpson-Miller calls “a cultural and sporting super power”, which she is convinced can help spur economic growth. Add reggae music and Bob Marley to the mix and she contends cultural and sporting accomplishments can be translated into prosperity.
“We intend to exploit Jamaica’s international brand and develop the potential of our cultural industries,” she said.
“Like the glorious Jamaican sunshine rising over the deep blue of our mountains and pushing away the night sky with its rays of hope and promise, Jamaica faces 2014 with confidence,” Simpson-Miller wrote.
In Barbados’ case, there is too much talk and far too many unfulfilled promises of forward movement by the government. That was the essence of the observations made by Richard Francis, Standard & Poor’s lead analyst for Barbados after a trip to the island.
Whether it is Four Seasons, reducing the deficit or tackling the debt bond, the bottom line is the same: a country stuck in reverse gear.
• Tony Best is a veteran journalist and NATION New York corespondent.