IF WE LOOK at the world over the last three and a half decades, the Caribbean actually sticks out in a very important way, and not in a good way.
If you look at most of the developing and emerging world, of which the Caribbean is a part, there is a really dramatic change that started in the mid-1990s and countries that were called third world countries became known as the emerging markets that were driving global growth.
So they raised their growth rates from three and a half per cent per year from 1980 to 1995 to five and a half per cent per year from 1995 to 2012 and why that matters is because when you increase your growth rate from three and a half per cent to five and a half per cent that means more people are lifted out of poverty at an increasing rate, you are doubling the standard of living in the country.
But the Caribbean did not follow that pattern. If you look over the last three decades, the growth rates of the Caribbean have gotten progressively slower every decade from two per cent to one and half per cent, to one per cent, to less than one per cent now in the aftermath of the crisis.
Caribbean populations are growing by about one per cent per year, so if economic growth is only half of a per cent per year that means people are getting poorer on average. And one of the reasons why this is happening is – and I would include myself among this group – our leaders have not delivered for the region.
We have to be honest with our citizens. We have not delivered the kind of growth that the rest of the world has seen, we have not delivered the kind of growth that other emerging economies have seen and that is something which we have to address.
The countries that have managed to produced higher standards of living have done so because their leaders have demonstrated three basic principles. They have demonstrated discipline, they have demonstrated clarity and the combination of discipline and clarity will produce trust amongst the people in their leadership about the direction of their country.
Like many children of Caribbean parents I experienced the rod of discipline and by discipline in economic policy I don’t actually mean that kind of austerity.
It is a sustained commitment to a long term vision.
You don’t achieve a gold medal by waking up one morning and going out and running 25 one hundred metre sprints, you have to build yourself up to that slowly, steadily over time.
Economic policy has to follow the same general principles.
You have to have a vision of what is a pragmatic growth strategy for your country and what’s good for Barbados will be a little different than what’s good for Jamaica or Trinidad, but the common element across those countries has to be the willingness to undertake the steps that you need to achieve that vision.
These are the kinds of questions that government must confront in order to be able to continue to deliver those services that governments should deliver in order to create an environment in which people can prosper.
Captured from Dr Peter Blair Henry’s comments at the Caribbean Economic Forum hosted by the Central Bank.
Dr Peter Blair Henry is Dean of New York University’s Leonard N. Stern School of Business.
