LAST month, on June 24 and 25, Jamaica’s second biggest lender, the Inter-American Development Bank (IDB), in partnership with the World Bank, the Caribbean Development Bank, and other development agencies including the UK’s Agency for International Aid, held a regional workshop, the Caribbean Growth Forum (CGF), in Nassau in The Bahamas.
The key presentation was by the IDB’s President Moreno, who argued that the forecast for continued weak economic growth in the US and Europe was bad news for the Caribbean’s tourist industry, and that the Caribbean “cannot depend on an improvement in external conditions”. For this reason, doing nothing was “not a viable option”, as, in words that could have applied specifically to Jamaica, “it implies either spiralling debts or a fiscal compression with persistent low growth” which would inevitably 1 standards “lead The alternative to for worse your is ’ citizens to living offer ”. hope to the region s citizens through “reaching a grand agreement to put your countries on a path to higher and socially inclusive growth”. Moreno rightly observed that this does not mean a one-size-fits-all solution, as there is no single set of policies that would allow the entire Caribbean to get on a path to growth. “The solutions must be home grown in each of your countries”.The Caribbean Growth Forum, which was launched in Jamaica in June 2012, supports the competitiveness action plans of the 15 participating Caribbean countries by driving a number of regional public private dialogues focused on creating private sector development and growth. It seeks to identify action orientated policy reforms in three main areas: the investment climate, skills and productivity and logistics and connectivity, monitor their implementation, as well as creating opportunities for regional learning.The overall goal is very similar to Jamaica’s so far failed efforts, starting in the mid 1990s, to create what we in Jamaica have called a social partnership. More recently, Jamaica’s efforts include the partnership for progress effort between 2003 and 2005, and the partnership for transformation effort of 2009, covered in more detail in the IDB report “Mapping of Public – Private Dialogue in Jamaica: Issues and Options for Jamaica”.In his own speech opening the conference, IDB Caribbean head Gerard Johnson noted that the Caribbean’s future survival required growth. He observed that after independence the Caribbean did very well, being an average of three times richer than comparable small middle-income countries. However, in recent years it had fallen behind as a region, and the continued lack of growth had increased crime and hopelessness. He noted that the intention was not to create another talk shop, “but concrete initiatives to improve doing business”. Amongst the questions that the forum needed to ask were “what are the specific actions required?”, who will follow up, and who is ultimately responsible. His counterpart from the World Bank, Francoise Clottes, outlined an agenda of voice (listening), hope, change, action, and implementation of the change, leading ultimately to accountability.The most important session of the conference was on “Improving the Investment Climate in the Caribbean”, a panel which included two Jamaicans, Jamaica Producers CEO Jeffrey Hall and competitiveness guru Professor Alvin Wint of the University of the West Indies. The wide-ranging discussion, which included participants from Belize, Barbados and Minister Khaalis Rolle from the Bahamas revealed that many of the problems facing the Caribbean: access to credit, the specific issue of venture capital, transactions costs (eg registering land), government bureaucracy, investment promotion, etc were very similar across many Caribbean countries although the specific issues varied.Some solutions could be implemented regionally, such as creating credit bureau at the regional level to spread set-up costs, but some areas, such as investment promotion, would inevitably be competitive, as Minister Rolle pointed out. He cited the example of the taxation of the cruise lines, where a regional strategy was agreed at a regional Heads of Government meeting, and the very next day, a Government would give a further concession when the cruise line called the prime minister and said they would go to a different Port. Hall noted that Jamaica’s Junior market had improved access to capital by creating an opportunity for exit by investors, and their appeared to be some regional interest in Jamaica’s innovation. He observed that the impact of high energy costs in areas such as food manufacturing, with a normal net margin of say three to four per cent, were underestimated, as it was not just the direct cost (to be alleviated by say a solar panel on the roof), but all the other higher energy related increase in costs which cascaded right through the production system.Finally, Professor Wint cautioned against the bandaid approach to policy, using as an example the experience of one-stop shops, which he advised, had come to be called in Jamaica “one more stop shops”. The creation of one stop shops, typically in the investment promotion agency, often caused resentment in other government agencies, who decide “to show where the real power lies”. Rather than trying to have everything stay with the one stop shop, he advised instead a fundamental reform of investment process across government. This view was supported by Minister Rolle, who advised that, in his experience, even putting the one-stop shop in the prime minister’s office doesn’t work. Virtually all of these, and other lessons mentioned are relevant to Jamaica. It must therefore be hoped that our policymakers are listening, and that there is now a real desire for reform.
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