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AS I SEE THINGS: Economic uncertainties

Brian Francis

AS I SEE THINGS: Economic uncertainties

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Caribbean governments have been struggling to get economic fundamentals right. That situation has developed because of the absence of any real economic strategies in response to an unpredictable global economy as well as the length of time taken for return to stability in the international arena.
Hence, for the past five years, most Caribbean countries have been struggling to generate sustained levels of economic growth, unable to lower their fiscal deficits and debt levels, powerless to provide meaningful employment opportunities for their citizens, and have shown no real capacities to manage their ever increasing costs of living. The end result is that citizens have been called upon to make more and more sacrifices in order to provide a platform for “take-off” sometime in the near future should our economic fortunes improve.
But even with all the sacrifices, conditions in the global economy continue to pose serious economic challenges for Caribbean countries.  First, for example, after some recovery in the fourth quarter of 2013, the United States economy declined by over two per cent in the first quarter of 2014 and median wages paid to American workers continue to fall.  Second, there is a major crisis developing in Iraq, with the “ISIS” militants aggressively attacking government’s troops with the ultimate goal of seizing Baghdad and other key cities to be followed by the establishment of an “Islamic state.”  At this point in time it is difficult to predict exactly how things are likely to unfold in Iraq.  But, it is safe to conclude that the present situation could have significant effects on oil prices and that may possibly present even more challenges for our economies.
Therefore, irrespective of the extent of our pessimism or optimism, it seems obvious to me that Caribbean countries ought to brace themselves to face even more economic uncertainties in the short to medium term. If that’s the case, then, the logical response by our governments (strongly supported by leading institutions such as the trade unions, churches, private sector and other key non-governmental organisations) is to plan for the worse while expecting the best.  But with this strategy, what are the major ingredients for success?
Essentially, three important ingredients are necessary for success: First, governments must recognise that with limited financial resources some elements of their social programmes must be put on hold until conditions in our economies improve to the point where affordability is no longer an issue.  Second, conscious efforts must be made to fully utilise and advance all of the important institutions that have been built over many years with a vast amount of resources invested therein. Hence, for example, the Caribbean Court of Justice and the CARICOM Single Market and Economy must be embraced and used to further advance the interests of all the people of the Caribbean. Third, our governments must do everything in their collective wisdom to overcome the “implementation deficit” which continues to limit our capacities to grow and develop.  As I have said time and time again, we in the Caribbean do not suffer from lack of ideas; instead, we are plagued with the lack of implementation of ideas!
All in all, therefore, as responsible Caribbean governments and people, we simply must accept that we continue to face economic uncertainties at both the regional and international levels and how well we respond to those scenarios will determine our chances of emerging out of our present economic stranglehold. And that is as simple as it gets.