For the past four and a half years, Caribbean economies have been under a tremendous amount of stress brought about by a combination of domestic and foreign factors, leaving many economists and other intellectuals to ponder the way forward.
Consequently, several alternative policy prescriptions have been offered as possible solutions to the major economic problems facing regional economies. These solutions include stimulus packages in some cases, austerity measures designed to stabilise economies, and other specific ideas such as improving competitiveness of local industries to boost exports.
What is clear, therefore, is that when it comes to finding solutions to our economic problems, there really isn’t any shortage of ideas. For example, prior to the 1980s most Caribbean countries followed closely the import substitution industrialisation development paradigm that sought to grow and develop our economies through a set of inward-looking policies that led to the emergence of manufacturing as a major driving force in regional economic development.
Several decades earlier, Sir Arthur Lewis advanced the strategy of “industrialisation by invitation,” based on the recognition that as small economies with limited savings and investments, it was necessary to allow foreign capital to play a major role in our economic transformation since local resources alone could not have brought about the kind of social and economic development that was badly needed in the Caribbean at the time.
Today, every country in the region now depends heavily on foreign direct investment as a driver of economic growth and development and has even put in place attractive incentive schemes to help direct available financial resources our way.
If, therefore, the problems facing Caribbean countries cannot be blamed on a shortage of meaningful ideas, why have our economies continue to struggle financially and economically? Is it a case of bad luck? Is it a case of bad policies? Is it that we just can’t do any better given the hostile nature of the global economy?
I would think the answer might be found generally in a combination of all of these factors. Equally important, I also firmly believe, too, that the problems facing Caribbean economies continue to linger because we have consistently failed to do the little things that are important to keep our heads above the level of the swirling waters around us.
Indeed, there is no shortage of issues to draw from. Take, for example, our budgetary process and consider this simple question: Why do our countries continue to allocate expenditures to generate a deficit on the current account? If any of our policy makers can justify this practice, then, I rest my case.
To sum up, therefore, the challenges facing Caribbean economies cannot be blamed on a lack of proper ideas. Hence, to resolve Caribbean economic problems we simply have to resort to “basics” and start doing the little things that matter.
And a reasonable place to start is the preparation of our annual estimates of revenues and expenditures since those estimates duly represent our twelve-month planning tool and have the potential to make or break our economies going forward as we have seen time after time.
(Dr. Brian Francis, the former Permanent Secretary in the local Ministry of Finance, is a Senior Lecturer in the Department of Economics at the Cave Hill Campus in Bridgetown, Barbados of the University of the West Indies)