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AS I SEE THINGS: Our economies must be diversified


BRIAN FRANCIS

AS I SEE THINGS: Our economies must be diversified

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DESPITE SOME POSITIVE signals coming from the Inter American Development Bank about the future growth paths of Latin American and Caribbean countries, major concerns still remain in relation to issues such as the inherent inflexibility of our economies particularly because of lack of diversification across and within important sectors.

For the most part, Caribbean countries are still generally heavily dependent on tourism and international business as the main driving forces behind economic growth and development. While this issue has emerged time after time in debates about the transformation of our economic landscapes, very little has been done by way of diversification to generate any real level of comfort as far as sustainability of our economic progress is concerned.

But, the reality is that all is not lost. For certain, our small and highly vulnerable economies can achieve and maintain relatively high levels of economic growth over a very long period if we embrace sound and sensible socioeconomic policies and strategies.

For example, why have most countries in the region abandoned agriculture as a means of promoting economic development in the short, medium and long term? Is it not clear to all and sundry that agriculture has the potential to solve many of the economic ills we have been suffering from for so long?

I believe policymakers in our small states seem overwhelmed by some of the critical issues plaguing this important sector and therefore take comfort in pursuing alternative development strategies such as citizenship by investment programmes. But is such a strategy sustainable?

Returning to agriculture, let’s face it: There are several aspects or characteristics affecting the modernisation and maximisation of yields and income from agriculture in the majority of Caribbean countries. Most, if not all of these issues, are in fact interconnected. Here are three examples: (i) Economies of scale in agricultural production. Because of the overall size of our countries, opportunities for achieving the benefits from scale-economies are close to non-existent, and this influences what should be produced, of what quality, and with which markets in mind.

(ii) The magnitude of the alienation of arable land from agriculture, especially where large concrete structures have been put up has had the effect of reducing the potential output from a revived agricultural sector as well as further exacerbating the scale-economies limitations already existing.

(iii) Land fragmentation through generations of inheritance (in countries that do not practice the primogeniture system of inheritance) has further restricted the possibilities for even medium-scale production in most of the countries’ landholdings.

The million dollar question facing us then, is: Are these characteristics insurmountable to overcome? I say, no!

All we need as a people is to recognise that despite the massive contributions made by tourism over the years to economic transformation, Caribbean countries will never be able to generate and sustain any reasonable rates of economic progress if our economies are not diversified, allowing for other sectors such as agriculture to play its meaningful role in development. And that is the plain truth!

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