AS I SEE THINGS: Sectoral policies in the Caribbean
In the 1960s, with the exception of The Bahamas, most of the countries in the Caribbean were at similar levels of economic development based on per capita income.
But all of that changed significantly four decades later as different countries implemented economic development strategies that placed vastly different emphasis on sectoral developments. The net result was that countries such as Antigua and Barbuda, Barbados, St Kitts and Nevis and Trinidad and Tobago emerged as some of the new leaders in Caribbean economic development.
It is no secret that Antigua and Barbuda, Barbados, St Kitts and Nevis, and St Lucia focused heavily on the development of tourism as their main engines of growth and development. Other countries such as Belize, Dominica, Guyana, Haiti, and Suriname ensured that agriculture maintained its prominence in the transformation of their economic landscape.
Jamaica and Trinidad and Tobago were perhaps the two countries where manufacturing played a significant role in economic activity along with some agriculture and services. In effect, therefore, what we have witnessed thus far in the Caribbean is a wide range of sectoral policies that countries thought were keys to their future growth and development.
Indeed, following in the footsteps of Rostow and his “stages of development” model, the ideal situation for countries seeking to reconfigure their economic landscape is to transition from agriculture and other forms of subsistence living to services and mass communication.
Such transition should generate significant improvements in the standard of living in those countries as is evident in most advanced capitalist economies. In short, therefore, according to Rostow’s observations, countries that rely heavily on agriculture are deemed economically backward while those in which services dominate are modern and hold the greatest potential for growth and development. Isn’t this quite interesting in the context of Caribbean economies at present?
You see, the last two economic reports coming out of the Caribbean Development Bank clearly acknowledge that the countries in the region that have been performing well in terms of economic growth are those where “commodities” are important while the economies that are struggling to grow rely heavily on services.
Given the ongoing turmoil in the global economy, tourism in the Caribbean is clearly hurting. Hence, the countries that depend heavily on this critical industry would be more challenged to grow. With commodities’ prices on the rise, it is not surprising that small countries like those in the Caribbean that export food and oil for example would benefit significantly and those gains would drive economic growth.
Going forward, therefore, we in the Caribbean should rethink our sectoral policies. I still firmly believe that despite recent experiences, tourism and services in general do hold the greatest prospects for the development of Caribbean economies. But, we cannot be naive. We have to recognise and accept that agriculture and manufacturing, both broadly defined, must be allowed to make meaningful contributions to our economic development.
The only real questions that remain are: What precise role should we assign to agriculture and manufacturing? Are we going to continue to pursue sectoral policies on a country-specific basis or within the context of a Caribbean Single Market and Economy?